1. Administration for Community Living U.S. Department of Health and Human Services March 2016 DD Formula Overview 1

2. DD Act Requirements The Developmental Disabilities Assistance and Bill of Rights Act of 2000 (DD Act) Section 122 requires that appropriated funding be allotted on the basis of: 1.Total population of the state/territory 2.Need for services for people with DD in the state/territory 3.Financial need of the state/territory 2

3. DD Act Requirements The DD Act also requires –Minimum allotments for states and territories –Adjustments to the minimum allotments when there is an increase in appropriations and an increase in Consumer Price Index (CPI) –Hold harmless for Councils, only –Reduction of Allotment: allotted amount proportionately reduced 3

4. DD Formula Minimum allotments (as adjusted) Allotments based on 1.Total population of the state/territory 2.Need for services for people with DD in the state/territory 3.Financial need of the state/territory Hold Harmless, for Councils only –Prior year award amount, 2000, 2001, 2002, minimum amount Reductions if appropriated funds are less 4

5. Why the change? The old formula is out-of-date, last adjusted in the late 1970s or the early 1980s Uses unreliable data sources Requests from grantees to change the formula Recognition by AIDD staff and OGM staff at ACL (and ACF) that the formula was very complicated 5

6. Process for Revising the Formula AIDD removed the formula from the text of the regulation to create an opportunity to revise the formula. 6

7. Goal for Revising the Formula Goal to create a formula that is: –Consistent with Congress’ intent to provide funds to states based on greatest need –Clear –Concise –Transparent –Valid and reliable 7

8. The Challenge The DD Act does not define the following: –Need for services for people with DD in the state/territory –Financial need of the state/territory AIDD had to identify a way for defining these two data points and their weights 8

9. Background Review AIDD met with internal experts to discuss current formula and DD Act requirements for the formula AIDD collected information on how other federal agencies calculate formulas to identify commonly used data sources 9

10. Formula Workgroup AIDD formed a workgroup in Spring of 2015 to assist with developing a new formula Identified experts as workgroup members: –DD Researchers/Data experts –Retired DDC and P&A directors –Representative of NACDD and NDRN –AIDD staff –ACL staff (OGM, OPE (Office of Performance and Evaluation) for data) 10

11. Discussion of Need for Services Considered various data sources: –Medicaid –IDEA –SSI Workgroup concluded that these data are unreliable because each State determines program eligibility and reporting requirements. 11

12. Discussion of Need for Services The Workgroup discussed the possibility of using the estimated percent of people with developmental disabilities (DD) as a way of representing need for services Assumption being that all people with DD will need some type of service 12

13. Discussion of Financial Need Discussed the issues with Per Capita Income (PCI) and that it can skew the data, masking pockets of financial need Discussed using poverty, unemployment and a combination of poverty and unemployment 13

14. Formula Workgroup Based on ideas presented by the workgroup, ACL/OGM developed different ‘runs’ of the formula using different data The Workgroup reviewed and discussed these ‘runs’ with state/territory name concealed Workgroup made final recommendations 14

15. Post-Workgroup Activities Based on recommendations from the workgroup, and reviews of the different runs, AIDD concluded to use the following data for the formula: –Total population data from the Census Bureau –Prevalence rate of 1.58% of total population –Combination of poverty and unemployment 15

16. ACL and HHS Review ACL leadership reviewed recommendations and concurred AIDD presented recommendations to Assistant Secretary for Planning and Evaluation (ASPE) Richard Frank and his staff –Concurred with findings –Recommended to weight data since population is counted twice 16

17. Finalizing the Formula Based on APSE recommendations, ACL did formula runs with data weighted at different levels AIDD and ACL leadership reviewed the runs and decided upon 30% population, 30% need for services, and 40% financial need OMB reviewed and concurred with the recommended formula 17

18. 18 New Formula DD ActWeightData SourceNotes Minimum allotmentN/ABased on prior year amount; adjusted upwards when there are increases in appropriations and CPI and the appropriations increase exceeds the CPI increase. No change Total population30%July Census estimated figures released August each year Reflects previous year population Need for services for people with DD 30%Based on 1.58% prevalence rate for DD in each State/Territory from the HHS National Health Interview Survey on Disability (NHIS-D). Considered to be most reliable estimate Financial Need of the State/Territory 20% Poverty counts for States and Puerto Rico, Census Bureau Unemployment counts for States and Puerto, Bureau of Labor Statistics (BLS) Uses most current data closest to July of each year July Data of each year Hold harmlessN/APrior year award amount, amounts from 2000, 2001, 2002, minimum Councils only ReductionN/AIf aggregated amounts to be allotted exceeds the total amount appropriated, each state’s amount should be proportionately reduced.

19. 19 New Formula Data Points Data Points: 1.Minimum Allotments for state/territory are determined (adjusted if necessary) 2.Total state/territory population estimates obtained from the Census Bureau 3.Poverty data: Latest data obtained from the Census Bureau for 50 states, DC, PR (currently 2014 data) 4.Unemployment data: Data obtained from Bureau of Labor Statistics for 50 states, DC, PR (select to use July 2015 data) 5.Data for territories (AS, GU, MP, VI) is not available for Poverty and Unemployment, but they will all receive minimum allotments

20. 20 New Formula Allocation Steps Allocation Steps: 1.Calculate each grantee’s “calculated minimum amount” by getting the maximum from the Hold Harmless amounts from prior year, 2000, 2001, 2002 (for Councils only) and the minimum allotment. 2.(Councils only) Compare this summed amount to the appropriated funding. If there is a reduction factor, then each grantee gets a same percentage reduction from its “calculated minimum amount”. Allocation ends.

21. 21 New Formula Allocation Steps (cont.) 3.30% of funding is for “Population Allocation”: Distribute by population % first, then adjust each grantee’s allotment so all grantees’ 30% of minimum amounts are satisfied. 4.30% of funding is for “Need for services ”, which is the 1.58% prevalence rate of population: Distribute by 1.58% of population first, then adjust each grantee’s allotment so all grantees’ 30% of minimum amounts are satisfied.

22. 22 New Formula Allocation Steps (cont.) 5.20% of funding is for “Poverty Allocation – financial need”: Distribute by Poverty count % first, then adjust each grantee’s allotment so all grantees’ 20% of minimum amounts are satisfied. 6.20% of funding is for “Unemployment Allocation – financial need”: Distribute by Unemployment count % first, then adjust each grantee’s allotment so all grantees’ 20% of minimum amounts are satisfied.

23. 23 New Formula Allocation Examples (What-if no HH)

24. 24 Old Formula DD Act Formula Requirement WeightData SourceNotes Minimum allotmentN/ABased on prior year amount; adjusted upwards when there are increases in appropriations and CPI and the appropriations increase exceeds the CPI increase. Same as the New Formula Total populationN/AJuly Census estimated figures released August each year Same as the New Formula; State pop. factored into 2 and 3. Need for services for people with DD in State/Territory 1/3SSA data on 18-64 year olds whose parents are receiving SSI (ADCP) SSA data is an outdated way of measuring need and is a large undercount of need for services. Financial Need of the State Territory 2/33 year average of per capita incomePer capita income can skew the data and is not the most accurate reflection of financial need Hold HarmlessN/APrior year award amount, amounts from 2000, 2001, 2002, minimum Same as the New Formula; For Councils only ReductionN/AIf aggregated amounts to be allotted exceeds the total amount appropriated, each state’s amount should be proportionately reduced. Same as the New Formula

25. 25 Old Formula Data Points Data Points: 1.Minimum Allotments for state/territory are determined (adjusted if necessary) 2.Total state/territory population estimates obtained from the Census Bureau, also calculate the ages 18-64 working population 3.Per Capita Personal Income (PCI) data obtained from the Bureau of Economic Analysis, current year USPCI and calculate a 3-year average each state/territory 4.Adult Disabled Children Program (ADCP) data obtained from the Social Security Administration

26. 26 Old Formula Allocation Steps Allocation Steps: 1.Calculate each grantee’s “calculated minimum amount” by getting the maximum from the Hold Harmless amount from prior year, 2000, 2001, 2002 (for Councils only) and the minimum allotment. 2.(Councils only) Compare this summed amount to the appropriated funding. If there is a reduction factor, then each grantee gets a same percentage reduction from its “calculated minimum amount”. Allocation ends.

27. 27 Old Formula Allocation Steps (Cont.) 3.Calculate a PCI factor: Divide US PCI by each grantee’s 3-year average PCI (higher factor means higher financial need), multiplied by grantee’s total population. PCI Factor = Grantee Pop * USPCI Average (FY16PCI, FY15PCI, FY14PCI) 4. 2/3 of funding for “PCI Allocation – financial need”: Distribute by PCI factor % first, then adjust each grantee’s allotment so all grantees’ 2/3 minimum amounts have been satisfied.

28. 28 Old Formula Allocation Steps (Cont.) 5.Calculate an ADCP factor : Divide ADCP by each grantee’s 18-64 working population (higher factor means higher need of services), multiplied by grantee’s total population. ADCP Factor = Grantee Pop * ADCP 18-64 Working Population 6.1/3 of funding for “ADCP Allocation – need for services”: Distribute by ADCP factor % first, then adjust each grantee’s allotment so all grantees’ 1/3 minimum amounts have been satisfied.

29. Comment Period Seeking comments on the types of data for the formula Comment period closes COB March 21, 2016 Send comments to: AIDDformula@acl.hhs.govAIDDformula@acl.hhs.gov AIDD will review comments to determine whether changes are made to the formula Post FY17 estimates to ACL website in April