Commonwealth of Massachusetts Executive Office of Health and Human Services Chapter 257 of the Acts of 2008 Provider Information & Dialogue Session: Lead Poisoning Prevention, Diagnostics, & Treatment Service Class June 23,

2 OUTLINE Chapter 257 Overview: Rate Setting Approach Survey Results Reported Staff Time Allocation –Program Director –Community Health Worker Reported Expense Allocation Rate Structure Individual Casework –Lead Levels 0-14mg/dL –Lead Levels 15+ mg/dL Environmental Cases Health Education Components –Outreach Events & Fairs –Presentations Impact Analysis

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 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. FY10FY11FY12FY13 Statutory Requirement: Percent of POS System with Regulated Rates 10%30% Spending Base Associated with Statutory Percentage (based on $2.3B FY10 POS Baseline) ~ $230M~ $690M

4 The HCFP-led cost analysis and rate setting effort has several objectives and challenges. Objectives and Benefits Development of uniform analysis for standard pricing of common services Rate setting under Chapter 257 will enable: A.Predictable, reimbursement models that reduce unexplainable variation in rates among comparable, economically operated providers B.Incorporation of inflation adjusted prospective pricing methodologies C.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 Pricing Analysis, Rate Development, Approval, and Hearing Process 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

5 OUTLINE Chapter 257 Overview: Rate Setting Approach Survey Results Reported Staff Time Allocation –Program Director –Community Health Worker Reported Expense Allocation Rate Structure Individual Casework –Lead Levels 0-14mg/dL –Lead Levels 15+ mg/dL Environmental Cases Health Education Components –Outreach Events & Fairs –Presentations Impact Analysis

6 Rate Setting Approach Four different categories of activities with be rated: 1.Individual Casework: Monthly rate per case for as long as case is active. There will be two Individual Casework rates based on Blood Lead Level. –Lead Level 0-14mg/dL –Lead Level 15+mg/dL 2.Environmental Cases Monthly rate per environmental case until compliance is reached. 3.Health Education: Outreach Events & Fairs 4.Health Education: Presentations –Billed on a per Outreach Event/Fair and Presentation basis.

7 There was considerable variation in the allocation of PROGRAM DIRECTORS’ time across the different activities. Range: 0% - 55% 0% - 80% 0% - 100% Average FTE – Program Director PROVIDER Health Education: Outreach Event/Fairs Health Education: Presentations Individual Casework Total FTEs Provider Provider Provider Provider Provider Provider Provider Provider Rates will incorporate the overall average FTE ratios that result from the allocation of time across the different activities. Programs may continue to allocate staff time as they see fit within budget constraints. For example, a program with a PD that spends most of her time on an activity to which other providers allocate mostly CHW time may find the rate is not covering their costs.

8 COMMUNITY HEALTH WORKERS on average allocate over 75% of their time to Individual Casework activities. Range: 2% - 40% 1% - 30% 30% - 95% Average FTE – Community Health Worker PROVIDER Health Education: Outreach Event/Fairs Health Education: Presentations Individual Casework Total FTEs Provider Provider Provider Provider Provider Provider Provider Provider

9 Average Reported Expense Percentages by Activity ACTIVITY Health Education: Outreach Event/Fairs Health Education: Presentations Individual CaseworkTotal Staff / Mileage Travel 11% 78% 100% Program Supplies & Materials 50% 16%33%100% Direct Administration Expense10%15%75%100% Occupancy18%13%69%100% Expenses were split by activity based upon survey responses. Occupancy and meeting travel expenses were split between the different activities in proportion to the allocation of FTEs. Programs WITHOUT Environmental Cases Programs WITH Environmental Cases ACTIVITY Health Education: Outreach Event/Fairs Health Education: Presentations Individual Casework Environmental CasesTotal Staff / Mileage Travel 8%15%34% 43%100% Program Supplies & Materials 23% 18%33%28%100% Direct Administration Expense 18% 20%35%28%100% Occupancy 8% 13%49%30%100%

10 OUTLINE Rate Setting Approach Survey Results Reported Staff Time Allocation –Program Director –Community Health Worker Reported Expense Allocation Rate Structure Individual Casework –Lead Levels 0-14mg/dL –Lead Levels 15+ mg/dL Environmental Cases Health Education Components –Outreach Events & Fairs –Presentations Impact Analysis

11 There will be two separate Individual Casework rates based on lead level. Providers report significantly more contacts and visits per case for blood lead levels 15mg/dL and above than for blood lead levels 0-14mg/dL. The proportion of 0-14mg/dL and 15+mg/dL cases varies by provider, so separate rates by lead level are necessary for rates to reflect the variation in service intensity.

12 Individual Casework Rate 1.The Division of Health Care Finance and Policy calculated the expenses and FTEs allocated to Individual Casework for each provider based on survey results. 2.The costs were then split between 0-14mg/dL and 15+mg/dL lead level cases based on the percentage of visits each provider reported conducting. 3.The per case unit cost was calculated for the two lead level categories by taking the FTEs and expenses and dividing them by the number of open cases for each lead level. CHW FTE 1.00 CHW FTE.75 75% Casework 1/3 Visits 2/3 Visits CHW FTE.25 CHW FTE mg/dL Cases 25 Cases 30 ÷ ÷ = FTE per 0-14 Case.01 = FTE per 15+ Case mg/dL *numbers are for illustrative purposes only

13 Individual Casework Rate 4.Lastly, the average total cost of a case is divided by the average length of a case in order to derive the monthly case rate. 123Ave Days Months 5.00 Rounded Months 0–14 mg/dL15+ mg/dL 216Ave Days Months 8.00 Rounded Months

14 Individual Casework Draft Model Budgets One CHW FTE devoting 100% of her time to lead level 0-14 cases would, on average, manage 89 cases in one year. One CHW FTE devoting 100% of her time to lead level 15+ cases would, on average, manage 50 cases in one year. Unit costs equal the weighted average across providers.

15 OUTLINE Rate Setting Approach Survey Results Reported Staff Time Allocation –Program Director –Community Health Worker Reported Expense Allocation Rate Structure Individual Casework –Lead Levels 0-14mg/dL –Lead Levels 15+ mg/dL Environmental Cases Health Education Components –Outreach Events & Fairs –Presentations Impact Analysis

16 Environmental Case Draft Model Budget The Environmental Case rate is spread over 8 months, the average number of months a case is open. One environmental case FTE would, on average, manage 175 cases in one year. Unit costs equal the weighted average across providers.

17 OUTLINE Rate Setting Approach Survey Results Reported Staff Time Allocation –Program Director –Community Health Worker Reported Expense Allocation Rate Structure Individual Casework –Lead Levels 0-14mg/dL –Lead Levels 15+ mg/dL Environmental Cases Health Education Components –Outreach Events & Fairs –Presentations Impact Analysis

18 Current Draft Health Education Rates are problematic. Current draft rates based on survey responses and reported numbers of health education outreach events and presentations result in rates that appear to be inflated. For example, the draft rate for a presentation is almost twice what a provider would receive for working with a lead level 15+ case for 8 months. DPH, Healthcare Finance and Policy and EOHHS believe that the inflated rates may be a result of one or both of the following: Under reported number of outreach events and presentations Erroneously high estimates of staff time allocated to work relating to outreach events and presentations.

19 Health Education - Allocation of Time and FTEs OUTREACH EVENTS/FAIRS# Outreach Events % Program Director Time Spent on Activity Equivalent Program Director FTE allocated to Activity: % CHW Time Spent on Activity Equivalent CHW FTE allocated to activity Provider 1 220%0.135%0.07 Provider 250%0.0010%0.10 Provider 350%0.0015%0.15 Provider 4 755%0.114%0.04 Provider 5915%0.1510%0.20 Provider 62045%0.052%0.02 Provider %0.0340%1.00 Provider 8 400%0.0023%0.45 Average1421%0.0614%0.25 PRESENTATIONS# Presentations % Program Director Time Spent on Activity Equivalent Program Director FTE allocated to Activity: % CHW Time Spent on Activity Equivalent CHW FTE allocated to activity Provider 1 10%0.0010%0.10 Provider 290%0.0010%0.10 Provider 31080%0.525%0.07 Provider 41145%0.0545%0.34 Provider 51940%0.081%0.01 Provider 6 260%0.0015%0.30 Provider 74133%0.0330%0.75 Provider %0.155%0.10 Average2027%0.1015%0.22

20 Based on current data, there is little to no relationship between the number of events and the FTE allocated to the Health Education activity.

21 Health Education – Ratio of Events per FTE One CHW FTE devoting 100% of her time to Outreach Events and Fairs would participate in, on average, 55 events per year. One CHW FTE devoting 100% of her time to presentations would conduct, on average, 33 presentations per year. Events per FTE Outreach Events / FairsPresentations Program Director76106 Community Health Worker5533

22 Timeline and Next Steps Use Program Provider feedback from this session to inform the development of Rate Options Analyze potential regional differences in costs Conduct a Fiscal Impact Analysis Provider Session A Agency / HCF Rate Options Development Provider Session B Purchasing Agencies Review and Approval Public Hearing FebruaryMarch - JulyJuneJuly-AugustSeptember-October