Mr. Rick Dwyer, Project Manager
Mr. Jamie Kilpatrick, Deputy Project Manager
Dear Mr. Dwyer and Mr. Kilpatrick,
On behalf of the
providers of ACTS (Agencies for Children’s Therapy Services), we wish to thank PCG (the State Fiscal Agent) for your
efforts in coordinating Early Intervention payments and information. You are probably aware that the ACTS members collectively
provide a majority of the services in the Early Intervention Program (EIP).
work system wide and your help to individual providers with particular problems is appreciated. I also note that as PCG is
approaching the first anniversary of assuming financial management of the EIP pursuant to law, PCG has certainly made strides
towards stabilizing the various systems and payment constructs. When you assumed management last Fall the EIP as it related
to timely payments to providers was totally out of control, chaotic and threatening the financial viability of many Early
Intervention (EI) agencies and individual providers.
your efforts to deal with the myriad problems of a billing process that clearly was prematurely implemented, and we appreciate
the system improvements. However, even now many providers are NOT being paid in a timely manner.
Cash flow is the lifeline of providers. If there is no reliability as to when agencies will be reimbursed
for their expenditures pursuant to claims and vouchers submitted to the Fiscal Agent, their ability to pay their obligations
is put at risk as are the services they provide to vulnerable children of this State.
When in 2012 the State Legislature passed the measure which established a State Fiscal Agent to be responsible
for the financial management of the EIP, the Legislature DID NOT change the binding rule set forth in Section 2557(1) of the
Public Health Law which states explicitly that payment of “ALL approved costs” to service providers and others
shall be made “at least quarterly by the appropriate governing body…upon vouchers presented and audited in the
same manner as the case of other claims against the municipality.” Approved Early Intervention services (and subsequent
claims) are defined in Section 2541(7) of the Public Health Law. Furthermore Section 2559(3)(iii) of the Public Health Law
specifies that providers shall submit those incurred costs to the Fiscal Agent for claiming payment.
Put quite simply…payment of “ALL approved costs” and doing so “at least quarterly”
could not be more clear or explicit.
There is absolutely nothing in
the law or past practices to suggest that the Fiscal Agent is authorized to make providers wait until commercial insurance
or Medicaid has adjudicated a claim before a provider can be reimbursed for their “approved costs.” Quite the
contrary. Prior to the advent of the State Fiscal Agent, municipalities who were then responsible for paying providers did
so within three months of receiving their invoices, pursuant to instructions from the Public Health Law sections that I have
cited. In most counties, that was accomplished in much less than three months.
fact the law only refers to the requirement that providers (through the Fiscal Agent) must first “seek payment”
of their claims from third party payors prior to municipalities being billed for such services. The law DOES NOT say
that such claims must first be adjudicated by third party payors prior to municipalities being billed for their contribution
into the escrow account from which the Fiscal Agent makes direct payments to providers which again, must be made “at
least quarterly”. There is a world of difference between “seeking payment” and “adjudication”.
The Fiscal Agent’s practice of waiting for third party payors to adjudicate a claim prior to municipalities being billed,
and providers being paid, has no basis in law and is contrary to legislative intent and the history of the Early Intervention
As for “approved costs”…that refers NOT
to claims after they have been processed by commercial insurance or Medicaid, but rather to provider billable costs that are
appropriate to the Early Intervention Program according to the Department of Health. That IS and always has been the meaning
of “approved costs”. In fact if the adjudication of a claim were the benchmark for determining “approved
costs” then the only costs that would fall into that category would be those approved and paid for through third party
or government payor insurance plans. That is totally illogical because such “approved” costs would already have
been paid by such third party or government payors leaving only “unapproved” costs to be reimbursed to providers
from the escrow account by the Fiscal Agent. That is not what Section 2557(1)(2) and 2547(2) of the Public Health Law provides
nor what the Legislature intended.
Considering the foregoing and in
accordance with New York State law, ACTS demands that the Fiscal Agent remit to its member agencies all approved costs related
to Early Intervention upon the submission of vouchers within the period of time specified in the Public Health Law (Section
2557). If the Fiscal Agent fails to do this, it will be in willful violation of the law and subject to the appropriate remedies
in the courts.
If you disagree with our views set forth here I would
appreciate knowing your reasoning. Otherwise I will presume that you concur.
again thanks you and your colleagues for your efforts to improve the Early Intervention payment procedures. We hope, but also
insist, that those efforts in the future will be consistent with the law.
ACTS TESTIFIES at HEALTH COMMITTEE BUDGET HEARING IN ALBANY CONCERNING EDUCATION
On February 3, 2014, this testimony was delivered to the Health Committee Budget Hearing by ACTS
Executive Director Steven Sanders, who for 28 years was a Member of the State Assembly and one of the original sponsors of
the law creating Early Intervention:
DeFrancisco, Chairman Farrell, Chairman Hannon, Chairman Gottfried and Members of this Joint Budget Committee
name is Steven Sanders. I am Executive Director of ACTS, an association of agencies that provide a majority
of the Early Intervention services statewide.
Sometimes the very worst policy
decisions are the decisions to do nothing. Proposing nothing is as surely a budget choice as proposing something…and
that policy choice carries real consequence. Imagine for a moment a breakout of an infectious disease threatening the wellbeing
of tens of thousands of toddlers, and in the face of that crisis the Governor and the Department of Health chose to recommend
no action in the budget…just status quo.
Well that is exactly the policy recommendation of
the Governor for the Early Intervention Program in crisis. After a year of chaos and an obviously flawed billing protocol
implemented by the Department of Health last April, the Governor has proposed no change. Agencies and individual providers
are waiting long months for reimbursement of services performed, and in some cases STILL waiting since April, May and June.
As a result, programs for at risk children are also in jeopardy.
He has opted not to fix
a system that continues to fail, despite the best efforts and dedication of officials at the Bureau of Early Intervention.
It is not their fault. Like providers they too are overwhelmed by difficulties that defy solutions, and insurers who defy
their responsibilities. The fault lies in the poorly conceived plan. The Legislature was only given sparse
details of that plan in the 2012 budget.
Providers and Legislators were promised and voted for a
system of billing that bypassed the counties, and would be managed by a State Fiscal Agent. A system which the Department
promised that payments would be processed promptly and that commercial insurance would be paying more of their fair share.
None of that has happened. Providers large and small have been
put at great financial risk, some operating on the edge of insolvency, undermining services. In recent
months reimbursements have actually slowed, not accelerated. And while counties have been relieved of much of their
tasks and expenses, it has largely been the providers, and NOT the Fiscal Agent, who have absorbed enormous additional work
to process claims. This has added dozens of hours of additional administrative work each week, uncompensated. In
contrast counties WERE paid for much of their tasks of processing E.I. claims, to the tune of nearly $13 million each year
statewide. Providers got the work but not the compensation.
As for payment by commercial insurance,
according to the Department’s figures, after 10 months that payment is half of what historically was remitted. And contrary
to the data given to you this morning by Commissioner Shah, providers have NOT been paid 91% of what they billed since April.
The actual number is closer to 85% for nearly the whole year. That is because the Department does not include all claims submitted
by providers in their calculation. That translates into over forty million dollars still owed providers, some of those unpaid
claims actually going back eight, nine and even ten months!
This is not a success story by any metric
or measurement. Put simply, it is a failure. It is threatening the viability of hundreds of providers and more importantly
threatening the continuity of services for our most vulnerable toddlers. It degrades a program that for over 20 years has
saved the state countless tens of millions of dollars EACH YEAR in avoided far more expensive special education costs. In
the Executive’s view nothing is wrong, nothing needs fixing. I am here to tell you the Executive is wrong.
What is desperately needed is for the Legislature to repair what the Governor stubbornly refuses to acknowledge.
The prescription to restore the Early Intervention Program to good health has already been written.
It is embodied in the legislation that has been introduced by Senator Hannon (S.6002), and Assemblyman Gottfried (A.8316).
The measure would do what the Legislature THOUGHT it was doing two years ago: Require the State Fiscal Agent to act
as the true intermediary between providers and third party payors. The Fiscal Agent would replace the functions administered
by the counties prior to April 1. Isn’t that really the job of the Fiscal Agent? Isn’t that what the
State is paying it $45 million to do?
Second and importantly, the bill would assure that providers
are reimbursed, in whole, for their services within a specified period of time. The Department boasts that providers have
been paid for “most” of their services. Really? Is this how the State operates?
After nearly a year providers are still waiting and waiting for reimbursements, uncertain when
they might be paid. What other business would accept being paid for “most” of their contract or services? What
lender or landlord would be satisfied with being paid for “most” of their bill? Would the State be content with
taxpayers paying “most” of their tax obligation each year?
The commitments made by the
Governor and the Department have not been kept because the problems are systemic. Making providers wait until commercial insurance
gets around to adjudicating a claim, if ever, in order to be paid by anyone has been, and continues to be, a losing proposition.
In summary: Commercial insurance payments have declined not improved; Providers are not being paid promptly,
and in some cases not at all. The Fiscal Agent is not doing most of the billing tasks. That work has fallen on providers increasing
their time and expense all of which is uncompensated. A loss of time means less time for services. There are only so many
hours in a week.
The Early Intervention Program continues in crisis. Parents and providers have
pleaded with the Governor to do something. He refuses to respond or to act. Worse still, he asserts that nothing is wrong.
Now we beseech the Legislature to act and to correct the Governor’s poor policy choice of
inaction in this budget.
THANK YOU for always listening and for being the champion for the Early
ACTS TESTIFIES at LEGISLATIVE BUDGET HEARING IN ALBANY
On January 28, 2014, this testimony was delivered to the Legislature
Budget Hearing by ACTS Executive Director Steven Sanders, who for 28 years was Member of the State Assembly and one
of the original sponsors of the law creating Early Intervention:
Chairman DeFrancisco , Chairman Farrell, Chairman Flanagan,
Chairwoman Nolan and Members of this Joint Budget Committee:
I thank you for this opportunity to
testify today. My name is Steven Sanders. I am the Executive Director of ACTS…Agencies for Children’s Therapy
Services. ACTS is an association of providers of pre-school special education and Early Intervention agencies from around
Education is back in the forefront of the Governor’s budget proposals, as it
should be. Ultimately we can all agree that there is no concern more important to our State’s future and economy than
the education of ALL the children of this State.
The Governor highlighted early childhood education
issues. Today I want to discuss one aspect: insuring an efficient and adequate delivery system of services
to preschoolers in need of special education programs in their home. It is commonly referred to as SEIT, special education
ACTS agrees that a payment methodology which replaces the cumbersome tuition
based methodology predicated on a provider by provider cost determination is something that the State should consider. Establishing
a regional rate for similar services of all providers in a region is a sensible concept, but must be done with great care
and a thorough cost analysis.
Regional comparative costs of compensation, completion of session
notes and other mandated paper work, travel time, coordination of related services, supervision of professional staff, billing
and collection, cost reporting preparation and other associated educational cost factors
need to be assessed so that providers receive a sustainable rate to deliver a quality educational product for youngsters whose
needs require in home instruction and help.
And while this may not be rocket science, neither is
it such an easy and simple matter to arrive at the proper rate for each region of the state.
all a regional rate is intended to do is to just drive down expenses to the state without regard to what the real costs may
be, then the children who need these services will suffer. A cost study for each region must be scrupulously examined before
regional rates can be established. This study should be done by the State Education Department and submitted to the Legislature
for its review. It is foolish to think that such a comprehensive study can be properly accomplished and implemented in just
a few months.
Moreover there will be inevitable adjustments that agencies will need to account
for and incorporate in their finances and business models which will also take some time. This is especially true if the regional
rate varies considerably from their current tuition rate. Indeed if such new rates are in substantial variance with existing
rates, they may need to be phased in over several years. Once a regional rate is established and embedded it must be THE rate.
It would then be the responsibility of providers to deliver the educational services at or below that cost line, with no “claw-backs”
In addition, any established rate will need to be indexed and adjusted for inflation as
is the case under current methodology for current CPSE and CSE programs. Otherwise, providers’ ability
to continue to deliver needed services will be put into jeopardy over time.
I strongly recommend that no transition to regional rates be planned prior to the 2015-16 School Year. It is essential that
SEIT programs know what rate they can expect long before they must begin to deliver services based on this new methodology
and payment expectations.
The Governor also recommends that payment be based
on actual services, similar to the Early Intervention Program. The idea is that payments will be available once the service
is performed and then billed. This sequence works only if there is prompt remittance. With that caveat ACTS would support
ACTS disagrees strenuously that the New York City School District be given special
authority to award SEIT contracts based on an RFP process or competitive bid. That idea flies in the face of the regional
rate concept. The regional rate idea works because it eliminates a lot of unnecessary bureaucracy both for providers and government
and it treats SEIT providers in the same region equally and fairly.
To place New York City SEIT
providers in a position where they must compete against one and other for approval, and inevitably try to low ball bids in
order to receive contracts will surely compromise services for the children who need them the most. Education programs are
not like construction contracts where the cost of material and labor can be negotiated. We should not want SEIT providers
or any providers, to cut corners when they are delivering special education services. If NYC rates are substantially below
rates in neighboring counties, teachers will accept work in counties outside of NYC resulting in fewer children receiving
services in NYC. All providers should receive a fair rate, set by the State and then provide excellent
services to our most vulnerable students.
ACTS is dedicated to the proposition that pre-school special
education, and SEIT in particular, should be provided always with great dedication and professional skill. Significant changes
as those that the Governor proposes, if adopted, must be developed thoughtfully and not rushed creating the utter havoc we
saw this past year with the billing changes to the Early Intervention Program. We should be planning for
a rational transition and not try to force big changes in just a matter of months in order to meet some arbitrary date or
self-imposed political deadline. That is why I stress that such changes must not occur before the 2015-16 School Year.
ACTS is prepared to work with the Legislature and the State Education Department to assist in the planning.
As always, we appreciate the opportunity afforded to us to present this testimony.
ACTS TESTIFIES at PUBLIC HEARING
IN ALBANY FOR NEEDED E.I. BILLING CHANGES
On October 22, 2013,
the State Assembly held important legislative Hearings in Albany into the problems with the Early Intervention billing transition
and Fiscal Agent. Along with a number of other associations and providers ACTS presented the following testimony which was
very well received by the panel of Legislators. ACTS will be following up with additional meetings and communications with
members of the State Assembly and the State Senate in advance of their return to Session in January. This testimony was delivered
to the Legislature by ACTS Executive Director Steven Sanders, who for 28 years was a Member of the State Assembly and one
of the original sponsors of the law creating Early Intervention:
Thank you for this opportunity to address the Assembly Committees on Health, Insurance
and Oversight, regarding the critical issues impacting the Early Intervention Program, which for 20 years was the envy of
Intervention is estimated to save seven dollars for every dollar that the state invests. This is true because successful
Early Intervention AVOIDS or REDUCES far more expensive Special Education services which multiplies costs to school districts
and to the State significantly. Over 70,000 preschool toddlers need these critical services each year. They
and their families are served by highly skilled and dedicated professionals and agencies.
Yet the Early Intervention Program has been unnecessarily
placed in serious crisis this year.
Because of an ill-conceived transition process in the billing protocol resulting from a change in the law,
for months this year providers were not paid, at all…and now nearly seven months into this transition, long delays
in reimbursements, particularly for commercial insurance claims, persist. According to the DOH’s figures nearly 60%
of commercial insurance “claims” since April STILL remain in limbo. That equates to over 70% of the actual dollar
reimbursements still owed to providers! A case in point: members of my association on average are
still owed 77% of their commercial insurance claims.
The Department of Health would have you believe that things are going fine now. They most certainly
are not. They may tell you that 85% of total claims have been responded to. However taking nearly seven months to reach that
figure is not a measure of success. It is a statistic of futility and one that cannot be continued. Many
providers faced with insolvency resorted to financing costly loans using their homes and personal assets as collateral just
to keep services to at risk children from ceasing.
How did a program that operated so well for two decades devolve so quickly in just a matter of months?
Fortunately the answer to that question is NOT complicated… nor are the
Governor Cuomo proposed drastic changes to Early Intervention which would have delegated control of the program to commercial
insurance, creating an odd managed care medical model, totally unsuited for this education readiness program. The Legislature
correctly rejected that idea and instead approved what it thought were some cost saving and streamlining measures. Effective
April of this year providers would contract directly with the State instead of local Counties. A State
Fiscal Agent was supposed to be established to manage all provider claims.
The measure also relieved counties of their time consuming responsibility of processing
billing and recouping payments from third party payors. It was believed that the Fiscal Agent would assume most of those tasks
on behalf of the State.
no Fiscal Agent was in place when the transition began on April 1. Thus no claims were processed nor were any payments made
for nearly two months.
massive amount of paper work and interaction with commercial insurance companies previously handled by County governments,
has somehow become almost the total responsibility of unprepared and uncompensated providers. Nobody expected this! These
are early childhood professionals with advance degrees in learning therapy services. They are not hospitals or medical groups.
They are not, and will never be, insurance billing experts. It is foolish to believe that individual therapists
or agencies can succeed in collecting more money from commercial insurance when local governments with its official powers
and resources could not.
And IF there was the thought that the Fiscal Agent would act as an intermediary
between providers and insurance companies, that simply is not happening. Providers, large and small are incurring
hours and hours of additional work each week and tens of thousands of dollars in additional unreimbursed costs. Once they
submit their claims to the Fiscal Agent it becomes largely the responsibility of providers to deal with the overwhelming tangles
and questions from insurance that inevitably follow. THIS MUST CHANGE. Providers and agencies are
not equipped to assume these extensive and time consuming tasks, and certainly not without any reimbursement.
Moreover just three years
ago the Department of Health spent millions of dollars installing a new computer tracking and billing system for Early Intervention
called “NYEIS” (New York Early Intervention System). The detail and data on claims uploaded by every provider
should be sufficient for the Fiscal Agent to submit clean claims without insurance companies subsequently making ever more
demands for additional information.
change in the billing law most providers received payment of virtually 100% of their claims within about a month of their
billing submission to their County government. And at a minimum they knew when to expect payment. Now, they have no idea how
much or even when they can expect payments. THAT TOO MUST CHANGE.
I am quite certain that when the Legislature approved this new system of billing,
most Members thought that the much heralded Fiscal Agent would be interacting with insurance to assure that providers would
be paid within a reasonable time frame. That has NOT turned out to be the case.
It is CRITICAL to understand that the Fiscal
Agent is supposed to pay providers whatever insurance will not. BUT the Fiscal Agent will not pay providers at all until insurance
has decided how much of the claim (if any) they will pay. With commercial insurance in particular that process has proven
to take months and months and months! And consequently providers must wait months and months and months to be paid for services
cannot run their programs, pay their obligations, and serve their clients if they cannot have a reliable expectation of when
they will be paid. Such a system is simply untenable and financially unsustainable… and terribly, terribly unfair.
And it is jeopardizing services to your constituents.
Sadly I do not anticipate that this situation will improve sufficiently without
Bureau of Early Intervention has tried to ameliorate and resolve problems, and I give them much credit for their efforts and
thank them for their help. It is appreciated. However there is only so much that they can or are willing to do within the
context of the current law.
order to restore some semblance of order and balance, providers must have prompt payment of their claims within
a reasonable and finite time frame. And their overwhelming new administrative tasks must be both lessened and reimbursable.
This can be achieved.
But in order to do so certain policy changes need to occur:
must be paid if not by commercial insurance or Medicaid then through the escrow account within about 30 days of when that
claim is electronically submitted to insurance. If insurance entities do not adjudicate a claim within that period of time,
then it must be the responsibility of the Fiscal Agent to immediately remit payment to providers and reconcile the accounts
at such later point that insurance does finally adjudicate the claim.
from providers that are submitted through NYEIS should be first reviewed by the Fiscal Agent for completeness through appropriate
software filters and then sent to Medicaid and commercial insurance for adjudication and payment.
information is required to be provided through NYEIS should be considered sufficient for insurance adjudication.
and Service Coordinators must be reimbursed for their new administrative tasks and expenses.
remittance, information and payments should be sent by commercial insurance to the Fiscal Agent. The
Fiscal Agent will remit payment to the providers.
And here is another thought suggested by a prominent legislator: Since commercial insurance reimbursement
only accounts for about 3% of the total E.I. payments which according to the Department of Health, is not expected to change
much in the near future, why not avoid the billing morass altogether and simply assess a fee on insurance companies on a proportional
basis to raise the equivalent revenue expected from those companies? It would save all parties much time and grief and allow
services to be provided by therapists and agencies unimpeded, and probably more efficiently. There would be no additional
cost to State and local governments; commercial insurance would be responsible for its fair share; and providers could be
reimbursed by the Fiscal Agent promptly. It is a fascinating idea.
But whatever road the Legislature chooses, it must
not choose the path of status quo with the current system unchanged. That is a road pocked with more difficulties for providers
and less access to services for children and their families.
Early Intervention was one of the most successful programs that this State ever
created, providing desperately needed help to learning delayed youngsters and saving government tens of millions of dollars
each year in avoided costs. It needs to be fixed, NOW, and restored as the exemplar that it was for 20 years.
One thing for sure… that one year
old or two year old child needing services cannot wait a year or two. The clock will not stop while government hopes that
the system will right itself. It will not, and wishing won’t make it so. What is required are amendments
to the law as soon as the Legislature returns to Albany. A year in the life of a small child can make all the
difference for better or for worse. PLEASE choose better.