RD308 - Report on Virginia’s Part C Early Intervention System -- July 1, 2012 - June 30, 2013

Executive Summary:
In the 2013 Appropriation Act, paragraph H.2. of Item 315 directs the Department of Behavioral Health and Developmental Services (DBHDS) 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 FY2013 and Beyond

As anticipated last year, Virginia’s Part C Early Intervention System faced significant budget shortfalls in FY2013. While the Medicaid revenue realized through the Medicaid Early Intervention Services Program continued to provide funding for services to children with Medicaid, the amount of funding (federal, state, local, private insurance, family fees) available for services to children without Medicaid and the reimbursement rate for service coordination (case management) for children with Medicaid are inadequate to cover the costs for these services. In FY2012, the Department was able to offset some of the local systems’ budget shortfalls with one-time additional funds realized from vacant positions, ARRA funds, and efficiencies within the Department including savings from DBHDS’ facilities operations. However, those funds were not available in FY2013 to assist the 26 (out of 40) local systems that requested additional funds. Eight of those local systems reduced or completely cut services to eligible children and families, in violation of federal Part C regulations. DBHDS was required to cite certain localities for non-compliance.

The additional state funds allocated by the Governor and the General Assembly for the end of FY2013 and for FY2014 are making a significant difference. Local systems have resumed child find efforts and those local systems that had cut services in FY2013 report that they are now serving all eligible children (with the exception of one local system whose continued noncompliance is now related to an infrastructure issue). Looking ahead, the system is still growing but also remains stressed. Unless funding stays apace with growth, Virginia runs the risk of falling back into noncompliance, which puts federal funding at risk and results in children and families not getting the supports and services they need in a timely and effective manner. The Department, in collaboration with other state agencies and local stakeholders, is continuing to identify and evaluate possible sources of additional revenue, to closely monitor the local fiscal situation and to ensure local system personnel have the skills to provide effective oversight of local budgets and spending. DBHDS is providing guidance and management support to the local lead agencies to address these issues.

Data System Update

The existing early intervention data system, the Infant and Toddler Online Tracking System (ITOTS), was developed and implemented in 2001 primarily to meet annual federal reporting requirements related to child data. The system provides data on who is getting services and includes the number of children by local system, race/ethnicity, gender, age, and the reason for eligibility. Reports can be pulled for point-in-time data on who is being served, annual review, and limited trend data. ITOTS 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.

• Local systems incur additional costs as ITOTS cannot accept data from local information systems. Additional time is spent preparing manual or Excel reports.

• ITOTS data reports are limited in scope and, therefore, the analysis of the available data does not allow analysis of outcomes.

ITOTS allows for the collection of data on the services planned on each child’s initial IFSP but does not provide for the collection of data on how those services change over time, on delivered services, or on payment for services. Because of the significant limitations of this system, there is no mechanism available for local systems or for DBHDS to get the kind of real-time, ongoing data that would be necessary to effectively and efficiently monitor service delivery for individual children, to study trends and patterns, or to monitor funding sources and service costs by child or by local system.

Between 2006 and 2010, a number of initiatives were implemented to analyze and improve ITOTS. Although data system improvements have been implemented to address data integrity and better reporting, fiscal constraints and competing data priorities within the Department led to delays in developing or purchasing a data system with the complete functionality necessary to enter and report on delivered services and to have more complete and accurate revenue and expense data.

Since 2011, the Health and Human Resources Secretariat has been committed to developing a consistent, comprehensive and non-duplicative data system for use across Virginia’s Health and Human Resources agencies rather than developing or enhancing program-specific data systems. Since many local agencies and service providers have or are in the process of developing and implementing electronic health record systems, the Department’s focus on data collection for all programs (not just the Part C early intervention system) has shifted to identifying and implementing the most effective and efficient mechanism for importing the data already collected by local systems into a state database through which that data can be aggregated, analyzed and reported. Until such a system is implemented, ITOTS will continue to be used and the Department’s challenges in meeting federal and state reporting requirements will continue.

Revenue and Expense Data

The table on page 3 the report - "Total Revenue to Support Part C Early Intervention Services" - shows revenue from all sources as reported by the 40 local early intervention systems for FY2013.

In accordance with Item 315.H.2., the chart on page 3 of the report - " Total Expenditures for all Part C Early Intervention Services" - provides detail about the total amount of federal and state Part C funds and ARRA funds expended in FY2013 for Part C early intervention services as reported by the 40 local lead agencies and the private providers with whom those local lead agencies contract.

The discrepancy between revenue and expenses is primarily related to efforts by local systems to stretch available funding in the face of budget shortfalls. Many local systems held bills as long as possible with the hope of receiving additional funds or paying bills from late FY2013 in FY2014. Some local systems worked with private providers to temporarily reduce the rates they charged for services for children in Part C. In addition, it took time for local systems that had established waiting lists or reduced services due to budget shortfalls to bring those children into the system and resume full service levels. Therefore, the expenses associated with serving these children may not have been reported in FY2013.

Total Number of Infants, Toddlers and Families Served

A total of 15,523 infants, toddlers and families received Part C early intervention services in the one-year period from July 1, 2012 – June 30, 2013. As anticipated, Virginia’s Part C early intervention system experienced significant shortfalls in FY2013 that resulted in several local systems establishing waiting lists for services and a reduced number of children served in FY2013 than would have been served if there were sufficient funding.

The table on page 4 of the report - " Services Provided to Those Infants, Toddlers and Families" - breaks down the services that were provided to Part C eligible infants and toddlers by the type of early intervention service determined to be needed in order to achieve the child’s outcomes as listed on the child’s Individualized Family Service Plan (IFSP).

In addition to the services listed on IFSPs, a total of 9,305 children received an evaluation to determine eligibility and/or an assessment for service planning in FY2013.