State

State's cuts squeeze out group homes for disabled

Chicago Tribune; Chicago, Ill.; Feb 23, 2002; Celeste Garrett and Julie Deardorff, Tribune staff reporters;

Abstract: Dungarvin, which operates facilities in 11 other states, made its decision to leave Illinois after the state notified the agency Jan. 22 that Medicaid payments would be reduced by more than $350,000 a year, and that rate would be retroactive to Jan. 1, said Thomas Cook, Dungarvin's regional director.

As Illinois continues to cut payments to group homes for the developmentally disabled, a company that runs 20 of the homes said it can no longer afford to operate here, leaving dozens of residents and their families wondering about their futures.

The company is just one of many organizations getting pinched as the state tightens its purse strings.

Over many years, the state has provided minimal increases in funding to group homes, making it difficult for them to operate. Struggling with shrinking revenues, Gov. George Ryan this week proposed a budget with even deeper cuts. Those are pushing some group homes to the edge, or even over it, advocates and providers say.

Dungarvin Illinois Inc., a for-profit company with homes in Rockford and the Quad Cities, said it will pull out of Illinois on Friday.

The group homes are less expensive alternatives to large state facilities. Typically, four to eight people with disabilities live in each home, with 24-hour supervision.

"We have no idea what's going to happen," said Cheryl Kinsinger, whose autistic son Lance, 26, lives at one of the homes run by Dungarvin. "But some of these people have no family. They are [wards] of the state and who knows what's to happen to them? This is a travesty."

Tony Paulauski, executive director of ARC of Illinois, an advocacy group for the disabled, called the cuts "traumatic for community agencies in Illinois."

"When it shakes out, the smaller [facilities] might have to close," Paulauski said. "We'll certainly see layoffs and service reductions. That's my concern."

Dungarvin, which operates facilities in 11 other states, made its decision to leave Illinois after the state notified the agency Jan. 22 that Medicaid payments would be reduced by more than $350,000 a year, and that rate would be retroactive to Jan. 1, said Thomas Cook, Dungarvin's regional director.

The lower rate would force the agency to operate at a loss of more than $30,000 a month, Cook said. The agency has operated its Illinois division at a loss for the last four years, but never as much as $30,000 a month, a spokesman said.

Though they plan to pull out Friday, Dungarvin officials said they are trying to work with the state to find another operator for the homes, which house 56 residents.

"It's our understanding that they have a responsibility to continue until we can secure new providers," said Tom Green, spokesman for the Illinois Department of Human Services. "We're working on a plan."

Combination of factors

Advocates say four recent decisions are particularly hard on operators of group homes:

- The state has suspended a 2 percent cost-of-living increase for the second year in a row. - The budget would make a $14 million across-the-board reduction in payments for community services for the disabled. - Changing the reimbursement schedule will create cash-flow problems for the homes. - The state is eliminating extra payments for those disabled people with the greatest needs.

"The first thing that makes [the budget proposal] devastating is that for the second year in a row, we're not getting a cost-of-doing- business increase," said Art Dykstra, executive director of Trinity School Services, which operates programs for the developmentally disabled in south Cook, Will and Grundy Counties. "But it's the subtleties [in the proposal] that set the stage for disaster."

Ryan recommended a budget of $4.9 billion for the Illinois Department of Human Services, including increases in some grants for community-based programs serving people with disabilities.

The budget proposal redirects money away from state psychiatric hospitals and into community settings, a shift many providers and advocacy groups say is long overdue. According to a 1999 U.S. Supreme Court decision, known as the Olmstead Act, the developmentally disabled must be placed in settings that--as much as possible--are integrated into the community.

Illinois has the fourth-highest number of developmentally disabled people living in institutional settings, according to a report by the Illinois Association for Rehabilitation Facilities, a trade association for agencies that serve people with disabilities. In 2000, Illinois also ranked among the lowest (39th) in spending on the developmentally disabled.

"Illinois has been very slow to act on Olmstead and if it had started transitioning people to more integrated settings, we wouldn't be in the situation we are now," said Tom Wilson of Access Living.

Funding called inadequate

Ryan's budget proposes adding $5 million to create 110 new spots in group homes. But providers say the funding is inadequate, and whoever takes on the new residents will lose money.

Ryan also proposed standardizing group-home reimbursement rates and changing from a grant-funded system to a fee-for-service arrangement, which means providers will get paid after administering services, rather than before.

Some agencies applaud the change to a fee-for-service plan, calling it a more efficient use of resources.

But the change will cause cash flow problems because homes will be paid only after they provide services, not before. Agencies don't have large reserves on hand and will likely have to borrow from banks to meet expenses.

The Department of Human Services plans to give providers a two- month advance on July 1 to soften the impact of moving to a fee-for- service, Paulauski said. It will then deduct that advance beginning Sept. 1 over the remainder of the fiscal year.

Financial problems for the agencies have been mounting for years. "In the good years of the mid-'90s through the past year we didn't get increases in funding like we should have," said Jim Hogan, president of Cornerstone Services in Joliet. "Now it's disastrous to try to take away the little we received."

Those with loved ones in the Dungarvin homes are hoping for some answers soon. "Everyone here is high-functioning and none of these people need to be institutionalized," said Peg Gorkowski, whose son, Kris Gorkowski, 25, is a resident at one of the Rockford group homes. "And a lot of them, like my son, have daily contact with their families.... Taking him out of Dungarvin and sending him [to another facility] Downstate would be traumatic. The results would be irreversible."