Department of Early Childhood proposes modest cost containment for Early Intervention program amid rising caseloads

Department of Early Childhood officials told the Joint Budget Committee that the Early Intervention (EI) program is serving roughly 19,459 unduplicated children in fiscal year 2024‑25 and that caseloads and service‑unit usage have grown since post‑pandemic eligibility broadenings. Staff said about 40% of EI children are covered by Medicaid and roughly 9% by private insurers that participate in the Early Intervention Services Trust; remaining costs are carried by state and federal funds.

DEc proposed four initial cost‑containment strategies aimed at saving roughly $953,000 in the remainder of FY25‑26 and about $1.6M in FY26‑27: a temporary administrative freeze at the department (vacant positions, pause on data‑enhancement spending and travel), discontinuing provider payments for client no‑shows within 24 hours, eliminating subcontractor mileage/travel reimbursement (affects about 15% of providers who claim mileage), and removing a $250 training stipend plus a subsequent $250 retention stipend. Department staff emphasized these choices were made to minimize direct service impacts but acknowledged each measure reduces provider income and could exacerbate recruitment and retention challenges in a workforce already under stress. The department also outlined more complex strategies for future review — greater use of Medicaid billing via the EI Services Trust, requiring provider participation in private‑insurer networks, and redetermination of eligibility processes — and committed to further stakeholder engagement and a fuller report in December.

Committee members pressed department staff on the funding hierarchy (private insurance → HCPF/Medicaid → state general fund), the share of EI costs routed through HCPF and the EI Services Trust, the structure and allowable broker indirect rates (a de‑minimis indirect of 10% previously, increasing to 15% in FY25‑26 for federal fiscal year contracts), and the risk that shifting reimbursements or eliminating stipends will drive providers out of the field. Staff agreed to provide additional breakdowns of Medicaid draws, the broker/direct‑service split across contracts, and historical utilization patterns for the last two years to validate projection assumptions.