Very bad incentives in New York State

State institutions for the developmentally disabled generate so much federal Medicaid money that New York's other programs for people with intellectual disabilities would be threatened without them, state officials acknowledge in an internal document obtained by the Poughkeepsie Journal.

The article is here.  It gets worse:

The document, labeled "Confidential – Policy Advice," raises questions about the state's decision to keep 1,100 institutional beds at eight centers that were once slated to close.

And that is not all:

The Medicaid reimbursement rate for state institutions is $4,556 per person per day, the Poughkeepsie Journal has reported, three to four times higher than the cost of care.

Or this:

Put another way, just 1 percent of New York's developmentally disabled population – its 1,400 institutionalized people – generates about 40 percent of federal Medicaid money for the system, operated by the state Office for People With Developmental Disabilities.

This is one root of the problem:

The reason New York's rate is so much higher than the cost of care is a provision in the formula that, since the 1980s, allowed the state to keep two-thirds of federal payments for residents moved from institutions into community homes.

The Poughkeepsie Journal uncovered quite a story.  How does this sentence grab you?:

New York is well-known among disability researchers and providers for its ability to maximize Medicaid revenues, reaping more federal money for the developmentally disabled than any other state.

And does it put people to work?

New York's nine high-cost institutions are part of the reason, but a greater factor is the sheer size of the system, which serves 125,000 people including nearly 37,000 in 7,500 state and private group homes. The state even has a $27-million-a-year research center on developmental disabilities, and a huge bureaucracy to manage all that: 27,000 employees in 2009 earning an average of $42,000. This includes 278 people who made more than $100,000, according to an analysis of the state's salary database.

If we pursue an earlier story, and ask about the people living in the system, it gets truly scary:

Opened in 2001 without public input or review, the LIT [Local Intensive Treatment Unit, part of this system] serves what officials say are people who have had a brush with the law. Residents are classified by "offending behaviors," and, unlike those in two other units of what is now called the Wassaic campus of the Taconic Developmental Disabilities Service Office, they are not free to leave.

The Wassaic LIT and 10 other "intensive treatment" units – some with uncomfortable resemblance to prisons – mark a stark departure from the state's historically non-punitive approach to care of people with mental disabilities.

…In fact, numbers the state did provide show the LIT is populated mostly by people who have been transferred not from the criminal justice system but from other units here and across the state system.

To return to one of the original facts:

Every one of the unit's residents, among 1,400 residents in nine state institutions, generates $4,556 per day in state and federal Medicaid reimbursements.

Twelve percent of the residents are listed as being institutionalized for "elopement."  This guy offered an skeptical perspective on what is happening:

"I don't believe that that is the case, that these people are offenders," said Sidney Hirschfeld, director of the statewide Legal Service office.

He said a very small number had any involvement in the criminal justice system and was concerned that residents were being classified by offenses for which they were not charged, tried or convicted.

Need I relate stories such as this?

In one case, a mildly disabled woman in her 50s was kept in a unit so long – 15 years – that she developed aggressive "institutional behaviors" that became the justification to keep her there. A judge ordered her released, Shea said, but months later a community home still has not been found.

“Those situations are not unique,” Shea said. “Lengths of stay are 10 to 12 years.”

And here is another perspective, from inside the politics:

“Whatever they do there, my preference would be to obviously save jobs,” Euvrard said

For the pointer I thank the ever-vigilant Michelle Dawson.


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