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 State Lead Agency (SLA). 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 (LLAs) 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 state fiscal year (SFY) 2013, beginning July 1, 2012. 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 SFY 2013 and another $6 million for SFY 2014.

In recognition of continued growth, annual increases have been allocated since SFY 2015, and the General Assembly allocated a total of just over $23.6 million for SFY 2022. An additional increase of $2.9 million was approved for SFY 2023 and maintained for SFY 2024.

In SFY 2023 reported expenses for the Part C early intervention system exceeded reported revenue. Looking ahead, significant revenue growth will be essential as indicated by the following trend

• Child count numbers have not only fully rebounded from the COVID-19 pandemic but also are increasing sharply beyond pre-COVID numbers. The one-day child count grew by over 10.4% between June 1, 2022, and June 1, 2023.

• The State budget for SFY 2024 includes a 12.5% Medicaid rate increase beginning January 1, 2024 for early intervention services other than service coordination. Although very helpful, this rate increase still does not cover the full cost of providing services nor does it completely close the gap in overall funding for early intervention. In addition to impacting the need for additional funds, the discrepancy in cost versus reimbursement is contributing to provider shortages.

• Local systems spent over $2.6 million of one-time funds from the American Rescue Plan Act (ARPA) for direct services in FY 2023 to address the continued increases in child count and service delivery costs. These funds end on September 30, 2023.

• Impacts of personnel shortages, which were lessened during the height of the pandemic, have become evident again and are impacting infants, toddlers, and their families. In SFY 2023, fourteen (14) LLAs were found to be out of compliance with federally mandated timelines because they lack the providers necessary to serve the number of children being referred and found eligible for early intervention services.

To the maximum extent possible, the following narrative, charts and other graphics respond to the legislative requirements as delineated in Item 313 H.2. The following data is based on revenue and expenditure reports received from the forty LLAs and includes data from private providers with whom the LLAs contract.