Cost Study of Private Day Special Education Programs Released

October 8, 2019

Language included in the 2018 Appropriations Act required the Office of Children’s Services to contract for a study of the rates paid for private day educational placements funded through the Children’s Service Act, which would include recommendations for how a rate-setting structure for these services might be implemented. The consultants selected to complete the study, Public Consulting Group (PCG), released an interim report in late 2018 and held listening sessions on a draft final report this summer to solicit feedback in advance of the report’s October 1 due date. The report has now been released. It provides a recommended methodology for the development of rates, but cautions that a second round of data collection would be necessary to develop rates in the future, since only about 40 percent of schools provided the data requested by PCG (although these schools account for approximately 64 percent of the students served in private day placements).

The report includes a proposed methodology for setting rates for operating and personnel costs and includes some sample rates based on the information supplied by participating providers. Operating costs would include elements such as facility costs, food service, and insurance; personnel costs covered salaries and benefits. PCG recommended that, should the legislature opt to develop school-specific rates in the future, schools would need to be required to submit cost information in order to calculate these rates. PCG also recommended that regional variations in cost be taken into account by developing a set of base rates for each region (this issue was discussed at several of the regional listening sessions this summer). The report also recommends that rates for physical therapy, occupational therapy, and speech-language pathology services be set separately, as the costs for these services varied significantly. PCG suggests that an inflation adjustment using the Consumer Price Index would be useful in order to project rates into future years.

PCG points out that one benefit of a potential rate-setting structure to local governments and other interested parties would be predictability, noting, “Standardized rates may allow for stable budgetary predictions among all groups.” At this time, due to the limitations of the data provided, it is difficult to determine the specific effects on individual schools and localities, as PCG notes: “One goal of this rate study was to analyze the impact of new rates on local school districts, local governments, and other affected entities. As specific rates are not set, the local impact is indeterminate at this time. For any future studies, a sample analysis on rate impact to local school districts and local government funds would be advisable.”

It is anticipated that this issue will continue to be under discussion by the legislature and the Administration during the upcoming General Assembly session, including through a study of special education and a study of the Children’s Services Act, both of which were approved by the Joint Legislative Audit and Review Commission’s Study Selection Subcommittee on October 7 and planned for 2020. The full Commission is expected to approve these studies at its November meeting.

VACo Contact: Katie Boyle

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