Senate Budget & Appropriations Committee
Department of Human Services
May 3, 2012 @ 10 a.m.
Testimony by Commissioner Jennifer Velez
Good morning, Chairman Sarlo, members of the Senate Budget & Appropriations Committee.
I’m here today to discuss the fiscal year 2013 proposed budget.
I have with me members of my executive management team, including our Chief of Staff; two
Deputy Commissioners, our Division Directors and our CFO. As we proceed this morning, I
will introduce them to you, as appropriate, when I ask for their assistance in providing to you
more detailed responses to your questions.
I mentioned during my Assembly testimony that this is my 5th budget year as Commissioner of
the Department of Human Services; I actually think it’s my 6th – and I remain very humbled to
continue in this position. I’m also very fortunate to have an experienced and very solid
management team. Recently, I’ve made two key additions, including Lowell Arye, our newest
Deputy Commissioner, and Joseph Amoroso, our Director of the Division of Disability Services.
There are a few key issues from the current budget and the proposed budget that I’d like to take
this opportunity to address:
I testified last year about the initiatives underway to reform and transform our State’s Medicaid
program – and the proposals to best serve our most vulnerable populations: our seniors, people
with disabilities and children. This fiscal year, we transitioned approximately 155,000 aged,
blind and disabled Medicaid recipients from an inefficient fee for service system into managed
care. The staggered roll out from July 1 through October 1 allowed the State’s contracted HMOs
to build and secure their provider networks to accommodate the needs of new enrollees.
During the ongoing negotiations regarding our Comprehensive Medicaid Waiver, CMS has
indicated support for our delivery system changes, pilot programs and our request to reduce the
institutional bias now inherent in Medicaid by supporting flexibility in federal matching dollars
for home and community based services. And, now, we are in the last stages of that process.
When we receive final approval, we will reassess implementation dates, savings projections and
post the terms of the waiver on our website. In the meantime, the Department is engaged
actively with stakeholders to prepare for implementation.
During this fiscal year, we have achieved some offsetting savings through lower than projected
Medicaid enrollment, higher than projected savings from the most recent moves to managed
care, and higher than anticipated manufacturer drug rebates – but we’re still working daily with
CMS to secure a final approval for the waiver. Both from a policy perspective and a budget
perspective, the waiver is critical to advance the reforms that we believe are necessary to create a
sustainable program.
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Last year, there also was some concern surrounding the proposed closure of Vineland
Developmental Center. What followed was the creation by statute of a Task Force on the
Closure of State Developmental Centers. This task force convened in February and we await its
final recommendations. In the meantime, the Department continues to honor the civil rights of
residents in the developmental centers by offering them community residential opportunities.
The Division of Developmental Disabilities serves about 42,000 individuals with a range of
services from information and referrals, to placement. During this current fiscal year, over 700
people received community placements or expanded services – through a variety of means,
including emergency placements, day supports for people leaving school, the waiting list, or
Olmstead – and the FY’13 budget supports funding of nearly $40 million additional (State only)
dollars to afford similar opportunities for even more people this coming fiscal year.
Closure plans for the Garrett W. Hagedorn Psychiatric Hospital are on schedule for June 30 th of
this year. An estimated $16 million has been allocated in the FY’13 budget to both meet our
Olmstead commitment and to reinvest in the mental health community.
The Department has established an onsite Employee Resource Information Center, which
provides assistance and support to employees regarding vacancies in other state hospitals and
developmental centers, as well as throughout the Department. In addition, in partnership with
the Department of Labor and Workforce Development, we hosted a job fair at Hagedorn. We’re
doing all we can to limit the loss of jobs and as a result, the projected number of staff impacted
by the closure has been decreasing. The FY’12 budget anticipated 540 employees might be
displaced; by June, we expect it to be closer to 200 full time employees.
We’ve also worked with the Department of Military and Veterans’ Affairs to repurpose part of
Hagedorn’s campus to create Veterans’ Haven North, which will support veterans who are
homeless and in need of substance abuse treatment and other services. This new program is
modeled from the successful program that now operates in South Jersey on the grounds of
Ancora Psychiatric Hospital.
This year, the Department’s Division of Family Development implemented an electronic Child
Care tracking and payment system among its nearly 5,000 providers for about 70,000 children.
The system replaces outdated, cumbersome paperwork; provides enhanced program safeguards,
and maintains real time attendance and payment information. This initiative was part of a much
broader childcare program reform, which began four years ago with the alignment of income
eligibility criteria for families in Abbott and non-Abbott districts and the requirement of at least
part-time work activity to qualify. Implementation of the new system has been challenging for
both providers and families, and I’ve been happy to meet with some of you on this committee, as
well as other stakeholders, to understand and work through the challenges. In the end, we’ll
have a much improved, modernized, transparent and accountable system to serve our eligible
families.
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Regarding the proposed budget:
This next fiscal year will include a common sense restructuring of some vital state government
services in an effort to better serve New Jersey’s residents.
The Department of Human Services will be integrating senior services, currently provided
through the Department of Health, into our operations.
As the single state agency for Medicaid benefits, we have been working in partnership with the
Department of Health to administer many programs and services to the aging population. Under
the proposed restructure, all federal and state funded services and supports for seniors now will
be coordinated within one Department.
Moving senior services to DHS creates a single point of access for seniors and people with
disabilities and their caregivers regardless of Medicaid eligibility. The benefits of this move
were very much highlighted during the discussions and design of the Medicaid Comprehensive
Waiver. The restructuring allows for a continuum of coordinated and integrated disability and
long-term care resources, which we believe will show improved health outcomes, realize the
outcome of receiving appropriate care in appropriate settings and create the opportunity and the
ability for aging adults to remain at home with proper supports.
The planned move to managed Long Term Services and Supports further develops New Jersey’s
progress in supporting seniors and people with disabilities’ desire to work and live in their
communities for as long as possible. One very practical benefit of implementing managed Long
Term Services and Supports will be the expansion of the home and community-based services
package to any qualifying Medicaid-eligible enrollee, not limited to people who currently fit into
one of the current Home and Community Based waiver programs.
There has been a significant amount of discussion surrounding the nursing home rates in this
budget. Beginning in FY13, nursing homes will be part of the Department of Human Services’
budget – and my staff and I have met – and continue to meet – with the stakeholders on this
issue. We understand and appreciate the challenges facing the private and county nursing home
operators. The budget proposal for FY’13, including the decision to continue the corridors in
rate setting for a third year, was made to stabilize rates for all nursing homes, as much as
possible, within the funding parameters prior to the implementation of Managed Long Term
Services and Supports.
Finally, most children and adolescents now served by DHS will transition and be served by DCF,
which was an idea discussed by many advocates and stakeholders – really since the time that
DCF was created. Governor Christie agreed with the notion that one department should be
serving the whole child. This restructuring ends the historic fragmentation that now exists –
particularly for families whose children need services and supports from both departments. With
its wide-ranging network of community services, DCF is positioned to provide a holistic
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approach to serving children with autism and other developmental disabilities. The departments
will work together to transition adolescents, aged 16 to 21, as they move into adulthood.
I think it’s important to note that thus far, I’m aware of only positive feedback from a good
number of our stakeholders on both the seniors and the children – and to date, we’ve held
meetings with many groups and families affected by the changes. The response has been
positive.
Thank you. I’m happy now to answer any questions you may have.
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