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The market analysis reviewed national and state policy directions affectingServices Consulting Mercer to conduct a market analysis of current social,

March 2004

    Developmental Disabilities Program Market Analysis

    State of Montana Department of Public Health and Human Services

    State of Montana Department of Public Health and Human Services DDP Market Analysis

Contents

    1. Executive Summary ................................................................................................... 1

    2. Introduction ............................................................................................................... 3 3. National Policy Directions ......................................................................................... 4

    ; Federal Policy Directions ..................................................................................... 4

    ; State Policy Directions ......................................................................................... 6

    ; Self-direction/Consumer Choice........................................................................... 9

    ; Deinstitutionalization ......................................................................................... 10

    ; Quality Management and Improvement .............................................................. 11 4. State Trends ............................................................................................................. 13 5. Local Trends ............................................................................................................ 21

     ; Overall Population ............................................................................................. 21

    ; Median Income .................................................................................................. 23

    ; Unemployment .................................................................................................. 25

    ; Housing ............................................................................................................. 27

    ; Safety and Security ............................................................................................ 28 6. Cost ......................................................................................................................... 30

    ; Direct Care Compensation ................................................................................. 30

    ; Pay ..................................................................................................................... 30

    ; Discretionary and Non-Discretionary Benefit Costs ........................................... 33

    ; Service Expenditure Patterns within the DD Population ..................................... 35

    7. Closing Comments................................................................................................... 54

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    State of Montana Department of Public Health and Human Services DDP Market Analysis

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    Executive Summary

    The State of Montana Department of Public Health and Human Services Developmental Disabilities Program (DDP) is redesigning its approach to allocate individual resources for persons with developmental disabilities. As part of this redesign effort, Mercer Government Human Services Consulting (Mercer) conducted a market analysis of current social, economic, and service delivery trends affecting Montana’s developmentally

    disabled (DD) persons.

    The market analysis reviewed national and state policy directions affecting people with developmental disabilities and examined cost, service utilization, access, and quality of care issues on a comparative basis nationally and with four peer states.

    The Centers for Medicare and Medicaid Services (CMS), formerly the Health Care Financing Administration (HCFA), have increased the focus on Medicaid due, in large part, to the increasing number of people with developmental disabilities and their concomitant costs within the long-term care network. Among the results of this heightened vigilance are expectations that states develop sound and rational protocols specific to rate setting and resource allocation for persons with developmental disabilities enrolled in Medicaid services. Additionally, CMS is actively promoting increased consumer choice and self-direction, quality of care and cost control and are increasingly demanding that support systems incorporate components of consumer choice such as individualized budgets and service portability.

    In broadest terms, changes in policy over the last few decades have promoted integration into the community and transferred management of programs for persons with development disabilities from public or state provided services to private networks often comprising both non-profit and for-profit organizations. Many of these changes were encouraged by CMS, which allowed states to obtain HCBS waivers to promote community-based forms of service delivery to people with developmental disabilities. As Mercer Human Resource Consulting 1

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    State of Montana Department of Public Health and Human Services DDP Market Analysis

    a result, many states, including Montana, have reduced their participation in the ICF/MR (Intermediate Care Facility for the Mentally Retarded) program. Other drivers of policy change include demands for increased consumer choice and self-direction and litigation.

    To provide Montana with a comparison of service access and utilization trends, Mercer analyzed the experiences of four other states with developmental disabilities programs of similar size; these were termed ―peer states.‖ New Mexico, North Dakota, South Dakota, and Wyoming were identified as the peer states, and data related to these states was analyzed for possible implications on service access and utilization. Among these states, Montana has the second highest estimated population of persons with developmental

    disabilities, consistent with the overall population for the state compared to the peer states, but has the lowest median income. Montanans have the second highest housing costs among its peers, presenting some challenges to securing affordable living situations. The crime rate is lower than the U.S. as a whole and third highest among peer states, presenting a favorable picture overall relative to securing safe living situations. At the

    same time, unemployment in Montana was generally low, offering employment

    possibilities, especially in and around metropolitan areas, for persons with developmental disabilities, but simultaneously suggesting that it may be harder to fill positions such as personal caregivers and habilitation workers.

    Montana has made strides in serving the DD population. Between 1998 and 2002, there was a 56 percent increase in the numbers of persons served in Montana’s HCBS program, and continuing enrollment growth is planned. Additionally, by 2002, the average spending level per participant has almost tripled 1994 spending. Yet, HCBS spending per state resident is the lowest among peer states. The average number of DD residents per facility in 2001 in Montana (3.1) is higher than its peer states, but is the same as the average occupancy per facility for the nation as a whole.

    Moving forward, capitalizing on progress, and addressing gaps will require implementing new tools ; individual needs assessment capabilities, individual budget allocations, and a new provider rate structure ; in a deliberate, thoughtful, and equitable manner that

    addresses the needs of people with developmental disabilities, their advocates, care providers, and taxpayers.

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    State of Montana Department of Public Health and Human Services DDP Market Analysis

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    Introduction

    DDP is redesigning the approach to determining individual budget allocations for persons with developmental disabilities. Two goals of this redesign effort are: (1) to develop a needs assessment process that will authorize individual levels of support in a fair and equitable fashion; and (2) to link that service authorization process to standardized provider reimbursement rates.

    As part of the redesign effort, the DDP contracted with Mercer Government Human Services Consulting (Mercer) to conduct a market analysis of current social, economic, and service delivery trends that may impact the future. This market analysis examines cost, service utilization, and access, and quality from the national and state perspective. The report’s next four sections deal with the following issues:

1. Key national policy trends which affect Montana service directions.

    2. National trends concerning caseload enrollment, service utilization, and expenditures.

    3. State service trends which examine geographical access and cost variances in service

    delivery.

    4. Benchmark data for calculating provider reimbursement factors, standardizing

    individual needs assessment profiles, predicting caseload growth patterns, and

    modeling shifts in service utilization.

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    State of Montana Department of Public Health and Human Services DDP Market Analysis

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    National Policy Directions

    There are several major policy directions that impact publicly funded developmental disabilities services nationwide.

Federal Policy Directions

    CMS is pursuing an increasingly activist policy agenda in the arena of Medicaid-funded services for people with disabilities. This agenda includes raising performance standards for state operation of Medicaid home and community-based services (HCBS) waiver programs.

    Through much of the 1990s, CMS (then HCFA) quietly encouraged states to expand access to Medicaid home and community-based services. States were given considerable free rein to expand their Medicaid HCBS waiver programs for people with disabilities to allow them greater access to HCBS. This resulted from efforts to be more supportive of local communities and reduce governmental management of programs for persons with developmental disabilities. In 1994, CMS formally ended its efforts to control the number of individuals that states served in their waiver programs. Federal oversight of HCBS waiver programs was confined at that point mainly to paperwork compliance rather than in-depth assessment of service quality and effectiveness.

    As a result, states were able to make the HCBS waiver program their main vehicle for financing community developmental disabilities services. Between 1993 and 2001, the number of HCBS waiver participants with developmental disabilities more than tripled from approximately 102,000 individuals nationwide to almost 328,000, and HCBS waiver spending for developmental disabilities services leapt from $2.2 billion to $10.9 billion. States refinanced existing services and leveraged state dollars through the waiver program to expand their service systems.

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