1. + January 14, 2014 Part C Fiscal Overview

2. + Overview Objectives Introductory opportunity Increase understanding of Part C as a coordinated system of services and financing Background on basis in Law and Regulation Gain national context for financing challenges and state variations View the array of funds states use and how funds are used Expanding knowledge Broad scan of financing dynamics with structural contexts Specific information highlighting breadth and complexity with potential areas for further state analysis and exploration Opportunity for state teams to learn and plan together for strategic structural Part C system financing enhancements January 2014 Part C Fiscal Overview

3. + Overview Outline Philosophy and Intent of Part C Statutory and Regulatory Language related to Finance National and State Context, Trends, and Considerations Current Part C Financing – Results from the 2012 ITCA Finance Survey Opportunities for Strategic and Structural Part C System Financing Improvements January 2014 Part C Fiscal Overview

4. + Philosophy of Part C January 2014 Part C Fiscal Overview

5. + Philosophy and Intent of Law Part C would not be restricted to education/ special education services Recognizes that all very young children develop and learn in family and community activities. Established the requirement for family centered services using the typical routines, activities and settings in which families and young children live, learn, work and play January 2014 Part C Fiscal Overview

6. + Philosophy and Intent of Law First federal legislation to mandate interagency coordination Part C designed as “glue money” to bring things together for families and eligible children No erosion of existing mandates establish other funds as “payor of first resort,” (non- supplantation) January 2014 Part C Fiscal Overview

7. + Philosophy and Intent of Law: Programmatic and financial management implications Part C requires a coordinated system of intervention for families Services and funding involve multiple federal, state and local entities and crosses traditional agency, department, and professional boundaries Financing Part C is complex, varies state by state, and must take into account state and local demographics, structures and processes, resources and supports, and the current political and economic context and trends January 2014 Part C Fiscal Overview

8. + Statutory Language Related to Finance January 2014 Part C Fiscal Overview

9. + Statutory Language Related to Finance Sec. 631 Findings and Policy Sec. 635 Requirements for a Statewide System Sec. 637 State Application and Assurance Sec. 638 Use of Funds Sec. 640 Payor of Last Resort January 2014 Part C Fiscal Overview

10. + Statutory Language Related to Finance Sec. 640: Payor of Last Resort (a) NONSUBSTITUTION- Funds provided under section 643 may not be used to satisfy a financial commitment for services that would have been paid for from another public or private source, including any medical program administered by the Secretary of Defense, but for the enactment of this part, except that whenever considered necessary to prevent a delay in the receipt of appropriate early intervention services by an infant, toddler, or family in a timely fashion, funds provided under section 643 may be used to pay the provider of services pending reimbursement from the agency that has ultimate responsibility for the payment. January 2014 Part C Fiscal Overview

11. + Statutory Language Related to Finance Sec. 640: Payor of Last Resort (c) REDUCTION OF OTHER BENEFITS- Nothing in this part shall be construed to permit the State to reduce medical or other assistance available or to alter eligibility under title V of the Social Security Act (relating to maternal and child health) or title XIX of the Social Security Act (relating to Medicaid for infants or toddlers with disabilities) within the State. January 2014 Part C Fiscal Overview

12. + Part C Finance Regulations January 2014 Part C Fiscal Overview

13. + Part C Finance Regulations Subparts A and B §303.1 Purpose of the early intervention program for infants and toddlers with disabilities. §303.120 Lead agency role in supervision, monitoring, funding, interagency coordination, and other responsibilities. January 2014 Part C Fiscal Overview

14. + Part C Finance Regulations Subpart C §303.203 Statewide system and description of services. §303.207 Availability of resources. §303.225 Prohibition against supplanting; indirect costs. January 2014 Part C Fiscal Overview

15. + Part C Finance Regulations Subpart C §303.225 Prohibition against supplanting; indirect costs. (a) Each application must provide satisfactory assurance that the Federal funds made available under section 643 of the Act to the State: (1) Will not be commingled with State funds; and (2) Will be used so as to supplement the level of State and local funds expended for infants and toddlers with disabilities and their families and in no case to supplant those State and local funds. January 2014 Part C Fiscal Overview

16. + Part C Finance Regulations Subpart C §303.225 Prohibition against supplanting; indirect costs. (b) To meet the requirement in paragraph (a) of this section, the total amount of State and local funds budgeted for expenditures in the current fiscal year for early intervention services for children eligible under this part and their families must be at least equal to the total amount of State and local funds actually expended for early intervention services for these children and their families in the most recent preceding fiscal year for which the information is available. Allowance may be made for— (1) A decrease in the number of infants and toddlers who are eligible to receive early intervention services under this part; and (2) Unusually large amounts of funds expended for such long-term purposes as the acquisition of equipment and the construction of facilities. January 2014 Part C Fiscal Overview

17. + Part C Finance Regulations Subparts D and E § 303.344 Content of an IFSP. (d) Early intervention services. (1) The IFSP must include a statement of the specific early intervention services … including - (iv) The payment arrangements, if any. §303.420 Parental consent and ability to decline services. (a) The lead agency must ensure parental consent is obtained before— (4) Public benefits or insurance or private insurance is used if such consent is required under §303.520; (5) Disclosure of personally identifiable information consistent with §303.414 January 2014 Part C Fiscal Overview

18. + Part C Finance Regulations Subpart F §303.500 Use of funds, payor of last resort, and system of payments. §303.510 Payor of last resort. §303.520 Policies related to use of public benefits or insurance or private insurance to pay for Part C services. §303.521 System of payments and fees. January 2014 Part C Fiscal Overview

19. + National and State Context, Trends, and Considerations January 2014 Part C Fiscal Overview

20. + National and State Context: Challenges (reported from ITCA 2012 State Challenges and Responses) Increased costs of the Part C system Program growth rate (screening and referral initiatives) Increased costs of children with complex needs State budget availability In the 2012 survey fourteen states indicated they faced a deficit in the current fiscal year – several others indicated it was too early to tell January 2014 Part C Fiscal Overview

21. + Context: Responses to Challenges (from ITCA 2012 State Challenges and Responses) Increase use of family resources increased family fees and required families to use their private insurance or be placed on a fee schedule Indirectly impacting service delivery reduced provider reimbursement -- some providers decline to continue because of fiscal constraints Positions left vacant Changes in service delivery required prior approval for hours of service that exceed an identified amount narrowed eligibility January 2014 Part C Fiscal Overview

22. + National Context: Part C System Funding 2004 and 2012 compared January 2014 Part C Fiscal Overview

23. + National and State Context State structural differences State Lead Agency Health, 26 states Education, 13 states Other (e.g. Rehab, Children’s) 17 states Common State Part C structures and payment implications Individual providers often includes fee for service Comprehensive (program) providers often includes cost reimbursement or up front payments Regional Local/District Administration mixed payment systems January 2014 Part C Fiscal Overview

25. + Context: State Structural Differences: Considerations in Resource Expansion Location of capacity and infrastructure to access, distribute, manage, and monitor the methods of finance Which organization, at what level, accesses resources? Where is eligibility for resources determined? How are the resource funds accessed? How is the funding distributed to providers? Who reports expenditures and uses? How are financial incentives and management controls impacting decisions at the provider levels? January 2014 Part C Fiscal Overview

26. + Context: State Population Differences: Considerations in Resource Expansion State Part C Eligibility Criteria: Broad criteria for developmental delay, 19 states Moderate criteria for developmental delay, 19 states Narrow criteria for developmental delay, 18 states Demographic Differences: Eligibility and access to public and private insurance Geographic location of child population Growth trends in child population Incidence and prevalence of factors associated with developmental disabilities and delays January 2014 Part C Fiscal Overview

27. + Context: State Structural Differences: Considerations of Capacity State systems require infrastructure to support the documentation and ongoing monitoring of the fiscal system  Mechanisms to establish and adjust rates or allocations  Mechanism for payment  Contracts  Vouchers  Central Finance  Data System  Evaluation Methodologies

28. + Context: State Differences Considerations of Capacity Maintaining dynamic finance systems require ongoing monitoring and adjustments based on the environment Changing demographics Changing funding levels and financing methodologies in interdependent systems Changing political and economic context Changing partnerships and new interagency agreements New funding sources Revised policies Better support and guidance More state funding January 2014 Part C Fiscal Overview

29. Structure for Developing and Sustaining a Part C Finance System Demographic information about the population of Part C eligible children in the state: What proportions of children are likely to be eligible for which sources of funds? Where are they in the state? Information about possible fiscal resources: Requirements? What can each pay for? Who is eligible? Design a finance and data system based on the demographics, political and economic context of the state Existing and potential political and economic context in the state: Traditional, current uses of funds? Existing resources? Competing priorities? Anticipated political changes? Necessary agreements, negotiations, applications for use of funds: MOUs? Waivers? Infrastructure to support the documentation of use of funds and/or billing Development of policies and procedures for accessing resources and supports and/or billing Development of guidance and provision of ongoing support for localities and service providers in implementing policies and procedures Ongoing monitoring: Changing demographics? Changing political and economic context? Need new interagency agreements? New funding sources? Revised policies? Better support and guidance? More state funding? Narrower Part C eligibility criteria? Establishing a Vision January 2014 Part C Fiscal Overview

30. + Context: Evolving opportunities Data systems – increased state and national data States have data and able to analyze current funding Able to project demographic, service needs, and financial requirements Changes in systems funding Part C Medicaid structure changes Managed Care and Accountable Care Increased focus on care coordination, cost containment, improve outcomes Opportunities for access to insurance Increasing numbers of children with insurance coverage Increased coverage for habilitation Increased coverage for services to children with Autism Shifts in use of other funds (e.g. TANF) Opportunities for coordination and funding integration. Increases in funding for early education and prevention services to infants and toddlers January 2014 Part C Fiscal Overview

31. + State Financing of Part C Systems Results 2012 ITCA Finance Survey January 2014 Part C Fiscal Overview

32. + ITCA Finance Survey Background: Annual Performance Report (2004, 2005) Surveys 2010 and 2012 Survey Monkey format Survey Distributed to all 56 states and jurisdictions January 2014 Part C Fiscal Overview

33. + ITCA Finance Survey Data source and Limitations Forty ‐ nine states participated in the 2012 survey Data not validated Missing Data – Influenced by system structure Inability to access data outside of lead agency; Don’t ask provider organizations for fiscal data January 2014 Part C Fiscal Overview

34. + ITCA Finance Survey State Identification of Funds January 2014 Part C Fiscal Overview

35. + ITCA Finance Survey Key Findings: System Funding 62% of survey respondents unable to provide total revenue for each fund source Influence of state structure Cost of resources to collect, report, and track Over $3.5 billion in identified revenue 2004: $1.5B 2005: $2.3B 2010: $3.0B Total Federal Share was 38% as compared to 53% in 2004 January 2014 Part C Fiscal Overview

36. + ITCA Finance Survey Key Findings: System Funding Based on data provided: 27% of revenue provide by State line item 24% of revenue provided by Medicaid 19% of revenue provided by State general funds 12% of revenue provided by Federal Part C 7% of revenue provided by local government funding January 2014 Part C Fiscal Overview

37. + ITCA Finance Survey Key Findings: Sources of Revenue Identified by States Total: ~ $3.5 bn January 2014 Part C Fiscal Overview

38. + ITCA Finance Survey Key Findings: System Funding States by Federal Part C grant % of Total Budget January 2014 Part C Fiscal Overview

39. + ITCA Finance Survey Part C System Funding Fund Sources Used by Multiple States FederalStateLocal Part CState Part CLocal Education Agency PART B 619State General FundsFoundations Part B 611Title V StateSpecial Fundraising MedicaidCSHCN StateLocal Government SCHIPState Special EdCash Donations Title VTobacco FundsUnited Way Champus / TricareDeaf Blind SchoolsHMO/Managed Care WICState DD FundsPrivate Insurance Early Head StartState Mental HealthFamily Fees TANF January 2014 Part C Fiscal Overview

40. + ITCA Finance Survey - System Funding % of States using Funds Compared to % of National System Funded by Source January 2014 Part C Fiscal Overview

41. + ITCA Finance Survey - System Funding % of National System Funding Compared to Highest % of a State’s System January 2014 Part C Fiscal Overview

42. + ITCA Finance Survey Part C Infrastructure Funding Number of Funds Used by States FederalStateLocalTotal State Personnel 76215 Regional 46212 Local Personnel 871025 SICC 4329 Child Find Public Awareness 115925 Eligibility Determination 1071128 Comprehensive System of Personnel Development 64212 Monitoring 75315 Dispute Resolution 63211 Data System 54312 IFSP Development 871126 January 2014 Part C Fiscal Overview

43. + ITCA Finance Survey Part C Direct Services Funding Number of Funds Used by States FederalStateLocalTotal Assistive Technology910 29 Audiology11810 29 Family Training & Counseling9710 26 Health9610 25 Medical107 27 Nursing8810 26 Nutrition979 25 Occupational Therapy9710 26 Physical Therapy9710 26 Psychological Services9710 26 Service Coordination8610 24 Special Instruction7710 24 Speech Language Pathology9810 27 Sign and Cued Language9710 26 Social Work7710 24 Transportation8610 24 Vision108 28 Respite6710 23 January 2014 Part C Fiscal Overview

44. + ITCA Finance Survey - System Funding Number of States Using Funds by Lead Agency January 2014 Part C Fiscal Overview

45. + ITCA Finance Survey - System Funding States with Family Cost Participation January 2014 Part C Fiscal Overview

46. + ITCA Finance Survey - System Funding States by Insurance % (Public and Private) of Total Budget January 2014 Part C Fiscal Overview

47. + Opportunities for Financing Part C Early Intervention Systems January 2014 Part C Fiscal Overview

48. + Opportunities for Financing Part C Early Intervention Systems States’ access to data is increasing knowledge of: populations served, services provided, and funding resources accessed and used National comparisons of funding and structural information facilitate state assessments of potential funding sources. Changes in public and private insurance coverage and systems may offer opportunities for new Part C system roles and relationships. Strategic funding initiatives include assessments of Federal and State laws and regulations, state structures, capacities, and trends. January 2014 Part C Fiscal Overview

49. + Opportunities for Financing Part C Early Intervention Systems Engage and develop interagency relationships and teams (ICC and others) Identify and analyze state information and resources Participate in future webinars in this series Share available resources on the web Access technical assistance January 2014 Part C Fiscal Overview

50. Thank you for your attention! This is the first of four webinars in a series on Part C Finance presented in 2014. Resources related to this call and other calls in the series are available at the following URL: http://ectacenter.org/~calls/2014/financepartc/financepartc.asp