Health Law Project Changes in Birth to 3 EI

LARGE TEXT BOX Tool to enlarge text.


Select a button to change the background color on this page.



Harrisburg Office: 20 N. Market Square, 3rd floor, Harrisburg, PA 17101

Phone: (717) 236-6310 Fax: (717) 236-6311


DPW proposes to eliminate MA funding for direct therapies

& services in settings with more than 10% children with disabilities

What is this "MA waiver"?

The State Agency that administers the Early Intervention program for children birth to three, the Department of Public Welfare, Office of Mental Retardation ("DPW/OMR") is proposing to make significant changes in the kind of Early Intervention ("EI") services that can be paid for with Medical Assistance ("MA") funds. Because roughly half of the MA funds used for EI services come from the federal government, DPW/OMR has to get permission to make these changes from the federal agency that administers MA. This request for permission is called a "Medicaid [or "MA"] waiver request".

Why should I care about what services are funded by MA?

It is true that these proposed changes do not change the fundamental legal requirements for EI (found in State Act 212 and in the federal Part H of IDEA). If a service that was on a child's Individualized Family Service Plan ("IFSP") could not be funded by MA, there would still be a legal requirement to fund it (out of the money provided by the State to the county MH/MRs for EI called "county allocations"). However, funding is often a consideration in determining what services will be made a part of a child's IFSP. Therefore, major changes in funding are likely to produce major changes in service. In fact, it is DPW/OMR's intent that these proposed changes in funding create changes in service.

What kind of services would no longer be funded by MA?

Note that many of these services and therapies that are proposed to be excluded from MA funding are currently funded by MA. Therefore, to the extent that these services and therapies are still included in the IFSPs of children on MA, there would be a loss of federal funds. It is this potential loss of federal funds that results in the financial incentive not to include on IFSPs direct therapies and other services excluded under the proposed MA waiver. If the service or therapy is not included on the IFSP, the child has no legal right to receive that service through EI, even if, theoretically, there is another source of funding for it.

What kind of services would be funded by MA?

Two categories of service would be covered: service coordination (which can already be funded under MA) and a group of instructional and support services that come under the heading of "family centered services". Family centered services "consist of a range of habilitation and developmental supports provided directly to the child while the child's family or caregiver is present [and actively involved] or indirectly to the child by instructing and supporting the family or other caregiver in how to perform service techniques and procedures." Developmental instruction would be one of the services, not currently funded by MA, for which the State would be able to get additional federal funds if an MA waiver was approved.

Who could provide "family centered services"?

Family centered services could be provided by certified assistants in speech, physical or occupational therapy as well as by licensed therapists. Developmental instruction would be provided by teachers certified in special education or early childhood. In addition, counties could certify people who had a bachelor's degree and one year's experience or an associate's degree and three years experience to provide developmental instruction.

To whom do these proposed changes apply?

These changes, if implemented, would apply to EI services billed to MA for children on MA (the yellow Access card) and would include EI services provided to those children enrolled in an HMO under MA. In theory, services that do not comply with the proposed MA requirements could be paid for using funds DPW provides to county MH/MRs for EI (called "county allocations"). However, there will be tremendous financial pressure on counties to only include services on IFSPs that could be billed to MA rather than depleting their limited county allocations.

The changes would not apply directly to families whose children are not on MA. However, there is the possibility that counties and providers may change all their birth to 3 EI programs to fit the proposed MA model rather than have the administrative burden of two different EI systems.

What happens next?

DPW/OMR will solicit comments from the State Interagency Coordinating Council (State "ICC") at its next meeting on Thursday, February 6th. (The State ICC meets at 11 a.m. at the Capital Area IU in Summerdale, north of Harrisburg, off of I-81) The State ICC has the authority to advise but cannot stop DPW/OMR if it chooses to go forward with this waiver request. DPW/OMR decides to go forward, it must file the waiver request with the federal agency that administers the MA (Medicaid) program. That agency is called the Health Care Financing Agency ("HCFA"). HCFA has at least 90 days to act on the request. 1/29/97

Update to 1/29/97 Memo on Early Intervention Waiver

Questions Remain on OMR's Proposed EI Waiver

The Office of Mental Retardation made a presentation on 2/6/97 at the State ICC meeting regarding its proposal to seek federal permission (called a "waiver") to change the birth to 3 Early Intervention services which can be funded by Medical Assistance ("MA"). This memo is based on that presentation and the questions and comments that followed. It continues to be our opinion that this proposed waiver will have a significant impact on the birth to 3 Early Intervention program and bears thoughtful consideration by families, providers and counties.

Questions clarified

New provisions to be added to the proposed waiver

Some remaining questions

Final thought

Nancy Thaler, Deputy Secretary of OMR stated: ěThe only way this waiver will earn [federal] funds is if service plans are family centered." Therefore, in order for the waiver to be successful in drawing down more federal funds, family centered instruction and support in natural environments will have to be substituted for direct therapies and center-based services (which are largely excluded from reimbursement under the waiver). Indeed, direct therapies and center based services can still be funded through other sources, but unlike MA, these funds are capped. Therefore, if direct therapies, which can now be funded by MA, would be made a part of the child's IFSP after the waiver takes effect, these therapies would most likely have to be billed to other funding sources. This would result in a loss of federal funds that would have been realized by billing MA under the current system.

The point is this: either the service model will change as a result of the waiver or the waiver will not draw down all the federal funds possible under the current system. This is not to imply that changing the service model is necessarily bad. The problem is that the changes would be brought about as a result of decisions made by OMR without meaningful public input and without many serious questions being resolved.