NYSARC hearing testimony predicts unfunded minimum wage will bankrupt developmental disability field
Saturday, February 6, 2016 - 4:46 pm

Leadership from NYSARC predicts devastating financial consequences on the field if a Medicaid funding solution is not included as part of Governor Andrew Cuomo’s $15 minimum wage proposal.

NYSARC is the largest not-for-profit organization in New York State supporting individuals with disabilities and their families.

St. Lawrence NYSARC, which serves about 750 clients, closed one workshop in Hermon last year, consolidated some services, and has cut its workforce from about 620 to about 580 through attrition over the last few years.

In testimony submitted to the Joint Legislative Hearing of the Senate Finance and Assembly Ways and Means Committees on the budget, NYSARC Executive Director Steven Kroll said: “The governor’s proposal contains a serious flaw that threatens the financial viability of an entire field of caregivers and the people and families those caregivers support. Without a Medicaid rate increase in the state budget, not-for-profit providers will need to absorb $270 million in increased labor in year one and $1.7 billion in added labor costs by 2021. Such an unfunded expense will be devastating for the field, consequently leading to employee layoffs, and diminishing the quality of care to tens of thousands of New Yorkers with Down syndrome, cerebral palsy, autism, and neurological impairments.”

In his testimony, Kroll recommended the appropriation of $270 million in the state budget to fully fund the first year increase in the minimum wage for employees working for not-for-profit developmental disabilities agencies. The workers include more than 100,000 direct support professionals, preschool aides/assistants, and other support professionals statewide who provide hands-on supports 24 hours a day, seven days a week. He also recommended appropriating $120 million to fund a 3 percent cost of living increase for these workers.

“The state needs to meet its statutory obligations to support people with developmental disabilities and proportionately fund the not-for-profit developmental disabilities sector with the same wage increases that have been already established for fast food workers and are proposed for all workers in the state budget,” Kroll said.

In addition to the unfunded minimum wage, Kroll’s testimony addressed growing concerns about the mounting number of adult children with developmental disabilities living at home that can no longer be cared for by aging family caregivers.

“Our families are in crisis, terrified about what will happen to their loved ones when they’re aged or gone. Yet we still don’t have a comprehensive plan from the state regarding how many people need services, where people can receive these services, and how we can pay for it. As far as we are concerned, the only number that should be on the waiting list is zero, and we need a comprehensive plan and timeline to get there,” Kroll said.

In his testimony, Kroll recommended the appropriation of $100 million state share ($200 million total) to provide additional placements for people living at home in need of out of home residential care. He also urged the adoption of budget language prioritizing individuals for residential placement on a basis that includes a transparent, clear, and uniform process statewide.

Kroll also highlighted the failure of the newly revised provider reimbursement methodology known as rate rationalization, a confusing, inflexible system that often includes retroactive rate changes that make it difficult, if not impossible, for providers to plan ahead and develop a budget. Rate rationalization sets the stage, he added, for future rate cuts that guarantee a steady financial erosion of the entire system of care.

In particular, he cited rate rationalization’s impact on the Supported Employment Program (SEMP). The program is critical to meet the State’s goals of achieving least restrictive employment for people with developmental disabilities. Yet it no longer funds transportation to get to work and the sudden change in hourly billing from monthly billing has reduced provider reimbursements by approximately 40 percent.

In his testimony, Kroll recommended fixing rate rationalization by 1) allowing for a rate of return; 2) not penalizing efficiency; 3) appropriating $57 million for a SEMP contingency fund; and 4) reimbursing providers for snow days and other unavoidable program closures and absences among those receiving services.