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Working Within Available Resources. Business Managers Summer Conference July 16, 2010 Cherry Valley Lodge.

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working within available resources

Working Within Available Resources

Business Managers

Summer Conference

July 16, 2010

Cherry Valley Lodge

slide2
Today’s presentation will illustrate how the MCBDD organization is using effective business and fiscal practices to sustain the programs and services for individuals with developmental disabilities
slide3
Our Goal:

Program sustainability while working within our available resources

  • Our Challenge:

weak economy

declining state financial support

increased need for services

static or eroding tax base

two basic strategies
Two Basic Strategies
  • Maximize revenue opportunities based upon a cost/benefit approach
  • Minimize expenses while maintaining program quality, reputation, and organizational stability
what drives cost
What “Drives” Cost?

4 Largest Cost Elements:

Wages

Health Insurance

Workers Compensation

Medicaid waiver matching funds

strategies to address the major cost elements
Strategies to Address the Major Cost Elements

Control wage growth (as a % and total $)

  • More effective labor negotiations
  • Cap salary range growth – From 1989 to 1998, the BA salary range increased by 30.5%. From 2001-2010, the BA salary range increased by 5.7%. The management staff salary range eliminated “step” increases in September 2002
  • Strategic downsizing: Reduce the total number of employees. In January 2005 there were 304 employees. In January 2010 there were 253 employees. Methods include attrition, layoffs, job re-structuring, etc
  • Increase the length of the work day. The length of workday for MEADD professional employees increased from 7 hrs per day to 8 hrs per day (1820 hrs per year to 2080) for same annual wage. This means that 30 professional staff (25 SSA’s, 4 Habs, 1 Job Placement Specialist) each worked 260 hrs per year for a total of +7800 hrs (3.75 FTE’s)
  • No retroactive wage adjustments when contracts are implemented past the expiration date
  • No expansive language that affect attendance or wages & benefits
strategies to address the major cost elements1
Strategies to Address the Major Cost Elements

2. Control health insurance costs:

  • Negotiate employee co-payment on health insurance premiums
  • Negotiate a “cap” on maximum premium
  • Create incentives to drop coverage
  • Wellness program initiatives
  • Cost reduction plan features: generic Rx, mail order Rx, increased deductibles, increased point of service co-pays
  • “Shopping” the plan for best provider has resulted in 0%, -1.1%, and 0% in past 3 yrs
strategies to address major cost elements
Strategies to Address Major Cost Elements
  • Workers Compensation premium cost
  • Transitional employment program
  • Risk management plan to reduce injuries and improve safety practices
strategies to address major cost elements1
Strategies to Address Major Cost Elements
  • Medicaid waiver matching funds
  • Medicaid Waiver Obligations Agreement with ODMRDD and ODJFS in 2005 set forth the obligations for providing matching funds by ODMRDD and each County Board in Ohio
  • “Martin waivers” as a result of the Taft-Martin lawsuit settlement provide 1500 “free (no local match) waivers” statewide. MCBDD took 38 Martin waivers.
  • OSCB negotiated an “emergency waiver set-aside” in the State Medicaid plan for the MRDD system that shortened the time it took to get someone onto a waiver when an emergency occurs.
  • Payer of last resort policy – require that Medicaid card be used or waiver accepted before County Board funding is expected.
other methods of expense control
Other Methods of Expense Control
  • Outsource Information Technology function to Mahoning County IT Dept in 2009 ($90,000)
  • Outsource residential housing property management to Gateways in 2005 ($75,000)
  • Restructured Family Resources program in 2006 ($250,000)
  • Dropped Baker-Stentel steno service in 2009 ($80,000)
  • Job enlargement: increase duties of an employee for additional pay but eliminate another position that previously performed some or all of those duties. Examples include Kris Hodge (Community Services Director, Medicaid Manager & Assistant Supt); Jim Groner (Hab Center Director, Adult Services Coordinator, + oversight of Facilities Coordinator and Transportation Supervisors; Pete Poulakos (oversees the production at 2 workshops instead of a manager at each site).
  • Initial salary placement (Example step 0 versus step 5 for a BA
other methods of expense control1
Other Methods of Expense Control
  • Initial salary placement for BA schedule at Step 0 vs. Step 5 would save $51,753 over 5 yrs ($35,086 vs. $45,436 starting salary)
  • Initial salary placement for a Workshop Specialist at Step 0 vs. Step 5 would save $22,500 over 5 yrs ( $24,168 vs. $28,668)
other methods of expense control2
Other Methods of Expense Control
  • Tighter control over salary column placement. The award should be made only when the educational advancement is pre-approved and relevant to the current job position
  • Centralized purchasing to take advantage of quantity discounts and by “shopping” for best price
other methods of expense control3
Other Methods of Expense Control
  • Reduce Purchase of Service contracts for Adult Day Array services after clients are placed on Medicaid waivers (County Board cost is reduced from 100% POS cost to 38% local Medicaid match)
  • Bring Medicaid waiver administration back in-house. It is less costly to hire a FT waiver administration specialist than to pay NEON a flat per case fee (savings of +125,000 per year)
other methods of expense control4
Other Methods of Expense Control
  • Careful control of Individual Service Plan (ISP) costs. Family members, guardians, providers, advocates will sometimes seek higher levels of funding and service authorization than is necessary, including appeals to the State of Ohio. For example, our annual Medicaid plan costs were $17,000,000. If that # were increased by just 5% ($850,000), we would pay 38% local match) or an additional $323,000 per year
other methods of expense control5
Other Methods of Expense Control
  • Provide DD services to our intended target population (OEDI and COEDI eligible)
  • This is a difficult area because it means saying no to some individuals who apply for services
  • Some individuals have disabilities but do not meet our eligibility requirements because their disability is not severe enough to meet OEDI requirements
  • Examples of qualifying diagnoses that may result in ineligible status: ADHD, Mild mental retardation, Autism, Mental illness…
  • Persons found eligible in another county board of developmental disabilities are not assured of eligibility if they transfer to another county board
other methods of expense control6
Other Methods of Expense Control
  • Control of overtime costs and use of substitutes
  • Inventory controls to prevent waste and theft
  • Use of LPN’s instead of RN’s based on the County Board’s nursing needs of persons served at our facilities + access to RN consultant
  • Use of ADP time tracking equipment to validate attendance records (replaced paper system)
  • Use van for SSA travel instead of mileage reimbursement
  • Use shuttle buses at 2 workshops to bring drivers and aides back to Transportation Dept saving fuel and extending useful life of the buses
other methods of expense control7
Other Methods of Expense Control
  • HB300 Energy conservation project with Johnson Controls at all buildings. Spent $1.1 million paid with a 10 year loan with guaranteed savings in energy use, maintenance avoidance and down time
  • Dropped most of the old Centrex phone lines saving $24,000 per year
  • Cancelled low use cell phones for managers and professional staff to save monthly costs. Also went with Mahoning County IT Dept on large scale bid for new cell phones
other methods for expense control
Other Methods for Expense Control
  • Purchase long distance telephone service through Mahoning County and getting large price discount
  • Joined Ohio Schools Council and gained access to price discounts on group term life insurance, hotel rates, aggregated utilities purchases (electric and natural gas)
other methods of expense control8
Other Methods of Expense Control
  • Developed M.O.U. with AFSCME union to convert from two shifts of bus routes (one and a half hours apart) at Bev Rd and Meshel workshops to “one shift” at each facility. This resulted in an agreement to have 8 hour drivers and aides become 6 hour (per day) employees. Current drivers and aides are grandfathered in and new hires are hired as 5 hour employee
  • The one shift system also reduces bus routes saving money on bus depreciation, fuel and maintenance costs
cost avoidance as expense control
Cost Avoidance as Expense Control
  • Paid off Citibank 10 year loan for the Johnson Controls energy conservation project in 2 years saving approximately $150,000
  • Paid off all bus lease/purchase agreements saving $18,000
  • Lease the former Rayen Avenue workshop to Gateways to Better Living for $1.00 avoiding costs for security, utilities, maintenance, etc.
  • Used the Sandusky County Board of DD client database software at $0 cost avoiding the purchase of expensive commercial software products
revenue enhancement strategies
Revenue Enhancement Strategies
  • The next series of slides will describe things that are planned or have been done to create new funding streams or to maximize existing revenue streams
  • Since 75% of our roughly $24 Million budget comes from the 2 tax levies, there are not many sources of “new money,” so we have to learn how to capitalize on known sources of alternative revenue other then passing additional levy millage
income effect as revenue
“Income Effect” as Revenue
  • Refinanced supported living residential costs by obtaining I.O. waivers consistent with goals in the HB94/405 Medicaid Expansion legislation passed in 2001.
  • Refinanced Adult Day Array services costs by using I.O. and Level One waivers available through the State Dept of Developmental Disabilities’ Medicaid plan. This has resulted in a new funding stream of Medicaid reimbursement for adult day services and non-medical transportation that is approaching $2,000,000 per year for the County Board as new revenue. The refinancing of adult day services has also enabled the County Board to reduce POS contracts to private day services providers by obtaining waivers for the POS cases
revenue enhancement methods
Revenue Enhancement Methods
  • Using 2 hr delays on bad weather day instead of full day closing. This enables the adult day programs to provide 5 hrs of services and receive partial reimbursement for the day rather than lose the full day
  • Improved training on documentation, quality billing standards and supervision of invoicing process reduces errors and lost billing opportunities and improves cash flow
revenue enhancement methods1
Revenue Enhancement Methods
  • Increased training and effective performance evaluations improve efficiency and productivity thereby reducing the need for more personnel to do the same amount of work
  • Effective and accurate rate-setting in order to maximize “allowable cost recovery” under applicable state and Federal reimbursement regulations
revenue enhancement methods2
Revenue Enhancement Methods
  • Obtained approval for Home Choice/Money Follows the Person funding for formerly institutionalized individuals creating a ”new” funding stream
  • Pursuing approval as an Adult Day Health Services vendor under ODJFS to pay for adult day services for fifty clients on HCBS and Transition waivers. This would be a “new” funding stream
revenue enhancement methods3
Revenue Enhancement Methods
  • OACBDD and OSCB are seeking a rate increase for Targeted Case Management from $10.18 to $19.12 per unit through a cost and time study by the Federal Medicaid agency (CMS)
  • Reduced costs for needed vehicles by applying for and obtaining three light transit vehicles through the Federal Transportation agency at 20% of cost saving nearly $40,000 per vehicle
  • Apply for small grant awards under the Mahoning County Green Team recycling program
future revenue threats
Future Revenue Threats
  • Loss of Tangible Personal Property Tax if the State legislature does not correct this problem. A 7 year phase-out will begin in 2012-13 biennium budget that will result in gradual loss of $1,662,244 in TPPT levy income by 2019
  • Possible further loss of Ohio Dept of Developmental Disabilities state subsidy in the next 2012-13 biennium budget. Projected state deficit in next biennium is $5-9 Billion without new taxes or major cuts in state funding. MCBDD has only $1,342,906 left in general fund subsidy as of State FY11 (ends 6-30-11)
mcbdd fiscal strategy since 2004
MCBDD Fiscal Strategy Since 2004
  • Policy 6040 - Financial Management Plan
  • No deficit spending. Current Year expense budget cannot exceed Current Year revenue
  • Establishes restricted accounts for non-reoccurring expenses (severance pay, major capital improvements, 27TH pay, debt service, and client emergencies). It is NOT a savings account
  • Requires accurate revenue and expense forecasts. Look at fiscal history from 2000-09
  • No deferred maintenance
  • One time receipts/income goes into restricted fund accounts
  • Goal is to fully fund long term liabilities
  • Zero based budgeting for expenses on a year to year basis
summary
Summary
  • Avoid Fiscal Watch, Fiscal Warning or Fiscal Emergency status with the State Auditor by means of prudent fiscal decision-making
  • Maximize revenues where cost-beneficial
  • Effective and reasonable expense management
  • Have a short term and a long term fiscal operations strategic plan
  • Be prepared so that you can readily recognize an opportunity to make money or save money through wise decisions
  • This is not a profit-making organization. The money pays for client programs. As a public organization, we owe the public a good return on their investment in our mission.

The end