Chapter 257 of the Acts of 2008

1. Chapter 257 of the Acts of 2008 Provider Information & Dialogue Session:Placement and Adoption Services and Supports Service Class December 2010 www.mass.gov/hhs/chapter257 eohhspospolicyoffice@state.ma.us

2. Agenda • Chapter 257 Implementation and Status Update • Implementation Strategy • Setting Rational Rates • Service Classification System • Contract Reform • Overview of Placement and Adoption Services and Supports Service Class • Definition and Overview of Department Programs • Procurement Approach • Timeline for Implementation • Facilitated Breakout Sessions • Reporting Back and Concluding Comments

3. Chapter 257 of the Acts of 2008 Regulates Pricing for the POS System • Chapter 257 places authority for determination of Purchase of Service reimbursement rates with the Secretary Of Health and Human Services under MGL 118G. The Division of Health Care Finance and Policy provides staffing and support to EOHHS for the development of CH 257 Pricing. • Chapter 257 requires that the following criteria be considered when setting and reviewing human service reimbursement rates: • Reasonable costs incurred by efficiently and economically operated providers • Reasonable costs to providers of any existing or new governmental mandate • Changes in costs associated with the delivery of services (e.g. inflation) • Substantial geographical differences in the costs of service delivery • Some current rates within the POS system may not reflect consideration of these factors. • Additional funding was not appropriated to finance any potential cost increases associated with the law. • The statute specifies a four year implementation timeframe.

4. The Cost Analysis and Rate Setting Effort has Several Objectives and Challenges Pricing Analysis, Rate Development, Approval, and Hearing Process • Objectives and Benefits • Development of uniform analysis for standard pricing of common services • Rate setting under Chapter 257 will enable: • Predictable, reimbursement models that reduce unexplainable variation in rates among comparable, economically operated providers • Incorporation of inflation adjusted prospective pricing methodologies • Standard and regulated approach to assessing the impact of new service requirements into reimbursement rates • Transition from “cost reimbursement” to “unit rate” • Challenges • Ambitious implementation timeline • Constrained resources for implementation • Cross system collaboration and communication • Data availability and integrity (complete/correct) • Coordination of procurement with rate development activities Data Sources Identified or Developed Provider Consultation Cost Analysis & Rate Methods Development Provider Consultation Review/ Approval: Departments, Secretariat, and Admin & Finance Public Comment and Hearing Possible Revision / Promulgation

5. Chapter 257 Requires Successful Achievement of Three Strategies 3. Reform Contracting 1. Create Service Classes 2. Develop Reimbursement Methodology & Rates Establish new cross-Secretariat organizational and governance structure Develop Implementation Plan Develop Service Classes FY09 • Develop Service Class structure to group similar services & programs • Build out process & technology to manage codes & classes • Align activity codes to Service Classes Maximize Cumulative Statutory Requirement • Use of Master Agreements • Contracts w/ performance features • Contracts shared across departments Service Value FY10 10% of System $215M Enabling FY11 40% of System $860M • Rate analysis and establishment • Contract consolidation across agencies • Improved reporting FY12 70% of System $1.50B Minimize • Number of different POS contracts • Cost reimbursement contracts FY13 100% of System $2.15B

6. The Chapter 257 Implementation plan is Organized by Newly Defined POS Service Classes • Why were Service Classes Created? • Rate setting and procurement reform require an overall organizing structure for the classification of POS services • There were no Secretariat standards for categorizing or describing similar services within or across Departments. The use and functionality of MMARS codes vary widely from Department to Department– as a result, it is very difficult to report on the performance, costs, and volume of services delivered across EOHHS. • How were Service Classes Created? Working groups met with the EOHHS POS Policy Office over the course of three months Departments formed POS Service Classification Working Groups Current POS Services Reviewed, Described, and Catalogued EOHHS Suggested Service Groupings Departments Verified / Modified and Developed Definitions Current MMARS Codes were “Mapped” to New Service Classes

7. Providers Purchasing Department Purchasing Department Purchasing Department Purchasing Department Purchasing Department Purchasing Department In Many Cases, Contract Reform is Necessary to Implement Chapter 257 Today Vision for FY13 Providers • Secretariat or DepartmentMaster • Agreements • By Service Class • DHCFP rate schedules • Panel of qualified providers • Departments purchase via rate agreements Dept Dept Dept Dept Dept Dept Dept • Thousands of individually negotiated contracts • Multiple contracts within and across departments with the same providers. • Services with core similarities purchased individually by agencies and regions • Low capacity for rate management, cross-agency coordination, performance assessment • Reduced contract complexity and redundancy • Greater amendment flexibility for providers and agencies • Greater opportunity for provider engagement • Streamlined, centrally-managed procurement cycles managed

8. Master Agreements Simplify Management of the POS System for Providers and Departments • Benefits to Providers • Single bidding cycle for similar services • Bid once – engage many times under a single bid • Standard reporting formats • Rate transparency • Potential to engage with new purchasing Departments • Streamlined contract management • Benefits to EOHHS Departments • Reduced procurement burden • Potential to expand pool of providers • Enable statewide coordination • Eliminate multiple procurements for the same service • Streamlined contract management

9. Master Agreements: Approach, Opportunities, and Decision Points Goal: Replace multiple, individually-negotiated and procured contracts with a single contract model that: Maximizes procurement and contract management efficiency for providers and departments and Maintains necessary department decision making and governance authority Initial Procurement: EOHHS and Departments will develop the RFR to reflect current program design(s) unless Departments elect to make changes Scope will be sufficiently broad to enable the addition of new service models and segments over time as needed by departments The RFR will have a core of service requirements as well as secondary requirements specific to the needs of participating departments The RFR and response requirements will be simple and streamlined Meeting the qualification threshold is not a guarantee that a provider will be selected by a participating department to deliver services under the MA POS Contract Reform Goals: Efficiency, simplification, departmental flexibility and governance authority Initial Procurement Departmental Selection Process Contract Management Procurement Management

10. Contract Reform Goals: Administrative Simplification, Flexibility, Departmental Governance Departmental Selection Process: Once providers are qualified, participating Departments may employ a Department- level selection process to engage any provider from the qualified list based on criteria determined relevant to that department. This procurement will employ the concept of “Consumer Choice”, which will drive the provider selection process. Contract Management: Departments can elect to use the MA as a rate agreement with or without provider-specific obligations in MMARS. Departments encumber and manage their own funds under the MA. Ready payment is optional but supported based on a departments choice. Procurement Management MA procurements can reopened as needed to enable new providers to qualify. Re-opening may also involve amendment of the procurement to include a new program model and/or regulated rate schedule.

11. Agenda • Chapter 257 Implementation and Status Update • Implementation Strategy • Setting Rational Rates • Service Classification System • Contract Reform • Overview of Placement and Adoption Services and Supports Service Class • Definition and Overview of Department Programs • Procurement Approach • Timeline for Implementation • Facilitated Breakout Sessions • Reporting Back and Concluding Comments

12. Placement and Adoption Services and Supports Overview Service Class: Placement and Adoption Services and Supports Service Class Definition: Programs that provide a continuum of services relating to foster care, shared living placements and adoption, including recruitment, placement, and supports to individuals, families, and caregivers to promote stability in the temporary or permanent family placement. * FNFO Intensive Foster Care - As part of Chapter 257 implementation, rates were regulated in October 2009 (114.4 CMR 11.00) for Intensive Foster Care. EOHHS and DHCFP will analyze the regulated rates in concert with the larger service class to determine whether changes are appropriate.

13. A substantial percentage of each Department’s spending goes to providers that are also under contract with other Purchasing Departments within the Service Class: 100% of DYS spending 64% of DCF spending 35% of DDS spending Each purchasing Department operates on a different procurement schedule– a coordinated procurement would greatly simplify RFR and contracting processes. The Placement and Adoption Services and Supports Service Class is a strong candidate for procurement reform Why?

14. Agenda • Chapter 257 Implementation and Status Update • Implementation Strategy • Setting Rational Rates • Service Classification System • Contract Reform • Overview of Placement and Adoption Services and Supports Service Class • Definition and Overview of Department Programs • Procurement Approach • Timeline for Implementation • Facilitated Breakout Sessions • Reporting Back and Concluding Comments

15. Planned Timeline for Implementation • Implementation Challenges: • Alignment with competing agendas and mandates- EOHHS, HCFP and Departments will be working closely with one another to address the sequencing and coordination issues presented by competing procurement deadlines, finance law requirements, and reform mandates • Procurement simplification- EOHHS is working with Departments to minimize the administrative burdens for joining a secretariat or cross-departmental master agreement, particularly for service providers who have recently responded to departmental requests for proposals

16. Breakout Session Discussion • Questions for providers that contract with two or more purchasing departments for Placement and Adoption Services and Supports : • Client populations differ between DDS, DCF and DYS in many respects, including: • Age • Custody status • Length of stay with foster families • Greater emphasis on skills building than on emotional stabilization • Security needs • Do these differences in the client population translate into different program structures and/or cost drivers for the purchasing departments? Examples include: • Staff qualifications and salary levels • Average time staff spent per day working with the client and family • Components of service provided (recruitment of families, matching and placement, training, support and oversight to client and foster family, etc) • Resources (time, room and board, activity costs, etc) expended by foster family to care for and support the client • Departments have different licensing requirements for foster homes. What impact does this have on providers from a program structure and cost standpoint? • Do DCF and/or DYS providers that also serve DDS focus on older youth who may transition to DDS placement services once they turn 22? • Would providers benefit from a single bidding cycle across departments?

17. Breakout Session Discussion (Cont.) • Questions for DCF providers that deliver both Adoption and Foster Care services: • What are the similarities and differences in delivering adoption and foster care services, in terms of: • Program structure • Components of service • Cost drivers?

18. Breakout Session Discussion (Cont.) • Questions for all providers • What does the spectrum of care look like? What are the different needs of people involved? • What unit payment structure would work best for these programs and families (stipends, daily rate, monthly rate, performance-based, etc)? • What levels of staff and family supervision, availability, professional requirements and/or qualifications are necessary to achieve the intended outcomes? • What are the intended outcomes that service organizations work to achieve? Do these vary by Department and/or program, site, client need? • How does geographical region or setting affect program costs?