ARRM's Daily Dispatch

'Protecting people with disabilities'

As folks are meeting with legislators, we’ve heard many legislators making a similar claim: "We are protecting people with disabilities." They argue that because they are providing more funding in this biennium compared to the previous one, they are "protecting" disability services. We thought you should have some helpful and timely information about this claim, given the many site visits and meetings you have scheduled next week.

Here are a few talking points to put that claim in context:

1. The proposed health and human services budget bills in the House and Senate do provide funding in the upcoming biennium that is greater than the last two years-- about five percent more. However, total general fund spending in FY 2010-11 for health and human services was $10.2 billion. Without changing the rates paid to providers, the services available, or eligibility requirements, health and human services spending in FY 2012-13 is projected to be $12.3 billion.


2. A five percent increase over the last biennium is insufficient to maintain the same level of services for the same number of people eligible for current programs. 


3. Under both the House and Senate proposals, there are no across the board rate reductions for waivered services. That means that services for current recipients shouldn’t substantially change, which is a good thing. 


4. However, there would be significant numbers of individuals currently eligible for services that won’t receive them. Also, there are other reductions that would significantly impact the quality of life for people with disabilities: elimination of coverage for eyeglasses and restriction in payments for dental providers limiting access to their services.


5. As providers, we understand we must find efficiencies in our operations to help control the rising cost of care. This is why ARRM has offered our own reform ideas to reduce the regulatory burden and ensure dollars are spent on care, not bureaucracy.

While legislators are still working through the final budget and specific reductions are likely to change, the claim that disability services are "protected" is debatable. Hopefully, this information is helpful for members in understanding that claim, and will allow you to engage in productive discussions with your elected officials. For more detailed information on current proposals impacting providers and the greater disability community, click here for ARRM’s latest summary.

--Craig Wieber, Chief Fiscal Analyst

Repeal of federal tax provision

With so much focus on issues at the state level, we thought you should know about a recent change in federal law that impacts ARRM members.

Included in last year’s federal health care reform law, the Patient Protection and Affordable Care Act was a provision requiring businesses to send a 1099 tax form and collect W-9 information from every vendor it purchases more than $600 worth of goods or services from each year. This provision was set to begin in 2012. We received feedback that this provision created a lot of unnecessary administrative work and was particularly onerous.

As of last week, it is one less thing ARRM members need to worry about. Congress has passed legislation, the Small Business Paperwork Elimination Act, repealing the 1099 tax-reporting requirement. President Obama signed the bill, so the 1099 requirements will not go into effect. For more information, check out this story. 

--Craig Wieber, Chief Fiscal Analyst

State revenue collections continue to exceed expectations

The encouraging news on state revenue collections continued for the most recent two months. For February and March, state revenue collections were higher than anticipated.  Revenue from all sources was higher than forecasted, over $32 million. This is the first time revenue collections have been announced since the last budget forecast in February. For these two months, the state collected about $2.3 billion in revenue, about 1.4 percent higher than projected. 

The governor and legislature will use the revenues and spending from the February forecast to put together the budget for the upcoming biennium; these new figures won’t figure into that discussion. And, this news only gives a partial picture of the state’s finances because it only reflects revenues and does not indicate any changes in spending patterns. That said, this is still good news.

To read a story on this from the Star Tribune, click here.

--Craig Wieber, Chief Fiscal Analyst

House passes HHS budget bill

Late Tuesday night, the House passed its version of the health and human services budget bill. The House made a few changes from the version passed out of the Ways and Means Committee that are of interest to providers and anyone interested in disability services. 

First, an amendment was added to remove any reduction in rates to disability and elderly service providers that would be required if the Department of Human Services fails to achieve $300 million in savings from a federal waiver of Medicaid requirements. Second, language was added to clarify how waiver enrollment would be handled under the House’s proposal to freeze spending levels. As people leave the waiver, no new enrollment would occur until the number of enrollees fell to the number served as of March 2010. No current enrollees would lose services, but no new enrollees would be allowed until the population reaches earlier levels for the DD, CADI, and TBI waivers. Finally, a provision was added to eliminate the annual adjustments counties receive to their DD waiver allocations (often referred to as the DD acuity factor) to account for the increased needs of those receiving services.

The bill still contains many provisions that Governor Dayton strongly opposes: repeal of early expansion of Medicaid, a waiver of Medicaid requirements with unsubstantiated savings, and significant reductions to many other grant programs.

What happens next, like many things at the capitol these days, is unclear. No one knows if the House and Senate will convene a conference committee, assemble a compromise, and send it off for an almost certain veto. Or, the two sides may begin negotiations on a global agreement first. We will continue to monitor the situation and keep members updated.

--Craig Wieber, Chief Fiscal Analyst

House Ways & Means approves HHS budget bill

Tuesday, the House took the next step in moving its HHS budget bill to the floor.  There were several changes made in the Ways and Means Committee. The biggest change was including a repeal of the early expansion of Medicaid, which was originally included in the Senate position and Gov. Dayton strongly opposes.

There are a few other changes that will impact disability services. The House’s major proposal for disability waiver savings--a freeze in waiver spending at FY 2010 levels--remains, but at a significantly reduced level. After further consultation with DHS, the House is now recognizing the additional costs resulting from some individuals re-entering nursing homes and home care. Previously, that proposal reduced disability waiver spending by $344 million and now that savings has fallen to $93 million. The House also expands the governor’s proposal to eliminate future increases to counties’ DD allocations. In addition, the House adds back its 10 percent reduction to rates for certain “low needs” individuals being served in corporate foster care, in an effort to move them into less expensive settings.   

Finally, the House bill still contains language to develop a tiered system of services for the DD waiver being championed by Representative Abeler. If enacted, this requires regular assessments of individuals with the goal of moving them into less expensive treatment settings. We will continue to monitor this and all the provisions as the process continues.  For a detailed summary and comparison of the Governor, House, and Senate positions click here.

With approval by the Ways and Means Committee,the revised bill will now travel to the House floor.  It is expected to be debated today and will pass later today. Once passage occurs, the House and Senate will appoint a conference committee to work out the differences between the two bills before they are sent on to the Governor. 

--Craig Wieber, Chief Fiscal Analyst