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Health and Human Services

<h3>Executive Summary</h3><h4>Key Facts</h4><ul><li>The Oklahoma Health Care Authority has oversight over all Medicaid waiver programs.</li><li>Through an interagency agreement, the Department of Human Services has authority to direct operations or make programmatic changes to the Waiver Program.</li><li>Oklahoma is just one of six states that have a state agency other than the state’s Medicaid agency operating the waiver program.</li></ul>The 1999 U.S. Supreme Court Olmstead decision established that those with needs meeting an institutional level of care have the right to receive services within their community, if able.Home Based Community Waivers are a tool for states to comply with the Olmstead decision by providing those with disabilities access to in- home and community- based services instead of institutional- based services.Prior to 1981, individuals with critical developmental or intellectual disabilities were often limited to receiving state-funded support in an institutional setting. Expansion of the Social Security Act provided guidelines to states for meeting those needs outside of institutional care.Through Home and Community-Based Services Waivers, states have the option of “waiving” certain Medicaid program requirements to tailor services to Medicaid recipients living in their communities. Federal guidelines provide states with broad authority in creating waiver programs, as long as the cost of services provided through the waiver don’t exceed the costs of services in an institutional setting.When state resources and funding are not available to meet the needs of all those who seek services provided through Medicaid waivers, a “waiting list” is created. There are 5,619 physically or mentally disabled Oklahomans waiting to receive services through a state waiver as of March 2021.<img src="https://dy8iim215g2zo.cloudfront.net/waiting_list_6d037bceef.png" alt="waiting-list.png">Oklahoma offers six different Home and Community-Based Services Waivers. This evaluation examines only the waivers for which there is a waiting list for services. Each of the three programs with waiting lists are administered by the Department of Human Services:<ul><li>The Community Waiver</li><li>The In-Home Services Waiver, Child</li><li>The In-Home Services Waiver, Adult</li></ul>Through this evaluation, the Legislative Office of Fiscal Transparency (LOFT) examined past and current efforts to transition more people from waiting for services to receiving services through Home and Community-Based Services Waivers and sought to identify both opportunities and resources needed to better meet the needs of those waiting.LOFT’s evaluation resulted in three key findings:<h4>Finding 1: DHS’ Management of the Waiver Program Has Not Led to Substantial Progress Toward the State’s Goal of Providing Services to All Those Waiting</h4>Currently, DHS is processing waiver applications for people who signed up on the list 13 years ago. Under these conditions, a 5-year-old entering the Waiting List today would likely never receive the In-Home Service Waivers for Children due to the length of the wait time. That child would age out before becoming eligible and would first receive services under the more expensive In-Home, Adult or Community Waivers.The two key drivers of waiting lists are high demand and program limitations, which can include a program’s structural design or resources. LOFT found that the number of people moved from Oklahoma’s Waiting List into waiver services over the past decade has remained relatively flat, despite the Oklahoma Legislature dedicating almost $9 million over the past eight years to the Department of Human Services (DHS) for this purpose. LOFT observed no direct correlation between the additional appropriated funds and the actual transition of people moving from the Waiting List into a waiver.The greatest change in the Waiting List – 2,400 applicants removed in 2019 – was due to purging the names of those who could not be reached or no longer needed services. In evaluating past and current management of the waiver program, LOFT found that DHS’s failure to determine eligibility upon intake of those signing up on the Waiting List limits the agency’s understanding of individuals’ needs and subsequently, development of a plan to meet them. <a href="https://www.ssa.gov/OP_Home/ssact/title19/1915.htm" rel="noopener noreferrer" target="_blank">Proper intake</a> could also determine which of those waiting need immediate services and which are waiting in anticipation of future service needs.DHS recently contracted for an independent assessment of the needs of those waiting for waivers; the sixth assessment to be conducted in approximately a decade. LOFT did not observe key differences in the type of data collected between the current and past assessments, nor a strategic plan for how this new information would be used to move those waiting into waivers.Approximately half of those on the Waiting List contacted by DHS for services are not moved into waiver services. LOFT found that DHS’ management of the Waiver Program and lack of case management upon application for a waiver are contributing to inflation of the Waiting List.<h4>Finding 2: The Ratio of Budgeted Community-Based and In-Home Services Waiver Slots to Members Served is Declining, Despite Increases in State and Federal Funding</h4>States that offer waiver programs submit a plan to the Federal government demonstrating its ability to continually fund any wavier slots. In comparing the number of members served from FY16 to FY20 to the number of waiver slots budgeted for in the agency’s five-year plan, LOFT found that DHS is serving less members than its plan states it can serve. Additionally, LOFT observed a declining percentage of members served over the five-year period when compared to the number of slots budgeted for in the agency’s plan.The In-Home Services Waiver for Children, which is only available for children aged 3-17, has the lowest utilization rate (or service rate) of all DHS’s Home and Community-Based Services Waivers. This waiver is currently the most cost-effective Medicaid waiver offered in Oklahoma, yet DHS offers a maximum of 250 waiver slots for this program and for the past three years has served just over half of those slots. 1,890 of those on the Waiting List are between the ages of 3-17.The Developmental Disabilities Services division (DDS), which administers the Home and Community-Based Waiver Program, is one of seventeen divisions within DHS. LOFT found that increases in Federal matching funds, State appropriations, and an overall increased budget to DHS, have not resulted in serving substantially more people through the Community and In- Home Services Waiver Program.This chart shows the Federal and State investment into the DDS Waiver Program for Community and In-Home Services from FY16 to FY21. This depicts a growing federal investment from FY18 to FY21, requiring less state investment to maximize program outcomes. Currently, Oklahoma receives an approximate 3:1 Federal match. The bar for FY21 shows LOFT’s calculation for the investment required to serve all members of the Waiting List, using the blended Federal Medical Assistance Percentage (FMAP).<img src="https://dy8iim215g2zo.cloudfront.net/waiver_program_costs_917796c254.png" alt="waiver-program-costs.png">DHS contends its ability to operate the Community and In-Home Services Waivers has been limited by the number of available providers, low provider rates, antiquated technology, and regulatory restrictions. LOFT observed no correlation between the number of Medicaid providers and the number of members being served, a metric that must be determined before DHS submits its five-year plan for each waiver to the Federal government. Additionally, LOFT identified various mechanisms available to the State to stabilize or increase provider rates, if needed. While DHS’ technology is outdated, LOFT found it to have robust capabilities that could be enhanced with knowledge investments. Last, LOFT found no basis for DHS’ claims of existing rules limiting the agency’s ability to assess the needs of those applying for a waiver, a fact affirmed by the third-party assessment currently underway.<h4>Finding 3: There Are Both Immediate and Long-Term Opportunities to Increase the Number of People Served by Community and Home-Based Services Waivers</h4>LOFT took three approaches to determining what resources would be required to serve all those currently on the Waiting List:Scenario 1: $16 million in State funds. This scenario assumes no changes to the program or Waiting List, and that 55 percent of people waiting will be determined eligible for services.Scenario 2: No additional investment, but strategically maximize current funds. With this scenario, LOFT estimated the impact of amending the number of waiver slots allocated to different programs. DDS plans to add 66 wavier slots to the Community Waiver in FY23. LOFT found this waiver is not currently serving all member slots budgeted to it. By limiting the current Community Waiver capacity increase to 16 instead of 66 and reallocating the associated budgeted costs to the In-Home waiver, Oklahoma could serve 693 additional children or 346 adults by FY23, at no additional cost.Scenario 3: $5 million strategic investment into just the waiver serving children ages 3-17. If the State were to shift from a “first on, first off” processing of all waivers and instead chronologically serve those within respective waiver groups, it could target funds to a specific waiver for strategic impact. LOFT estimates 1,890 children could be served with a $5 million investment; the entire child demographic on the Waiting List.Both State and Medicaid rules provide Oklahoma the flexibility to change its waiver program, and processes exist to amend service plans. Changes could take effect within 6-9 months.

Executive Summary

Delivery of Mental Health Services

Report

Report & Resources

### Policy Considerations and Agency Recommendations

#### Policy Considerations

The Legislature may consider the following:

- For improved transparency, repurpose an existing fund or create a program stabilization fund. Identified underutilized funds or realized programs savings could be deposited for targeted reinvestments.
- Requiring a more transparent process to establish provider incentive payments, with an emphasis on paying incentives based on performance or metrics the state wishes to achieve, such as adding specific vendors to allow for higher utilization of waivers.
- Requiring annual updates be provided to the Legislature regarding a strategic plan to increase the number of people served from the Community and In-Home Services Waiver Program Waiting List. Updates should reflect progress made toward milestone objectives.
- Requiring publicly available monthly data updates reflecting current cost expenditures and number of waivers being utilized by month and year to date.
- Dedicating funds for a third-party operational audit to identify inefficiencies and duplication of services within the Developmental Disabilities Services division and its partners, which could create internal savings to be reinvested into the program.
- Requiring that data collected by Liberty Healthcare of Oklahoma (Liberty) and reported to the Department of Human Services be made publicly available online and updated regularly to provide, at minimum, the number of people on the Waiting List.

#### Agency Recommendations

DHS should:

- Create a strategic plan with goals and milestone objectives for how the Developmental Disabilities Services Waiver Program will be enhanced. Goals should be fully achievable two years before the State’s renewal deadline for the current program.
- Conduct a cost analysis of its waiver structure to identify opportunities for adding or adjusting waiver services to improve cost effectiveness and to enable more people to be moved onto waivers.
- Revise management of the Waiting List so that only those who need immediate services are shown on the public-facing Waiting List. The agency should maintain a separate list of those who anticipate needs in the future.
- Make the data reporting required in the Liberty contract publicly available, including data on the cost of the waiver program and the number of waivers being utilized.
- Enhance communications with the people on the Waiting List, including communication of any program changes and potential impact, as well as estimates for wait times.
- Deposit any one-time funds, such as service costs of an individual plan being less than budgeted, or other cost savings generated through the program into the program stabilization fund. Funds should be reinvested into the programs to achieve goals listed within a strategic plan.

Recommendations

Priority Evaluation of the Oklahoma Department of Human Service Developmental Disabilities Service Waiver Waiting List

Impact Evaluation

Priority Evaluation of the Oklahoma Department of Human Services Developmental Disabilities Service Waiver Waiting List

Accountability Report

October 2021

Oklahoma Department of Human Services Developmental Disabilities Service Waiver Waiting List

General Government 

Report: 25-640-01
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