High Expense Endangers Program for Disabled

The federal government could force changes in a state healthcare program designed to save money by providing the developmentally disabled with less expensive home- and community-based services because the program has become as expensive as more traditional institutional care, LFC analysis shows.

The $78,800 annual per-client cost for care under the program known as the “DD waiver” is almost as much as the $84,300 it costs to provide care through nursing homes and other intermediate care facilities, the LFC Evaluation Unit concludes in a report presented to the committee in June.

The federal Centers for Medicare and Medicaid, which grants the waivers allowing states to use Medicaid funding for home- and community-based care, requires those programs to be cost neutral, meaning they can’t cost more than traditional Medicaid services.

New Mexico’s waiver is scheduled to be renewed in 2011.

The LFC evaluation reports New Mexico’s DD waiver program, budgeted at about $260 million a year in state and federal funds, is the eighth most expensive in the country. It serves 3,792 disabled clients. Another 4,555 clients are on a waiting list and receiving care through the regular Medicaid program.

The evaluators found that, while the New Mexico program is considered one of the best in the country for quality of care, it lacks the tools to operate efficiently, including an adequate information technology system, an accurate and up-to-date client needs assessment tool, and current information on the appropriateness of its provider rates or a method to check those rates

A discrepancy between records on services provided and payments to providers suggests either the records are wrong or the providers are being overpaid, the evaluation says.

That inaccurate information on client use of services makes it difficult for the department to predict future costs.

The evaluation recommends the Human Services Department and Health Department, which jointly oversee the program, provide greater oversight of the private contractors providing care.