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Board to review IHSS consortium amendment after debate over costs and service levels
Summary
The subcommittee continued consideration of an amendment that would raise the In‑Home Supportive Services consortium contract from about $74.9 million to $84.44 million after HSA staff said reductions originally proposed would remove needed consortium hours; advocates argued the consortium prevents costlier institutional care and the committee continued the item to June 3 for further review and legal/RFP review.
The Budget & Finance subcommittee debated a proposed amendment that would increase the competitively awarded In‑Home Supportive Services (IHSS) consortium contract from about $74,996,175 to roughly $84,444,020 to restore hours DPH/HSA staff concluded were necessary to preserve services for the program's most intensive consumers.
Phil Arnold, deputy director for finance and administration at the Human Services Agency, told the committee IHSS serves about 21,000 consumers in San Francisco and that the consortium contract serves roughly 1,000 of the most intensive cases. Earlier budget proposals assumed shifting about 20% (approximately 200 consumers) from the consortium mode to an independent provider (IP) mode to save general‑fund dollars, but a case‑by‑case review showed many of those consumers require the consortium's higher level of supervision and services. "We realized that we had cut too deeply," Arnold said, explaining the department proposes a partial restoration so the resulting contract still represents a reduction from the current year but less than originally assumed.
The budget analyst cautioned the amendment increases a competitively bid contract beyond its original amount and said that makes the decision a policy matter for the full Board; the analyst also noted HSA expects additional FMAP (federal Medicaid) funds and that the Board will review the HSA 2009‑10 budget. Supervisors asked about selection criteria for moving consumers to IP mode; Arnold said program and consortium staff jointly reviewed cases and determined many could not safely transition.
Arnold described cost differences between service modes (roughly $28/hour for consortium versus about $14/hour for IP mode) and said the consortium's overhead covers scheduling, supervision and training; he noted providers (care workers) are about 85% of contract costs, with 15% for admin and program staff. Arnold also warned that a state waiver reduced state wage support and left a city shortfall in the neighborhood of $22 million; he said HSA expected roughly $14 million in FMAP funds that could partially mitigate the gap.
Margaret Barron, executive director of the IHSS Consortium, testified the consortium provides wages, training, peer mentors, nursing oversight and on‑site supervision for the most challenging consumers and compared consortium care to institutional care at Laguna Honda Hospital (cited in the hearing as ~ $175 per day in general fund cost, or about $63,000 per person per year), arguing the consortium is cost‑effective and essential to keep consumers in their homes.
City Attorney Cheryl Adams advised that increasing the not‑to‑exceed amount would require a continuance and that whether the change triggers a new RFP depends on the underlying RFP language; HSA staff said the RFP was premised on hours rather than a dollar ceiling and that the tentative award was conditioned on commission and committee approval. The committee agreed to continue Item 5 to the June 3 meeting to allow document review and further legal and budget consideration.
Next steps: Item 5 will return to the Budget & Finance subcommittee on June 3 with additional materials, legal review of RFP language and HSA's budget context for FMAP funds and potential general fund impacts.
