Congress enacted early intervention legislation in 1986 as an amendment to the Education of Handicapped Children’s Act (1975) to ensure that all children with disabilities from birth to the age of three would receive appropriate early intervention services. This amendment formed Part H of the Act, which was re-authorized in 1991 and renamed the Individuals with Disabilities Education Act (IDEA).When the IDEA was re-authorized in 1998, Part H became Part C of the Act.IDEA was reauthorized most recently in December 2004. Virginia has participated in the federal early intervention program, under IDEA, since its inception.

In 1992, the Virginia General Assembly passed legislation that codified an infrastructure for the early intervention system that supports shared responsibility for the development and implementation of the system among various agencies at the state and local levels. The Department of Behavioral Health and Developmental Services (DBHDS) was designated and continues to serve as the lead state agency for implementing this act. The broad parameters for the Part C system are established at the state level to ensure implementation of federal Part C regulations. Within the context of these broad parameters, 40 local lead agencies manage services across Virginia.

In 2012, the General Assembly appropriated the state funds necessary to increase the Medicaid reimbursement rate for early intervention targeted case management from $120 per month to $132 per month for FY 2013, beginning July 1, 2012. In order to address a looming $8.5 million deficit in funding for early intervention due to significant increases in the number of children served and static federal funding, the General Assembly provided critical support for Virginia’s early intervention system in 2013 by allocating an additional $2.3 million in state general fund dollars for early intervention in FY 2013 and another $6 million for FY 2014. In recognition of continued growth, annual increases were allocated in FY 2015 – FY 2018 and the General Assembly allocated a total of almost $18.6 million and just over $19.7 million for FY 2019 and FY 2020, respectively.

In FY2019, there were a growing number of indicators of significant stress on the early intervention system, including increasing reports of fiscal and provider shortages with resulting impacts on the timeliness and quality of critical early intervention services received by infants, toddlers and their families.

• The number of children served in the Part C early intervention system increased by 4% from FY 2018 to FY 2019. From FY 2012 to FY 2019, the number of children served in early intervention increased by 34%. While the General Assembly has increased state Part C funding to help support this growth, the total revenue available to support the system has increased by only 19%.

• Increasing costs over time have resulted in widespread reports from service providers that the early intervention rates set in 2009 no longer cover the cost of providing early intervention services. In addition to impacting the need for additional funds, this discrepancy in cost versus reimbursement is contributing to increasing provider shortages and, therefore, high caseloads and multiple instances of noncompliance with federal requirements.

• Fourteen local systems requested additional funds to pay for needed early intervention services in FY 2019. State Part C funds allocated by the General Assembly through a caboose bill were the only additional funds available and addressed about 40% of the requests for additional funding. As a result, one local system notified the DBHDS that they were holding high-level discussions about relinquishing their responsibility as the local lead agency. Ultimately, that local system decided to remain as the local lead agency for that area.

To the maximum extent possible, the following narrative, charts and other graphics respond to the legislative requirements as delineated in Item 312.H2. The following data is based on revenue and expenditure reports received from the forty local lead agencies and includes data from the private providers with whom the local lead agencies contract.