Bad Budgeting by Kitzhaber Team Led to Surprising Spike in Disability Services

The K Plan that greatly improved developmental disabilities services meant the state could no longer shut out developmentally or intellectually disabled children or forgo paying for all of a person’s needs. But the state never budgeted for more kids, leaving the state with a rude awakening when four times as many families signed up.

Former Gov. John Kitzhaber’s team at the Department of Human Services approved an expansion of services that quadrupled the number of disabled children, leaving state budget writers unaware after developmental disability services leaped by 18 percent.

The federal government required the state to assist all eligible children under its home- and community-based model, the K Plan. But before the service expansion, the state strictly capped the number of children with intellectual or developmental disabilities at 800.  

In 2013, the Department of Human Services abided by the 800 number, despite a waiting list that backlogged services and discouraged many other families from even trying, according to Lilia Teninty, the current director of the Developmental Disability Services. There are now 3,300 child clients with intellectual or developmental disabilities, who receive in-home services to help parents or guardians with daily living.

“I don’t think there was much planning done in this area,” Teninty conceded. “There wasn’t any understanding of how many kids there would be.”

Teninty met with The Lund Report along with Director Clyde Saiki and Aging and Disabilities Director Ashley Carson-Cottingham. All three officials have been promoted to their leadership positions since Gov. Kate Brown took office after Kitzhaber’s resignation.

Kitzhaber boasted that the Affordable Care Act’s Community First Choice State Plan Option, better known as the K plan, was a “win-win-win” for Oregon when it was approved in the summer of 2013. But, while it has opened the state to helping more people and offering them more care, it has sharply increased state spending both on children and adults, especially in the arena of developmental disability services, even as Kitzhaber announced it would save money.

One big reason the state has not saved money is because the program was designed to be an incentive for more humane long-term care rather than relying heavily on institutional care for people with intellectual or developmental disabilities. But Oregon has long since closed Fairview Training Center and has been a national leader in providing home- and community-based care -- it did not have far to go to be more progressive.

“Whenever something new comes in line, Oregon steps up to be the first,” Teninty noted.

The federal government does assist the state with 6 percent more cash per client than it does under the old system, but even with that, Oregon spends more than 20 percent more money to handle a much larger caseload and more money per case.

Spending per biennium rose $470,000 from 2013-2015 to a budgeted $590,000 in 2015-2017. At the same time, the federal government has upped its investment in Oregon’s people with disabilities program from $1.2 million in 2011-2013 and nearly $2 million in the current budget cycle. The programs serve about 24,000 people. .

On the adult side, a cost-per-caseload cap of $21,000 was lifted, allowing all disability clients to get all of their needs covered without running up against a ceiling that rations their care.

Spending at the Aging and People with Disabilities Division also leapt up 17 percent between the last two budget cycles, but those cost increases stem more from labor law changes and unexpectedly high demand from younger baby boomers who signed up in the wake of the recession.

Teninty said DHS’ new forecasting model has caught up to speed and is accurately projecting new caseloads, but the K Plan has other quirks that create costs where previously the state paid  nothing.

The plan was designed to help friends and family members of disabled adults get paid for the care they give in lieu of hiring out the care to a personal support worker, but now that people have learned they can receive money for this, many have signed up for compensation for simple tasks such as driving a disabled person to the store -- errands they would have freely done before compensation was in play.

Paying for every natural support also inhibits the assimilation for challenged adults into the community, since every relationship becomes transactional. “We want people to be integrated into the community. We want to build natural supports,” she said.

The Developmental Disability Services Division has fewer tools than its sister division, Aging & People with Disabilities, to rein in costs. The agency aims to promote more voluntary natural supports, but the programs should also begin to stabilize on their own. They serve two totally different groups -- people in need of state assistance because their health has declined, and people who were born with a disability that the state would have to help with anyway.

Going back to the old system for Developmental Disabilities Services is likely not an option -- Teninty said they’d lose $155 million in federal support. However, her projection relied upon keeping services at their new levels, as state functionaries have not considered returning to a per-client cap of $21,000 or limiting the program to 800 randomly served children while shutting out the rest of the state’s disabled children.

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