Presentation - House Appropriations Committee

Governor McAuliffe’s Amendments to
the 2014-2016 Biennium Budget
A Summary of New Spending Initiatives and Savings Strategies for the
Department of Behavioral Health and Developmental Services
Presentation to the
House Appropriations Committee HHR Subcommittee
January 27, 2015
Debra Ferguson, Ph.D.
Virginia Department of Behavioral
Health and Developmental Services
Budget Overview for DBHDS
• The budget increases the DBHDS general fund appropriation for
essential operations:
– $5.9 million in FY 2015
– $20.4 million in FY 2016
• Also includes general fund savings strategies:
– $3.5 million in FY 2015
– $5.3 million in FY 2016.
Slide 2
Budget Overview – GF Spending and Cuts
Budget Actions – Operations
DOJ Settlement Agreement (DBHDS & DMAS)
Comprehensive I/DD Waiver Redesign
Behavioral Health Community Initiative (LIPOS)
State Mental Health Facilities Operations
Piedmont and Catawba Revenue Shortfall
(includes DMAS general fund offset)
VCBR Operations
Electronic Health Records (Loss of Incentive
Other Central Office Initiative (1 MH Position)
Additional Funding Subtotal
GF FY 2015
$2.8 million
GF FY 2016
$7.2 million
$2.3 million
$2.2 million
$2.7 million
$5.1 million
$3.0 million
$5.9 million
$20.4 million
Savings Strategies (Central Office, MH Facilities,
Training Centers, VCBR) -- No cuts to CSBs
($3.5 million)
($5.3 million)
Net Funding for DBHDS System Total
$2.4 million
$15.1 million
Note: The totals include budget amendments in DMAS that are related to the DOJ settlement
agreement and waiver reform.
Slide 3
Budget Actions (Community)
• Training center closure costs ($1.3 million in FY 2016).
• Provide on-going support for Rental Choice VA program ($400,000
in FY 2016).
• Support rent subsidies resulting from waiver redesign ($675,000 in
FY 2016).
• Support the transition of individuals from training centers to the
community not covered by Medicaid ($125,801 in FY 2016).
Slide 4
Budget Actions (Facilities)
• Replace lost revenue for Piedmont Geriatric and Catawba hospitals
($3.8 million in FY 2015 and $9 million in FY 2016).
• Adds funds to accommodate delaying the closure of NVTC until
March 2016 ($1.3M in FY 2016)
• Address increased special hospitalization costs at state facilities
($1.9 million in FY 2016).
• Eight additional staff at Western State Hospital related to
increased acuity and increased need for direct observation
($454,532 in FY 2016).
• Six additional direct care staffing at Commonwealth Center for
Children and Adolescents ($268,260 in FY 2016).
• Six additional security staff at VCBR ($123,417 in FY 2016).
Slide 5
Budget Actions (Central Office)
• Continue funding for LIPOS costs ($2.15 million in FY 2016).
• Electronic health records Medicare incentive payment
replacement ($3 million in FY 2015 and $800,000 in FY 2016).
• DOJ settlement agreement costs ($140,000 in FY 2016).
• Waiver system ($453,888 in FY 2016).
Slide 6
Budget Actions (DMAS)
• Additional support to new independence waiver ($1.2 million
in FY 2016).
• Rebase the DOJ settlement agreement ($535,369 in FY 2015
and $5.1 million in FY 2016).
Slide 7
Summary of Savings Strategies
• Governor announced FY 2015 savings strategies in October.
• FY 2016 savings are a continuation of FY 2015 strategies identified
in October.
• New FY 2015 savings to capture one-time savings associated with a
delay in the opening of beds in Southwestern Virginia Mental
Health Institute saving $364,363 general fund.
• New licensing fees for all adult behavioral health and
developmental services licensed by the department.
Slide 8
Budget Language Highlights
• Provision for the Office of the State Inspector General to conduct or
contract for a study of Catawba Hospital and Piedmont Geriatric
• Expanded use of VPBA Bond to support community housing
development (DOJ related).
• Redesign of day support to independence waiver (DMAS).
Slide 9
CMS Re-designation of Piedmont / Catawba Hospitals
Background on Piedmont Geriatric and Catawba Hospitals
Piedmont Geriatric Hospital is a 123 bed gero-psychiatric hospital with
four wards exclusively for the treatment of patients 65+ years.
• MEL = 438 positions; Current full-time staff = 367 (1/1/15);
• Total Funding = $23.1M; General Fund $0.6M; Nongeneral Funds $22.5M.
Catawba Hospital is a 110 bed active recovery psychiatric hospital; houses
two adult and two geriatric care wards.
• MEL = 292 positions; Current full-time staff = 245.2 (1/1/15);
• Total Funding = $21.8M; General Fund $10M; Nongeneral Funds $11.8M.
Slide 10
CMS Re-designation of Piedmont / Catawba Hospitals
• Piedmont and Catawba Hospitals are currently certified by Medicare as Acute
Care Hospitals and Medicaid as Long Term Hospitals. As a result, the state
currently receives both Medicaid and Medicare revenues due to this dual
• CMS issue relates to Medicare certification: In a HHS OIG letter, DBHDS was
informed that neither of these hospitals qualify as Acute Care Hospitals.
• There were no “no cost” options available.
• Having beds/units certified differently within the same hospital would invoke the
hospital-within-a-hospital requirements of separate staff for each, which is also
cost prohibitive.
• Single designation will result in a significant loss of revenue and negatively
impact the facilities’ operating budgets.
Slide 11
CMS Re-designation of Piedmont / Catawba Hospitals
• The hospitals will now be certified as ICF/nursing facilities by
Medicaid. It should be noted this was the least costly option
• Governor’s introduced budget provides funding to address the
shortfall in revenue, $3.8M GF in FY 2015 and $9.1M GF in FY 2016,
partially offset by GF match required in DMAS of $1.7M in FY 2015
and $4.0M in FY 2016.
• The funds in the Governor’s budget are essential to maintain
hospital operations.
• This issue has implications for the future of Piedmont and Catawba
Hospitals within the state’s network of care.
Slide 12
Mental Health Taskforce
• The Governor’s Taskforce on Improving Mental Health
Services and Crisis response completed its final report
October 1, 2014.
• The report included 25 recommendations.
• Joint Subcommittee Studying Mental Health Services in the
Commonwealth in the 21st Century endorsed the
Taskforce’s report with specific priority to seven
• DBHDS is currently costing out the implementation of the
Slide 13