A new federal review finds that bureaucratic friction between two major funding programs is creating gaps in disability employment services for some of the most vulnerable workers in the country, according to Disability Employment: Providers Cited Challenges with State Coordination of Federal Funds, published Sept. 23 by the U.S. Government Accountability Office (GAO).
An estimated 2 million adults in the United States have intellectual or developmental disabilities (I/DD), such as Down syndrome and cerebral palsy, and while many want to and can work, they are less likely to be employed than those without disabilities. Employment service providers described the administrative burden of navigating two separate state agencies as a challenge that contributed to service gaps, including confusion about whether a vocational rehabilitation (VR) agency closure letter was required before Medicaid home- and community-based services (HCBS) employment services could begin.
In Pennsylvania, for example, service coordinators experienced confusion about whether a closure letter from the state's VR agency was required before Medicaid HCBS employment services could begin, creating what the report describes as "unnecessary service gaps for some individuals." Providers across the three states the GAO examined described the administrative burden of navigating two separate state agencies as a recurring challenge, not an isolated one.
The VR program, administered by the U.S. Department of Education, and the Medicaid HCBS program, overseen by the U.S. Department of Health and Human Services (HHS), represent the dominant channels through which federal dollars reach employment service providers working with individuals with I/DD. The U.S. Department of Labor has also played a role, joining Education and HHS in issuing a joint letter in 2022 that encouraged state agencies to coordinate different funding streams and cited specific strategies, including sequencing and braiding, to increase employment for individuals with disabilities.
The GAO examined how these programs operated in a nongeneralizable sample of three states, Georgia, Pennsylvania, and Washington, selected for variation in programmatic factors and geography. In each state, VR and I/DD agencies generally funded employment services sequentially, with the VR agency covering costs first before the I/DD agency followed through Medicaid HCBS, rather than braiding funds, which involves using multiple funding streams separately and simultaneously to support an individual. State officials told the GAO that sequential funding was more common than braiding, and they described various administrative and policy reasons for this pattern.
Providers in those states were compensated under one of two models: a fee-for-service approach based on units of service rendered, such as billed time, or a milestone-based model tied to employment achievements such as job placement. According to one employment service provider, fee-for-service compensation does not incentivize providers to reduce services as an individual develops job skills. Milestone-based compensation, on the other hand, may not cover a provider's actual costs, which can vary in unforeseen ways, according to employment service providers the GAO interviewed.
The report was prompted by concerns that employment service providers for individuals with I/DD often struggle to secure funding, and the GAO was asked to examine the degree to which separate federally funded programs could lead to inefficiencies. No specific congressional requester is identified by name in the available source material. The report is structured as a question-and-answer document and contains no formal recommendations.
The federal Departments of Education, Health and Human Services, and Labor have issued guidance and technical assistance on combining program funds, including a joint letter in 2022 that encouraged state agencies to coordinate different funding streams and cited specific strategies such as sequencing and braiding. Providers described the administrative burden of navigating two separate state agencies as a challenge that contributed to service gaps, with providers in Pennsylvania specifically citing confusion about whether a closure letter from the state's Vocational Rehabilitation agency was required before employment services through Medicaid home- and community-based services could begin.
In the three states examined, sequential funding, where the VR agency funds services first and the I/DD agency follows through Medicaid HCBS, was more common than braiding, which uses multiple funding streams separately and simultaneously. In Pennsylvania, I/DD service coordinators experienced confusion about whether a closure letter from the state's VR agency was required before HCBS employment services could begin, creating unnecessary service gaps for some individuals.
The report found that two programs with different administrative homes and different compensation models, the VR program and HCBS, are administered sequentially rather than in tandem, and that navigating both created administrative burdens and service gaps for individuals with intellectual or developmental disabilities (I/DD). Because the GAO examined only three states and the sample is nongeneralizable, the full scope of coordination failures across the country remains unclear. The report carries no formal recommendations, and the Departments of Education, Health and Human Services, and Labor have issued guidance and technical assistance on combining program funds, including a joint letter in 2022 that encouraged state agencies to coordinate different funding streams and cited specific strategies such as sequencing and braiding. The Departments of Education, Health and Human Services, and Labor have addressed this population through guidance, including a joint letter issued in 2022 encouraging state agencies to coordinate different funding streams.
Explore related legislative activity on Legis1.com.
Access the Legis1 platform for comprehensive political news, data, and insights.
Spot something wrong? Report an issue with this article