Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session:

Commonwealth of MassachusettsExecutive Office of Health and Human Services

Chapter 257 of the Acts of 2008

Provider Information and Dialogue Session:

Youth Foster Placement, Adoption & Supports Services

March 22, 2012

www.mass.gov/hhs/chapter257 [email protected]

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Agenda

• Chapter 257 of the Acts of 2008

• Overview of Youth Foster Placement, Adoption and Support Services

• Definition and Overview of Programs

• Procurement Approach

• Pricing Review

• Data and Initial Review

• Pricing Structure/Considerations for Each Service

• Timeline and Key Milestones

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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 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

• Many current rates within the POS system may not reflect consideration of these factors.

• Chapter 9 of the Acts of 2011 establishes new deadlines for implementing POS rate regulation as well as requires that related procurements not go forward until after the rate setting process is completed.

Jan 2012 Jan 2013 Jan 2014

Statutory Requirement: Percent of POS System with Regulated Rates 40% 30% 30%

Spending Base Associated with Statutory Percentage (based on current projection of $2.278B POS Baseline to be implemented) ~ $880M ~ $660M ~ $660M

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In implementing Chapter 257, EOHHS will leverage three POS Reform Strategies to improve services and client outcomes

POS Reform Strategy

– # POS contracts for similar services

– Use of cost reimbursement contracts

3. Reform Contracting

+ # of contracts shared across departments

+ # contracts w/ performance features

+ Use of Master Agreements

+ Overall POS governance structure

2. Develop Rational Rates

1. Create Service Classes

Minimize

Maximize

Increased Administrative EfficiencySimplification and improved

coordination of administrative processes for agencies and providers

More resources directed toward client activities

Imm

edia

te T

erm

Nea

r T

erm

Lo

ng

Ter

m Improved Client Outcomes

Improved quality management

+ Develop service class structure defined by outcomes

+ Enhance POS taxonomy database+ Align activity codes to service classes

Enabling

Integrated data management

systems

Improved reporting

More clients served w/ higher quality

services

Improved client outcomes

Contract consolidation

across agencies

Rational resource base and stronger provider system POS Reform

1/1/12

1/1/13

1/1/14

Statutory Requirement

Service Value

40% of system

30% of system

30% of system

~$880M

~$660M

~$660M

Rates to be reviewed every two years

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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” to “unit rate”

Challenges• Ambitious implementation timeline

• Data availability and integrity (complete/correct)

• Unexplained historical variation in reimbursement rates resulting from long-term contracts and individual negotiations between purchasers and providers

• 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 or Developed

Provider Consultation

Cost Analysis & Rate Methods Development

Provider Consultation

Review/ Approval: Departments, Secretariat, and Admin & Finance

Public Comment and Hearing

Possible Revision / Promulgation

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• Reduced contract complexity and redundancy

• Greater amendment flexibility for providers and agencies

• Greater opportunity for provider engagement

• Streamlined, centrally-managed procurement cycles managed

• Thousands of individually negotiated contracts

• Multiple contracts within and across departments with the same providers.

• Services with core similarities purchased individually by agencies and regions

• Low capacity for rate management, cross-agency coordination, performance assessment

In Many Cases, Contract Reform is Necessary to Implement Chapter 257

Today Vision for FY15

Purchasing Department






Providers

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Providers

Secretariat or Department

Master Agreements

• By Service Class

• DHCFP rate schedules

• Panel of qualified providers

• Departments purchase via rate agreements

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Agenda





• Pricing Review




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Youth Foster Placement, Adoption and Support Services Service Class

Service Class Definition: Programs that provide a continuum of services relating to foster care, shared living placements and adoption, including recruitment, placement, and supports to individuals, families, and caregivers to promote stability in the temporary or permanent family placement.

Service Class Agency Activity Code

Program NameTotal Projected

Program Spending ~

DCF AMSS ADOPTMGMT $ 4,856,900 DCF FNIF + Intensive Foster Care $ 77,711,522 DCF FOSC CONT FOS CARE $ 653,000 DCF FOSM Foster Care Mgmt Recruitment $ 1,827,246 DYS 2504 Foster Care $ 1,586,673 DYS 2509 Specialized Foster Care $ 113,327

86,748,668$

Placement & Adoption Services & Supports

Total Spending

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Youth Foster Placement, Adoption and Support Services Procurement Plan

• 100% of DYS providers are also DCF providers.

• Combined DYS and DCF purchased over $85M of contracted foster care and support services in FY11

• DCF & DYS will jointly issue this RFR to create a master agreement with shared rate contracts in early 2013. Chapter 257 rates will be adopted with a target effective date of July 1, 2013 for contracts.

• DMH currently purchases Intensive Foster Care using the DCF rates, planned to be included in the Caring Together with Families joint procurement with DCF

• These rates will mirror the IFC rates as they change with this rate development

• The Caring Together RFR will include language to reflect this process

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Master Agreements simplify management of the POS system for providers and departments.

• Benefits to Providers:

• Single bidding cycle for similar services

• Bid once – engage many times under a single bid

• Standard reporting formats

• Rate transparency

• Potential to engage with new purchasing Departments

• Benefits to EOHHS Departments

• Reduced procurement burden

• Potential to expand pool of providers

• Enable statewide coordination

• Eliminate multiple procurements for the same service

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Agenda





• Pricing Review




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Overview of Youth Foster Placement, Adoption and Support Services: Data Sources

• DCF:• Intensive Foster Care (FNIF & FOSC): Utilization data from claims units. • Adoption Management Supports (AMSS): Utilization data from claims units.• Support Services (FOSM) and Specialty contracts (AMSS): Contract Data from

Fiscal Year 2011. • UFR, if needed to enrich data analysis of specific cost elements.

• DMH: Utilization data from claims units.

• DYS: UFR data supplemented with the construct of contract data from previous fiscal years.

• Other Benchmarks: Salary data from BLS, Salary.com, market indicators, etc.

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DCF: Intensive Foster Care

• Intensive Foster Care services rates, based on model budgets, were developed in 2009.

• Considerations in model budget development included:• Staffing:

• Childcare Workers• Family Resource Workers• Supervisors• Support Staff (5hrs/week)• Program Director (4 hrs/week)

• Tax & Fringe costs

• Flex Pool money

• Foster parent rates were not increased in the previous rate development process

– What are the differentiating factors between department foster parenting and Intensive Foster parenting?

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DCF: Adoption Management and Support (AMSS)

• DCF currently purchases product based adoption services and specialty contracts to support adoption.

• Product Based Adoption includes an array of rates grouped into 6 service specifications, to address specific client needs and provide comprehensive services.

– Six service groups - Consultation, Placement Case Management, Family Development, Recruitment, Intervention and Interstate.

– What are the challenges in providing product based services? What have been the significant cost factors? How has utilization and capacity affected reimbursement?

• Specialty contracts for Special Needs adoption recruiting and supports to adoption families and staff.

- What have been the significant cost drivers?

- What are the best options for defining a unit of service for payment purposes?- What kind of performance standards may be used? How can these be connected

to reimbursement?

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DCF: Support Services (FOSM)

• This contract provides support and retention services to Departmental Foster and Pre-Adoptive Families.

- A wide variety of activities are included in this contract.

- What have been significant cost factors? Are there performance measures which can be utilized. What suggestions do you have regarding a shift from cost to unit rate reimbursement?

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DYS: Traditional and Intensive Foster Care Programs

• The DYS rates are set on a regional basis– Northeast, Central, Western, Metro, & Southeast

• Rates for:– Traditional Foster care beds– Intensive Foster care beds– Juvenile Detention Alternative Held & Filled Beds (Pilot Sights)– Guardian Care

• Special considerations for DYS:– Foster care parents engage with DYS contracted agency to ensure they meet

DYS specific requirements:– Less than 2 DYS children in a home– Engagement with Youth Advocate Counselor and Foster Care Coordinator– Job training for older DYS clients

• What are the cost drivers for these programs?

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Agenda





• Pricing Review




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Fall 2012 Summer 2013Winter 2013Summer 2012Winter/Spring 2012

Procurement Process

Department Service Design Finalized and Rate Development

Executive Sign-Off EO 485 to ANF Public Hearing

Rates Adopted Rates Effective

Provider Sessions and Feedback

• 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 setting project, EOHHS conducts an average of 2-3 provider input sessions prior to Executive Sign-Off and the Public Hearing Process to allow for greater depth in understanding 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: DHCFP and purchasing departments consider testimony in advance of rate adoption.

• Procurement Process: The procurement will be issued after the rates have been adopted.

• 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.

Updated Implementation Timeline and Key Milestones for Youth Foster Placement, Adoption and Support Services

July 1

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Questions/Feedback

Please Email Questions & Comments to:

[email protected]

Please Visit the Chapter 257 Website:

www.mass.gov/hhs/chapter257

Chapter 257 of the Acts of 2008 Provider Information and Dialogue Session:

Documents