COST OF SURVIVAL increase

Message and Talking Points

NO $18.7M CUT - NO EXTENSION IN PAYMENT CYCLES FOR DD LONG-TERM CARE PROVIDERS

Message and Talking Points

Message:

Community long-term care providers serving people with developmental disabilities cannot withstand another 17 day planned delay in payment.

• DD long-term care providers are currently waiting 90 days for payment. They cannot be asked to add another 17-day delay to their payments when many are already at the end of their credit limits.

• The DD long-term care system has been asked to meet multiple unfunded mandates that increase their cost with no State funding attached to those mandates.

• DD long-term care staff are substantially underpaid for the care they provide. Unable to pay credible wages or give deserved raises, the recruitment and retention of qualified staff is a problem that is only getting worse. Constant staff turnover has a direct impact on the quality of life and well being of those being served.

• Skyrocketing insurance and utility costs add to the pressure DD long-term care providers feel and dramatically increases the cost of providing necessary services.

We ask that you support DD long-term care providers who serve vulnerable individuals by restoring the $18.7 million that was cut by extending the payment cycle.

DELAY IN PAYMENTS -- CASH FLOW

Message and talking points

Message:

Community providers for persons with developmental disabilities and mental illness must be paid in a timely manner for services provided.

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• Community providers are largely dependent on the State for funding. They cannot wait sixty days for reimbursement from the State - they have payroll, and other business related expenses, which must be paid in a timely manner.

• Cost to provide services in community agencies continue to escalate. Health insurance premiums have increased an average of 40% over the past three years, workers compensation premiums have increased an average of 19%, and travel related expenses have also increased. Local fundraising efforts have had declining results since 9/11.

• Interest rates to borrow money for "operating cash" are approximately 4.25%. Example, one agency spent $48,000 dollars in interest this past year for short-term borrowing. Lines of credit have been exhausted for many community agencies. Furthermore, interest is a non-reimbursable expense.

• While we understand that the Governor is borrowing funds to begin paying providers on a timely basis - the reality is this money will run out before the end of the year. Community agencies need a more permanent solution to the cash flow problem, as they cannot continue to operate in crisis mode indefinitely.

• Community agencies do not have a reserve to draw upon to meet payroll and other expenses when the State is late in paying their bills. The State can no longer ask community agencies to wait for their money - payments to community providers must be prioritized.

We ask for your support HB3512, which will prioritize the payments to community agencies.

2% RESERVE IN DHS BUDGET

Message and Talking points

Message:

Services for persons with developmental disabilities and mental illness must be exempt from the 2% reduction - or any proposed reserve.

Governor Blagojevich has ordered an additional 2% reduction across the board "if necessary, based on the state's economic situation."

How are agencies to plan for a reduction that may or may not happen? When agency resources are already stretched to their breaking point, agencies cannot withhold two percent of their state payments on the chance that a 2% reduction could be taken at any time.

• A 2% reserve - if it is imposed - will bring community services and supports - to their knees. Programs will close. People with disabilities and their families will be cut from services. The current level of services cannot be sustained with a combined 3.25% cut, despite presentations that suggest this is a maintenance budget.

• Most community organizations that provide critical services and supports to persons with disabilities have maxed out their lines of credit over the last year. Community agencies no longer have the option of borrowing from community banks on the promise of payment tomorrow.

• Community organizations have no choice but to reduce vital services to the residents of Illinois, leaving their safety and futures in jeopardy.

We ask for your support to exempt community agencies for persons with developmental disabilities and mental illness from the proposed 2% reduction.

(Please note: although not yet official, there is a strong possibility that DCFS will be asked to reserve 2% as well. If you are a child welfare provider, ask your legislator to support exemption from a DCFS reserve.)

Department of Human Services Proposed Budget Cuts

Message and Talking Points

Message:

Community mental health and developmental disability services cannot withstand a 1.25% cut.

The community system was shocked when the budget was presented with over $10 million in cuts - a 1.25% decrease in money to provide services to people with disabilities.

• That's a 1.25% decrease in services to people with mental illnesses. ($3.25 million)

• That's a 1.25% decrease in services to people with developmental disabilities. ($6.25 million)

These are times when our government is telling us we all must do more with less. And certainly the reality of Illinois' economic downturn has been a part of the community service providers' planning. But you should know:

• The proposed cuts will not only present a reduction of service capacity, but it will cut Medicaid reimbursements for those services as well.

• Most community organizations that provide these services and supports are 85 - 90% funded by DHS and have maxed out their lines of credit over the last year, trying to do more with less. Borrowing today from community banks on the promise of payment tomorrow is no longer an option for community agencies.

• Unlike other businesses that can raise prices, cut product lines, lay­off staff, or use other measures to cut costs; providers' reimbursements and outcomes are set by contract, levels of service are mandated by rule, staffing ratios are set in regulation, and the waiting list of people needing service continues to grow.

We ask for your support of the community services that allow people with disabilities to live to the fullest extent of their abilities by restoring the 1.25% across-the-board cuts to mental health and developmental disabilities community services.

Average Cost per Resident of State Institutions for People with Developmental Disabilities

*An additional 208 residents with DD live in other state facilities primarily serving persons with mental illness

** Totals for Kiley, Fox, Murray, Howe and Ludeman include budgeted monies for planned physical plant improvements or repairs. Total budget for all facilities does not include $13.5 million for day training purchased from community providers for about 1000 residents of these facilities.

***Although not originally budgeted, the Administration has since announced 40-50 new beds at LDC. Costs estimated to be at least 10 million dollars for FY '04.

Note: By comparison, the state presently sets an average topline payment of $56,685 to non-profit community providers for each CILA (small group home) resident they serve. This amount includes residential, day training, and case coordination services. An average of $7000 of this amount is paid by the Federal Government under Social Security.

Sources: Governor's FY '04 Budget Book & DHS Monthly Statistics Report, March 2003