Financing Transition Services when Everyone is the "Payer of Last Resort"

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FINANCING TRANSITION SERVICES WHEN EVERYONE
IS THE “PAYER OF LAST RESORT”
Employment Policy and Measurement Rehabilitation Research and Training Center
Funded by the National Institute on Disability and Rehabilitation Research (NIDRR)
to Institute on Disability at the University of New Hampshire
Authors:
Nanette Goodman
Michael Morris
Burton Blatt Institute at Syracuse University
September 2015

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FINANCING TRANSITION SERVICES WHEN EVERYONE
IS THE “PAYER OF LAST RESORT”
1. Introduction
Over the past several decades a number of innovative service delivery strategies
have developed to increase employment outcomes for youth and adults with
disabilities such as supported employment, customized employment, Project Search,
and Youth Guideposts for Success. What these and other contemporary best
practices have in common is an acknowledged need to coordinate priorities,
resources, and services across multiple systems and funding streams.
This need requires agencies to jointly develop employment plans that address each
individual’s unique set of barriers to employment, and engage the most appropriate
services and supports to address these barriers. This may require the system to
draw on agencies and multiple funding streams either sequentially or
simultaneously. This process of using multiple funding streams while keeping the
source of the funding separate for accounting purposes is known as “braiding”
resources.
Despite the critical need to braid resources from multiple agencies to implement
best practices in employment policy, this cross-agency collaboration has been
notoriously difficult to accomplish. The lack of alignment between the individual
systems has been well documented. Each system has its own mission with its own
eligibility criteria, reporting requirements, payment arrangements, funding cycles
and approaches to evaluating outcomes (Mills et al 2013). State systems struggle to
align policy and practices, which undermines the support of integrated work
experiences for youth with the most significant disabilities (Advisory Committee,
2015).
While this sounds complicated from a systems perspective, it can create an
insurmountable barrier to job seekers. Individuals may start in one system and if
they need a service that falls outside the statutory obligations of that system or if
they exhaust time-limited funding for a particular service, they are left to search for
other alternatives.
This issue is particularly acute for transition-age youth. This is a period when
education, employment readiness, and job experience overlap. It is also the period
when youth move from education into the adult human service system—a period
sometimes referred to as “falling off a cliff.” Good coordination between schools,
vocational rehabilitation, and other providers can have significant long-term
benefits. For example, work experience in high school yields long-term employment

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benefits (Morris and Goodman, 2013). Early career planning can identify gaps in
education that can be addressed by the school.
Although many states have started to coordinate more person-centered approaches,
some states claim the federal requirement that several of the major employment
funding sources be “payer of last resort” make this coordination more difficult.
Federal rules from the Rehabilitation Services Administration (RSA), Office of
Special Education Programs (OSEP), Centers for Medicare and Medicaid Services
(CMS) and the Department of Labor-Employment and Training Administration
(DOL-ETA) require that their programs (which are implemented by state and local
agencies) pay for services only when other sources of funding are not available.
While these regulations seem to discourage resource braiding by implying one
agency cannot pay until other agencies have denied services to the client, in recent
years the Office of Management and Budget, the Department of Justice (DOJ) and
many federal agencies (include RSA, OSEP, DOL, and CMS) have encouraged cross-
agency collaboration in planning and delivering services and sharing costs.
For example, in 2011, the Office of Management and Budget (OMB) issued a
memorandum to all heads of executive department, OMB’s Mandate for Federal
Cross-Agency Collaboration & Resource Coordination, requiring that agencies
“establish better processes for cross agency and cross government collaboration
and… remove barriers that impede coordinating or blending funding streams from
multiple federal programs and agencies as well as from other levels of government
or non-governmental sources to achieve better outcomes.” (Lew, 2011)
In April 2014, the U.S. Department of Justice entered into a consent decree with the
state of Rhode Island to improve school to work transition planning for all youth
with disabilities between the ages of 14 and 21. The consent decree requires
interagency agreements or memoranda of understanding between multiple state
agencies that will “clarify and streamline interagency procedures and allow for
blending and braiding of funding” to improve integrated, competitive employment
outcomes. (Consent decree, 2014)
The federal government leaves it up to the state agencies that implement the
various programs to interpret the regulations and determine if they have met the
payer of last resort requirements. If the federal agency overseeing the program
determines that the requirement has not been met, it could theoretically withhold
grant funds or reimbursements. In order to avoid this prospect, some states have a
very conservative approach—one agency will not provide services until others deny
the service and provide a denial letter.
Other states have taken the strategy of compartmentalizing and sequencing the
funding. This approach is makes it easier administratively but prevents them from
working together collaboratively for the best interest of the client.
The Workforce Innovation and Opportunity Act enacted in 2014 may clarify the

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respective role of each agency as it extends the responsibility of Vocational
Rehabilitation to provide services to transition age youth. Under the law, VR
agencies are required to spend 15% of their funds for transition services,
specifically pre-employment transition services as defined within the act.
The paper will be structured as follows: Section 2 discusses the legislative and
regulatory language that, on the one hand requires each of the four funding streams
(VR, Medicaid, IDEA, and ETA) to be payers of last resort and on the other hand
requires them to coordinate services and funding. Section 3 describes Delaware’s
successful approach to coordinating services and funding across systems. Section 4
presents recommendations to increase the adoption of successful strategies.
2. Legal and Regulatory requirements
RSA, CMS, OSPE and ETA each have requirements that programs implemented with
their funding be payers of last resort. At the same time, each agency requires or
encourages cross-agency collaboration at both a systems level and at the level of
individual service delivery. States are left to balance these two sets of requirements.
A. Vocational Rehabilitation funded by RSA
RSA provides annual grants to VR agencies designated by each state to serve
individuals who have “a physical or mental impairment that constitutes or results in
a substantial barrier to employment” and “can benefit from VR services” to achieve
an employment outcome. Priority must be given to serving individuals with the
most significant disabilities if a state is unable to serve all eligible individuals.
Guided by the Rehabilitation Act of 1973 as amended (29 U.S.C. 720-731), VR
agencies provide job-related services including job search and placement, vocational
guidance and counseling, vocational or other training services, assistive and
rehabilitation technology, supported employment, and transportation (GAO, 2012)
i. Payer of last resort
Under the Rehabilitation Act, state VR agencies are required to have a state plan that
includes the following assurance:
Prior to providing any vocational rehabilitation service to an eligible
individual…the designated State unit will determine whether
comparable services and benefits are available under any other
program (other than a program carried out under this title).
[Rehabilitation Act, Section 101(a)(8)(A)(i)]
The comparable services clause includes important caveats. A person does not have
to exhaust similar benefits if “diagnostic services, VR counseling, referral to other
services, job placement, or rehabilitation technology are involved VR [29 USC §

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721(a)(8)].” This means that for these services, VR can be considered the primary
payers. It is important to note that supported employment services provided under
the Rehabilitation Act are not excluded from the payer of last resort requirement.
Similar benefits do not need to be exhausted if “consideration of a similar benefit
would interrupt or delay progress toward achieving employment outcome, an
immediate job placement, or services to an individual at extreme medical risk.” If
one of these conditions is met, VR must provide the service and then seek
reimbursement from the other agency.
ii. Cross agency collaboration
System level: RSA requires that the VR state plan include an “interagency
agreement or other mechanism for interagency coordination” between the state
designated VR agency, the state agency administering the state Medicaid program,
higher education, and the state workforce investment system. The agreement or
mechanism must describe the method for defining the financial responsibility of
each public agency for providing specific services to a common customer with a
disability. The state plan must also specify procedures for resolving interagency
disputes regarding payment of reimbursement for specific services. 29 U.S.C. §
721(a)(8)(B)
Individual level: the Individual Plan for Employment (IPE) must list all services to
be provided to meet the employment goal, whether or not they are the
responsibility of the VR agency. It must then identify the services the VR agency is
responsible for providing, any comparable benefits the individual is responsible for
applying for or securing, and the responsibilities of any agencies to provide
comparable benefits. 29 USC § 722(b)(3)(E).
B. Medicaid
Medicaid is a means-tested entitlement program generally funding medical services.
When it funds employment-related services and supports, it typically does so under
the Home and Community-Based Services (HCBS) waivers, administered by the
state’s agency for Developmental Disabilities or other human service agency.
Eligibility for waivers requires that the applicant meet the financial and non-financial
requirements of Medicaid and meet the definition of the group specified by the waiver
and a “level of care” requirement. Within some federal constraints, states have flexibility
in defining the group covered by each waiver (e.g, Intellectual and developmental
disability, traumatic brain injury, physical disability)
Although specific services vary by state and by waiver, waivers generally provide
day habilitation, prevocational services, supported employment, career planning,
case management, independent living assistance, family training, and environmental
modifications and other services as approved.

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i. Payer of last resort
Medicaid, primarily a health care insurer, is intended to be the payer of last resort
with few exceptions. Under Title XIX of the Social Security Act and Title 42 of the
Code of Federal Regulations, State Medicaid agencies must “take all reasonable
measures to ascertain the legal liability of third parties to pay for care and services”
that would otherwise be paid by Medicaid [42 U.S.C. § 1396a(a)(25)(A)]. When
states seek Federal approval to operate HCBS waivers that include employment
services, they are required to provide this assurance:
When a state covers prevocational and/or supported employment
services in a waiver, the waiver service definition of each service must
specifically provide that the services do not include services that are
available under the Rehabilitation Act (or, in the case of youth, under
the provisions of the IDEA) as well as describe how the state will
determine that such services are not available to the participant before
authorizing their provision as a waiver service. [CMS, 2008, p. 131-132]
In September 2011, CMS published an informational bulletin to highlight the
opportunities available to use waiver supports to increase employment
opportunities for integrated employment outcomes through the 1915(c) waiver
program (Mann 2011) .The bulletin provides clarification to states that Medicaid
waiver funds can be used for supported and customized employment, peer support
services, and prevocational services. It reminds states that they must maintain
“Documentation… that the service is not available under a program funded under
section 110 of the Rehabilitation Act of 1973 or the IDEA (20 U.S.C. 1401 et seq.).
If the operating agency does not maintain acceptable documentation the CMS
regional office may recommend that the state may be denied reimbursement for
some services.
ii. Cross agency collaboration
System Level: CMS showed its support for cross agency collaboration through its
11-year support of Medicaid Infrastructure Grants (MIG). Authorized under the
Ticket to Work and Work Incentives Improvement Act, the MIG program gave states
the opportunity to undertake systems-change efforts aimed at increasing
employment outcomes of people with disabilities. States were encouraged to use
grant funding to “implement Medicaid buy-in programs, increase the availability of
statewide personal assistance services, form linkages with other state and local
agencies that provide employment related supports, and create a seamless
infrastructure that will maximize the employment potential of all people with
disabilities. (CMS 2011)
Individual Level: CMS specifies that services for participants in Medicaid HCBS
programs must be developed through a person-centered planning process and
prescribes the qualities that the planning process and resulting person-centered

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plan must have. In addition to requiring that the process “addresses health and
long-term services and support needs in a manner that reflects individual
preferences and goals,” CMS includes several clauses in regulations that implicitly
encourage cross-agency collaboration.
First, the rules require that the person-centered planning process is directed by the
individual with long-term support needs, and may include a representative that the
individual has freely chosen and others chosen by the individual to contribute to the
process” thus indicating that CMS wants other stakeholders (which may include
other agencies) involved in the planning process. Second, the person centered plan
should “reflect the services and supports (paid and unpaid) that will assist the
individual to achieve identified goals, and the providers of those services and
supports, including natural supports” indicating that CMS recognizes that the
individual may be receiving services from multiple sources.
C. Special education
Any child with a disability who needs special education and related services to receive an
appropriate education qualifies for special education services from their local education
authority (LEA) funded in part by Special Education Grants from the Department of
Education. Schools are required to establish a transition plan for each student and the
school generally provides education, instruction on daily living skills, functional
vocational evaluations, transportation to school and school-related activities, and
physical, occupational, and speech therapy.
i. Payer of last resort
For those children eligible for services under Part B and also
eligible for services through a non-educational public agency (e.g.,
State Medicaid Agency), the local education agency (LEA) or the
State Education Agency (SEA) agency responsible for developing
the child's IEP is the “payer of last resort.”
(34 CFR 300.142)
A subsequent section of the code reiterates this requirement and gives example of
services to be provided by other agencies “that are also considered special
education or related services including but not limited to, services relating to
assistance technology devices, supplementary aids and transition services. If the
other public agency fails to pay for the service, the LEA is to provide the service and
claim reimbursement from the agency that failed to provide it. 34 CFR § 300.154
ii. Cross agency collaboration
System Level: IDEA requires the state to ensure that an interagency agreement or
other mechanism for interagency coordination is in effect between educational and
each non-educational public agency that identifies a method for defining the

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financial responsibility of each agency and policies to promote timely delivery of
service.
Individual Level: IDEA requires that, at age 16 or younger if appropriate, transition
services are to begin for students determined eligible for special education. The
Individual Education Plan (IEP) must include measurable post-secondary goals
related to training, education, and employment and must include “identifying the
responsibilities of agencies other than schools to provide the services.” 29 U.S.C. §
721(a)(9)
D. Workforce Development System
i. Payer of last resort
The Workforce Innovation and Opportunity Act (WIA) includes “payer of last resort
language” in relation to Title I, Workforce Development Activities.
Funds provided under this title shall only be used for
activities that are in addition to activities that would
otherwise be available in the local area in the absence of
such funds. Pub. L. 113-128, §194(1)
ii. Cross agency collaboration
System Level: The Statutory Authority of the Workforce Development System and
the system’s network of American Job Centers (previously called One-Stops)
mandates coordination with specified partners and encourages collaboration with
others. Under WIOA, each state must every submit a “single, unified strategic plan
for preparing an educated and skilled workforce.” Pub. L. 113-128, §102(b)(1). Key
partners include the VR agency and can include Temporary Assistance for Needy
Families (TANF) and the Carl Perkins career and technical education programs. VR
and the Workforce Development system must also describe their approach to
coordination with the Social Security Ticket to Work program and a state’s Mental
Health and Intellectual and Developmental Disability service delivery systems. (Pub.
L. 113-128, §134(a)(3)(A)(viii)(II)(cc))
Individual Level: Job seekers may eligible for individual training accounts to
purchase training services from a list of providers. WIOA specifies that “Each local
board may, through American Job Centers, coordinate funding for individual
training accounts with funding from other Federal, State, local, or private job
training programs or sources to assist the individual in obtaining training services”
(Pub. L. 113-128, §134(b)(3)(F)(iv))

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3. Transition Services in the Workforce Innovation and
Opportunity Act
WIOA includes three provisions that affect States’ approaches to coordinating
funding for transition services.
VR funding for transition services: First, WIOA requires that the State VR agency
spend 15% of its funds on transition services. These services include job
exploration counseling, work-based learning experiences, counseling on post-
secondary opportunities, workplace readiness training, and training on self-
advocacy. Other services are also allowed if funds are available. It is important to
note that this requirement must be implemented without additional funds so VR
agencies will need to reallocate funds from other services.
Cooperative Agreements between VR and other agencies: Second, WIOA
requires that the state VR agencies have cooperative agreements between with the
state agency responsible for administering the state Medicaid plan, and with state
IDD agencies, with respect to the delivery of VR services, including extended
services. This means that VR must have in place agreements with those agencies
responsible for long-term supports for people with disabilities, impacting in
particular individuals with IDD, those with significant mental health issues, and
those with other issues requiring long-term care funded by Medicaid. (Hoff 2015)
Extended services for supported employment: WIOA defines supported
employment to mean “competitive integrated employment, including customized
employment, or employment in an integrated work setting in which individuals are
working on a short-term basis toward competitive integrated employment, that is
individualized and customized consistent with the strengths, abilities, interests, and
informed choice of the individuals involved, for individuals with the most significant
disabilities.” The law specifies that supported employment services can be provided
by the VR agency for up to 24 months and may be extended as necessary. (PL 113-
128 §404(39).
4. Delaware’s Successful Collaboration Strategy
A. Pathways to Employment
In 2014, Delaware established “Pathways to Employment” administered by the
Department of Health and Human Services using Medicaid 1915(i) authority to
provide individually tailored employment services to eligible transition age youth
with disabilities who want to work in a competitive work environment. The state
maintains a robust Pathways to Employment Website.
The program contracts with community providers to offer on-the-job supports,
transportation, personal care, orientation and mobility training, assistive

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technology, and other services to help individuals attain and maintain employment
based on their specific needs.
Although the program was still in the early phase of implementation at the writing
of this paper, it has the potential to bring additional resources to transition services.
And demonstrate an approach to interagency braided funding that meets the
statutory requirements of RSA, OSPEP, DOL-ETA, and Medicaid.
Purpose: The Pathways to Employment program is designed to expand the
availability of early work experience and other evidence-based employment
transition services. The program does the following:
• Serves low income individuals, across disabilities who desire to work in a
competitive work environment;
• Provides individually tailored services for individuals with visual
impairments, physical disabilities, intellectual disabilities (including brain
injury) and autism spectrum disorder to help them obtain or sustain
competitive employment;
• Offers an array of services that will support individuals to explore and plan
career paths and build career readiness. Pathways will include important
services, such as on-the-job supports, transportation, personal care,
orientation and mobility training, assistive technology, and other services to
help individuals maintain employment based on their specific needs;
Services: The 1915(i) State Plan Amendment clearly defines each service
• Employment Navigator
• Financial Coaching Plus
• Benefits Counseling
• Non-Medical Transportation
• Orientation, Mobility, and Assistive Technology
• Career Exploration and Assessment
• Small Group Supported Employment
• Individual Supported Employment
• Personal Care (including option for self-direction
Services can be delivered either through a community service provider or through a
self directed option.
Eligibility: In order to participate in the Pathways to Employment program an
individual must:
• Want to work
• Be aged 14 to 25
• Be enrolled in Medicaid and meet related financial eligibility criteria

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• Be in one of the targeted disability groups (persons with intellectual
disabilities; autism spectrum disorders; visual impairments; or physical
disabilities)
• Meet certain disability-specific functional criteria
The program is estimated to serve 430 people per year once it is fully functional in
2016 including Individuals who are Visually Impaired, Individuals with Physical
Disabilities, and Individuals with Intellectual Disabilities, Autism Spectrum
Disorders or Asperger’s Syndrome
Administrative structure: The Pathways operates as a fee-for-service program
administered by Delaware Health and Social Services (DHSS), and the Division of
Medicaid and Medical Assistance (DMMA). Three operating divisions within DHSS
are jointly responsible for administering the program: Division of Developmental
Disabilities Services (DDDS), Division of Services for Aging and Adults with Physical
Disabilities (DSAAPD) and the Division for the Visually Impaired (DVI). The state
established a Pathways Steering Committee to provide ongoing oversight for the
program, including measuring the efficacy of the system and ensuring ongoing
quality improvement)
Funding: Section 6086 of the Deficit Reduction Act of 2007 (DRA), established
section 1915(i) of the Social Security Act adding an optional State Plan benefit that
contains many of the features of a Home and Community Based Services (HCBS)
waiver. Like an HCBS waiver, states can target services to persons based on age,
diagnosis, and condition. States can also apply functional criteria such as limitations
caused by disability. States can provide community based services that would not
otherwise be covered under the State Plan to allow persons to live independently in
the community. Two notable differences from HCBS waivers are that a 1915(i) State
Plan Amendment (SPA) does not require individuals to meet an institutional level of
care in order to qualify for HCBS and states cannot limit participation in the
program once an individual meets established eligibility criteria. (Delaware
Pathways Provider manual)
Referral sources: Individual may be referred to the program from schools, VR or
other agency. An individual may self-refer by contacting the State’s Aging and
Disability Resource Center (ADRC). The ADRC performs a preliminary screen and
refers the applicant to the appropriate Pathways operational division for a full
eligibility evaluation.
Case Management: Employment navigators play a critical role in the Pathways
process. They assess eligibility, develop employments plans, facilitate access and
referral to needed services, and monitor the employment plan. The navigators are
state employees located within the three disability agencies operating divisions and
funded by the waiver. The navigators are well positioned to provide conflict-free
case management because they are not employed by VR, the schools, or a

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community service provider and thus have no incentive to direct the individual to
any particular set of services.
Provider Certification and Payment: Per the Pathways Memorandum of
Understanding (MOU) between DDDS, DSAAPD and DMMA, DMMA has delegated
the functions of developing provider standards to the Pathways Steering Committee.
Certifying that providers meet those standards across the Pathways participating
divisions has been delegated to the Pathways Provider Certification Committee
(PPCC), which will contain members from DDDS, DSAAPD and DVI. (Provider Policy
Manual). All Pathways providers must also be eligible to provide services for VR
clients.
Providers are paid on a fee for service basis generally by 15 minute increments. The
fee schedule is posted on the State’s Pathways information for service providers.
Providers must honor consumer choice. Providers must agree to provide service to
any waiver member who chooses them, unless they are at capacity or if the provider
cannot or can no longer safely support a Pathways member. If the consumer
expresses a desire to change providers, the provider will continue to provide
services to the consumer and will assist with transition until the consumer has
transitioned to the new service or service provider. (Provider Manual)
Services for people with mental health disabilities: While the Pathways program
used Medicaid 1915(i) to provide employment services for on individuals with
physical, vision or developmental disabilities, the State used the Medicaid 1115
Demonstration Waiver authority to establish a program for individuals with Mental
Health that includes employment supports. It is open to people of all ages rather
than being limited to transition age and young adults. Promoting Optimal Mental
Health for Individuals through Supports and Empowerment (PROMISE) is designed
to support Assertive Community Treatment (ACT). It offers employment services
along with clinical service, psychological, nursing, and personal care services. Like
the Pathways program, PROMISE coordinates with DVR to provide initial
employment services while PROMISE provides ongoing supports.
B. Attributes that Facilitated Collaboration
i. Leadership
In 2012, under the leadership of Governor Jack Markell, Delaware took three actions
that showed the state’s high-level commitment to increasing employment among
people with disabilities.
• As Chair of the National Governor’s Association in 2012-2013, Delaware
Governor Jack Markell focused his “Chair’s Initiative” on increasing
employment opportunities for individuals with significant disabilities. Under
his leadership NGA developed “A Better Bottom Line: Employing People with
Disabilities.”

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• The State legislature passed Employment First Legislation” that requires
state agencies that provide services to persons with disabilities to consider,
as their first option, employment in an integrated setting for persons with
disabilities.
• The state legislature established a “Transition Task Force for Emerging
Adults with Disabilities and Special Health Care Needs” with work groups on
employment, education, transportation, and health services.
“A Better Bottom Line” has served as a blueprint for Delaware’s disability
employment initiatives. The report identifies five key areas in which states should
take action to increase employment including:
• Make disability employment part of the state workforce development
strategy.
• Support businesses in their efforts to employ people with disabilities
• Increase the number of people with disabilities working in state government.
• Prepare youth with disabilities for careers that use their full potential,
providing employers with a pipeline of skilled workers.
• Make the best use of limited resources to advance employment opportunities
for people with disabilities.
Delaware has taken action in each of these five areas. Although all require some
level of cross agency collaboration, this report focuses on State’s strategy to provide
transition services and to use Medicaid funding under a 1915(i) waiver to increase
the financial resources available to provide employment supports to people with
disabilities.
The report highlighted the value of early transition planning, incorporating career
readiness into the school curriculum, and facilitating job exploration and work
experience for students. Rita Landgraf, Secretary of Delaware Department of Health
and Human Services (DHHS) recognized the vital role of cross agency collaboration
in providing these services. At the time the VR agency began working with students
during their senior year of high school. Guided by “A Better Bottom Line,” the state
made providing early support a strategic priority.
Secretary Landgraf brought together VR, ED, and the disability departments in her
agency (Services for people with Developmental Disabilities, Physical Disabilities,
and Visual Impairments) to develop a Medicaid 1915(i) waiver that would allow the
state to supplement existing resources with Medicaid funds and expand student
access to community service providers at a critical time in the student’s preparation
for work and give LEA the ability to leverage the expertise of the providers.

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Medicaid served as a natural additional source of funding for two reasons. First,
school systems receive Medicaid reimbursement for medical and behavioral health
services, certain transportation, and physical, occupational, and speech therapy
services for eligible students so schools are accustomed to interacting the Medicaid
system. Second, CMS has encouraged states to include employment-related services
in HCBS waivers for adults with intellectual, developmental and other disabilities.
ii. Long history of cross-agency collaboration and a commitment to
employment outcomes
Over the past 10 years, DVR, DDDS, and the Department of Education (DOE)have
developed a close working relationship to develop and administer several programs
that require cross agency collaboration including the following:
Early Start to Supported Employment (ESSE): In 2005, Delaware started a pilot
program “Early Start to Supportive Employment” to provide a more seamless
transition from school to work for students with intellectual and development
disabilities who would benefit from supported employment services. Serving
students in their last two years of school It Early Start to Supported Employment” is
a collaborative program sponsored by the Delaware Division of Vocational
Rehabilitation, the Delaware Division of Developmental Disabilities Services, the
Delaware Department of Education and Local School Districts.
As shown in Table 1, the school, DVR, and DDDS are all involved in the planning
process at the beginning of the process. As a result, services are coordinated while
funds are used sequentially. DVR provides the initial funding for a contracted
provider while the school focuses on addressing any education deficits identified
during the intake or assessment process. DDDS provides long-term supports. All
service providers involved in the program must be authorized providers in both
systems so the transfer of financial responsibility from DVR to DDDS is invisible to
the individual.
Table 1: Early Start to Supported Employment: General Timeline for Services
Players
Service
Time
Local school program
with student, family,
DVR, DDDS and others
as needed
Transition meeting, application,
enrollment, and intake
Fall/Winter year
before exit
Student and family
Family orientation, provider fair,
student and family choose a provider.
Spring/Summer
exit year
DVR/Provider
Supported Employment Assessment
Fall/ exit year
Provider (funded by
DVR)
Student has variety of vocational
experiences
Fall/ exit year
Provider (funded by
DVR)
Job development for the student
Winter/ exit year

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Provider (funded by
DVR)
Student place in long-term employment
Anytime during
exit year
Provider (funded by
DVR)
Services are provided for student to be
successful
30 days after
placement
Provider (funded by
DVR)
3-month period to ensure that
placement is stable.
30 days after
retention
Funding transfers to
DDDS
Successful employment brings closure
of the student’s case with DVR and
ongoing supports are in place through
DDDS.
90-days after
stabilization
Source: Delaware Early Start to Supported Employment: Parent Handbook
Project Search: Division of Vocational Rehabilitation, Community of Integrated
Services, the Department of Education and Autism Delaware are collaborating to
provide Project Search, a program that provides youth with significant disabilities
on-site work experience combined with training in employability and independent
living skills,
Employment boot camp: DDDS, DVR, and DOE combined their resources to fund a
three-day employment boot camp for educators, paraprofessionals, agency folks,
service providers and parents
iii. Clearly defined roles for each agency
Leaders at DOE, DDVR, DVI, and DDDS make a very clear distinction about the
respective roles of their agencies for all collaborative programs. If a service is
primarily educational, DOE takes responsibility. Schools may provide some job
sampling and observation but it is VRs responsibility to do customized, formal
assessments and job development. The LEA uses results of the VR assessment to
identify educational gaps that can be filled through classroom instruction. Prior to
the 1915(i) waiver, Medicaid provides health and therapeutic services as well as
long-term employment supports when VR services are expended but had no
additional role.
Memoranda of between DVI, DMMS, DSAAPD, DDDS, and DHHS further identify the
respective roles of each agency in the administration of the programs including
which agency is responsible for oversight and monitoring, day-to-day operations,
maintenance of the website, screening, intake, plan development, facilitating
individual’s choice of provider, recruiting providers, setting rates and other
functions.
iv. Government Organizational Structure
The size and structure of the state government facilitates a high level of
coordination. Delaware has a population of less one million people. It has only
three counties and the social services are not county driven so the state does not

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need to develop policy that accounts for a wide range of different provider systems.
The state has only 16 LEAs so leadership from one person at the state level can
influence all LEAs. The Department of Health and Human Services houses agencies
serving all disabilities (mental health, I/DD, physical disabilities, vision) as well as
the Medicaid agency. VR and the Workforce Development System are in the State’s
Department of Labor.
v. Provider Alignment
The relationship between VR and Pathways is predicated on an alignment between
providers in the two programs. All Pathways providers must also be VR providers.
This allows program participates to move seamlessly between VR-funded and
Pathways-funded services. However, because most of the significant overlap in
covered services between the two services, most users use the different components
of the system sequentially rather than concurrently.
A. Role of Payer of Last Resort
The State Plan Amendment Preprint requires the State to assure “non-duplication”
of services. Specifically, it requires: “State plan HCBS will not be provided to an
individual at the same time as another service that is the same in nature and scope
regardless of source, including federal, Sate, Local, and private entities. For
habilitation services, the State includes within the record of each individual an
explanation that these services do not include special education and related services
defined in the Individuals with Disabilities Improvement Act of 2004 that otherwise
are available to the individual through a local education agency, or vocational
rehabilitation services that otherwise are available to the individual through a
program funding under §110 of the Rehabilitation Act of 1973 (DE SPA #14-002).
As shown in Table 2, many of the services available under the Pathways Waiver are
also provided by LEAs or VR. Because of the payer of last resort regulations,
Medicaid cannot pay for these services if they are available elsewhere.
Table 2: Other Providers of Services Provided by Pathways
Pathways to Employment
Services
Possible Payers
Case management
ED, VR and Medicaid all have case management-type
services. The Employment Navigator is responsible for
case management for Pathways
Individual supported
employment
VR, Medicaid
Group supported
employment
Medicaid
Financial coaching
Medicaid
Benefits counseling
VR, Medicaid

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Non medical transportation
Medicaid
Assistive technology
ED (If the school buys the AT it is the property of the
school and the youth cannot carry it with them upon
exit)
VR will pay for AT if it is directly related to work. If VR
denies the AT, it becomes the Medicaid’s responsibility.
Career exploration and
assessment
ED, VR, WIOA, Medicaid
Personal Care
Medicaid
Because not all services provided under the waiver are available elsewhere,
individuals can theoretically receive differentiated services through different
funders at the same time. However, because Medicaid cannot pay for services that
are available from other sources, to date, the relationship between ED, VR and
Pathways is sequential rather than concurrent. In practice, Pathways is important
for long-term supports and in cases where VR has a waitlist.
5. Recommendations
Given the ambiguity in the guidance from the ED, RSA, CMS, and DOL, states
continue to struggle with merging funds from multiple agencies to provide effective
employment services to people with disabilities. In order to address this confusion
federal agencies should address barriers to braiding funding at the system and
individual level using the following approaches:
System Level
• The DOL and RSA should require that states include, as part of their Unified
or Coordinated State Plan under the WIOA, to identify their approach to
braiding resources and resolve the questions of payer of last resort.
• DOL, RSA, ED, and CMS should require performance reporting at a systems
level on documented successes with braided funding to advance economic
self-sufficiency for individuals with disabilities.
Individual Level
• Each agency that develops a plan for employment (IEP transition plan under
ED, the Individual Plan for Employment under RSA, the Person-Centered Plan
under Medicaid, and the Individual Employment Plan under WIOA) should
require a discussion of how funds from multiple agencies will be used to
implement the plan.

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• Federal agencies should protect states from financial audit and states to
waive payer of last resort requirements across funding streams (Medicaid,
ED, VR, Workforce development) if at an individual level the objective and
outcome to be achieved is a competitive integrated employment outcome
with a career pathway.

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6. References
Advisory Committee on Increasing Competitive Integrated Employment for
Individuals with Disabilities (2015). Interim Report. Accessed September 25, 2014
http://www.dol.gov/odep/pdf/20150808.pdf
Centers for Medicare and Medicaid Services (CMS) (2011). Active Projects Report,
Research and Demonstrations in Health Care Financing: A Comprehensive Guide to
CMS’s Research Activities. Accessed Oct 8, 2015 https://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-
Reports/ActiveProjectReports/Downloads/2011_Active_Projects_Report.pdf
Consent Decree, United States of America v. the State of Rhode Island (Case 1:14-cv-
00175-L-PAS Document 3-2 Filed 04/08/14)
http://www.bhddh.ri.gov/misc/pdf/3%20-%20Consent%20Decree.pdf
Government Accountability Office (GAO) (2012) Students with Disabilities: Better
Federal Coordination Could Lessen Challenges in the Transition from High School.
GAO report:12-594. http://www.gao.gov/assets/600/592329.pdf
Lew, J. (2011) Implementing the Presidential Memorandum "Administrative
Flexibility, Lower Costs, and Better Results for State, Local, and Tribal
Governments.” Memorandum for the heads of executive departments and agencies.
M11-21
https://www.whitehouse.gov/sites/default/files/omb/memoranda/2011/m11-
21.pdf
Mills, L., Luecking, R., Morris, M. & Will, M. (2013) Making Collaboration Real:
Building a Progressive Vision for a Policy and Service Delivery Framework that
Promotes the Effective Leveraging of Resources to Improve Employment &
Socioeconomic Advancement of Youth and Adults with Disabilities. Prepared for US
Department of Labor, Office of Disability Employment Policy.
http://www.leadcenter.org/resource-center/report/2013-lead-center-policy-
roundtable-report-making-collaboration-real
Morris, M. & Goodman, N. (2013) Creating Change with Incremental Steps: Enhancing
Opportunities for Early Work Experience. University of New Hampshire; RRTC on
Employment Policy. http://www.researchondisability.org/docs/default-document-
library/creating-change-with-incremental-steps-final-report.pdf?sfvrsn=0