Sep 29, 2011

In California- Lawsuit over provider rate cuts

Fresno advocates back suit over disabled services
By Barbara Anderson / The Fresno Bee

Fresno advocates for the developmentally disabled say a series of state budget cuts have imperiled services for the state's most vulnerable citizens.

About 60 advocates and their clients rallied outside of a law office in Fig Garden Village in support of a federal court lawsuit filed Wednesday in Sacramento seeking to reverse those cuts.

The lawsuit claims the state violated federal law when in 2009 it initiated a string of reimbursement cuts for services including daily living skills, job training and job placement.

The California Department of Developmental Services and the Department of Health Care Services are named in the suit, which was brought by The Arc of California, a nonprofit community-based advocacy organization for the disabled, and United Cerebral Palsy Association of San Diego.

In the central San Joaquin Valley, about 13,000 children and adults with developmental disabilities receive the help, according to the state.

One Fresno provider, Judy Rogers, said the state has been "picking on the most vulnerable because they can't fight back."

Rogers owns Vocation Plus Services, Inc., which provides job training and other programs for about 150 developmentally disabled adults.

Rogers, who brought clients to the rally, said state cuts forced her to file bankruptcy and reorganize last year to keep her business of 27 years afloat.

The state froze provider rates in 2003 and cut rates by 3% in 2009. The cut was increased to 4.25% in 2010 and it was extended to June 30, 2012, the suit says.

The state also is making providers take 14 mandatory unpaid holidays and has reduced payments by half for cases where a consumer did not participate in a program for the entire day, the suit says.

Nancy Lundgren, a spokeswoman for the state Department of Developmental Services, said the agency does not comment on pending litigation.

But, she said, "given the size of the budget shortfall, difficult decisions are needed. However ... California is the only state in the nation with an entitlement to services for persons with developmental disabilities."

The 4.25% rate cut will save the state $91 million, she said.

The suit says the state receives federal Medicaid funds to provide services to the disabled and must get federal approval before cutting rates to ensure the cuts will not impair access or erode quality. The state failed to get federal approval or consider the effects of the cuts, said William T. McLaughlin II, a Fresno lawyer who is the lead attorney on the lawsuit.

McLaughlin said the state also is violating the Lanterman Act of 1969, a state law that guarantees people with developmental disabilities the right to support services necessary to live independently.

The lawsuit seeks to restore provider rates to their pre-2009 levels and reverse other cuts, and seeks an injunction requiring state agencies to comply with state and federal laws governing programs for the developmentally disabled.

Service providers said programs for the developmentally disabled save money by allowing people to remain in homes and out of institutions.

Care for a developmentally disabled individual in an institution costs $340,000 a year, said Lori Ramirez, executive director of The Arc Fresno. Community-based programs can serve the same person for $17,000 a year, she said.

Lundgren, the state spokeswoman, said many of the consumers in the community receive little more than case management, which reduces the average cost. Residents in developmental centers have severe behavioral and medical needs that can be expensive to meet.

Ramirez said some of The Arc Fresno consumers have been with the program for years. The nonprofit agency serves about 575 adults and has 145 employees.

In its 58 years in Fresno, the agency has never had to limit consumers, Ramirez said. But that could change.

"We've always prided ourselves in helping anyone who came to our door – but we're now looking at capping our programs," she said.

Ramirez said salaries have been frozen, positions eliminated and staff hours cut to control costs, but health benefits, worker's compensation and electricity bills keep going up.

Jose Barela, 34, of Fresno, is one of the clients at The Arc Fresno.

He understands the state's budget problems, he said. But cutting programs for the developmentally disabled will not help.

The Arc Fresno is helping him learn public speaking skills, which he hopes to use to get a job, he said. Barela has cerebral palsy.

"Without the programs, we'll be stuck at home or in group homes," he said.

The reporter can be reached at or (559) 441-6330.

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