Chapter 257 of the Acts of 2008

Chapter 257 of the Acts of 2008 Provider Information & Dialogue Session:Family Transitional Supports Service Class August 19, 2010 www.mass.gov/hhs/chapter257

Session Objectives • In this session, EOHHS seeks to: • Provide an overview of chapter 257 • Outline the programs purchased by DCF and DPH for which DHCFP will regulate rates under the Family Transitional Supports Service Class. • Provide a forum to discuss the rate structures and methodologies that are in development for Family Transitional Supports services. • Outline tentative timelines for the DPH procurement and the rate regulation process.

OUTLINE • Chapter 257 Overview • DCF & DPH Family Transitional Support Services to be Rated • Rate Setting Analysis and Structure • Timeline • DPH Procurement • Rate Regulation & Promulgation

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 Division of Health Care Finance and Policy. • Chapter 257 requires that DHCFP consider the following criteria 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 rates within the POS system do 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.

The HCFP-led 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 • (Extremely) fast paced 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 Option Development Provider Consultation Review/ Approval: Departments, Secretariat, and Admin & Finance Public Comment and Hearing Possible Revision / Promulgation

Family Transitional Support Overview Service Class Definition: Programs that provide families a place of overnight housing in a specialized congregate or individual setting to enable stabilization and transition to a safe, permanent and self-sufficient home environment. *Services purchased by DPH under activity code 3380 have already been regulated under 114.4 CMR 12.00. HCFP will reevaluate these rates in the context of the larger service class when they are due for review in 2012.

DPH & DCF Family Transitional Supports Rate Regulation and Service Definition • DPH is redefining the service model it will purchase under 4919 Family Sober Living in its new procurement. These services will transition from cost reimbursement to unit rates regulated by DHCFP. • DCF does not intend to change the services that it purchases. DCF will NOT re-procure its Domestic Violence Residential programs at this time. DCF will reimburse providers with rates DHCFP has regulated for the existing domestic violence shelter models: • Emergency Shelters • Substance Abuse/ Mental Health Shelters • Residential Housing Stabilization

Program Model Descriptions • DPH Family Sober Living Program • Provides a transitional sober living environment to assist and support families recovering from substance use to achieve self-sufficiency and independent living. This goal is achieved through: • Case management services within an alcohol and drug-free living environment that support the active search for permanent housing and employment and reinforce recovery • Establishing community-based supports to maintain ongoing goals in the recovery process. The environment created in the program encourages and supports residents to coalesce as a community and support each other in their recovery from alcohol and/or other drug problems and the continued development of independent living skills. DCF Substance/ Abuse Mental Health Residential programs that help women who are in unsafe situations and are experiencing trauma, addiction and/or mental health problems to be safe, sober, enhance relationships, and effectively attend to the needs of their children. Domestic violence services must occur in welcoming, safe, and nurturing atmospheres and work to mitigate the profound depth of despair trauma engenders. DCF prefers bidders who can shelter individuals and families in their own community.

Program Model Descriptions • DCF Emergency Shelter • Provides individuals and families who need to leave an unsafe situation with timely and easy access to shelter within their own communities to help them achieve immediate safety while retaining access to school, work, and other supportive connections. • The intake process must: • be welcoming, easy to participate in, culturally sensitive, and accommodating of language needs. • safely include support people identified by the individual to assist her/him in completing the intake • The program must: • allow adults and children to remain connected to informal support from family, friends, counselors, pastors, and others they depend upon in the community. • demonstrate the capacity to shelter and serve children as well as adults, and be able to accommodate DCF-involved families requiring assistance with visitation and/or reunification. • DCF Housing Stabilization • Helps victims and their families find stability within their communities, expand their networks of support, and build their capacity to live independently and securely. Support services help program participants access and maintain permanent housing, access employment and/or attend school, parent their children, and generally prepare for economic independence. • Housing may be: • scattered site rental apartments in which families assume the lease once the program has provided the unit; • condominiums or single family homes purchased by families through home buying assistance provided by the program; or • apartments in multiple dwelling buildings.

Program Expense 50% 39% 45% 40% 35% 30% 25% 20% 14% 13% 15% 11% 9% 7% 10% 2% 4% 1% 5% 0% Clinical Dir Admin Occupancy Admin M&G (Adj) Tax & Fringe (Adj) Direct Care Support Direct Care Management Other Program Expenses Non-Specialized Direct Care Across all programs, Non-Specialized Direct Care salaries and Occupancy costs combined account for over 50% of total program expenses • Data Sources: • HCFP utilized FY10 contract budget data from DPH and DCF, and issued a provider survey to collect occupancy cost information.

Unit rates across all FTS programs range from $24 to $315 per room per day.

There are significant differences between the average unit costs for DCF Residential Housing Stabilization models compared to the other DCF and DPH models • DCF Emergency Shelters, Substance Abuse/ Mental Health shelters, and DPH Family Sober Living programs have the highest average costs per room per day (there are not significant differences between these three models). • DCF’s SSTAP II Residential Housing Stabilization programs have the lowest average costs per room per day.

Non-Specialized Direct Care salary expenses per unit explain 55% of the overall variation in daily rates

Occupancy costs explain 31% of the overall variation in daily rates. • While occupancy is a cost driver for Family Transitional Support Services, we are not yet able to explain the variation in occupancy costs. • Aside from the SSTAP II model programs, occupancy costs do not differ significantly by model. • Occupancy costs do not vary significantly by region • HCFP is analyzing the results of an occupancy survey distributed to FTS providers as well as to DYS residential providers in order to try to explain variation in occupancy costs. HCFP will work to incorporate any significant results into the rate structure.

Rate Setting Approach • Rates will be paid per room, per day based on an appropriate utilization percentage. • There will be at least one rate for each of four separate models: • Substance Abuse & Mental Health (purchased by both DPH and DCF) • Emergency Shelter • Residential Housing Stabilization • SSTAP II Residential Housing Stabilization • HCFP, EOHHS, DCF and DPH are still in the process of evaluating whether or not there need to be additional rate options within each model to account for regional differences or other sources of variation. • HCFP tested for statistically significant differences in staffing ratios and unit costs across all models. Different benchmark amounts reflect statistically significant differences between models or groups of models.

HCFP has grouped staff positions into three main categories. • Non-Specialized Direct Care DCF: • 19S Day Care Teacher • 28S Counselor • 30S Case Worker / Manager • 31S Direct Care / Program Staff Supervisor • 32S Direct Care / Program Staff III • 33S Direct Care / Program Staff II • 34S Direct Care / Program Staff I DPH: • 30S Case Worker / Manager • 31S Direct Care / Program Staff Supervisor • 33S Direct Care / Program Staff II • 34S Direct Care / Program Staff I • Recovery Specialist • Case Manager • Child Service Coordinator • Clinical DCF: • 23S Social Worker, L.I.C.S.W. • 24S Social Worker, L.C.S.W. • 25S Licensed Counselor DPH: • 27S Certified Alcohol / Drug Abuse Counselor • Clinical Director • Direct Management DCF: • 1S Program Director • 2S Program Function Manager • 3S Asst. Program Director • 4S Supervising Professional DPH: • 1S Program Director • 2S Program Function Manager

DRAFT Model Budget – SUBSTANCE ABUSE / MENTAL HEALTH and FAMILY SOBER LIVING • DCF and DPH selected staffing ratios that were representative of the range of existing staffing ratios and that conformed with their program policy expectations. • DCF utilizes the same Direct Management and Direct Care staffing ratio and salary benchmarks in the Substance Abuse/ Mental Health and Emergency Shelter models. • The Substance Abuse / Mental Health model is the only model with licensed clinical staff. • The Occupancy unit cost calculation is currently equivalent to the median for all programs except the SSTAP II models, for which DHCD pays the housing expenses. • The Other Expenses unit cost calculation is the median of all programs excluding the Residential Housing Stabilization models. The Other Expense unit cost was significantly higher for SA/MH and Emergency shelter models. • The Direct Admin unit cost calculation is the median of all programs. The different benchmark salaries and ratios reflect measures of central tendencies

DRAFT Model Budget – EMERGENCY SHELTER • The model budget for the Emergency Shelter model programs is identical to the budget for the Substance Abuse/ Mental Health model, with the exception that there is no clinical staff in this model. The different benchmark salaries and ratios reflect measures of central tendencies

DRAFT Model Budget – RESIDENTIAL HOUSING STABILZATION • The staffing ratios for the Residential Housing Stabilization models are significantly less intensive than in the other models. The benchmark ratios are equal to the weighted average ratios for current programs. • The Direct Care benchmark salary for the Residential Housing Stabilization model is higher than for other models. Direct Care staff in these programs are responsible for working with larger numbers of families and have less management oversight. • The Occupancy unit cost calculation is currently equivalent to the median for all programs except the SSTAP II models, for which DHCD pays the housing expenses. • The Other Expenses unit cost calculation is the median between all Residential Housing Stabilization Programs. The unit cost is significantly lower than for other models, due largely to lower meal costs. • The Direct Admin unit cost calculation is the median between all programs. The different benchmark salaries and ratios reflect measures of central tendencies

DRAFT Model Budget – RESIDENTIAL HOUSING STABILZATION SSTAP II • The model budget for the Residential Housing Stabilization SSTAP II programs is identical to the budget for the other Residential Housing Stabilization programs, with the exception that the occupancy unit cost is lower to reflect the fact that the Department of Housing and Community Development is responsible for housing costs. The different benchmark salaries and ratios reflect measures of central tendencies

OUTLINE • Chapter 257 Overview • DCF & DPH Family Transitional Support Services to be Rated • Rate Setting Approach • Timeline • DPH Procurement • Rate Regulation & Promulgation

Planned timeline for implementation EOHHS and HCFP have the goal that rates will be adopted under Chapter 257 to coordinate with the execution of DPH contracts under the new procurement in Winter 2011. It may be necessary for DPH to specify interim rates in its RFR since the regulatory process will prohibit the adoption of rates on an earlier timeline.

Chapter 257 of the Acts of 2008