Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session:

1. Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session: Child & Family Nutrition Services May 11, 2012 www.mass.gov/hhs/chapter257 eohhspospolicyoffice@state.ma.us

2. Agenda Chapter 257 of the Acts of 2008 Overview of Child & Family Nutrition Definition and Overview of Programs Rate Considerations Feedback from April 6, 2012 Session Review of Pricing Analysis and Methodologies Data Sources Example Model Budget Break Out Groups Staffing considerations Facility Costs Flexibility Timeline and Key Milestones

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 for the development of Chapter 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 • Many current rates within the POS system may not reflect consideration of these factors. • Services that are 100% federally funded are excluded from the Chapter 257 mandate. • Chapter 9 of the Acts of 2011 establishes new deadlines for implementing POS rate regulation as well as requires that related procurements not go forward until after the rate setting process is completed.

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 • Data availability and integrity (complete/correct) • Unexplained historical variation in reimbursement rates resulting from long-term contracts and individual negotiations between purchasers and providers • Constrained financial resources for implementation, especially where pricing analysis warrants overall increases in reimbursement rates • Cross system collaboration and communication • Coordination of procurement with rate development activities Data Sources Identified or Developed Provider Consultation (s) Cost Analysis & Rate Methods Development Provider Consultation (s) Review/ Approval: Departments, Secretariat, and Admin & Finance Public Comment and Hearing Possible Revision / Promulgation

5. Agenda Chapter 257 of the Acts of 2008 Overview of Child & Family Nutrition Definition and Overview of Programs Rate Considerations Feedback from April 6, 2012 Session Review of Pricing Analysis and Methodologies Data Sources Example Model Budget Break Out Groups Staffing considerations Facility Costs Flexibility Timeline and Key Milestones

6. Child & Family Nutrition Service Class Service Class Definition: Programs that provide specialized nutrition services, health education and healthy foods for families, including women, infants, and children. • The state and federal $28M WIC Nutrition program is a part of the larger WIC funding system which also includes • $90M in federal funding for food and nutritional support • $23.5M retained revenue for food

7. EOHHS, HCFP and DPH WIC continue to work collaboratively to adequately define and develop rates for reimbursement for Child & Family Nutrition Services • DPH will continue to administer all WIC programs in compliance w/ federal laws and state regulations and policies. • WIC centers will continue to receive funds for the Federal-only programs on a cost reimbursement basis. • Services will: • Reach the same level of clients • Support existing staff : client ratios

8. Child & Family Nutrition: Rate Considerations • DPH contracts and reimbursement levels currently reflect required DPH/USDA specified: • Staffing Patterns • Service Levels • Other contractual obligations • DPH will continue work with the USDA to develop, monitor and direct contract development, execution, and amendments. • Considerations in Chapter 257 rate development will include: • Current rate bands • Personnel, occupancy and other cost drivers • Feedback from providers and staff regarding service delivery & cost • Maintaining access to services is an important goal in the rate development process. • Work is underway to adjust reporting and billing systems to accommodate the DPH/USDA required documentation and tracking associated with service delivery and personnel costs. • Appropriate documentation and tracking of costs and billing is a priority within this process. All associated state and federal mandates will be incorporated into the reporting and billing processes.

9. Child & Family Nutrition Provider Feedback from April 6 Consultative Session • Staffing • How will sick time, vacation & training needs be incorporated into this rate? • How will salaries be determined? We need to offer competitive salaries to recruit and retain quality staff. • Tax & fringe costs represent a large financial burden. How are Tax & Fringe included in the rates? • Facility Costs: • How are additional sites factored into the rate? • What are the true costs associated with operating more than one site? • Programmatic Flexibility • How will unforeseen events, such as suppressed client encounters due to emergency weather, be incorporated into rate development? • Will the rates be flexible to account for caseload shifts due to transmigration or population or other cyclical trends? • Is community outreach included within the rates?

10. Agenda Chapter 257 of the Acts of 2008 Overview of Child & Family Nutrition Definition and Overview of Programs Rate Considerations Feedback from April 6, 2012 Session Review of Pricing Analysis and Methodologies Data Sources Example Model Budget Break Out Groups Staffing considerations Facility Costs Flexibility Timeline and Key Milestones

11. Child & Family Nutrition Rate Analysis: Data Sources • FY11 Contract Budgets; EIM filings • Participation and other caseload data • Costs included in the rate development include caseload rate, recurring and one-time exceptions. • Analysis will review effects of program size (e.g., caseload), geography, agency type, number of sites, etc.

12. The DPH WIC/HCFP/EOHHS project team plan to use a model budget approach Development of multiple models developed to reflect various caseload sizes: Single monthly accommodation rate for each model Salaries will reflect analysis of the FY11 WIC contract budgets and other external data sources (e.g., Bureau of Labor & Statistics) Includes all reported cost categories from contract data Staffing assumes all federal financial and operational requirements are met Taxes & Fringe, Occupancy costs, and Admin Allocation will reflect a measure of centraltendency from FY11 WIC contract budgets Other Expense and Direct Administrative costs represent the per-provider average costs A Cost Adjustment Factor (CAF) will be included to bring the base year costs though the rate period of FY 2015 Example:

13. Agenda Chapter 257 of the Acts of 2008 Overview of Child & Family Nutrition Definition and Overview of Programs Rate Considerations Feedback from April 6, 2012 Session Review of Pricing Analysis and Methodologies Data Sources Example Model Budget Break Out Groups Staffing considerations Facility Costs Flexibility Timeline and Key Milestones

14. Updated Implementation Timeline and Key Milestones for Child and Family Nutrition Services July 1 • Department Service Design Finalized: All service components, staffing ratios, staff qualifications, other program inputs have been decided by the purchasing department. • Provider Sessions: For each rate setting project, EOHHS conducts an average of 2-3 provider input sessions prior to Executive Sign-Off and the Public Hearing Process to allow for greater depth in understanding core program components, cost drivers, and procurement considerations. • Executive Sign-Off: Commissioner and C257 Executive Committee sign-off on draft rates and implementation plan. • EO485 Submitted to ANF: Draft rate regulation to ANF; Will better align the rate regulation proposal with budget planning. • Public Hearing: DHCFP and purchasing departments consider testimony in advance of rate adoption. • Procurement Process: The procurement will be issued after the rates have been adopted. • Rates Effective: Where possible, reimbursement under regulated rates will align with beginning of SFY to minimize mid-year contract amendments for both purchasing Departments and providers.

15. Questions/Feedback Please Email Questions & Comments to: eohhspospolicyoffice@state.ma.us Please Visit the Chapter 257 Website: www.mass.gov/hhs/chapter257