Committee examines DHHS decision to discontinue contracts with out-of-state providers

A recent decision by the state Department of Health and Human Services not to extend contracts with two out-of-state providers offering services for those with developmental disabilities was the focus of an Aug. 12 hearing of the Legislature’s Developmental Disabilities Special Investigative Committee.

DHHS recently notified Goodwill of Sioux City, Iowa and Ability Building Services (ABS) of Yankton, S.D. that their contracts would not be renewed. The department has said that the state does not have adequate oversight authority or jurisdiction to regulate outside the state to ensure safety and quality assurance at the facilities.

DHHS announced in July that NorthStar Services, a Nebraska service provider, would open a South Sioux City workshop, which would aid in the transition from Goodwill and ABS services.

Sen. Robert Giese testified in favor of re-establishing access to Goodwill and ABS. He said northeast Nebraska communities have a long history of traversing state lines to access needed services.

“Some families will be faced with the choice of moving out of state or losing access to services,” he said, adding that regulations could be rewritten to provide the necessary framework to certify the out-of-state facilities.

Dean Williams, representing Goodwill Industries, said the DHHS decision affects those with developmental disabilities aged 21 to 65. He said the DHHS contention that Goodwill’s contract must be discontinued due to federal Medicaid program requirements for quality assurance is unfounded.

“We have federal money crossing state lines all the time,” he said.

Donna Polaski, whose daughter, Teri, receives services from Goodwill, urged the continuation of the facility’s contract. She said Nebraska services are not adequate to ensure her daughter’s social and behavioral development.

“Please do not let the state of Nebraska take Goodwill from us. Because then my husband and I are going to have two choices: We will have to move to Sioux City… or my daughter will stay at home,” she said.

Jane Arens, a special education teacher from Crofton, said the out-of-state providers offer an avenue for young adults to transition to employment. She said rural communities in Nebraska do not have the employment opportunities that those with developmental disabilities need.

“I could teach [students with developmental disabilities] how to sort silverware and how to do certain job skills, but they are not going to be able to take that and transition that to a real working job, because we don’t have access to the employment opportunities,” she said.

Representing NorthStar Services, Linda Kallhoff testified that the organization has been working to modify and transition the services it provides to become an “employment first” agency. As of last quarter, she said, NorthStar has been able to secure employment for 50 percent of the people they supported, compared to the nationwide average of 24 percent of people with developmental disabilities who are employed.

Jodi Fenner, director of the DHHS division of developmental disabilities, explained the department’s rationale for not extending the contracts. She said the department has an obligation to adopt standards for community based services and must consistently apply those standards to all providers in order to receive federal Medicaid funding. Due to the out-of-state location of Goodwill and ABS, she said, DHHS does not have regulatory jurisdiction to ensure that those standards are met.

Fenner said that state law could be changed to permit private certification of community-based services, but even that must be applied consistently across all services. This objective cannot be accomplished solely within the regulatory framework, she said.

Formed in 2008, the Legislature’s Developmental Disabilities Special Investigative Committee is charged with, among other duties, investigating the placement and quality of care statewide for the developmentally disabled in Nebraska.

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