CSAVR's Response to the Adequacy of Incentives Advisory
Group's Recommendation Regarding VR Agency Reimbursement and EN
Outcome Payments
February 10, 2004
Jo Anne B. Barnhart, Commissioner
Social Security Administration
6401 Security Boulevard
Baltimore, MD 21235
Dear Commissioner Barnhart,
RE: CSAVR’s Response to the Adequacy of Incentives (AOI) Advisory Group’s Recommendation Regarding VR Agency Reimbursement and EN Outcome Payments
I would like to take this opportunity to express the support of the Council of State Administrators of Vocational Rehabilitation (CSAVR) for all of the recommendations contained in the Interim Report prepared by the Adequacy of Incentives (AOI) Advisory Group that is providing comment to the Ticket to Work and Work Incentives Advisory (TWWIA) Panel. The CSAVR is composed of the chief administrators of the State Vocational Rehabilitation (VR) agencies serving individuals with physical and mental disabilities in the states, District of Columbia, and the Territories. These agencies constitute the state partners in the State-Federal, public-private partnership referred to as the Public Vocational Rehabilitation (VR) Program. As you may be aware, VR is the service provider that has received over 90 percent of the ticket assignments to date under the recently enacted Ticket to Work Program
The AOI Advisory Group’s September 2003 Interim Report, “Recommendations for Improving Implementation of the Ticket to Work and Self-Sufficiency Program (Regulatory and Administrative Changes),” looks at a number of things that could be done to improve implementation of the Ticket to Work program, with a primary focus on recommendations to improve the adequacy of incentives for individuals in the targeted groups defined in the TWWIIA legislation. These groups include individuals with a need for ongoing support and services; individuals with a need for high-cost accommodations; individuals who earn a sub-minimum wage; and individuals who work and receive partial cash benefits.
Jo Anne B. Barnhart February 10, 2004
SSA Commissioner
While CSAVR supports all of the recommendations in AOI Interim Report, we are particularly interested in seeing Recommendation 3 implemented. Recommendation 3 is based on the premise that the Ticket to Work program should recognize the reality that some beneficiaries require both time-limited and ongoing services and supports in order to maintain and retain employment, particularly individuals with disabilities in these targeted groups. Given that only about twenty percent of the beneficiaries served nationwide by State VR agencies (SVRAs), including those whose cases are closed as successfully employed, are employed full-time with incomes at or above the amount designated as Substantial Gainful Activity (SGA), this premise appears to be substantiated.
To address this premise, the AOI Advisory Group has proposed that a third payment option be made available to SVRAs, an option that would supplement, not supplant, existing options available under the Ticket to Work program. Under the AOI Advisory Group’s proposal, a SVRA would provide vocational rehabilitation services, including supported employment and other time-limited employment-related services and supports, directly or through contracts with community rehabilitation programs, including Employment Networks (ENs), and then bill SSA under the traditional cost reimbursement payment system when an individual is earning at or above SGA for 9 consecutive months. An EN, working in cooperation with the SVRA, would then be able to accept the beneficiary’s Ticket after VR reimbursement billing is submitted to SSA, to the end that savings would still accrue to the Trust Fund (for SSDI) and the Treasury (for SSI) as a result of the beneficiary’s earnings. Under the AOI proposal, the value of the Ticket would not exceed the value of the outcome payments available under the outcome-milestone payment system. In practice, this approach would permit an EN to accept a beneficiary’s ticket after VR’s reimbursement claim has been filed with SSA. The remaining value of the Ticket would be equal to the total of the Outcome payments in the Outcome-Milestone Payment Option minus the amount the VR submitted for cost reimbursement. Under this payment option, the reimbursement payment would be considered as replacing the Milestone portion of that payment sequence. The remaining value of the ticket would be divided by the remaining 17 quarters of the 60-month/20-quarter ticket outcome payment period and that would be the quarterly payment available to the EN for providing extended or ongoing support service to ensure job retention.
This proposed payment option would be particularly good for individuals with significant disabilities who need extended or ongoing support services in order to maintain employment. It would permit SVRAs to partner with ENs to provide the continuum of services and supports necessary to effectively address the needs of individuals in the targeted groups identified in the TWWIIA legislation. It would increase the collaboration between SVRAs and ENs, thus better supporting participants in the Ticket to Work program. It would reduce the risk an EN would assume when serving individuals with disabilities in the targeted groups.
Jo Anne B. Barnhart February 10, 2004
SSA Commissioner
A draft of the AOI Advisory Group’s Recommendation 3 was shared with members of CSAVR’s Ad Hoc Ticket Work Group for discussion and comment during the Ticket Training conducted for third round Ticket states in August, 2003. Members of the Work Group were very excited about this proposal. A number of advantages related to the proposal were identified, including:
· Consumers would have access to a continuum of services because a specific funding stream would be available to provide on-the-job and long-term services and supports for consumers in supported employment and individuals with episodic disabilities such as mental illness.
· Members of CSAVR’s Ad Hoc Ticket Work Group, who are referring to this new payment option as “sequential funding,” felt the approach would encourage partnerships between SVRAs and ENs.
· These new partnerships would likely be easy to administer because it would reduce the need for interagency agreements that are fiscally binding.
· Beneficiaries who receive the extended services or ongoing support services that they need are more likely to sustain and advance in employment. This could potentially reduce the number of beneficiaries who must rely on VR for post-employment services or who work, become unemployed for some reason, and reapply for VR services.
However, CSAVR’s Ad Hoc Ticket Work Group did identify two potential disadvantages to this approach. First, as indicated in the AOI recommendation, SVRAs would bear all the risk involved in serving these individuals since beneficiaries with disabilities are presumptively eligible for VR services and since they must achieve 9 consecutive months of SGA before VR can submit for cost reimbursement. As mentioned earlier, only about 20 percent of the beneficiaries served by VR achieve this outcome.
Second, in some states the number of approved ENs is small and/or large parts of the state do not have any approved ENs available locally. In these states, beneficiaries would not have access to the extended services or ongoing support services needed to maintain employment. Consequently, SSA should consider allowing VR to be the recipient of the funds for extended services or ongoing support services when an EN is not available to provide these services.
To address some of these disadvantages, CSAVR’s Ad Hoc Ticket Work Group would like to propose that SSA consider a slight modification to the AOI recommendation regarding “sequential funding.” Under CSAVR’s proposed alternative, VR would submit for cost reimbursement based on the cost of services provided and associated administrative fees (ACP costs). SSA would then discount the total amount of possible outcome payments by the average reimbursement for the last documented year (rather than by the actual amount billed by VR for a particular beneficiary). The amount
Jo Anne B. Barnhart February 10, 2004
SSA Commissioner
of outcome payments left after this standardized discount would then be available for an EN to provide extended or ongoing support services.
This modification to the AOI recommendation would address VR’s concern that those beneficiaries with the most costly service needs would not have access to funds to pay for the extended or ongoing services needed to maintain them in employment. In addition, this would simplify SSA’s administration of this payment system since individual calculations would not be required for each beneficiary served under this payment option.
While SSA may be concerned because the total payments made under CSAVR’s proposed modification to this payment option would, at times, be greater than the total potential outcome payments under the Ticket program, the total of the cost reimbursement payment and the remaining discounted outcome payments could still be limited similar to the currently applicable limitation on payments under the traditional cost reimbursement system.
Section 6.5 (“Savings to the Trust Fund”) of SSA’s Vocational Rehabilitation Provider’s Handbook states that by law, “payments made to providers under the VR program cannot exceed the estimated savings to these funds" (i.e., the Trust fund for SSDI and the Treasury for SSI) [Sec. 6.5(A)].
In addition, subsection (B) (“The Current Savings Formula”) of Section 6.5 states:
“The amount of savings is determined on a case-by-case basis by an actuarial formula that is based on the use of two factors that determine the savings to the trust fund or general revenue fund. Each of the factors was developed by SSA’s Office of the Actuary and is based on a formula which considers the individual’s monthly benefit amount, expected duration of the disability, age at the time the person completes the continuous period of SGA, and gender. The factors are as follows:
1. The first factor represents savings of administrative costs (salaries, rent for property and equipment, purchase of supplies, etc.).
2. The second factor represents savings expected from decreased benefit payments resulting from the expected eventual termination of benefit payments to an individual because of work.”
Given that parameters for cost reimbursement have already been established, CSAVR’s modification to the AOI proposal could easily be kept within SSA’s current policy guidelines that limit the total amount of payments made on behalf of a particular beneficiary.
Jo Anne B. Barnhart February 10, 2004
SSA Commissioner
In summary, CSAVR is very excited about the recommendation being put forth by the AOI Advisory Group and the potential to address funding for extended services and ongoing support services for individuals with significant disabilities. However, the devil is always in the details. If SSA does decide to move forward with implementing a payment option similar to the AOI recommendation, we respectfully request that CSAVR representatives be consulted on a regular basis to ensure that any proposed changes provide maximum benefit to beneficiaries and that they do not negatively impact the Public VR Program in any way.
Sincerely,
Carl Suter
Executive Director
CC: Deputy Commissioner Martin Gerry, Disability & Income Security Programs, SSA
Commissioner Joanne Wilson, Rehabilitation Services Administration
Kim Hildred, Majority Staff Director, House Subcommittee on Social Security
Katheryn Olson, Minority Staff Director, House Subcommittee on Social Security
Connie Garner, Professional Staff to Senator Kennedy
Justin King, Professional Staff to Senator Jeffords
Holly Schmitt, Professional Staff to Senator Bunning
Sarah Wiggins Mitchell, Chair, TWWIA Panel
Marie Strahan, SSA
David Mank, Ph.D., Chair of AOI Advisory Group
