Arc rocked by changes in state policy

TUPPER LAKE – A chance of thunderstorms led the Adirondack Arc to reschedule its annual fundraising concert at the Municipal Park from Saturday to Sept. 10. However, Arc officials have bigger worries than storm clouds on the horizon.

As new financial regulations from the state collide with a minimum wage increase this December, officials forecast a storm of financial pressure that may further reduce the Arc’s programs to aide the developmentally disabled.

Chief Financial Officer Scott Stiles says the regulations prevent salary increases and program expansions, reducing incentives to retain staff and care supports for Arc customers. Fiscal stress within the agency resulted in the recent closure of its early intervention program that provided services to children from birth to age 3 at their homes and day-care centers. Officials say other programs – such as preschools in Tupper Lake, Malone, Salmon River and Saranac Lake – are “teetering on the edge” as the agency balances funding.

“We are adapting to a new state regulation called rate rationalization, which is causing stress on our programs because financially we’re only being funded for expenses for a prior year,” Stiles explained. He says these regulations are phased in and eventually could prevent the Arc from profiting beyond operational costs in several programs.

The Arc’s funding streams are largely through the Office for Persons with Developmental Disabilities and state Department of Education, with about 90 percent of financing coming from Medicaid and Medicare. Stiles says Education Department reimbursement policy no longer allows educational programs to operate under a surplus, and any losses from increased spending must be carried by the Arc for one to three years until the state rebases the programs.

“We used to be able to carry programs that had losses year after year with our other programs that had surpluses, but we’re not allowed to do that anymore,” he said. “We’re being told now any program that loses money has to fund itself and we have to find a way to fund it, which could range from cuts to the program to closing the program altogether.”

Rate rationalization was enacted in July 2014 to create steady, clear-cut and stable reimbursement for intermediate care facilities for developmentally disabled people, according to state Department of Health documents. Residential programs operated by the Arc receive the bulk of funding from the DOH and are required to adapt over time to reimbursement changes.

Stiles fears the Arc’s direct care staff will lose morale and interest if the agency lacks finances to raise pay alongside the minimum wage hike. Chief Operating Officer Cass Becker added that the Arc has struggled to retain professional staff who are enticed by pay and time off offered by school districts.

“The closure of the early intervention program has been a long time coming,” she said. “We’ve been trying to support that program with limited resources, and trying to reimburse staff who are professionals and hold master’s degrees to provide services at the same rate a school district might. We’re constantly looking for people, and we’re just kind of a launch pad for folks to go into school district jobs.”

Ann Charette, associate executive director of residential services, says budgetary constraints have challenged staff to “do more with less.” She says the Arc copes with losses by training management across programs to be frugal with money and finding creative ways to provide cheaper care.

“You have people with fairly significant disabilities who deserve the same life to access their home communities as you and I do,” Becker added, “but with these kinds of budgetary constraints, you don’t necessarily have the same kinds of supports you’d have if you were fully funded. They can’t go on vacation. They can’t just drive to Plattsburgh. Every move that we make, we have to consider from a funding stream, and that’s just not fair.”

DOH documents acknowledge that some agencies like the Arc would experience cutbacks from rate rationalization, but, “The Department expects that most providers in this situation will be able to accommodate the reduction in revenue by making programs more efficient without compromising the quality of services.” The document says it omits a job impact statement regarding the policy change because the DOH estimated no more than 100 full-time annual jobs will be lost as a result of rate rationalization.

Stiles says that for the time being, the Adirondack Arc has maintained a status quo in all programs other than early intervention. The agency’s strategies for dealing with financial deficits, he says, include lobbying state government, training staff to be efficient and continuing two annual fundraisers: a Malone egg hunt during Easter and the rescheduled Rock the Arc fundraiser in Tupper Lake.

In its fourth year, Rock the Arc will host four bands from 12:30 to 9:30 p.m. on Sept. 10 at the Tupper Lake Municipal Park. The concert will feature vendors, children’s activities and a series of raffles, including a 500 club raffle with a $10,000 first place prize and $8,000 divided among 13 others who buy the $100 ticket.

Stiles says these fundraisers are “only a small piece of funding for us, but right now, every penny helps.”