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To: Seena Carrington, Acting Commissioner
Division of Health Care Finance and Policy
From: Michael Weekes, President/CEOThe Providers Council
Re: Testimony re: 114.4 CMR 14:00 Rates for Family Stabilization
Services
Date: March 9, 2011
Acting Commissioner Carrington and members of the Division of
Health Care Finance and Policy,thank you for this opportunity to
address you. The Providers' Council is a statewide association
ofhome- and community-based caregivers contracting with state
purchasing agencies to deliver a widearray of rehabilitation,
education, health and social services.
In 2008, Governor Deval Patrick signed Chapter 257, An Act
Relative to Rates for Human and SocialService Providers, into law.
This law, passed unanimously by the Legislature, is intended to
bringfairness, adequacy and transparency to the Commonwealths $2.1
billion purchase of service system.More directly, it is an
opportunity for the Commonwealth to set prices paid for social
services thatadequately cover the costs of delivering safe, quality
services to people who must turn to the state forcare.
Chapter 257
The Executive Office of Health and Human Services reported in
October 2007 that: it is in theCommonwealths interest to ensure
that provider organizations are financially stable and that the
industrys workforce is paid a fair living wage. The state passed
the landmark law Chapter 257 lessthan a year after this report.
Section 4 of Chapter 257 requires EOHHS to establish rates of
payment for social service programsthat are reasonable and adequate
and meet the costs which are incurred by efficiently
andeconomically operated social service programs in conformity with
federal and state law, regulations,and quality and safety
standards.Chapter 257 also asked that the rates of payment be
adjusted to takeinto account:
The reasonable cost to social service program providers of any
existing or new governmentalmandates
A cost adjustment factor to reflect changes in reasonable costs
of goods and services of socialservice programs including those
attributed to inflation; and geographic differences in
wages,benefits, housing and real estate costs in each metropolitan
statistical area of thecommonwealth, and in any city or town
therein where such costs are substantially higher thanthe average
cost within that area as a whole.
Assessment of proposed rates
Our assessment of the proposed rate for these Family
Stabilization Services indicates that Chapter 257was not applied.
We have reviewed the rate methodologies which provide limited
information on thebasis of the numbers used:
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1. While data other than the Uniform Financial Report were used
in some instances, it is clearthat the UFR plays a role in these
rates. The UFR, while a convenient numerical database,does not
reveal the decline in service quality our sector has consistently
reported. UFR dataonly captures partial costs, and it fails to show
true market costs for staff salaries, insurance,training,
maintenance and other reasonable costs. It basically mirrors years
of level funding.
At best, it provides an incomplete picture and is insufficient
for projecting true costs or fairrates.
2. There appears to be no adjustment for unfunded mandates.3.
There is no apparent calculation of the costs to meet state and
federal regulations as required
by Chapter 257.
4. While a cost inflation factor is used, it is based on
depressed data. At the minimum, it is notsufficient to remedy the
issues raised in the report by EOHHS Financial Health ofProviders
in the Massachusetts Human Service System issued in October
2001
5. There is no consideration for regional/geographic differences
or competition providers facewith the private health care
market.
6. The highly abbreviated methodology formulas do not indicate
if any consideration has beengiven to quality and safety.
7. Frequently the state and providers compete in the market for
people with similar skills andcredentials. It is not unusual for
the state to recruit our workers because it can pay marketrates.
This differentiation in many salary categories essentially creates
two standards of care.This is not fair nor reasonable.
8. The methodologies provided by the Division of Health Care
Policy and Finance are highlyabbreviated. Full transparency is not
offered by the materials sent in response to our requests.
In Summary
We respectfully request that you withdraw your rate calculations
and revise them to incorporate thedirectives of Chapter 257 to
provide proper funding. The reliance on the Uniform Financial
Report(UFR) a document which is widely recognized as flawed
shortchanges people the state wishes toserve - and their service
providers. Further, the rates being set are designed to further the
states budgetgoals, not to meet the needs of the people being
served, provide an adequate salary for their caregiversor
adequately fund the operational needs of providers. I look forward
to seeing any revisions you might
make in response to the testimony you receive here today.
Providers Council
Testimony on: CMR 114.4 CMR 14.00
March 9, 2011 Page 2
