The Colorado Department of Early Childhood on Friday postponed plans to make deep cuts to a program that provides therapeutic care to young children with disabilities, a move that comes as state officials are searching for enough money to keep services in place at least temporarily.
The department had announced earlier this week that, starting Monday, the Early Intervention Colorado program planned to put a four-hour-a-month cap on services such as physical or occupational therapy that children can receive, due to a $4 million budget shortfall.
But as of Friday afternoon, all cuts planned for Early Intervention are paused until further notice, according to an email sent to the program’s partners by Lenita Hartman, acting Early Intervention program manager.
“We are actively working with the Joint Budget Committee to explore potential solutions, taking into consideration the concerns that have been raised,” she wrote.
An update with “more detailed next steps” for the program will be released by the end of the day Monday or early next week, she added.
Uproar over the Department of Early Childhood’s decision spurred the legislature’s Joint Budget Committee to call an emergency hearing late Thursday afternoon, and during that meeting, legislators questioned agency officials about their budget, and, at times, scolded them for not informing the committee sooner that services were likely to be cut.
“For some reason the department didn’t think we were worthy of knowing how serious this issue is,” Rep. Rick Taggart, a Grand Junction Republican, said during the hearing.
“I find this incredibly insulting not only to us, but to give providers only six days before changing service — how do you do something like that?” he asked department officials. “Why didn’t somebody come over here and say, ‘We got a perfect storm, we need your help?’ ”
Several committee members expressed their willingness to help stave off the cuts for as long as they can. But with Colorado facing a $1 billion budget shortfall, a major question loomed over the committee: Where can the state find the money?
One option being explored by the committee is whether underutilized money can be redirected from the state Department of Health Care Policy and Financing for the Early Intervention program to use directly. On Thursday, Jeanni Stefanik, the chief financial officer for the Department of Early Childhood, estimated that as much as $2.5 million might be available.
Early Childhood Executive Director Lisa Roy told The Denver Post on Friday that her department has been working with the budget committee and the health care finance department on finding a legislative funding solution.
“We’re working on a bill to make that happen,” Roy said, declining to specify whether the money will come from the Department of Health Care Policy and Financing.
At least $1 million is needed for the Early Intervention program to allow providers, such as dietitians, who can’t bill their services to Medicaid to keep working with children who receive the federal assistance for low-income families. It’s unclear how much more money the program needs to prevent the implementation of the limit to the services a child can receive each month.
Currently, there’s no limit on the number of hours of service a child can receive, but the four-hour monthly cap was among the “emergency cost containment measures” the Department of Early Childhood planned to make to the Early Intervention program starting next, according to a memo issued Tuesday.
It’s also not known for how long any additional cash might prop up the program given the state is facing a financial crisis.
“We have to find over $1 billion to cut and that ties this committee’s hands to fix a lot of problems in ways that we would have been able to in previous years,” said Rep. Shannon Bird, a Westminster Democrat and vice chair of the budget committee. “I’m open to all kinds of ideas, but fear that some of our options might be limited.”
The Early Intervention program serves babies and children up to the age of 3 with developmental delays and disabilities. The program serves an average of 11,178 children per month.
The Department of Early Childhood appropriated $87.4 million for the Early Intervention program and about 70% of that money comes from the state.
The agency realized the Early Intervention program was heading for a $4 million shortfall “just a few weeks ago,” Stefanik told the committee.
Department officials project the program’s spending several times a year and the department’s most recent look showed spending was higher than expected due to increased caseloads and because stimulus funding is ending and fewer costs are being covered by Medicaid, she said.
“It’s all come together to create this perfect storm,” Stefanik said.
The looming shortfall spurred the agency to look at where the program “is just more generous with what we are doing” and implement cuts, she said.
While the agency is projecting a $4 million shortfall, the program could actually end up with a $1 million surplus — which led Sen. Jeff Bridges, a Westminster Democrat and the budget committee’s chairman, to question department officials about why there is even a need to reduce services.
The potential surplus comes from a projected $5 million in underspending in other areas of the program. The agency plans to use half of that money — $2.5 million — to put toward the $4 million spending gap.
But department officials don’t want to use the entire $5 million because they want to make sure services the funds are allocated toward are covered for the rest of the fiscal year, said Kendra Dunn, the deputy director of program delivery for the Department of Early Childhood.
The $5 million in underspending is just a projection and may not actually be there at the end of the fiscal year, she said.
Changes, such as reducing therapeutic services for children to one per week, were intended to stretch out services through the end of the fiscal year to see if there’s extra money in June, Dunn said.
“There are measures we are taking that we need to take no matter what,” she added.
Roughly $1 million of the projected $4 million shortfall goes to children on Medicaid but who receive therapeutic care that can’t be billed to the federal program, Dunn said.
The problem the agency faces is that the department can bill Medicaid for services provided by occupational, physical and speech therapists. But care from another provider, such as a developmental interventionist, isn’t covered by Medicaid even if the services they are providing are physical or speech therapies, she said.
So in order to pay for those services, the agency has to use money from the state’s general fund, she said.
About 2,200 children in the Early Intervention program are on Medicaid, Dunn said.
The agency will need $1 million to make sure services to children on Medicaid do not change, Stefanik said. This amount would not prevent the agency from implementing other changes, such those related to reimbursements for providers.
“This is all a balancing game,” she said when pressed by lawmakers about why potential underspending couldn’t ensure that children’s services remain in place.
Get more Colorado news by signing up for our Mile High Roundup email newsletter.