Unallotment completed, disability community hit again

Governor Tim Pawlenty speaks about Minnesotans.
Governor Tim Pawlenty speaks about Minnesotans.

More cuts are coming that will adversely affect Minnesotans with disabilities. After a bruising and divisive regular session of the 2009 Minnesota Legislature, recent ‘unallotment’ decisions made by Gov. Tim Pawlenty to balance the state budget will take millions more from disability services.

“Families and businesses are battling their way through this prolonged economic downturn by re-examining their budgets, cutting expenses, and tightening their belts. State government must do the same,” Pawlenty said at a June 16 press conference.

While the legislature passed a balanced budget in the waning hours of the 2009 session, Pawlenty vetoed a tax proposal to balance the state books. As a result, the $2.7 billion gap remaining needs plugging. The governor decided that rather than calling a special session of the legislature, he would use his unallotment powers to do so.

Unallotment is a process that authorizes the governor to trim state appropriations without the approval of the legislature. Just how expansive that authority is has been the subject of a few recent public hearings of the Legislative Advisory Commission (LAC), a panel comprised of senior members from both the House and Senate. Lawmakers have repeatedly questioned the reach of the governor in cutting certain programs, such as General Assistance Medical Care (GAMC). Tom Hanson, commissioner of the Department of Management and Budget, who serves as secretary of the LAC, has repeatedly said the administration is well within the bounds of the current statute to make the decisions that will cut another $2.7 billion from the state budget.

Democratic lawmakers vehemently disagree, saying the governor has overstepped the boundaries of his statutory authority. After a few testy exchanges June 30 between Hanson and Speaker of the House Margaret Kelliher-Anderson, the speaker said she would be introducing legislation in 2010 to clarify that the unallotment statute was never intended for such expansive cuts, and to “bring it in line with that of most other states.”

Most cuts affecting the disability community will hit the human services part of the budget, not unlike what happened during the 2009 session. Forced to make difficult decisions while trimming the most rapidly expanding portion of the state budget, lawmakers passed a mix of service and provider payment cuts, in some cases eliminating programs altogether. (Please see June 10 issue of Access Press for details.) The governor used the same strategy in unallotting additional funds, in some cases compounding the cuts to the exact same programs and providers.

PCA program hit, again

Many changes were made to the personal care attendant ( PCA) program that will limit the number of individuals served by the program as well as the hours direct care workers may work in a given month. Lawmakers capped the latter at 310, and with the unallotment changes, the hours were further reduced to 275.

The state expects to save an additional $2.1 million as a result of the change, which will be the “direct result of individuals not getting access to their authorized PCA hours,” said Anne Henry, staff attorney at the Disability Law Center, at a June 29 DHS Managed Care Advisory Committee meeting where changes to the PCA program were discussed.

Those with complex conditions requiring high daily PCA care (up to 14.5 hours) are expected  to bear most of the cost savings, because multiple PCAs will be needed to serve a single individual, and hard to staff  2-4 hour night and weekend  shifts likely will need to be filled to meet their remaining needs.

Provider cuts revisited

Legislators slashed payments for most Medical Assistance (MA) and GAMC funded medical services by 3 percent, waivered services by 2.58 percent, and medical specialists by 5 percent. The governor will cut another 1.5 percent from medical services (which includes most rehabilitation therapies) and another 1.5 percent from specialists. Certain exceptions will be made, including rates for primary care and mental health services. Together these will save $9.1 million over the next two years.

Additionally, MA supplementary payments for critical access dental services were also eliminated for fiscal year 2011, which will save $6.2 million.

While cuts to provider reimbursement rates may not seem to have a direct impact on the lives of individuals with disabilities, it can have a profound effect on access to services. The dental service payments being trimmed were implemented a few years ago for the express purpose of increasing access to these often hard-to-find providers. MA, GAMC, and Minnesota Care payments have historically lagged well behind those of private insurers. The combination of cuts made by both the legislature and governor will cause some disability service providers to either limit the number of clients they are willing to see who rely on publicly funded health insurance, or they may choose to stop accepting them entirely.

MnDHO spared, for now

Over the last eight years, the Minnesota Disability Health Options (MnDHO) program has been the state’s only integrated managed care program for people with physical disabilities with the financial flexibility to coordinate both medical and long-term social services. It sustained a $4.7 million cut for the next biennium during the 2009 session.

The initial unallotment recommendations made by the governor proposed an additional $2 million cut, which threatened to close the program. Now serving 1,200 people in the metro area, about 55 percent of whom are eligible for both Medicare and Medicaid, the program has a high consumer satisfaction rate and very low rates of disenrollment.

Financing of the program has changed over the years, and a recent move toward risk adjustment for both medical and long-term care services (with a goal of better aligning costs of and payment for care) has been challenging. But all program partners (DHS, UCare and Axis Healthcare) remain committed to its success.

More cuts to come?

The largest part of the unallotted $2.7 billion budget hole was plugged with a $1.7 billion shift in education payments, which doesn’t address the state’s long-term need for solvency. State officials admit that the current cuts do nothing to balance the books beyond the current two-year funding cycle, and that much of the current crisis was resolved with billions in one-time federal stimulus funding. With the state and national unemployment rate continuing to rise, the demand for state service continues to increase. When the 2010 Legislature reconvenes on February 4, 2010, significant budget challenges will need to be addressed.

John Tschida is Vice President, Public Affairs and Research at Courage Center, Golden Valley, Minnesota
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