MINUTES OF THE INFORMAL MEETING OF THE JOHNSON COUNTY BOARD OF SUPERVISORS:
APRIL 11, 2007
Chairperson Harney called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 9:03 a.m. Members present were: Pat Harney, Larry Meyers, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Mental Health/Developmental Disabilities Services Director Elaine Sweet began by stating that this is the annual MH/DD work session with the Board for the purpose of establishing guidelines for proceeding with MH/DD contract rate negotiations. Mental Health/Developmental Disabilities Services has conducted an annual work session with the Board of Supervisors for several years, where MH/DD talks with the Board about how MH/DD negotiates contracts with the County Rate Information Systems (CRIS) providers, and the increase that should be allowed to the providers for salaries, benefits, and non-personnel related expenses. Sweet noted that she and MH/DD Contract Administrator Doug White have already had one round of contract negotiation meetings with all of the CRIS providers. MH/DD is ready to proceed with negotiating the rates and contracts that will be effective July 1st with the Board of Supervisors direction on what kind of inflationary increases to allow the CRIS providers. Any providers that don’t participate in CRIS receive the last rate that MH/DD paid CRIS providers for the same service. Sweet explained that MH/DD will have a number of new contracts due to the med fund administration reverting to the County on January 1, 2007. There will also be approximately 11 contracts with pharmacies for medication, and a contract with St. Luke’s Hospital in Cedar Rapids as required by Code.
Sweet noted that White has provided the Board with some background information on the rates and moneys MH/DD expended on services for MH/DD populations. In total MH/DD is anticipating that they will be spending $3.7 million for services to Johnson County providers, which is only for 100% County funded services. The County’s portion of waiver and ARO services is not included in the $3.7 million figure. Those rates are negotiated at the State level rather than at the local level. Therefore, when MH/DD talks about contract negotiations they are talking about just the 100% County funded services or rather the $3.7 million with a couple of exceptions. There are a few wavier services that are wavier programs that depend on the County to negotiate for them, for example transportation.
Sweet explained that they have looked at the 2007 to 2008 budget and calculated roughly what different percentage increases would cost MH/DD in terms of where they are anticipating that they will be with their local providers. For example, if the Board of Supervisors were to give a 2% overall inflationary factor, the cost to Johnson County would be $74,251. A 6% increase in the overall inflationary factor would cost the County $222,753. MH/DD also has provided the Board of Supervisors with what the County has done historically. In Fiscal Year 2004 to 2005 for personnel related expenses MH/DD factored a 1.75% increase which was applied twice during the year. In Fiscal Year 2005 to 2006 it was 2% and in the Fiscal Year 2006 to 2007 it was also 2%, which is consistent with the payroll increases that the County awarded the non-bargaining unit Johnson County employees. The annual inflationary factor at 1.9%, 2%, and 2% was consistent with the consumer price index for non-personnel related expenses.
Neuzil asked if it is 4% for the Fiscal Year 2006 to 2006 in total. White stated that it would be if they were to be applying the two. Neuzil stated that then it would be approximately 3.15% to 3.25%, which would have a fiscal impact of $111,000. Sweet added that it would depend on what the Board decides. If the Board decided to use 2% for the non-personnel and then give 2% twice during the year for personnel it would be different than giving 4% once during the year. R. Sullivan asked what the importance is in distinguishing between personnel and non-personnel. Sweet stated that in the case of Fiscal Year 2004 to 2005 there was a different percentage applied to the payroll personnel and the non-payroll personnel. The Board of Supervisors has consistently felt that it is fair to give providers the same personnel increase as Johnson County employees are receiving. Sweet added that this is not always the same as the consumer price index. Therefore, things don’t have to be continued in this fashion if the Board of Supervisors would rather apply a standard percentage.
Stutsman asked if part of the rationale for giving increases in this fashion was to make sure that the dollars went to personnel items because the Board didn’t want the dollars to be absorbed into the general operating budget because the Board wanted the providers to give raises to their employees. R. Sullivan added that in the Fiscal Year 2006 to 2007 the fact that the payroll increase happened twice was really 3.2% for an annual raise and then there was an additional 2% in addition to that. Sweet stated that the 3.2% was applied only to the personnel related expenses and not across the board. R. Sullivan said that 2% was applied to non-personnel expenses. Sweet concurred. Neuzil added that it was decided to do it this way to give the providers an incentive to provide a little more money for their employees which was something that the providers had asked for as well.
Sweet stated that during the 2004 to 2005 time period provider agencies were having a difficult time acquiring and retaining staff. There was large turnover and there were agencies that had waiting lists because they didn’t have enough staff. At that point in time there was a lot of effort put into raising the starting salary rates so that providers were able to acquire and retain employees. These efforts have been very successful at accomplishing this. R. Sullivan asked if the calculations of the 2% and 3% were calculated as being applied twice during the year. Sweet stated that this was strictly taking the total and applying a 2% increase. R. Sullivan replied that the real impact would be 1.5 times that over the course of the fiscal year. Sweet stated that it depends on what direction the Board decides to go. R. Sullivan stated that he is just trying to clarify some of the numbers on the handout because it appears that MH/DD is comparing apples to oranges and he just would like to make sure that they are comparing apples to apples. R. Sullivan stated that Fiscal Year 2006 to 2007 has a 2% increase which happened twice during the six-month interval, but then if he looks at the 2% figure it only represents one application of 2% where they are talking about two applications of 2%. Therefore, the cost would not be approximately $74,000 it would be more approximately 1.5 times that amount. Sweet added that the 2% to 6% is only an example due to the fact that it has not been decide yet, therefore, this depends on what the Board decides to do for the Fiscal Year 2007 to 2008. White explained that the top half of the spreadsheet uses the pricing structure that MH/DD has in place right now for all of the providers and increases it by 2%, 3%, or 4%; in the bottom half of the worksheet those percentages are applied against the cost reports themselves. Therefore MH/DD is coming at a new price structure from two different directions, one is to look at the old rates and one is to look at the cost and increase it by the inflationary factors.
Harney asked that when the Board of Supervisors is looking at the contracted rate the Board is looking at the overall services which include personnel as well as MH/DD costs and overhead. Stutsman stated that it is all over MH/DD costs. Sweets added that they are actual costs. Stutsman stated that at this point the question is where is the Board at with the budget and what can the Board of Supervisors do. Sweet stated that MH/DD is currently working on the amended budget that is due on Monday. She noted that there are still a few things that need to be researched due to the fact that it is hard to get a handle on the issues with the Adult Rehab Option and the Rehabilitation Services because MH/DD is in the middle of implementing changes in those two programs. Sweet added that the way it looks currently for the amended budget is that it appears that MH/DD will still have a good stable balance at the end of the fiscal year. The ending balance will be down from last year. As of this morning MH/DD is looking at a 5% to 6% fund balance as opposed to a 9.2% increase at the end of last year. Sweet added that these are projections based on what MH/DD currently knows now and things might change by June 30, 2007. This shows that MH/DD has been doing what the Board of Supervisors has asked them to do which was to spend down the MH/DD fund balance, but at the same time MH/DD isn’t spending all of the funds because the funds do still remain there.
Sweet said that for MH/DD to maintain a quality and viable MH/DD service system they to be sure that providers have a rate that will allow them to continue to provide services. When the rates are cut from the providers and it is expected that the providers provide the same level and quality of services, but not allow the providers to give their staff increases then long term the County would be hurting the entire system both locally and with the clients. Therefore, Sweet said that she feels if the Board of Supervisors does want MH/DD to cut their costs she doesn't feel that this is the place for those cuts to take place.
Harney said that personnel should get at least the inflationary cost and then what ever the Board feels is necessary on top of that for their services. Sweet asked the Board if they had determined yet what they are going to do for the non-bargaining employees at the County level. Stutsman replied that the budget has been certified. Neuzil added that he agrees with this as well, but he also fundamentally believes that the Board should be looking at what everyone else is paying around the state using the CRIS formulas in trying to come fairly close to some of these things as well and looking for spikes that don’t seem reasonable. Neuzil asked Sweet if she could clarify how these issues are factored in when making the negotiations. Sweet replied that MH/DD looks at where they had negotiated the rate and where the actual cost came in for that same time period. For any providers whose costs are consistently coming in less than the rate at which was negotiated MH/DD drops the rate 25% per year until the provider gets down to where their costs and rates are equal. Neuzil asked if this procedure is still effective. Sweet replied that this procedure is still working. Stutsman asked what the Board of Supervisors gave to the bargaining units. Neuzil stated that it depends on what unit is used. It is either 3.25% or the 2% and 2%, which come out to be about the same.
Sweet said that MH/DD has already been through one round of contracting with the CRIS providers and they are ready to move forward as soon as the Board gives direction. Sweet added that the providers need to be commended for the way they work together. MH/DD has seen a lot of collaboration on the part of the provider network in Johnson County in trying to poll resources and work together to gain efficiency and to work with MH/DD to be sure that the moneys are being spent appropriately and in the best interest of the consumers. This has gone a long way in Johnson County to keep MH/DD in the good financial position that MH/DD continues to enjoy. Again, MH/DD doesn’t have a waiting list in Johnson County and they are not looking at cutting critical services, as are many of the counties throughout the state. Therefore, MH/DD providers should be commended for this. MH/DD truly enjoys a very cohesive, positive, productive, provider network in Johnson County whereas many counties are at odds. Sweet said that when she goes to state-wide CPC meetings there is a lot of conversation about the need for arbitration between CPCs and providers. In many counties the disagreements and the odds have grown so large between the CPC and the provider agencies that they are actually putting a program together for arbitration. This has never been an issue that Johnson County has experienced. Neuzil said that given the fact that Johnson County is still doing okay with the fund balance there are not a whole lot of changes need. He said that it is also reasonable that the Board would give a similar personnel increase to providers as they did their own employees. Neuzil suggested the Board give a 2% increase twice during the year.
Sweet said that many of the other counties have clients in Johnson County as well, therefore, the local providers are dependent on MH/DD to negotiate reasonable rates that are applied to their contracts or to other counties recognizing the host counties contracted rate as well. The waiver is looking even more and more at counties to be negotiating rates for the waiver program. This allows the providers to bring in more Federal and State moneys and moneys from other counties to support their operations. Stutsman said that it is appropriate for the Board of Supervisors to support what it costs to do business in Johnson County and not what it costs to do business in a different county due to the fact that it is totally different. Stutsman said that she is looking for the providers of Johnson County to be stable in this environment.
Sweet stated that whatever MH/DD has been doing, they have been doing it right so far, therefore, unless there is a reason to change Sweet wouldn’t recommend that the Board of Supervisors stray too far from what has been done in the past. Stutsman reiterated that the Board is going to give a 2% increase twice a year for personnel and 2% for the total year for non-personnel expenses. Neuzil said that this is consistent with what the Board did in 2005 to 2006 and 2006 to 2007. Sweet added that MH/DD is very dependent right now on what the legislature does.
Harney asked if there has been any feedback from the providers on what their inflation rate is. Sweet replied that MH/DD has the providers actual cost reports from the last fiscal year, which is the starting point when MH/DD begins negotiating rates. Sweet added that Contract Employee Doug White analyzes the cost reports and the next step is for MH/DD to sit down with both the administrators and the finance people in each of the agencies to take a look at those costs and to ensure that the costs reflect the same thing across the entire provider network and that all things are being treated consistently. Harney replied that the cost reports are fairly stable from the past year. Sweet added that as a CRIS provider MH/DD has access to the information from all of the other counties that participate in the CRIS program. Therefore, part of MH/DD's process is to take a look at where Johnson County agencies costs and rates are compared to other agencies throughout the state. Neuzil restated that MH/DD adjusts these yearly, so that if the rates and costs get too high MH/DD will continue to drop them until they are more in line with what everyone else is paying. Sweet said that it would probably be a good idea to add this to whatever decision the Board does end up making, that is that MH/DD will continue to do the 25% reduction to bring the cost and the providers rates more equally in line.
R. Sullivan asked if CRIS puts caps on the pay of the upper level management and the direct line staff. Sweet replied that the CRIS report doesn’t put different caps on those different line items, but it becomes confusing due to the fact that there are so many different cost reports that are required. Where MH/DD doesn’t do this internally some of the other payers do waiver for example, and the providers are limited to how much of their cost can go toward administration versus other costs. Sweet said that there is legislation that is pending that will provide for one cost report to be used for everything instead of providers having to do four or five different cost reports depending on who their founders are. This is something that MH/DD talks regularly about with its agencies, not just at contract time but also throughout the year. Recently there has been a lot of discussion on this issue due to the change in minimum wage and how that is affecting their overnight staff that was at minimum wage, but also then how that will filter through the agencies and disrupt the balance between the different levels and the different pay ranges within the agencies. Therefore, this is something that MH/DD is also having to take into consideration.
Neuzil stated that it is import to try and keep some kind of consistency. Over the years there have been times when there wasn’t much for raises at all. Neuzil said that it would be nice to have a trend and keep the trend because then the providers could factor that in when they are creating their budget. This is another reason for the Board to try and stick to what it has already been doing in previous years. Harney said that he understands that MH/DD is going by the contract rate. Some agencies' rates are getting higher than other rates. Harney asked if they would want to cap some rates that are increasing more than others. Sweet explained that there are a lot of unique considerations within the agencies that have to be factored in. An agency that is providing SCL for the mentally retarded and the developmentally disabled is providing a very different service than an agency that is providing SCL for the chronically mentally ill whose mental illness may be active at the time. Therefore, SCL is a very different service depending on the agency. If a consumer were to come in and apply for services, not every agency that MH/DD contracts with for SCL is able to provide that service to a particular consumer. Sweet said that another thing that impacts the rate structure is the accreditation and depending on the agency and what service they provide. An agency that provides supported community living, vocational services, and respite services is going to have to pay for a lot more accreditation then an agency that just provides one service. The services and the accreditation standards vary between agencies also.
Harney said that he would like to make sure that the Board of Supervisors is being fair to each of the providers. Sweet stated that MH/DD meets regularly and talks with the provider networks about these issues. Sweet said that if the Board of Supervisors were to poll the providers she would be surprised if the Board were to find that any of the providers felt as though there was any kind of favoritism or that they were not being treated fairly within the provider network. Sweet added that maybe this needs to be done and the providers need to be polled so that they can find out if this is in fact the case. Stutsman asked Sweet if the Board has given her enough direction. Sweet said yes, but the Board also needs to act on it. Stutsman said that it would be recapped in the minutes when the contracts come in.
Adjourned at 10:50 a.m.
Attest: Tom Slockett, Auditor
By Casie Kadlec, Recording Secretary