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Local disability programs face potential budget cut

Fergus Falls Daily Journal - 4/13/2018

April 13--Productive Alternatives and other care services are facing a difficult future if they cannot reverse what is taking place. According to Steve Skauge, president of Productive Alternatives and local board member for the Minnesota Organization for Habilitation and Rehabilitation (MOHR), Productive Alternatives and other similar services are facing a potential 7 percent budget cut.

"This issue will not just affect Productive Alternatives, but across the state this affects all programs that receive waiver dollars or Medicare/Medicaid dollars," Skauge said. "Our program is vocationally oriented, but it affects group homes, PCAs, etc. It's a broad group of people that is impacted."

Skauge explained disability programs were in the process of restructuring the rates at which their employees get paid and reimbursed from the state. He said programs who provide services to people with disabilities are contractors of the state and counties. In result, these programs receive payment 50 percent through Medicare and Medicaid and 50 percent from the state. This process has taken place for about four or five years and the outcome affects tens of thousands of people and includes millions of dollars.

For instance, 7 percent is a lot of money to Productive Alternatives and could affect the services and programs they are able to provide.

"Almost all of it is related to wages and benefits, because the bulk of it is what we use to pay the people who deliver the services we provide," Skauge said. "When we haven't had any increases for some time and are behind that curve and then we are looking at a 7 percent cut going forward when many of us have already delivered wage increases."

Lutheran Social Services is one of many other programs who would also be affected by this 7 percent cut. LSS supports people with intellectual and developmental disabilities. According to Heidi Reisdorf, area director of LSS, in the Fergus Falls area LSS has various residential homes where people are supported in their homes.

"We have great work going on supporting people in their homes to be as independent as possible and to set goals whether it's work related, about their lifelong dreams and what they are looking forward to in their lives," Reisdorf said.

LSS strives to help their patients be independent in the communities they live in while making connections and being a part of what is happening there. With the potential 7 percent cut, Reisdorf said the services LSS is able to provide that are important to the community would be affected. LSS is already stressed with low wages for staff and a competitive job/employment market and so is Productive Alternatives.

How did this happen?

Skauge said much of the negotiating and process for waiver dollars happens between providers like Productive Alternatives and the State Department of Human Services, the Legislature and the Center for Medicare and Medicaid Services (CMS) on the federal level.

"In this process of negotiation over the years, we have worked on all the elements of the rate change and last year we worked on some very specific elements, because we are getting down to the brass tacks," Skauge said. "The last pieces of this process was negotiating what we assumed was an equitable dollar and process amount going forward."

Providers like Productive Alternatives need legislative approval once changes have been negotiated, because the Legislature holds the purse strings. At first, the Legislature and the governor did approve the dollar and process numbers presented. In result, Skauge said Productive Alternatives and other providers delivered wage increases on the assumption they would be getting the money from the government they were approved for.

However, one more approval had to come through and that is where the budget cut came in. The CMS also has to approve any plans in dollar numbers for these programs going forward. Skauge said providers are dependent on the Department of Human Services to pass on details of the waiver dollars negotiation onto CMS.

"In that process of communication between the Department of Human Services and CMS, there were issues that resulted in CMS on the federal level disallowing 7 percent of the dollars that had been legislatively approved last year," Skauge said.

If the 7 percent budget cut is not reversed by the end of the fiscal year on July 1, Productive Alternatives and other providers face a challenge. Skauge said he doesn't know how Productive Alternatives will pay for the wages they just raised.

"It's an uphill battle and I am hopeful we can win this," Skauge said. "I am trying not to think about the alternatives. ... Like cutting services. What can you do? You either raise money some other way or discontinue or cut back on some services. And there is not a lot of other options for programs like us to find funding. We are a vendor for the state of Minnesota."

Reversing the cut

July 1 is coming fast and Skauge said providers are trying to fix this mistake as soon as possible. He said they have to go back to the Legislature and get them to authorize putting the 7 percent cut back. Skauge said they are also working with the State Department of Human Services to go back to CMS to do a better job of explaining and hopefully rectify the situation.

Rep. Bud Nornes is aware of the 7 percent budget cut and he said the House is working on addressing the matter.

"We are aware of this issue and the House is working to modify the disability waiver rate system in our state," said Nornes, (R-Fergus Falls). "One bill that has been moving through the House would replace the 7-percent cut forced by the Department of Human Services by increasing the base rate used in Disability Waiver Rate System calculations. The bill also would help by providing more frequent rate adjustments to ensure that we see a smoother rise in rates rather than larger, more infrequent increases to make up for inflation. It is crucial for this issue to be resolved by July 1 and we in the House will continue working on legislation that provides solutions."

For those who want to help prevent the 7 percent budget cut going through, Skauge said to contact your legislators and representatives.

"People like me are contacting them all the time, but the real impact is when others contact them and get them on board," Skauge said.

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(c)2018 the Fergus Falls Daily Journal (Fergus Falls, Minn.)

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