Commonwealth of Massachusetts Executive Office of Health and Human Services Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session: DCF Family Stabilization May 12,

2 Agenda Chapter 257 Implementation and Status Update Impact of Governor’s FY12 Supplemental Budget Filing Updated Implementation Timeline and Key Milestones Implementation Strategy Setting Rational Rates Overview of DCF Family Stabilization Services Overview of Programs and Services (DCF) Contract Alignment (DCF) Review of Methodologies and Approaches Timeline and Contract Conversion

3 Impact of Governor’s FY12 Supplemental Budget Filing Governor’s supplemental budget signed in on April 11, 2011 as Chapter 9 of the Acts of 2011 establishes new deadlines for implementation as well as require that related procurements not go forward until after the rate setting process. Note: Family Stabilization Services as purchased by DCF will not be procured following the promulgation of rates; Existing procurement effective through June 30, EOHHS is developing communication to be posted on the Chapter 257 website and disseminated to departments and providers regarding the legislation, implementation plan, and activities that will be undertaken.

4 How will this legislation impact planned implementation? New implementation dates require meeting the current work schedule so that 40% of the POS system will have rates adopted by January 1, Delay reflects the amount of time needed to not only develop rate proposals, but to also plan for effective implementation. Allows for better alignment with the Commonwealth’s budget cycle; fiscal and client impact of proposed rates will be incorporated into Department spending plans and Governor’s budget proposal. Subsection (E) requires that departments not procure services prior to rate setting, where procurement is warranted. New procurements may only be issued with the written approval of the Secretary based on a documented finding that the procurement is necessary to assure: Continuity of consumer health, safety, or access, Program integrity, where a new contract is necessary to replace an existing contract that terminated early due to unanticipated circumstances, or Compliance with a court order, settlement agreement, or statutory requirement.

5 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 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 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. Year 1Year 2Year 3Year 4 Statutory Requirement: Percent of POS System with Regulated Rates 10%30% Spending Base Associated with Statutory Percentage (based on current projection of $2.1B POS Baseline to be implemented) ~ $215M~ $645M

6 Family Stabilization Services Service Class Definition: Programs that provide supports to enrolled individuals and families with the purpose of promoting stability, whether this involves preventing out-of-home placement, supporting transition between placements, or independent living. Rates for DDS, DMH, and MCB services have already been proposed and a public hearing relative to the promulgation of these rates was held on March 9, 2011 Today we will be discussing DCF Family Networks Support & Stabilization Department Activity Code Program NameProjected FY11 Spending DCF FNSSFamily Networks Supp & Stab $ 41,098,031 DDS 3176Family Support $ 27,176,293 DMH 3066Individual and Family Flexible Supports $ 14,737,426 MCB 2124Respite Care - Sr $ 251, Cooperative Funding - Sr $ 198,482 Total Projected FY11 Spending$ 83,461,332

7 DCF Family Stabilization Services Approximately 320 programs (some just different rates) provided by nearly 130 contractors. Continuing commitment to investment in community-based services. Focus on Flexibility: DCF did not dictate in the RFR the specific nature or design of the interventions providers could propose to achieve DCF goals. Rooted in the Community: Have the capacity to be shaped in a manner that will address the specific needs of each family Focus on Permanency Current Taxonomy: Comprehensive, Parent Support, Youth Support, Assessment, Family Stabilization, Placement Diversion, Reunification, Other Examples of programs: After-school, Supervised Visitation, Skill Building, Parent Aide, Parent Support Groups, Mentoring, In-home Respite, etc.

8 Approach to Pricing Multiple Unique Programs Challenge is allowing this flexibility in child welfare practice while meeting the pricing standardization required by the Chapter 257 process. The approach: Identify and categorized programs by common structure and cost factors. Comprehensive models: 6 proposed models which allow for different levels of clinical and staff intensity on an enrollment day basis. Can include Parent Aid.

9 Approach to Pricing Multiple Unique Programs (Cont.) Discrete services (generally hourly based pricing): Identify those priced elsewhere- DDS, CBHI, MassHealth, etc. Transportation Only programs under consideration for inclusion in EOHHS Transportation Contract. Remaining to be priced: Key cost indicators: Staff qualifications, staffing intensity, supervision intensity, standard costs: occupancy, fringe, etc, allow for some variation – e.g., Travel Broad categories have been tentatively identified: Hourly based direct care/professional services Group services After school programs Other Specialties

10 DCF Family Stabilization Services Pricing Methods All services will be classified in one of three categories : Comprehensive Model- Enrollment Day Services with existing rates Discrete Service Which Need a New Rate Created

11 Comprehensive Models- Enrollment Day Staffing Categories

12 Model C Blended Percent of Direct Cost Percent of Total Cost Client per Staff RatioFTE Program Director Clinical Direct Care Staffing Program Support-Clerical Total Dir Care Staff 3.28 Expenses Taxes & Fringe TBD Total Compensation 78%69.3% Non Staff Direct Exp. 22% 20.0% Total Direct Expenses Admin M&G12% TOTAL 100.0% Capacity 10 Rate Per Enrolled Day CAF Models uses FY10 DCF Contract data to determine staff to client ratios and non- staff direct expenditures. Tax and Fringe has been increased from our initial model from 20% of Salary cost to between 23-24% Non Staff Direct Expenditures are modeled as a percentages of total Direct Program costs in relation to staffing costs After receiving provider feed back that M&G calculations in some models were too low we have set M&G for the enrolled client day models at 12% of Direct Expense. Comprehensive Models- Enrollment Day

13 Model A-1 Direct Care Model A-2 Direct Care Percent of Direct Percent of Total Cost Client per Staff RatioFTE Percent of Direct Percent of Total Cost Client per Staff RatioFTE Program Director Program Director Clinical Direct Care Staffing Direct Care Staffing Program Support-Clerical Program Support-Clerical Total Dir Care Staff 1.75 Total Dir Care Staff 2.66 Expenses Taxes & FringeTBD Taxes & FringeTBD Total Compensation75%66.5% Total Compensation82%73.6% Non Staff Direct Exp.25%22.7% Non Staff Direct Exp.18%15.6% Total Direct Expenses Admin M&G 12% 10.7% Admin M&G 12% 10.7% TOTAL 100.0% TOTAL 100.0% Capacity 10 Capacity 10 Rate Per Enrolled Day CAF Comprehensive Models- Enrollment Day

14 Model B Blended (same as DMH FSI)Model D Clinical Percent of Direct Percent of Total Cost Client per Staff RatioFTE Percent of Direct Percent of Total Cost Client per Staff RatioFTE Program Director Program Director Clinical 91.14Clinical Direct Care Staffing 91.14Direct Care Staffing Program Support- Clerical Program Support- Clerical Total Dir Care Staff 2.98Total Dir Care Staff 2.75 Expenses Taxes & FringeTBD Taxes & FringeTBD Total Compensation82%73.6% Total Compensation83%73.8% Non Staff Direct Exp.18%15.7% Non Staff Direct Exp.17%15.5% Total Direct Expenses Admin M&G12%10.7% Admin M&G12%10.7% TOTAL 100.0% TOTAL 100 Capacity 10Capacity 10 Rate Per Enrolled Day CAF Comprehensive Models- Enrollment Day

15 Model E High Intensity BlendedModel F High Intensity Blended Percent of Direct Cost Percent of Total Cost Client per Staff RatioFTE Percent of Direct Cost Percent of Total Cost Client per Staff RatioFTE Program Director Program Director Clinical 71.48Clinical Direct Care Staffing 42.24Direct Care Staffing Program Support- Clerical Program Support- Clerical Total Dir Care Staff 4.55Total Dir Care Staff 7.61 Expenses Taxes & FringeTBD Taxes & FringeTBD Total Compensation 78%69.4% Total Compensation 86%72.7% Non Staff Direct Exp. 22%19.9% Non Staff Direct Exp. 14%16.6% Total Direct Expenses Admin M&G12%10.7% Admin M&G12%10.7% TOTAL 100% TOTAL 100% Capacity 10Capacity 10 Rate Per Enrolled Day CAF Comprehensive Models- Enrollment Day

16 Discrete Services with Existing Regulated Rates Outpatient Mental Health Services Psychological Services In-home Therapy CBHI Family Partner CBHI Therapeutic Mentor CBHI DMH Individual Youth Support Substance Abuse services Family Navigation

17 Discrete Services to have rates developed Rates for hourly services provided by direct care, professional or other staff to children, families or parents Group Programs for Children, Families, Parents Afterschool Programs Specialized Assessments

18 Discrete Services PROGRAM COSTS Direct Costs: # FTEs Staff Salary Program Director 0.10 Direct Care Staff 1.00 Subtotal salary 1.10 Taxes & Benefits % of salaryTBD Other costs %of staff cost12% Subtotal direct costs Indirect CostsOverhead (% of total direct cost)12.0% Subtotal indirect costs Total program costs BILLABLE UNITS Max # of compensable hours Non-direct service hours vacation (3 weeks) sick and personal (2 Weeks) Training (3 days) holidays (10 days) Planning/paperwork (2 hours per week) Supervision (1.5 hours per week) Travel (5 hours per week) Subtotal non-direct hours Max # productivity hours/FTE Model for hourly services provided by a direct care worker or professional staff Depending on the service different assumptions will be applied to the model with input from DCF program staff.

19 DCF Rate Implementation Preparation: Non-utilized programs not renewed for FY12. May be re-started after negotiation with DCF Contract Manager. Rates to be proposed Fall 2011 for January 1, 2012 promulgation January through March, 2012 for July 1, 2012 Rate Implementation Teams formed to review/discuss classification with providers Key indicators used to assign rate – e.g., staff qualifications Apply consistent standards, allow for review process Program adjustments documented as necessary

20 Department Service Design Finalized: All service components, staffing ratios, staff qualifications, other program inputs have been decided by the purchasing department. 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. Contract Alignment: DCF will work with providers to bring contract into alignment with the new class rates. 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. Implementation Timeline and Key Milestones for DCF Family Stabilization Services

21 Questions/Feedback