January 18, 2017 Senator John Stinner, Chairman Appropriations Committee Nebraska State Legislature 1445 K Street Lincoln, NE 68509 RE: Agency 25- Health and Human Services- 2017 Expedited FY 2016-17 Budget Adjustments (LB 22) Dear Chairman Stinner and Members of the Appropriations Committee, I am writing you today on behalf of Mosaic to provide this letter as an accompaniment to my testimony on the FY 2016-17 expedited budget adjustments. Mosaic is a mission-driven organization serving 3,700 people with intellectual and developmental disabilities throughout ten states, including 733 people in its home state of Nebraska. Together Mosaic staff members, volunteers, and the people it serves work as partners providing services that are personalized to their wants and needs. In Nebraska, Mosaic provides day services, employment services, extended family homes, residential services, intermittent services, medical and behavioral risk services, and affordable and accessible housing. As you are aware, in October 2016, changes were made to the billing of day programming hours by the Nebraska Department of Health and Human Services, Division of Developmental Disabilities. Mosaic appreciates the Department and the Administration’s efforts to rectify the situation; unfortunately, the proposed funding will not be enough to cover providers’ expenses during the period of October 2016 to March 2017. The loss of funding will impact Mosaic’s critical community-based services. Without any action, Mosaic estimates it will lose $738,000 of day services revenue for October 1, 2016 through March 1, 2017. Furthermore, each extended family home provider is estimated to lose $300 per month on average, although some exceed that figure depending on how many individuals they serve and the funding provisions attached. Mosaic respectfully requests the Committee include $7.08 million in deficit funding to make providers
whole for the five-month period. Mosaic also recommends identified savings from Beatrice State Development Center (BSDC) be reinvested into community-based settings. As a note, Mosaic supports Mr. Brian Kanter’s testimony and the letter submitted on behalf of the Nebraska Association of Service Providers (NASP). People with disabilities, their loved ones, and the greater community, including the State of Nebraska, rely on human service providers to achieve personalized services and promote meaningful lives in the community. The Governor’s proposal, regrettably, reduces valuable resources to an already stressed system. If providers have to bear these costs, it could lead to decreased financial stability for providers, fewer programs and choices for people in service, negative impacts on staff wages and benefits, and the potential reduction of group homes and extended family home providers. Changes in funding at the statelevel are compounded by federal rules increasing providers’ costs without any funding increase to implement the provisions. For example, the HCBS “settings” final rule requires greater community integration, person-centered planning, and a push towards more integrated employment for people with disabilities. Mosaic supports these initiatives, but the fact remains more staff will be required to continue achieving positive outcomes through quality-based services. For years, direct support workers have been filling the roles of teacher, social worker, and community connector, in addition to providing personal care so that people with intellectual disabilities can live meaningful lives in the community. Like a Nebraska state senator, a direct support job boasts long hours, irregular schedules, and low pay, yet is satisfying, fulfilling, and provides an opportunity to make a significant difference in people’s lives. Even though support workers are critical to the success of community-based services, the rates provided by the state and federal Medicaid partnership have not allowed salaries and benefits for these workers to reach a level to adequately compensate them for their work. Mosaic struggles with the recruitment and retention of staff because current rates preclude competitive wages. Mosaic in Nebraska’s community-based programs have an average turnover rate of 57.15% and 94.4 vacant FTE positions. In addition, competition for qualified workers is not only in the health care field, but with other industries as well. Unlike other industries, Mosaic does not have the ability to raise prices to cover increasing expenses such as health insurance and minimum wage increases. Mosaic is 96% Medicaid funded and 77.34% of its funding in Nebraska goes towards staffing costs. Mosaic has no ability to set prices, increase reimbursement rates, or shift cost burdens to non-Medicaid funded constituencies such as private pay insurance. In economic terms, disability service providers are price takers. Disability service providers are unique in this regard. We rely heavily on the federal and state Medicaid partnership to ensure our costs are covered. Medicaid reimbursement rates are directly connected to quality services; however, rates seldom reflect the actual costs of providing services to people with intellectual disabilities since the increasing costs of doing business usually outpace Medicaid rate adjustments. For example, the cost of compensation alone increased by two percent in 2015.1 It is imperative the Legislature and the Administration recognize the value of these services and ensure 1
https://www.bls.gov/news.release/eci.nr0.htm
Medicaid rates are sufficient to continue providing critical community-based services for people with intellectual disabilities. Again, Mosaic respectfully requests the Committee provide $7.08 million in the deficit budget bill to ensure the fiscal stability of providers to continue serving the needs of Nebraskans with disabilities. Thank you, again, for the opportunity to speak with you all today. Please do not hesitate to contact me with any questions. Sincerely, Mark L. Matulka Vice President of Government Relations Mosaic