Update on the New Rate System

1. State of Connecticut Department of Developmental Services 460 Capitol Avenue, Hartford, CT 06106 Update on the New Rate System November 5, 2008

2. A Little History with Peter Mason

3. Factors that lead CT to move to a rate based system • Individual’s Mobility through the system was hindered by variable funding. • Choice/Portability is more difficult • Unused Capacity • Rate disparity among providers • Turnover • Review of General Direction of Other States

4. First Steps towards Rates Initial Methodology Department/Provider Workgroup to establish Methodology Salary Based CT Department of Labor Data for wages Provider Annual Reports for Costs KISS

5. Rate Methodology • Currently based on an hourly wage of $14.20 per hour. • Includes benefits, supervision, indirect and administrative costs. • Factors out the time not available for providing direct supports (Vacation and sick time, supervision, training and meetings.) • Factors in the time consumers are not attending the program.

6. Attendance Factor • The original rates did not have a utilization factor for attendance. • These rates were modified by the Waiver Work group to include an 86% attendance factor for providers who pay DDS consumers for vacation time and 90% for all other providers.

7. Issues with the Rates GSE Rate was not promoting employment. Difficult to determine the additional support hours for the staff modifier. In some case this resulted in extensive negotiations. Individuals had to wait for services during these negotiations. Difficult for providers to track the staffing modifier. Billing for modifier was more difficult. More opportunities for errors in billing.

8. Initial Adjustments to the Proposed System • Developed a new grid utilizing the Level of Need. • Adjusted the GSE rate to be the same as the DSO rate. • Converted group day services into a day rate.

9. Next Providers Completed a Rate Analysis Waiver Work Group developed a rate analysis. Providers completed the analysis using their actual attendance and transportation data. The funding gaps between categories were too large. The need for more detailed information on transportation. Providers remained concerned about the 90 % attendance factor.

10. Current and Future Plans With Joe Drexler

11. Concerns about a 90% attendance factor in rates • Historically, Providers with contracts have been reimbursed for individuals without any regard to attendance. However: • Utilization-based billing is consistent with the general direction of waiver services nationally. • The rates the Department developed including a 90% factor have been successfully used for high school graduates since 2005. • When considering there are 260 weekdays in a given year, the average person can have 35 days away from the day program including holidays, vacations and sick time before the provider’s reimbursement is reduced from historical levels.

12. State Percentage Comment California 100% Maryland 95% Delaware 92% Oregon 90% Has a review process for special circumstances of low attendance Massachusetts 85% Does not pay beyond contract amount if utilization exceeds 85% 90 % Factor in Rates We recently asked other states what utilization factor they were using. The response is as follows: • Connecticut DDS has one of the more liberal attendance factors as compared to states who have shared information. • Using the 90% factor, the state shares the financial burden but does not exclusively own it.

13. 90 % Factor in Rates The transition to an attendance based reimbursement system has been part of the transition plan since 2006. All providers have been informed of this transition and the move should not be seen as being precipitous. We recognize that not all providers will initially meet the 90% factor. Providers should have begun to plan for this system change and started to implement transitional strategies to reduce costs or increase revenue to operate under the new system.

14. Action steps as a result of the Provider Analysis LON was revised to add additional questions to refine the score. Providers were surveyed on the individuals they transport to and from work. Identified the Need to revise Day Service Rates.

15. Continued refinement of Design • Continue with a contract umbrella with payments based on rates and utilization • Complete the development of rates relating to LON levels. • Proposed Structure includes folding transportation and staffing modifiers into approximately 17 rates. • DDS will develop a review process for extraordinary circumstances that would be beyond the providers ability to manage based on a 90% attendance factor. We anticipate these to be isolated instances.

16. Next Steps Review draft rate methodology with providers. Match the LON with the draft rates. Analyze the impact for a few providers using the draft rates. Review SL rate issues that have been raised.

17. Implementation Timelines There have been concerns expressed about implementing attendance billing in January. Given the concerns, DDS is delaying implementation until to July 1, 2008. With the implementation of the web based attendance application in December, the Department will be able to use the data in planning the transition. Working with the waiver workgroup, the work plan will be modified accordingly. CLA rates to be developed next fiscal year.