1. R A T E R E F O R M I N M A S S A C H U S E T T S CHAPTER 257
OF THE ACTS OF 2008
Presented by Vic DiGravio, President/CEO
Association for Behavioral Healthcare, Inc.

2. The History: Rate Reform in Massachusetts2
▶ Early ‘90’s - Rate-Setting Commission eliminated
▶ Providers did not received systematic rate adjustments for non- Medicaid contracted services (e.g., residential, employment, day services) in ensuing years
▶ No formal mechanisms were in place to adjust multi-year contracts to reflect rising costs of providing services
▶ Providers could not appeal price-setting decisions
▶ Rate adjustments done in de-centralized fashion by agency and/or area staff
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

3. The History: Rate Reform in Massachusetts3
▶ Newer contracts better funded than older contracts
▶ Result was human service system with no rational rate- setting mechanism
▶ Rates varied from contract to contract, even within same provider organization for same service
▶ Providers operated on razor-thin margins
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

4. The History: Rate Reform in Massachusetts4
▶ Three human services trade associations formed The Collaborative in 2002
Funded with special assessments on members of the three trade groups
Explored legal remedy – Providers had no legal standing
Legislation drafted to create formalized rate-setting mechanism
Bill filed in three consecutive legislative sessions
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

5. The History: Rate Reform in Massachusetts5
▶ Winter : tour of member organizations across state
▶ Inadequate rates were consistent theme
“Financial house of cards”
“Clients are suffering”
“Can’t hire and retain good staff”
“Absurd system”
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

6. The Campaign for Human Services: Rate Reform in MA6
▶ The Collaborative agreed to make rate reform legislation #1 public policy priority for legislative session
▶ Created The Campaign for Human Services
▶ Key Players:
Trade Executives
Steering Committee
Lobbying Team
Legislative Allies
Leadership of Provider Organizations
Staff from Provider Organizations
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

7. The Campaign for Human Services: Rate Reform in MA7
▶ Unprecedented grass-roots campaign
▶ Focus on Executive and Legislative leadership, rank and file legislators
▶ Hired Campaign Coordinator and Media Consultant
▶ Organized providers on regional basis to educate and lobby legislators
▶ Pursued media opportunities in leading news outlets (e.g., Ed Board Meetings; inviting reporters to programs)
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

8. Chapter 257of the Acts of 2008: Rate Reform in MA
▶ Passed both houses of legislature on unanimous roll call votes
▶ Mandated that the state set and review rates on a biennial basis for all human services purchased
▶ Required state to take into account inflation factors, geographical differences and new governmental mandates when setting rates
▶ Established right of providers to appeal rate-setting decisions
▶ New system phased-in over four years beginning 10/1/09
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

9. Implementation Challenges: Rate Reform in MA9
▶ Incredibly complex system - $2.5 billion in programs
▶ Maintaining unity of provider groups – Whose rates are adjusted first?
▶ Bleak budget outlook – Implementation coincided with recession and massive state budget cuts
▶ Not a priority for Governor and his Administration
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

10. Implementation Challenges: Rate Reform in MA10
▶ Due to challenges, state asked The Collaborative in to agree to extend full implementation of law by two years
▶ In exchange for other concessions, The Collaborative agreed to extend deadline for full implementation from to 2014
▶ By early 2014 it was apparent that state would not meet its statutory obligation to fully implement law
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

11. Seeking Legal Relief: Rate Reform in Massachusetts11
▶ Legal counsel for The Collaborative drafted complaint in Spring alleging state had failed in its obligation to fully implement Chapter 257
▶ The Collaborative shared draft complaint with Governor’s Office, EOAF and EOHHS in effort to seek negotiated settlement
▶ Administration’s position was that all laws are subject to appropriation and that they were not in violation of Chapter 257 because funding was not available to fully implement
▶ The Collaborative filed complaint in Superior Court, Summer 2014
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

12. Seeking Legal Relief: Rate Reform in Massachusetts12
▶ Case heard in Superior Court in early winter 2014
▶ The Collaborative’s complaint asserted:
State had failed to fully implement Chapter 257
Law was clear that any human services purchased from private providers had to have rates set in accordance with the law by statutory deadlines
To state’s argument that the law was subject to appropriation, our response was that there was no mandate for the state to purchase human services
If, however, the state chose to purchase services, then reimbursement paid to providers for those services had to be set in accordance with Chapter 257
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

13. Superior Court rules in favor of providers: Rate Reform in MA13
▶ January Suffolk Superior Court ruled that the Commonwealth of Massachusetts did violate the provisions of Chapter 257
▶ Ordered state to fully implement law by July 1, 2015
▶ New Governor and EOHHS Secretary announced they would not appeal ruling
▶ State entered into negotiations with The Collaborative around implementation of court order
▶ February state agreed to make interim financial payments to providers in return for two year extension to fully implement law
▶ State on track for full implementation by July 1, 2017
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

14. Chapter 257 success story: Rate Reform in MA14
▶ Approximately $300 million in initial and biennial rate increases paid to human service providers since 2009
▶ Providers are receiving biennial rate adjustments in the regular course of business
▶ Protections for providers against state demands to maintain same level of services even when program budgets are cut
▶ Appeals process has worked: Providers of Clubhouse services for individuals living with a mental illness received 20-24% rate increases after appealing initial rate-setting for those services
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E

15. Resources regarding Chapter 257: Rate Reform in MA15
▶ /legal-documents.html ▶
▶ Vic DiGravio □
 , x11
A S S O C I A T I O N F O R B E H A V I O R A L H E A L T H C A R E