2018: Services face uncertainties after veto

Access Press
6/10/2018 by Access Press Staff

One of the biggest disappointments of the 2018 legislative session is the failure to address a seven percent cut to the funding many Minnesotans with disabilities rely on to live, work and participate in their communities. The first round of the cut takes effect July 1, 2018. With no special legislative session to address the cut and other budget issues, many Minnesotans with disabilities face additional challenges on top of the critical workforce shortage.

The first cut will affect tens of thousands of Minnesotans who receive what are called “unbanded” services under the Disability Waiver Rate System (DWRS). Other cuts could take effect in the future, affecting thousands more people.

What was considered to be an interim fix to the initial cut was cast aside by Gov. Mark Dayton's veto of this year's supplemental budget bill. After a high-profile advocacy campaign, Dayton, the House and Senate had reached agreement as to how to rectify the cut.

Speaker after speaker described what the cut to waiver services would mean

But changes to address the cut were wrapped into a larger funding package that Dayton said he simply couldn’t support.

The Best Life Alliance, a consortium of more than 130 groups that has worked tirelessly on the staffing wage and supports issues, had a strong response.

“What should have been a no-brainer for legislative leaders and Governor Dayton – to quickly pass a fix to the regulatory policy glitch causing the cut and return tens of millions of dollars back to disability services – was allowed to get swept up in the political mudslide of this legislative session,” said Best Life Alliance Chairperson Judy Marder.

Marder is the parent of a child with disabilities. “Now, parents like me, people with disabilities who direct their own support services, and organizations which provide community-based supports, are left struggling to understand how to fill the gaping hole where this funding would have gone.”

A May 23, 2018 disability community rally planned to urge Dayton to sign the budget bill turned into outcry over the veto. Speaker after speaker said they were disappointed in the failure to address the funding cut.

Best Life Alliance members said they’ll continue to push for a special session. While the veto is a set-back that will have huge ramifications for many people across the state, it is not the end of their advocacy. They are committed to continuing to work this summer and fall leading into the next legislative session to find ways to address the seven percent cut and to continue to strengthen community-based disability services.

But frustration is huge. “The legislative process has failed not just more than 32,000 Minnesotans with disabilities who will now face a seven percent cut to the funding they receive to access supportive services to live and work in their communities,” said Marder. “It has also failed approximately 100,000 direct care staff and caregivers whose dedicated, life-changing work is already undervalued in the current rate structure.”

“I am aghast this would be allowed to happen in a state that once led the nation in its commitment to people with disabilities, their independence and quality of life,” Marder said. “If the State of Minnesota expects to uphold its commitment to people with disabilities and supporting their best lives, not acting to stop the cut is not an option. The Best Life Alliance, its partners and the dozens of legislators from both parties who worked hard to develop legislation to stop the cut will be continuing the fight and calling for Governor Dayton and legislative leaders go to special session to address this critical issue.”

The Minnesota Department of Human Services in late February 2018 announced the seven percent cut, prompting a scramble during the legislative session. The cut is a result of a regulatory conflict over rate-setting policy between the state and Centers for Medicare and Medicaid Services (CMS).CMS flagged the seven percent after model adjustments as an issue when the state submitted its waiver amendment in fall 2017. The request for the federal match of seven percent was removed by the state.

The cut affects the DRWS, which sets the funding rates people receive for supportive services. A few years ago, the Minnesota Legislature added needed increases to support service enhancements and support direct care staff recruitment and retention.

The cut has a complex history. The seven percent refers to a one percent increase passed in 2013, a five percent increase passed in 2014 and a one percent quality add on rate increase passed in 2015, totaling seven percent. The rate increase is considered an “after model adjustment” meaning it is added to an individual’s disability service rate after their framework rate has been established.

The rate increases were passed with changes to the DWRS, the tool used when setting rates for individuals. There are two components within that tool that are important to know about. One is banding, established and put in place for individuals already receiving a waiver rate as of December 2013. The state did this to ensure that individuals who will see a drastic change in their rate once they convert to the DWRS can do so gradually, allowing for services to be adjusted.

Individuals not already receiving a waiver rate when the DWRS was implemented in 2014 were put directly onto their DWRS rate. These individuals are referred to as “unbanded” and they will take the first cut.

When the DWRS system was established a mechanism was included that would automatically adjust rates every five years to equal the rate of inflation. This first adjustment occurred beginning July 1, 2017 with an average overall system increase of about 8.5 percent. The only individuals to see the full immediate impact of the adjustment were “unbanded” individuals.

The immediate impact of the cut will be to those individuals that have “unbanded” rates (about 27 percent of the people receiving home and community-based services). Others whose rates will be un-banded beginning July 1 are also affected, since they are the individuals who also saw the full impact of the inflationary increase.

Once banding ends, the seven percent after model adjustment will be removed for all individuals. That state’s coverage for the federal match ends June 30. It is expected that all unbanded individuals will receive a new service authorization with a new rate effective July 1. Currently, banding is set to expire on December 31, 2019. On that date everyone else will see the cut’s impact. “Stopping this cut is not providing new money to disability services; it is simply maintaining the funding the state committed to my daughter and others who access disability services,” said Marder.

She and many others said the cut is turning back the progress made toward properly funding services, to raise the low wages of direct care staff and retain talented workers. Best Life Alliance is emphasizing the point that the cut is especially devastating as the rest of the state’s economy moves forward.

Information from Best Life Alliance, ARRM and MOHR was used to prepare this article.