1. Commonwealth of Massachusetts Executive Office of Health and Human Services Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session: Narcotic Treatment Services May 28, 2013 www.mass.gov/hhs/chapter257 eohhspospolicyoffice@state.ma.us

2. 2 Agenda Chapter 257 of the Acts of 2008 Overview Definition and Overview of Programs Procurement Approach Review of Pricing Analysis and Methodologies : Narcotic Treatment Services Current Rate Set Components Model Budget Timeline and Key Milestones

3. 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 Center for Health Information and Analysis 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 Rates that have undergone Chapter 257 rate setting processes are subject to regular review. Rate reviews will reflect: Changes to the service since the preceding review Any systemic or programmatic changes desired by purchasing agencies Any updated or new data brought forth to support rate adjustments

4. 4 The 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/maximum obligation” to “unit rate” Challenges Ambitious implementation timeline Data availability and integrity (complete/correct) 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 Pricing Analysis, Rate Development, Approval, and Hearing Process Data Sources Identified, Components Reviewed, Model Budgets Developed Provider Consultation Review/ Approval: Departments, Secretariat, and Admin & Finance Public Comment and Hearing Possible Revision / Promulgation

5. 5 Agenda Chapter 257 of the Acts of 2008 Overview Definition and Overview of Programs Procurement Approach Review of Pricing Analysis and Methodologies: Narcotic Treatment Services Current Rate Set Components Model Budgets Timeline and Key Milestones

6. 6 NARCOTIC TREATMENT SERVICES Service Class: Clinical, Medical Counseling, Therapy and Treatment Activity Code: 3397 Narcotic Treatment Services Total Spend in FY12: Over $4.1 million Mass Health purchases the same units. Mass Health total spend in FY12: $11.5M Procurement: Once rates are promulgated, DPH will issue a procurement for Narcotic Treatment. Contracts awarded will be Rate Contracts. Contract and notifications of changes in expected billing levels will not change when new contracts are issued.

7. 7 Agenda Chapter 257 of the Acts of 2008 Overview of Narcotic Treatment Services Definition and Overview of Programs Procurement Approach Review of Pricing Analysis and Methodologies: Components Under Narcotic Treatment Services Current Rate Set Components Model Budgets Timeline and Key Milestones

8. 8 Narcotic Treatment: Current Components ServiceDPH PurchaseMass Health Direct Purchase Counseling Individual Family Group Medical Services (Dosing) XXXXXXXX XXXXXXXX Current Components Purchased Rates are regulated under 101 CMR 346.00 Rates for Certain Substance Abuse Programs Methadone Counseling: Individual, Group and Family Medical Services Visit: Dosing

9. 9 Methadone Counseling Notes: ● Productivity standard was calculated by taking standard 2080 yearly fiscal hours of work per employee and backing out : vacation, sick & personal time, holidays, training, supervision, no travel, 2 hrs/week for methadone medical management & discharge hearings and 3 hrs/week administrative (paperwork). ● Clinical non-licensed staff were identified as the primary staff and were set at 1.00 FTE. All other FTEs were set in relation to clinical non-licensed staffing. ● Tax and fringe was set at the measure of central tendency for a combined outpatient and methadone counseling FY11 UFR sample. ● Analysis of FY11 UFR data informed the administrative allocation percentage. ● CAF assumes a third quarter 2013 effective date and goes to the prospective date of second quarter of 2015, using the Spring 2013 Massachusetts Economic Indicators from IHS Global Insight. ● The Methadone Counseling rate is used as a foundation for the Group Methadone Counseling rate. The Group Methadone Counseling rate assumes two hours of staff time for an hour and a half group session for five individuals. ● The Family Methadone Counseling model is based on the Methadone Counseling model. The difference is that the productivity standard is different at 1,394 to account for 6 hrs/week of administrative (paperwork).

10. 10 Methadone Dosing Notes: ● Currently gathering date to determine productivity assumptions. ● Medical staff were identified as the primary staff and were set at 1.00 FTE. All other FTEs were set in relation to medical staffing. ● Tax and fringe, administrative allocation and the cost adjustment factor are consistent with other methadone and outpatient services models.

11. 11 Agenda Chapter 257 of the Acts of 2008 Overview Definition and Overview of Programs Procurement Approach Review of Pricing Analysis and Methodologies: Components Under Narcotic Treatment Services Current Rate Current Model Budget Timeline and Key Milestones

12. 12 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 review, EOHHS conducts a provider input sessions to allow for greater depth in understanding changes in 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: EHS, CHIA and DPH consider testimony in advance of rate adoption. Procurement Process: The procurement will be issued after the new rates have been adopted. Rates Effective: Start date of new contracts. Projected start date of contracts is 7/1/2014. Updated Implementation Timeline and Key Milestones for Narcotic Treatment Services

13. 13 Questions/Feedback Please Email Questions & Comments to: eohhspospolicyoffice@state.ma.us Please Visit the Chapter 257 Website: www.mass.gov/hhs/chapter257