RD368 - Report on Virginia’s Part C Early Intervention System July 1, 2014 – June 30, 2015


Executive Summary:
In the 2015 Appropriation Act, paragraph H.2. of Item 308 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 by November 15 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 FY 2015 and Beyond

The state funds allocated by the Governor and the General Assembly continue to help Virginia’s Part C early intervention system identify and serve increasing numbers of eligible infants, toddlers and their families. Looking ahead, the system is still growing and remains stressed. While revenue realized through the Medicaid Early Intervention Services Program continues to provide funding for services to children with Medicaid, the amount of funding (i.e., federal, state, local, private insurance, and family fees) available for services to children without Medicaid and the reimbursement rate for service coordination (e.g., case management) for children with Medicaid are inadequate to cover the costs for these services Approximately 59% of children enrolled in early intervention in FY 2015 were covered by Medicaid. Private insurance companies pay lower rates for early intervention services than Medicaid does and do not reimburse at all for service coordination, which must be provided for all children, or developmental services. Federal and state Part C funds must be used to make up the difference between the insurance rate and the Medicaid rate and to pay for services that are not covered. In addition to these general challenges, local systems report difficulty in being accepted as in-network providers with a number of insurance companies, and report declining reimbursement rates. Also, local systems report difficulty obtaining reimbursement for speech-language pathology services for infants and toddlers since this is generally a habilitative service (helping the child keep, learn or improve skills) for this population rather than a rehabilitative service (helping the child regain lost skills).

Unless funding keeps pace with growth, Virginia runs the risk of falling into noncompliance, which puts federal funding at risk and may result in children and families not getting the supports and services they need in a timely and effective manner. DBHDS, in collaboration with other state agencies and local stakeholders, is continuing to identify and evaluate possible sources of additional revenue, to develop strategies to address private insurance challenges, 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 ongoing guidance and management support to the local lead agencies to address locality-specific fiscal issues.

Total Number of Infants, Toddlers and Families Served

A total of 17,022 infants, toddlers and families received Part C early intervention services in the one-year period from July 1, 2014 – June 30, 2015. The 17,022 children and families served in FY 2015 represent a 4.6% increase from FY 2014. This maintains a similar level of growth as the previous year (4.8%).

The "Services Provided to Infants, Toddlers and Families" table on numbered page 4 shows 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 10,522 children received an evaluation to determine eligibility and/or an assessment for service planning in FY 2015.

Revenue and Expense Data

The "Total Revenue to Support Part C Early Intervention Services" table on numbered page 4 shows revenue from all sources as reported by the 40 local early intervention systems for FY 2015.

In accordance with Item 308.H.2, the "Total Expenditures for all Part C Early Intervention Services" chart on numbered page 5 provides detail about the total amount of federal and state Part C funds expended in FY 2015 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.

In FY 2015, reported expenses exceeded reported revenue in the Part C early intervention system. This discrepancy is primarily related to an increase in the number of children served, the insufficient reimbursement rate for Early Intervention Targeted Case Management and decreases in private insurance/TRICARE reimbursement and in other state funds used to support Part C early intervention.

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 presents a number of challenges to DBHDS 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 necessary to effectively and efficiently monitor service delivery for individual children, to study trends and patterns, to determine the impact of demographic and service delivery factors on outcomes for children and families, 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 incremental data system improvements have been implemented to address data integrity and better reporting, fiscal constraints and competing data priorities within DBHDS 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 many local agencies and service providers have or are in the process of developing and implementing electronic health record systems, DBHDS’s focus on data collection for all programs 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. DBHDS designated $250,000 for FY 2015 to develop such an interface for Part C early intervention data. That new functionality is in the testing phase now, with its release for external use expected in 2016. The interface itself will not expand the type of data collected in ITOTS but will provide a foundation upon which service delivery and financial data can be added and collected directly from local systems in the future. Until a significantly more robust system that includes delivered service and financial data is fully developed and implemented, DBHDS’s challenges in meeting federal and state reporting requirements will continue.