Costantino seasoned in budget fight

Costantino
Costantino

Few government department heads come better prepared to handle the often contentious battles over state spending and budget cuts than Steven M. Costantino, entering his second year as secretary of the Rhode Island Executive Office of Health and Human Services.
The former chairman of the House Finance Committee recently told Providence Business News he views his new role as leading the transformation of government agencies to “break down the silos and firewalls that interfere with the development of a seamless system of care for the individuals that we serve.”
The five agencies that he oversees – the Department of Children, Youth and Families, the Department of Elderly Affairs, the Department of Human Services (which oversees Medicaid programs in Rhode Island), the Department of Behavioral Healthcare, Developmental Disabilities and Hospitals, and the Department of Health – have often been at the center of the annual budget debate.
Disabled Rhode Islanders and their caregivers have protested $24 million in cuts to programs serving those with developmental disabilities. Efforts to pursue “rate reform” – to pay nursing homes one rate for services, based on price, not cost – have met with angry words from critics such Leading Age RI, the advocacy group for nonprofit nursing homes. DCYF, despite efforts to streamline its services, has already overspent its fiscal 2012 budget by a projected $7.8 million, leading to a testy exchange between current House Finance Chairman Helio M. Melo, D-East Providence, and Administration Director Richard Licht at a Jan. 16 hearing.
In the coming months, as the fiscal 2013 state budget is debated, there are certain to be more flash points – such as the proposal by the Department of Human Services under Costantino to eliminate dental services for adults on Medicaid, a budget cut that would save $2.6 million. Costantino is also seeking a 4.4. percent cut in the fiscal 2013 budget for the Medicaid programs managed by Neighborhood Health Plan of Rhode Island and UnitedHealthcare of New England, despite the high national ratings these programs have achieved
Nowhere has the crunching of budget numbers for health and human services been more under scrutiny than with the state’s Medicaid budget and the global waiver granted by the federal Centers for Medicare & Medicaid Services to Rhode Island.
Moving forward, the future of the waiver is somewhat unclear, according to Costantino.
“We’re just past … the midpoint on the five-year waiver program,” Costantino said. “Which, in federal terms, means we have to think about reapplying in the next six to 12 months.
John R. Young, deputy secretary working under Costantino, noted that Jan. 1, 2014, the beginning of the new world of health care reform, is roughly the same day as the current waive expires.
Costantino said he was “very, very pleased” with the whole concept of the Global Medicaid Waiver. “I believe it’s clearly been the catalyst for transforming the whole long-term care world as we know it.”
Not everything, however, has gone Costantino’s way in navigating the waiver arrangement. In June 2012, under the House’s budget proposal, recommendations were made to increase the fees paid by adults under RIte Care – a proposal that Costantino said had originated with his office. However, in September 2011 the federal agency ruled against the proposed rate increases, disallowing the premium increases, saying it was an eligibility restriction for children. Costantino was disappointed by the ruling. “I believe that RIte Care is a very efficient program. But Medicaid rates of spending are far outpacing what the revenue is, so even with the really good programs, you have to continue to tweak these programs so that they survive, because they are so efficient,” he said.
Many of Costantino’s initiatives involve changes in workforce, sometimes moving from a more highly paid, skilled workforce to a lower-wage workforce. “I think workforce has a challenge for everyone in health care,” he explained. “It’s not just a nursing home issue, it’s breaking across the whole spectrum of care. There are workforce challenges in terms of training, in terms of wage issues, but it also encourages operators of nursing homes to understand that there is new model evolving for long-term care. The business models are changing.”
Just as in hospitals, he continued, where so many procedures are now being done as outpatient services, the same is true for nursing homes. “The whole movement is to keep people out of the institution,” he said. “It requires a new way to finance their operations.”
As both House Finance chairman and now head of the state’s health and services agencies, Costantino has had to operate in a very lean budgetary period. And though he now wears a different hat, his perspective on the best way to solve the annual budget problems hasn’t changed.
“If I had a pool of money to invest, I would create incentives as our economy recovers, and use resources to make our programs more efficient and move toward greater consolidation,” he said, adding, “The best human-services program is a job.” •

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