News Room

The week of March 15, 2013

Top Story

House and Senate Release Budget Proposals
This week, both House and Senate budget committees released drafts of their respective budget resolutions for fiscal year 2014. Both committees reported their budget resolutions on party-line votes. As both committees were working to mark up and report their drafts, President Obama was meeting with the House and Senate Republican and Democratic caucuses on plans for resolving the budget debate. Even though the President's budget will not officially be presented to Congress until April 8, he held the meetings with Congress in hopes of building support for a "grand bargain" that will address the government's debt problem.

In his role as chair of the House Budget Committee Rep. Paul Ryan (R-WI) is the architect of the House budget resolution. For the most part, his FY 2014 resolution mirrored his FY 2012 and FY 2013 budget proposals. Perhaps the biggest difference was his inclusion of the $600 billion in new revenues achieved when Congress increased the marginal tax rate for higher income individuals earlier this year. The House budget reduces the deficit by $4.6 trillion by reducing spending, overhauling the tax code, and repealing the Affordable Care Act.

The Ryan plan would limit discretionary non-defense spending to about $414 billion in FY 2014, or about $92 billion less than the cap included in the Budget Control Act. Defense spending would increase to offset funds subject to the sequester. The Ryan plan is designed to balance the federal budget by 2023. It assumes that a reconciliation bill will address the issue of finding alternatives to the sequester, which as currently in effect requires cuts in mandatory spending every year until FY 2021.

Like last year, Ryan proposes turning both Medicaid and the Supplemental Nutrition Assistance Program (SNAP) into a block grant. In arguing for block-granting SNAP, Ryan argues that it would provide more incentives to states to reduce fraud. According to Ryan, "Like Medicaid, SNAP suffers from a flawed structure. States receive more money if they enroll more people in the program-so their incentive is to get people onto the rolls. They have little incentive to help people get off the rolls and find work. In fact, these programs make it harder to become independent."

Unlike last year, Ryan provided few specific recommendations on how the House authorizing or revenue committees should produce the savings or additional revenues required by his resolution. For example, last year the House resolution included a specific recommendation to repeal the Social Services Block Grant (SSBG), but the resolution reported this week from the Budget Committee has no such recommendation.

In the documents released along with the draft resolution, Ryan explained that a reconciliation bill will be considered only if the House and Senate agree on a final version of a FY 2014 budget resolution that includes reconciliation instructions. Until then, he believes there is little reason to work on drafting recommendations on what ought to be included in that reconciliation bill.

This is the first Senate Budget Resolution for the new Budget Committee Chair Patty Murray (D-WA). Murray states her priority is to "create the conditions for job creation, economic growth, and prosperity built from the middle out, not the top down." Similar to Ryan, Murray achieves about $4 trillion in deficit reduction but includes an equal mix of spending cuts and new revenues raised by "closing loopholes and ending wasteful spending in the tax code." The Senate resolution "preserves and protects Medicare, builds on the Affordable Care Act" (ACA) and includes a $100 billion targeted jobs and infrastructure package designed to repair crumbling roads and bridges.

The Murray draft would achieve $975 billion in deficit reduction by cutting $493 billion in domestic spending, $240 billion by "carefully and responsibly cutting defense spending," and $242 billion saved in reduced interest payments. The bill also includes reconciliation instructions for the Finance Committee to draft recommendations on how to increase tax revenues.

With vast differences between the House and Senate resolutions, both sides will have to agree to provisions to which they would otherwise object to achieve a compromise version. The budget resolution is used to guide Congress in drafting appropriation bills and other measures that affect the budget; it is not sent to the President for approval. Recognizing that the two chambers are far from agreeing how to deal with the budget, President Obama is actively working to build support for a compromise position that would include both spending reductions in some programs strongly supported by many Democrats, such as Social Security and Medicaid, as well as increased tax revenues that Republicans strongly opposed.

While the President told Republican members of Congress that balancing the budget was not one of his priorities, he did indicate his willingness to accept $2 in spending cuts for every $1 in tax revenues as part of a "grand bargain" compromise budget. His approach received very little support among the House Republican Caucus after their meeting with the President. House Majority Leader Eric Cantor (R-VA) reflected the sentiments of many in his caucus when he said after the meeting, "If the president wants to let our unwillingness to raise taxes get in the way, then we [will not] be able to set differences aside and focus on what we agree on."

Child Welfare

House Bill Would Expand Parent Legal Representation
On Monday, Rep. Gwen Moore (D-WI) reintroduced the Quality of Parent Legal Representation Act, which would provide an additional funding stream through the Court Improvement Program to enhance parental legal representation. Moore notes that quality counsel can help give parents access to services that prevent a child's removal, advocate for appropriate reunification services, and provide the parent with another advocate to keep the family together. The bill builds on the success in several states to provide quality legal parent representation. One is the Washington State Office of Public Defense (OPD) representation model, which focuses on caseload limits; professional attorney standards; access to expert services and program social workers; and ongoing oversight, training, and support for attorneys. An evaluation of the program showed an 11 percent increase in the rate of reunification in OPD counties compared to counties without OPD, and an 83 percent increase in the rate of guardianship.

In New York City, the Center for Family Representation showed that in one year, more than a third of the center's cases were dismissed, often permitting the court to rule that the family no longer needed child welfare services. According to Moore, these pilots and others across the country reinforce her belief that "child outcomes improve and courts function more effectively when all parties have quality legal representation." The text of the bill is available at www.thomas.gov.

Health Services

APHSA Submits Comments on Medicaid/CHIP Performance Indicators
On Wednesday, APHSA submitted comments to the Centers for Medicare and Medicaid Services (CMS) in response to a request for information (RFI) on performance indicators for the new business processes of the Medicaid/Children's Health Insurance Program (CHIP) eligibility and enrollment (E&E) systems to ensure the systems are satisfactorily enrolling and continuing coverage for eligible persons covered. The RFI asked for comments on reporting indicators within two primary domains: individual (applicant and beneficiary) experience with eligibility and enrollment, and provider experience with enrollment and claims payment. APHSA submitted comments on the first domain.

The comments expressed concern that the scope of certain indicators, like customer satisfaction and efficient administrative costs, was limited only to the interfaces between Medicaid and the Exchanges. The letter highlights earlier CMS guidance, "Enhanced Funding Requirements: Seven Standards and Conditions" (www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/Downloads/EFR-Seven-Conditions-and-Standards.pdf), which requires interoperability between state Medicaid/CHIP E&E systems and human services systems. APHSA added that the CMS indicators fail to take advantage of the unprecedented and time-limited funding opportunity made available through the cost allocation exception announced through a tri-agency letter in 2011 (www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/Downloads/Cost-Allocation-IT-Systems.pdf). The exception allows human services systems to benefit from common system development costs as long as the costs would have been incurred for systems developed for Medicaid/CHIP.

APHSA noted that failing to create interoperability performance standards for human services programs now will result in sub-optimizing the use of information technology (IT) assets that could otherwise be shared by SNAP and by programs under the Administration for Children and Families (ACF). There is much information already contained in current human service systems, and the development of these standards can be an incentive to think about new business processes to lower administrative burden on applicants, staff and taxpayers, and harness the value of data toward achieving outcomes. The APHSA letter is available at www.aphsa.org.

HHS Issues Final Rule on Benefit and Payment Parameters for 2014
In the March 11 Federal Register (78 FR 15409-15541), the Department of Health and Human Services (HHS) published the HHS Notice of Benefit and Payment Parameters for 2014 under the ACA as a final rule. This final rule provides further information and parameters related to the following: the risk adjustment, reinsurance, and risk corridors programs; cost-sharing reductions; user fees for federally facilitated Exchanges; advance payments of the premium tax credit; the federally facilitated Small Business Health Option Program (SHOP); and the medical loss ratio program. The final rule expands on standards set forth in earlier rules; the regulatory history is described in the rule.

ACA established the premium stabilization programs - risk adjustment, reinsurance, and risk corridors (sometimes referred to as the three "r" programs) - to protect against the effects of adverse selection as more individuals will likely enter the insurance market in 2014 and beyond. ACA established a permanent risk adjustment program, a transitional reinsurance program, and a temporary risk corridors program to provide payments to health insurance issuers that cover higher-risk populations and to more evenly spread the financial risk borne by issuers. The rule is intended to fill in the framework laid out in the Premium Stabilization Rule (77 FR 17220) with additional provisions and parameters for the three premium stabilization programs.

In addition to addressing the premium stabilization programs, the rule finalizes a number of standards governing the administration of advance payments of the premium tax credit such as provisions governing the reduction of premiums by the amount of any advance payments of the premium tax credit. The rule also establishes a number of standards governing the cost-sharing reduction program. Regarding the federally facilitated Exchange (FFE), the rule establishes a user fee, calculated as a percentage of the premium for a qualified health plan, applicable to health insurance issuers that will participate in an FFE. This final rule also outlines HHS' approach to calculating the fee. The rule establishes a number of standards and processes for implementing SHOP Exchanges, such as standards governing the definitions and methods used to determine whether an employer is a small or large employer and whether an employee is a full-time employee.

The rule also establishes a number of standards governing the Medical Loss Ratio (MLR) program, also known as the 80/20 rule. The MLR program generally requires health insurance issuers to submit an annual MLR report to HHS and provide rebates of premiums if they do not achieve specified medical loss ratios. This final rule is effective on April 30 and is available at www.gpo.gov/fdsys/pkg/FR-2013-03-11/html/2013-04902.htm.

Rules Address Notice of Benefit and Payment Parameters, ACA Provisions Related to SHOP
Also in the March 11 Federal Register (78 FR 15541-15552), HHS published an interim final rule with comment on Amendments to the HHS Notice of Benefit and Payment Parameters for 2014. This rule would adjust the risk corridors calculation to align with the single risk pool provision of the ACA and would allow qualified health plan issuers to use an optional simplified methodology for calculating the amounts of cost-sharing reductions provided during a transition period. Comments on this interim final rule must be received no later than 5:00 p.m. on April 30; the rule is posted at www.gpo.gov/fdsys/pkg/FR-2013-03-11/html/2013-04904.htm.

Finally, HHS published a proposed rule on March 11 (78 FR 15553-15558) on Establishment of Exchanges and Qualified Health Plans; Small Business Health Options Program that would implement provisions of ACA related to SHOP. The proposed rule would amend existing regulations regarding triggering events and special enrollment periods for qualified employees and their dependents, and would implement a transitional policy regarding employees' choice of qualified health plans in a SHOP. The rule is available at www.gpo.gov/fdsys/pkg/FR-2013-03-11/html/2013-04952.htm; comments must be received no later than 5:00 p.m. on April 1.

Economic/Work Support

House Approves Bill Extending TANF and Prohibiting Waivers
On Wednesday, the House passed the Preserving the Welfare Work Requirements and TANF Extension Act of 2013, H.R. 890. The bill, which passed by a mostly party-line vote of 246 to 181, combines a bill to extend the Temporary Assistance for Needy Families (TANF) program introduced by House Ways and Means Human Resources Subcommittee Chair Dave Reichert (R-WA) and a bill by Ways and Means Committee Chair Dave Camp (R-MI) preventing HHS from granting any TANF waivers. Under H.R. 890, current TANF law would be extended through December 31, with no changes. The waiver portion of the bill prohibits the HHS secretary from granting any TANF waivers and would rescind any waivers granted before the bill is enacted. ACF issued an Information Memorandum (IM) on July 12, 2012, that invited states to submit waivers that would propose "new, more effective ways to meet the goals of TANF, particularly helping parents successfully prepare for, find, and retain employment"; see www.acf.hhs.gov/programs/ofa/resource/policy/im-ofa/2012/im201203/im201203.

In a Statement of Administration Policy, the Office of Management and Budget (OMB) expressed support for the extension and but cited concerns over the provisions blocking the waivers. However, the statement stopped short of threatening a veto. The statement said, "This [waiver] flexibility was requested by governors on both sides of the aisle to allow states to test new, more effective ways to place more people on a path to self-sufficiency. Ultimately, no states formally applied for state waivers, deterred in part by inaccurate claims about what the policy involves; therefore, the limiting provision would have no practical effect on any pending application. The Administration is disappointed that the bill includes this unnecessary bar to innovative welfare-to-work strategies." The statement is available at www.whitehouse.gov/sites/default/files/omb/legislative/sap/113/saphr890r_20130312.pdf.

Camp disagreed that waivers are needed for states to increase work requirements. During last week's hearing on the waiver bill (see This Week, March 8), Camp said, "Nothing in current law prohibits a state from strengthening its work requirements and moving more individuals from welfare to work. Instead, a waiver would only be needed to weaken the work requirements, as the Administration wishes to do, pure and simple."

H.R. 890 is not likely to be considered in the Senate. It is unclear if the Senate will consider the resolution of disapproval, S.J. Res. 9, introduced by Sen. Orrin Hatch (R-UT), which disapproves the 2012 TANF waiver IM. The Senate continuing resolution includes a provision extending TANF through September 30. TANF is currently set to expire March 27.

House Passes WIA Reauthorization Bill
On Friday, the House passed the Supporting Knowledge and Investing in Lifelong Skills (SKILLS) Act. The SKILLS Act, H.R. 803, reauthorizes the Workforce Investment Act (WIA). The bill, which is sponsored by Rep. Virginia Foxx (R-NC), proposes eliminating some and consolidating the rest of 35 identified employment and training programs into a single Workforce Investment Fund (WIF) (see This Week, March 8). In its Statement of Administration Policy on the bill, the Obama Administration expressed strong opposition to the bill but stopped short of an official veto threat. The statement said, "Any effort to streamline the current system must allow for sufficient funding to meet the needs of workers and job-seekers, as well as adhere to certain core principles. It must improve services; provide easy one-stop access to those services, including for vulnerable populations; reflect employer and regional economic needs; enhance accountability and transparency; and promote continuous innovation and improvement."

The SKILLS Act is not expected to be taken up in the Senate. The Senate Health, Education, and Labor and Pensions Committee is in the process of developing its own legislation.

OFA Releases Q&As on TANF MOE Funds, EBT Transactions
On Tuesday, the ACF Office of Family Assistance (OFA) released a new series of questions and answers on the use of federal and state TANF maintenance-of-effort (MOE) funds. The questions touch on a range of topics, including foster care, adoption assistance, child care, staff training, information systems, and others. Among the questions addressed are some arising from OFA's Information Memorandum of February 20, encouraging states to partner with other agencies to address family homelessness. The Q&As are available at www.acf.hhs.gov/programs/ofa/resource/q-a-use-of-funds?page=all.

On Thursday, OFA posted another set of questions and answers on state implementation of the law barring the use of TANF electronic benefit transfer (EBT) transactions in casinos, liquor stores, and adult entertainment establishments. The Q&As reiterate the need for states to move ahead on putting policies in place to meet the new requirements enacted last year. They also clarify that the prohibition is on establishments, not purchases, and note that the new law applies to child-only cases. The Q&As are available at www.acf.hhs.gov/programs/ofa/resource/q-a-ebt-transactions.

FNS Announces Plans to Study Impact of ACA on SNAP
On Wednesday, the Food and Nutrition Service (FNS) issued a notice inviting comments on its planned study on the impact of states' implementation of the ACA on participation of nondisabled adults age 19 to 64 in SNAP. FNS will select six states in which to study the coordination of SNAP and Medicaid enrollment. The study will include the use of state administrative data and staff interviews. Comments are due to FNS by May 13. The notice can be found at http://www.gpo.gov/fdsys/pkg/FR-2013-03-13/pdf/2013-05781.pdf.

GAO Publishes WIC Eligibility Study
The Government Accountability Office (GAO) has issued a study of the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), Improved Oversight of Income Eligibility Determination Needed (GAO-13-290). GAO found that states vary in their policies for determining which household members are considered part of the applicant's family, in the period over which they count income to compare with WIC eligibility standards, and in the sources of income they include and exclude when determining eligibility. There was also variation at the local level because state guidance allows flexibility in application of policy.

Federal law allows families who participate in other assistance programs, such as Medicaid, to be automatically income-eligible for WIC. GAO found that in 2010, 2 percent of WIC recipients qualified on this basis even though their incomes exceeded WIC limits. Expansion of Medicaid creates potential for increased WIC participation by families with income in excess of program limits, although GAO could not determine a clear effect. GAO also said that FNS assists and monitors state administration of WIC but does not review monitoring results at the national level. GAO recommended that FNS set a timeline for performing national-level reviews. The study is posted at http://www.gao.gov/products/GAO-13-290.

Child Care

Begich Introduces Child Care Bills Addressing Affordability, Availability, and Quality
On March 4, Sen. Mark Begich (D-AK) introduced a series of bills designed to ensure affordable, available, and accessible quality child care for children and families. The Preparing and Reinvesting in Early Education Act ("PRE ED Act of 2013"), S. 440, would amend the Higher Education Act of 1965 to create a new student loan forgiveness program for early childhood educators. The bill would provide support for graduates with an associate's or bachelor's degree in early education.

Begich also introduced the Tax Credit for Early Educators Act, S. 438, which would amend the Internal Revenue Code of 1986 to provide a tax credit for early educators. The bill would also expand the tax deduction on certain expenses used to carry out learning activities and early childhood education instruction for students and/or early learners. This would offer up to $3,000 in tax credits to early childhood educators to assist them in purchasing early learning materials and other tools often not reimbursed by schools and early learning institutions. It also would modify the tax credit for dependent care services. S. 438's intent would be to increase the child care tax credit so more families could afford to place their children in high-quality child care settings.

Begich offered a third bill, the Child Care Public Private Partnership Act (S. 442), which would establish a program to provide child care services through public-private partnerships. S. 442 would give authority to the HHS secretary to establish a business incentive grant program. Under this program, states could enable eligible businesses, on a competitive basis, to carry out activities such as paying for start-up costs incurred to provide child care services, providing assistance for related child care costs, and paying for training and professional development for staff. S. 438, S. 440, and S. 442 can be found at www.thomas.gov.

Budget/Finance

Senate Debates Continuing Resolution
On Friday, the Senate adjourned for the weekend without acting on its version of a continuing resolution (CR) to fund the federal government through September 30 and avoid a government shutdown. Amendments to de-fund the ACA, temporarily freeze salaries of federal employees, and adopt a revised version of appropriations for the Departments of Labor, Health and Human Services and Education (Labor-HHS) were among those defeated during the debate. If the majority and minority leaders are unable to reach agreement on limiting the number of amendments, the Senate is scheduled to vote on Monday, March 18, to end debate. Majority Leader Harry Reid (D-NV) hoped to finish action on the bill this week to be able to move to debate on the Senate budget resolution next week. The Senate is expected to recess for Easter/Passover from March 22 through April 9. The government is currently funded by an earlier CR that expires March 27.

If approved, the Senate's Consolidated and Further Continuing Appropriations Act of 2013 would amend the continuing resolution, H.R. 933, passed last week by the House. Like the House bill, the Senate's CR includes full FY 2013 funding for Defense, Military Construction, and Veterans Affairs, and adds full-year funding for Agriculture, Homeland Security, and Commerce, Justice, and Science. The remainder of the agencies, including the Departments of HHS, Labor, and Education, are funded for six months. Like the House measure, the Senate bill maintains the sequestration cuts, reducing the bill's total funding from $1.043 trillion allowed for in the Budget Control Act of 2012 to $984 billion. However, the full-year funding provides those agencies with additional flexibility in implementing the automatic cuts from sequestration.

The bill includes a number of "anomalies," or funding adjustments. For example, the bill provides a $50 million increase for the Child Care and Development Block Grant and a $33.5 million increase for Head Start, to ensure successful implementation of requirements for certain Head Start programs to re-compete for funding. It does not contain funding requested by the Administration to implement the health insurance exchanges in the ACA or the Dodd-Frank Act, the financial sector reform law. The Senate bill does include an extension of TANF law through September 30 with no policy changes.

Program Integration

OMB Announces Funding for Pilot to Automate ICPC Records Exchange
On Wednesday, the Office of Management and Budget (OMB) announced funding for two new pilots that were developed within the Collaborative Forum, one component of OMB's Partnership Fund for Program Integrity and Innovation. The new pilots include "Supporting Permanent Placements of Foster Care Children through Electronic Records Exchange," a concept that was submitted jointly by APHSA, its affiliate the Association of Administrators of the Interstate Compact on the Placement of Children (AAICPC), and the state of Florida. The pilot will test the implementation of real-time, on-line data exchange for states to share records and other information that supports permanent placements of foster care children in homes across state lines. The system will be designed to reduce the time to process such cross-state exchanges and will be tested in at least five states. ACF will lead the pilot's implementation and use of the pilot's award of $1.25 million.

OMB also announced funding of up to $4 million for another pilot, "Trusted Online Credentials for State Agencies." This pilot is based on the work of the Forum's Identity Verification work group. It will provide a foundation for the improvement of public benefits administration by demonstrating how identity solutions can be used to overcome barriers to integrated and effective virtual identity management. These identity solutions will be aligned with the National Strategy for Trusted Identities in Cyberspace (NSTIC). According to NSTIC's guiding principles, identity solutions must be privacy-enhancing and voluntary, secure and resilient, interoperable, and cost-effective and easy to use. The National Institute of Standards and Technology (NIST) at the Department of Commerce, which oversees NSTIC, will lead this pilot.

More information on both pilots is available on the Collaborative Forum web site, http://collaborativeforumonline.com/.

Webinar Discusses Costs and Benefits of Online Services
On Tuesday, the Collaborative Forum hosted a webinar, "Demonstrating Value in IT Investments." David G. Fletcher, chief technology officer with the Utah Department of Technology Services, presented lessons learned from the state's 15 years of work to develop a sustainable model for digital government. Beginning with one service in 1999, Utah now offers more than 1,000 online services. The Center for Public Policy and Administration (CPPA) at the University of Utah conducted a study that sought to quantify the costs and benefits of this initiative. CPPA selected 25 services to analyze over a five-year period and collected all available cost data for online and offline service delivery. In October 2012, study results were released that showed the average cost for online transactions was $3.91, while the average cost for offline transactions was $17.11.

All interested persons and organizations can join Collaborative Forum meetings, access concept papers and other documents, and listen to webinars by joining and visiting the Forum's web site, http://collaborativeforumonline.com/.

Upcoming Events:

Collaborative Forum Monthly Meeting

March 21, 1:30 to 3:00 PM Eastern

APHSA News/Events

APHSA Executive Director Wareing Shares Vision for Human Services Transformation
This week, APHSA Executive Director Tracy Wareing was featured on a radio program, "The Business of Government Hour," on WFED (1500 AM) in the Washington, DC area. The program was co-hosted by Michael Keegan, managing editor of The Business of Government magazine, and Nicole Gardner of IBM. Wareing spoke about the current state of human services, APHSA's role as an agent of transformation in the field, and the challenges facing human services agencies. She noted that the recovering economy and the polarized political landscape have put agencies and the human services field on an unsustainable path. Wareing cited APHSA's Pathways initiative as the blueprint to move the field toward one that enables positive outcomes for human services customers. Pathways advocates person- and family-centric service delivery rather than the current fragmented system, centering on program integration, increased accountability, and data interoperability. She said the increased and proactive use of evidence-based practices, modern technology, business analytics, and social media will also support APHSA's vision for the future.

The interview wrapped up by addressing the success of the National Workgroup on Integration (NWI), which advocates integration of the health and human services sectors, and how the NWI maturity model is increasing the effectiveness of state and local agency governance. To access the interview, please visit http://www.federalnewsradio.com/163/3244379/Leading-the-initiative-for-transformation-of-the-HHS-system.