Lawmakers try to sort out why state didn’t spend millions earmarked for people with disabilities

State lawmakers tried on Monday to understand why the Department of Human Services left millions of dollars unspent that were supposed to provide services for people with disabilities.

A DOHS report showed that in fiscal year 2023, around $29 million dollars went unused. The department, previously known as the West Virginia Department of Health and Human Resources, has for years been spending far below its state appropriation for disability services.

Lawmakers said those millions of dollars could have been spent on addressing a glaring staff shortage of in-home workers. They help people with disabilities bathe, eat and remain in their homes — not unnecessarily institutionalized. 

In prior years, before the health department was split into three new apartments, money meant Individuals with Intellectual and Developmental Disabilities (IDD) was shuffled around to pay for other things. A DOHS leader told lawmakers that some of the money was spent on COVID-19 tests and contract nursing.

“I understand the need to rob Peter to pay Paul, but we’re robbing people with disabilities to pay for COVID testing,” said Del. Michael Hite, R-Berkeley.

DOHS Secretary Cynthia Persily explained that the departments were no longer taking any money out of its IDD services to pay for other things. The continuing unused funds, she said, were attributed to the pandemic, where people weren’t as comfortable with in-home care and didn’t utilize the state’s IDD waiver program that helps fund those services. 

“So of course our spend went down dramatically,” Persily said. “Our spend is just now getting back to where it should be and rightsizing.”

But lawmakers pushed back, saying that the unspent money earmarked for the IDD population could have gone to improving the state’s Medicaid reimbursement rate.

West Virginia uses state and federal money from Medicaid to reimburse private companies that employ direct care workers. Money from that reimbursement rate can be used to fund their salaries.

The low rate, providers said, is tied to paying workers around $11 an hour; the wage rate has contributed to staffing shortages around the state. 

“We’ve had to turn away about 102 residents who have needed services simply because we could not staff beds,” said Ray Ratke, CEO of enCircle, which provides services and staff to Individuals with Intellectual and Developmental Disabilities. “We’re operating at a loss that is unsustainable.”

EnCircle and similar companies pleaded with lawmakers to improve the reimbursement rate, but the session ended without any change.

DOHS leaders shifted the blame about staffing shortage back onto providers, saying that they could have used $200 million received via pandemic-relief dollars to fund caregiver raises. A rate study last year suggested that a salary range should be closer to $15.50-$18.60 per hour. 

On Monday, DOHS announced it will begin auditing Medicaid waiver providers that received COVID relief funds to see how their money was spent. 

“[The Bureau for Medical Services] will conduct the audit to ascertain how [American Rescue Plan Act] funds were spent, and to assure that 85% of those funds were provided directly to the direct care workforce in the form of wages or other incentives,” a news release said. “Ultimately, any unused or misused funds will need to be returned.”

Ratke told lawmakers he had already exhausted his ARPA money and still needed the Medicaid reimbursement rate increase to hire and retain staff. Without action, he said he’ll have to close homes that serve people with disabilities in the state. 

While DOHS could change the reimbursement rate on its own, department leaders told lawmakers they’d need additional money to make that happen.

A rate increase was not in the department’s projected five-year plan presented to lawmakers, particularly because Medicaid faces a $147 million funding shortfall for fiscal year 2025. 

Spending transparency concerns within DOHS was a leading reason Senate Finance Chairman Eric Tarr slashed funding for the IDD waiver program in the recently-passed budget bill. 

Families and providers have urged Gov. Jim Justice to restore the funding — about $11 million in state dollars — in the May special session.