You are on page 1of 7

Colorado

Legislative Room 029 State Capitol, Denver, CO 80203-1784


Council (303) 866-3521 FAX: 866-3855 TDD: 866-3472

Staff

MEMORANDUM

Pursuant to section 24-72-202(6.5)(b), research memoranda and other final products of Legislative Council
Staff research that are not related to proposed or pending legislation are considered public records and are
subject to public inspection. If you think additional research is required and this memorandum is not a final
product, please call the Legislative Council Librarian at (303) 866-4011 by July 19, 2007.

July 12, 2007

TO: Members of the Interim Committee to Study Long-term Care Services and Supports
for Persons with Developmental Disabilities

FROM: Elizabeth Burger, Research Associate II, 303-866-6272


Jessika Shipley, Senior Research Assistant, 303-866-3528
Kelly Stapleton, Senior Research Assistant, 303-866-4789
Amy Larsen, Senior Fiscal Analyst, 303-866-3488

SUBJECT: Overview of the System of Long-term Care for Persons with Developmental
Disabilities in Colorado

This memorandum provides an overview of Colorado's system of long-term care for persons
with developmental disabilities. Specifically, this memorandum discusses the administration of
services and describes the services that are provided. In addition, the memorandum describes
current funding for services in the state and discusses the waiting lists for services. Finally, the
memorandum provides estimates of the funding required to eliminate the waiting lists for services,
and describes issues related to the restructuring of Medicaid waivers used to provide services to
persons with developmental disabilities.

Definition of Developmental Disability

State statute defines a developmental disability as a disability that is manifested before the
person reaches 22 years of age which constitutes a substantial disability to the affected individual.
In addition, the disability must be attributable to mental retardation or related conditions which
include cerebral palsy, epilepsy, autism, or other neurological conditions when such conditions result
in impairment of general intellectual functioning or adaptive behavior similar to that of a person with
mental retardation.
Administration of Services

The Division of Developmental Disabilities within the Department of Human Services


oversees the administration of services for persons with developmental disabilities. Because the vast
majority of state services for persons with developmental disabilities are funded through the state
Medicaid program, the state Department of Health Care Policy and Financing also oversees and
administers services for persons with developmental disabilities.

Community Centered Boards (CCBs). In Colorado, persons with a developmental disability


access services through a Community Centered Board (CCB). There are 20 CCBs in Colorado.
Community Centered Boards are private entities which, as designated by statute:

• are authorized to determine the eligibility for services of persons with developmental
disabilities who live in a specific geographic region;
• provide case management services to persons with developmental disabilities;
• serve as the single point of entry for persons to receive state- and federally-funded
services and supports; and
• provide authorized services and supports to persons with developmental disabilities
either directly or by purchasing services and supports from service agencies.

Eligibility for Services

Any person may request an evaluation to determine whether that person has a developmental
disability and is eligible for services. Community Centered Boards are responsible for determining
whether the person is eligible for services. If the CCB determines the person is eligible for services,
within 30 days of the eligibility determination, the CCB must develop an individualized plan for the
individual. The individualized plan must identify:

• the needs of the person or family receiving services;


• the specific services and supports appropriate to meet those needs;
• the projected date for initiation of services and supports; and
• the anticipated results to be achieved by receiving the services and supports.

The individualized plan must be reviewed at least annually and modified as necessary or
appropriate.

Services Provided

Services for those individuals who qualify are provided through four main programs:

• Adult Comprehensive Services (Comp);


• Supported Living Services (SLS);
• Children's Extensive Support (CES); and
• Family Support Services (Family Support).

–2–
Below is a description of each program, who is eligible, and what services are provided.

Adult Comprehensive Services (Comp). Comprehensive services are provided to adult


individuals with a developmental disability who are living outside their family home and require
24-hour supervision and residential services. To be eligible, one must be at least 18 years old, have
a developmental disability, and require extensive support services to live safely outside the home.
Some services included in this program are:

• residential habilitation with 24 hour supervision;


• day habilitation services including supported employment services, access to typical
community life activities, and generalized skill development;
• training and habilitation services in the areas of personal, physical, mental, and social
development;
• transportation;
• specialized medical equipment and supplies, such as wheelchairs, wheelchair
adaptation, van adaptation, or toys or computers that aid in communication;
• skilled nursing;
• behavioral services and mental health services; and
• dental and vision services.

Some services take place within the community setting, while others take place in segregated
sheltered workshops or training centers where the majority of people may have a disability.

Supported Living Services (SLS). Supported Living Services are services and supports to
assist persons with developmental disabilities to live in the their own home, apartment, family home,
or rental unit that qualifies as an SLS setting. Supported Living Services are provided as an
alternative to institutional placement for individuals with developmental disabilities, but are not
intended to provide 24-hour supervision like Comp services. To be eligible, one must either live
independently with limited supports or already receive services from other resources such as family
members. Services include:

• specialized medical equipment and supplies;


• counseling and therapeutic services;
• dental, hearing, and vision services;
• day habilitation services including physical, occupational, or speech therapy;
• home modification;
• personal assistance services including assistance with bathing, personal hygiene, eating,
dressing, grooming, relief to family members who normally provide personal care, and
medications;
• communication services such as speech/language therapy;
• counseling services including individual, group, behavioral interventions, diagnostic
evaluations, occupational, and physical therapy;
• transportation; and
• assistance with employment (pre-vocational and supported employment).

–3–
Children's Extensive Support Services (CES). Children's Extensive Support Services are
provided to children who have a developmental disability, or to children under the age of five who
are at risk of a developmental disability or developmental delay. To be eligible, one must have
intensive behavioral or medical needs. Children's Extensive Support Services are provided as an
alternative to institutional placement for children with developmental disabilities. Services include:

• personal assistance services including assistance with bathing, personal hygiene, eating,
dressing, grooming, and medications;
• child care assistance;
• professional services such as counseling and therapeutic services;
• household services such as housekeeping tasks;
• home modification services such as adaptation of showers or toilets and making the
home accessible with ramps or railings;
• community connection services such as providing for recreational equipment; and
• specialized medical equipment and supplies including wheelchairs, wheelchair
adaptation, van adaptation, or toys or computers that aid in communication.

Family Support Services. Family Support Services are intended to provide services to allow
children and adults with developmental disabilities to remain in their family home and to provide
support to families as the primary care givers. Referrals to the Family Support program are made
through CCBs. Those eligible are required to have a family member with a developmental disability
living in the household. Eligibility for the Family Support Services program does not necessarily
guarantee services or support. The Family Support program is not funded through a Medicaid
waiver, but is funded with state dollars.

A family support plan is developed in conjunction with an individual's Individual Plan in


order to avoid duplicative services. Services may include:

• family support grants;


• support service coordination and educational materials;
• emergency and outreach services;
• reimbursement for medical and dental expenses not covered by health insurance
programs;
• child care;
• mobility aids and adaptive equipment;
• therapy and family counseling;
• recreation and leisure needs;
• transportation; and
• special dieting foods, clothing, and homemaker services.

Current Funding and Waiting Lists

The vast majority of services for persons with developmental disabilities are funded through
federal Medicaid waivers for home- and community-based services. These Medicaid waivers enable
the state to support services for persons with developmental disabilities using Medicaid funds that

–4–
originate as 50 percent General Fund and 50 percent federal funds. However, waiver services differ
from other parts of the state Medicaid program in that the state may limit the total number of
program participants. As a result, there are waiting lists for services.

Table I reflects FY 2007-08 funding and waiting list information. Adult Comprehensive
Services, Adult Supported Living Services, and the Children's Extensive Support programs are
funded primarily or entirely by Medicaid with a 50 percent state contribution. For budgetary
purposes, program resources are the number of individuals who are expected to receive services for
a full year and may vary from the actual number of clients served. Some of the persons on the
waiting lists are anticipated to be removed during FY 2007-08 due to the funding of new resources
and changing client needs. Family Support Services are primarily funded with state General Fund
moneys, and current funding serves about 4,000 families.

Table I
FY 2007-08 Funding and Waiting Lists

Avg. Cost per W aiting List


Total Resources Full Year as of
a
Com munity Program Funding Funded b Resource April 2007

Adult Comprehensive Services (Comp) $257,604,990 3,872 $66,530 1,368

Adult Supported Living Services (SLS) $61,106,767 3,584 $17,050 2,324

Children's Extensive Support (CES) $8,184,233 395 $20,720 157

Family Support Services $7,269,644 1,176 $6,182 4,178


a) Reflects funding in the Developmental Disability Services, Community Services, Program Costs line item of the FY
2007-08 Long Bill. It does not include 403 adult residential resources at the regional centers or services funded with
local dollars.
b) Of the resources shown, 78 adult comprehensive resources and 24 adult supported living services are funded for
an average of six months in FY 2007-08. These resources are counted as 0.5.

Eliminating the Waiting Lists

The waiting lists for developmental disability services are a fundamental problem. While
many people anticipated a judicial resolution from a lawsuit alleging that the state's waiting lists for
developmental disability services were illegal, the courts ruled in the state's favor allowing the
waiting lists to continue.1 The ruling leaves the state with broad flexibility to set funding levels for
services to the developmentally disabled.

1
Mandy R. v. Owens. In February 2005, Judge Richard P. Matsch, the trial court judge for the federal district court, ruled in the
state's favor. On September 21, 2006, the 10th Circuit Court of Appeals upheld the ruling.

–5–
Services for adults. The projected cost to the state of entirely eliminating the current waiting
lists for adult services is estimated at $46.6 million annually. Costs are shared between
comprehensive services and supported living services as shown in Table II.

Table II
Cost of Eliminating the Current Medicaid Waiting Lists
for Services for Adults with Developmental Disabilities

Net State Cost Resources


Program per Client* Required** Total State Cost

Adult Comprehensive Services (Comp) $29,688 1,094 $32,478,672

Adult Supported Living Services (SLS) $9,320 1,515 $14,119,800

Total $39,008 $46,598,472


*Costs are based on FY 2007-08 average net state costs including case management.
**Resources required are based on the waiting list as of April 2007, reduced by 20 percent to account for individuals not
removed from the wait list in a timely fashion and assuming 344 SLS slots would be opened up by individuals moving
to comprehensive services from SLS.

Eliminating the current waiting list would only take care of the problem for one year because
the demand for services continues to grow much faster than population growth. Joint Budget
Committee staff estimates that growth in demand for comprehensive residential services is about
4.1 percent per year, while growth in the state's population is between 1 and 2 percent per year. The
rapid growth is tied, in part, to the baby boom generation cohort of persons with developmental
disabilities. This group increasingly requires state-funded services as their parents age and are no
longer able to care for them.

Joint Budget Committee staff estimates that 180 new resources would need to be added each
year in the near future to avoid ongoing waiting list growth. After eliminating the waiting list, an
annual increase of about $6 million in state funds is required to avoid recreating it.

Services for children. At this time, staff is unable to accurately estimate funding
requirements to eliminate the waiting list for the Children's Extensive Support program. Placement
delays and problems with the program's ability to spend funds while children are awaiting placement
resulted in large under-expenditures going back to FY 2005-06. In FY 2006-07, thirty new
Children's Extensive Support resources were added, but under-expenditures topped 30 percent. Joint
Budget Committee staff anticipates that an FY 2007-08 budget adjustment, either to increase
numbers of children who may be served or to reduce the budget, is likely. While state funding needs
may be as high as $1.6 million (157 children x $10,000), at this time, it is unknown how many
children would remain on a waiting list after current funding is utilized.

Services for families. State funding for Family Support Services is administered much like
a block grant in that CCBs receive a set amount of money and that funding is used to provide
services to as many families as possible. Thus, any additional funding would be used to enhance and
expand services. State funding as high as $24.6 million may be required to provide full services to
all families on the waiting list ($5,900 x 4,178 families). However, it is important to note that many
of the families on the waiting list are receiving some services. Local funds may also be made
available for this program.

–6–
Restructuring of Payments for Services Funded through Medicaid Waivers

As noted earlier, the vast majority of state services for persons with developmental
disabilities are funded through the Medicaid program through various waivers. From the late 1990s
through FY 2005-06, the developmental disability system was managed pursuant to a systems change
agreement between the Joint Budget Committee and the Department of Human Services. Under the
systems change agreement, CCBs received payments based on an average service rate for their
individual regions and persons served, and the CCBs negotiated agreements with individual
providers based upon the specific needs of the persons served. This quasi-managed care system was
eliminated in FY 2006-07 after the federal Centers for Medicare and Medicaid Services (CMS)
notified the state that the payment methodology would no longer be permitted.

In February of 2006, the state began a process to revamp its billing system for comprehensive
and SLS waiver services. As directed by CMS, Colorado must establish clear guidelines for provider
rates, develop a process for determining client levels of need, and implement a payment system that
allows specific costs to be tied to an individual for all waiver programs.

The billing system change has driven a substantial workload for the Department of Human
Services, CCBs, and providers. In addition, the transition initially resulted in significant payment
delays to providers. Finally, a system developed to "hold harmless" any provider who faced financial
losses as a result of the billing system change had technical difficulties and hold harmless payments
were not distributed to providers until the spring of 2007.

The state is currently in the process of developing uniform tiered rates for residential services
and day habilitation services and evaluating all clients to determine their level of need and the
appropriate reimbursement tier for their services. An interim rate structure for comprehensive and
SLS waiver services was put into place in August of 2006. The final rate structure for
comprehensive services was expected to be implemented July 1, 2007, but delays in implementation
have pushed back the start date for the new rate structure to sometime in 2008. The final rate
structure for SLS waiver services is anticipated to be implemented in FY 2008-09.

The change from a quasi-managed care to a fee-for-service payment system for waiver
services will have short- and long-term fiscal implications for the state. For instance, in FY 2006-07,
the state budgeted over $1.8 million for one-time costs associated with the billing system
implementation. In addition, in FY 2006-07, a General Fund expenditure of approximately
$7.6 million was incurred to replace local funds that could no longer be accessed under the new
billing system. Finally, in FY 2006-07, the new billing system resulted in a one-time under-
expenditure of funds for services for individuals with developmental disabilities of approximately
$29.8 million. This under-expenditure was due to decreased flexibility of CCBs to administer the
funds, as well as the switch to a cash system of accounting for Medicaid-funded waiver services.
According to the Joint Budget Committee staff, although the fiscal implications for the state are still
uncertain, under the new system, the state's control on overall waiver costs will be far more limited
than under the former quasi-managed care system.

–7– S:\LCS\MEMOS\2007\Overview of the Developmental Disabilities System in Colorado7207112658.wpd