Supported Employment: Payment And Other Incentives

The Florida Developmental Disabilities Council funded the Supported Employment Payment and Incentive Study to examine best practices in other states for providing streamlined supported employment services across agency lines with a uniform payment and incentive system. Supported Employment is a program designed to assist persons with serious disabilities to obtain competitive, community-integrated employment. Supported Employment was first authorized through the Rehabilitation Act Amendments of 1986 and, since that time, has been a major avenue for employment for persons with developmental disabilities. The major premise of the service is that many persons with significant disabilities need additional support at the job site to secure a job and work successfully. These supports can be provided by employment specialists, mentors, coworkers, and employers (Revell, Kregel, Wehman, and Bond, 2000).

Supported employment is provided in two phases. Phase One is a time-limited employment service, primarily funded by state vocational rehabilitation programs, which usually includes job development, training, and job placement. Phase Two is known as extended or follow-along services and includes periodic job skills reinforcement and other supports necessary for job retention. It is usually funded by the developmental disability agency (West, Johnson, Cone, Hernandez, & Revell, 1998).

Successful implementation of supported employment services requires collaboration between Vocational Rehabilitation and the developmental disability agency to ensure that there is a continuous flow of uninterrupted services. The agencies should be aligned in their values, principles, and practices to encourage providers to render supported employment services.

Florida has been providing supported employment services to persons with developmental disabilities since the mid-1980s. Developmental Services (now Agency for Persons with Disabilities) developed collaborative working relationships with Vocational Rehabilitation to provide for job development and placement, while Developmental Services provided the job retention services (Phase Two). This working relationship has persisted across the decades, allowing supported employment to continue to be an important component of the service delivery system.

Vocational Rehabilitation, Medicaid, the Agency for Persons with Disabilities, and the Florida Developmental Disabilities Council want to see an increase in the provision of integrated supported employment. A literature review was conducted to provide additional insight regarding how financial issues have impacted the provision of supported employment services and a better understanding of how financial issues should be addressed.

Literature Review

Financial Disincentives

Supported employment grew rapidly from the mid-1980s to the mid-1990s, increasing supports to persons with disabilities by over 200% (Wehman & Kregel, 1995). The program continues to grow, but supported employment proponents are concerned that the growth has not surpassed the growth in segregated adult day programs and sheltered workshops. There have been numerous issues documented in the literature regarding the contributing factors to the predominate use of segregated environments. Several of these include financial issues.

Some of the constraints that originally impacted supported employment have been resolved over the last decade. Until the Balanced Budget Act of 1997, there were eligibility restrictions that prevented the provision of supported employment through the Medicaid Home and Community Based Waiver to persons who had never been institutionalized. The Balanced Budget Act of 1997 removed these restrictions, making the service available to a much broader population (West et al., 2002). Additional federal actions—such as President Bush’s New Freedom Initiative—emphasized competitive integrated employment for persons with disabilities. The Rehabilitation Services Administration of the U. S. Department of Education in 2001 amended their regulations governing the State Vocational Rehabilitation Program, defining an employment outcome as employment in an integrated setting (State Vocational Rehabilitation Final Rule, January 22, 2001). These two federal policy changes, combined with the Americans with Disabilities Act of 1990 and the Olmstead Supreme Court decision supporting community inclusion, provided additional impetus for integrated supported employment.

States, including Florida, are also facing fiscal challenges, with many more persons with developmental disabilities needing services, and with youth transitioning from schools requiring employment programs at an ever-increasing rate. Supported employment not only provides for community integration and personal income, but also has been found to be cost-efficient. Cimera in 1998 reported that, regardless of the severity or number of disabilities, supported employment was cost-efficient with respect to worker wages, tax payments, and overall social outcomes. In 2000, Revell, Kregel, Wehman, and Bond examined cost effectiveness through an analysis of the cost associated with achieving meaningful outcomes. The authors described how two states—Massachusetts and Oklahoma—provided funding for supported employment. They concluded that supported employment can be cost effective, though this is not always the case. According to the authors, what makes the difference is the competence of the providers.

Yet even with this focus on integrated employment and efficiency through supported employment services, many persons with developmental disabilities continue to work in segregated environments, such as sheltered workshops or other day programs. In Fiscal Year 2003, only 26% of individuals receiving community-based supports and services worked, and those that did worked for limited hours and low wages (Metzel, Boeltzig, Butterworth, Sulewski, & Gilmore, 2007). The Institute for Community Inclusion reported that state agencies that provide supports for adults with disabilities use facility-based programs 59% of the time and that the expansion of supported integrated employment has slowed. For the most part, states continue to expand their facility-based adult programs for persons with developmental disabilities (Hall, Butterworth, Winsor, Gilmore, & Metzel, 2003).

In 1999, West, Revell, Kregel, and Bricout showed that the policy restricting supported employment services to persons without prior institutionalization was negatively impacting supported employment services through the Waiver. Given that these restrictions were eliminated in 1997, supported employment programs through the Waiver were expected to significantly increase. West et al. completed a national survey of state developmental disability agencies in 2002 regarding the use of the Medicaid Home and Community Based Waiver to fund supported employment before and after the policy changes in the Balanced Budget Act of 1997. The researchers found that supported employment was growing faster than other day programs; however, they also determined that less than 16% of those receiving day habilitation services through the Waiver received supported employment and that the supports only accounted for 12% of the expenditures.

In an attempt to explain their findings, the researchers returned to their 1999 study in which two other barriers were reported by at least one fourth of the respondents: (a) difficult billing and documentation requirements, and (b) low reimbursement rates. In the 2002 follow-up article, the researchers speculated that financing issues may remain one of the disincentives to providing supported employment through the Waiver and that Waiver reimbursement rates to service providers continue to be low in comparison to rates that were paid by vocational rehabilitation agencies. The researchers stated that these factors may limit the providers’ interest in providing supported employment services through the Waiver. The authors recommended that states address financial disincentives to promote integrated work opportunities.

Other investigators have looked not just at the predominance of segregated settings, but also at the desired outcomes of the Supported Employment Program. Mank, Cioffi, and Yovanoff (2003) reviewed supported employment outcomes to determine if there has been quality improvement over the last decade. They found that there was a lack of significant change in wage levels, integration, and the types of jobs held by persons with developmental disabilities. The researchers stated that the lack of change in these variables may be due to larger system issues, noting that the structure and funding of supported employment may make it difficult for providers to invest in important components of the supports. It takes longer to find jobs that are full time and that have benefits, requiring more work assessments, job development, job exploration, and job matching. If the payment structure does not acknowledge this additional effort, there will be no financial incentives for helping people choose, get, and keep full-time jobs. The authors note that other system issues are at play as well. Loss of benefits—especially insurance—is of major concern to individuals and their families, as is transportation and supervision during non-work hours.

It should be noted that the Medicaid Buy-in Option provides a solution to the insurance dilemma by permitting states to continue to provide Medicaid benefits to persons if they lose their benefits due to income increases through work. The fear of loss of insurance benefits is repeatedly mentioned as a disincentive to work. Although not directly related to financing strategies, the Medicaid Buy-In is a financial investment that states can make to address this major barrier to employment. As of 2004, 39 states had implemented or were planning to implement the Medicaid Buy-In program (Sulewski, Gilmore, & Foley, 2006).

Wehman, Revell, and Brooke (2003) examined the issues of availability of competitive employment for individuals with significant disabilities compared to segregated day and work services. In this paper, the authors addressed several factors that impact the availability and quality of supported employment, examining both values and quality indicators. They assert that the goal of supported employment is more than simply finding jobs for people with significant disabilities, and that it should include a career focus. The authors believe that the number of hours worked on a weekly basis is considered a quality indicator for a supported employment program, stating that when persons receiving supported employment work less than 30 hours, the programs are faced with how to fill the non-work hours. This can result in turning to segregated programs for the needed activities and assistance. The authors recommend that funding agencies consider rewarding achievement of employment outcomes of 30 hours or more per week with funding incentives.

Wehman, Revell, and Brooke (2003) also addressed the importance of a well-coordinated job retention system. Unlike job placement, job retention services are often provided by non-Vocational Rehabilitation funding sources, such as the Medicaid Home and Community Based Waiver. According to the authors, there is strong evidence that ongoing supports after job placement and stabilization are required. Unfortunately, they have found that supported employment providers face substantial challenges in providing job retention supports after the Vocational Rehabilitation agency closes the case. Access to funding appears to be one of the key issues. According to the authors, agency funding frequently does not cover the costs of providing these services. West, Wehman, and Revell (2002) noted that maintaining supports after vocational rehabilitation services is key to addressing work-related problems, and that the amount of necessary contact hours may need to be increased during the three to six months after successful job placement. They also noted that non-Vocational Rehabilitation resources are used predominately for these services and that these are often inadequate to address the need.

Novak, Rogan, Mank, and DiLeo (2003) found, in their comprehensive survey of 50 states, that respondents overwhelmingly reported that inadequate long-term funding discouraged supported employment. Other disincentives noted are as follows:

· It is less expensive for community rehabilitation providers to render segregated services.

· The funding source available for segregated services is more stable than funding sources available for supported employment services.

· Programs that provide follow-along services (extended services) traditionally fund segregated programs.

Also noted in the study were fiscal incentives established by states. Examples are as follows:

· Vocational Rehabilitation provides upfront funding to community rehabilitation providers for job development and placement services in some states.

· Vocational Rehabilitation rate structure in 11 states favors integrated services. In some states, the hourly reimbursement rate for supported employment services is significantly higher than the daily rate for sheltered work.

· Any new funding made available through the state Vocational Rehabilitation agency or Developmental Disabilities is restricted to integrated services.

· If a consumer leaves a segregated program, the provider loses the “slot.”

· Some states offer bonuses for community employment outcomes.

High Performing States