Transcript Working Within Available Resources

Working Within Available
Resources
Business Managers
Summer Conference
July 16, 2010
Cherry Valley Lodge
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
• 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
• Maximize revenue opportunities based
upon a cost/benefit approach
• Minimize expenses while maintaining
program quality, reputation, and
organizational stability
What “Drives” Cost?
4 Largest Cost Elements:
Wages
Health Insurance
Workers Compensation
Medicaid waiver matching funds
Strategies to Address the Major
Cost Elements
Control wage growth (as a % and total $)
1.
More effective labor negotiations
a.
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
b.
c.
d.
e.
Strategies to Address the Major
Cost Elements
2.
a.
b.
c.
d.
e.
f.
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
3. Workers Compensation premium
cost
a. Transitional employment program
b. Risk management plan to reduce injuries
and improve safety practices
Strategies to Address Major
Cost Elements
4. Medicaid waiver matching funds
a.
b.
c.
d.
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
• 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
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
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
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 inhouse. 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 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 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 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 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
• 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 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
• 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
• 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
• 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
• 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 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 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 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
• 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
• 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
• 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