RD263 - Virginia Department of Behavioral Health and Developmental Services Report on Virginia’s Part C Early Intervention System (Budget Item 305 H.2., 2010 Appropriation Act) July 1, 2009 – June 30, 2010


Executive Summary:
In the 2010 Appropriation Act, Item 305 H.2. directs the Department of Behavioral Health and Developmental Services to report the following information to the Chairmen of the Senate Finance and House Appropriations Committees on October 1 of each year: (a) total revenues used to support Part C services, (b) total expenses for all Part C services, (c) total number of infants and toddlers and families served using all Part C revenues, and (d) services provided to those infants and toddlers and families.

Overview of Fiscal Climate for Part C in FY2010

After experiencing budget reductions and significant fiscal constraints in FY2009, the fiscal climate in Part C was much more stable in FY2010 due primarily to increased Medicaid revenue and the availability of additional funding for Part C under the American Recovery and Reinvestment Act (ARRA). On October 1, 2009 the new Medicaid Early Intervention Services Program was implemented, and the reported amount of Medicaid revenue for Part C services more than doubled in FY2010 compared to FY2009. ARRA funds were also a significant factor in the improved fiscal climate in FY2010 and supported just over $3 million of early intervention services for infants, toddlers and families.

Looking ahead, the fiscal outlook for FY2011 remains positive with Medicaid revenue expected to further increase (since the new Early Intervention Services Program will be in effect for the full year and the expected slow start-up period for the new program has past) and ARRA funding continuing. While the increased Medicaid revenue will continue and will be a critical component in the long-term funding structure for Part C, the ARRA funding ends September 30, 2011. The Department, in collaboration with other state agencies and local stakeholders, is closely monitoring expenditure and revenue data to determine the amount and possible sources of additional revenue needed to ensure the long-term financial stability of the Part C system after the ARRA funding ends.

Data System Update

The existing early intervention data system, ITOTS, was developed and implemented in 2001 to primarily meet annual federal reporting requirements related to child data. This data system now presents a number of challenges to the Department in meeting federal and state reporting requirements, including the following:

• Child data is collected in ITOTS only at entry into the early intervention system and is not collected as child status or service needs change.

• No financial data for Part C services is collected through ITOTS, resulting in a burdensome paper process for collection and reporting of comprehensive and reliable data related to the cost of providing services and the revenue sources that are accessed in providing services.

• ITOTS data reports are limited and the analysis of the data is burdensome.

Following a detailed analysis of ITOTS in the spring of 2006, a first phase of data system improvements were implemented to address data integrity and better reporting. As a second phase of the project, the Department further analyzed federal and state reporting requirements and other existing data systems within the Commonwealth and other states’ Part C data systems to determine the most cost-effective data solution to meet the needs of the Virginia Part C system. Initial plans called for the functionality necessary to enter and report on delivered services and to have more complete and accurate revenue and expense data to be operational by July 1, 2009. However, fiscal constraints and the need to prioritize data system changes necessary for implementation of the Medicaid Early Intervention Services Program resulted in the need to postpone implementation of a new, expanded Part C data system to FY2011. Extensive work on the design specifications was completed in FY2010, and plans for development of the new data system are under review and awaiting administrative approval at this time. This work is being supported with funding received for Part C through the American Recovery and Reinvestment Act (ARRA).

While awaiting the new, expanded Part C data system, the following reporting improvements were implemented in FY2010:

• The revenue and expenditure reporting form and process were revised to require reporting of the number of children receiving each service in each quarter of the fiscal year.

• A separate revenue and expense reporting form, developed in collaboration with private providers, was implemented to facilitate providers’ ability to report accurate financial data on a quarterly basis.

• A data exchange agreement between the Department of Behavioral Health and Developmental Services and the Department of Medical Assistance Services (DMAS) significantly increased the scope, specificity and accuracy of available data related to the amount of Medicaid funds used to support Part C services each year.