chapter 257 of the acts of 2008

Commonwealth of MassachusettsExecutive Office of Health and Human Services

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

Youth Intermediate-Term Stabilization Service Class

November 30, 2009

www.mass.gov/hhs/chapter257

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Session Goals

• Present an overview of EOHHS Chapter 257 Implementation

• Discuss the Chapter 257 Implementation Plan for the Youth Intermediate-Term Stabilization Service Class

• Engage in dialogue with individuals representing provider organizations that currently deliver these services to gain a better understanding of:

• How the programs, populations served, and levels of care included in this Service Class are similar to and different from one another

• Ideas, recommendations, comments and concerns related to this Service Class

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Youth Intermediate-Term Stabilization Overview

Service Class Definition: Programs that provide a child, adolescent, or young adult a place of overnight housing in a specialized residential or hospital setting for a limited period of time to promote stabilization and transition to a less restrictive setting, to a permanent family home, to independence, or to another adult serving program.

DepartmentActivity

Code Program NameProjected FY10

Spending *

DCF

FNGH Family Networks Group Homes $ 88,870,785

FNRS Residential Schools** $ 87,755,729

RESG Teen Living Program $ 9,104,970

RES0 Res Service $ 1,779,430

FNST Family Networks STARR $ 40,250,309

DMH

3079 Child/Adol Residential Service $ 22,745,098

3080 Intensive Residential Treatment $ 15,256,911

3081 Clinically Intensive Resid Treatment $ 1,936,286

3075 Individualized Support, Residential** $ 4,318,145

DPH 3470 Youth Residential $ 3,098,078

DYS

2503 Group Care $ 18,687,243

2500 Secure Treatment $ 11,775,661

2512 Long Term Group Care $ 5,037,680

2516 Trans. Indep. Living Program $ 1,010,316

2505 Revocation $ 3,170,238

Total Projected FY10 Spending $ 314,796,879

* Potential 9c implications for DCF, DMH, and DPH not reflected in projected spend amount

** Through 808 CMR 1.00, the Operational Service Division (OSD) maintains statutory authority to set tuition prices for Chapter 766 approved private special education programs. Although the Chapter 766 components of DCF’s FNRS and DMH’s 3075 will be included in the procurement for this Service Class, the DHCFP POS Pricing Unit will not establish rates for these services.

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Agenda

• Chapter 257 Implementation and Status Update• Implementation Strategy• Service Classification System• Setting Rational Rates• Contract Reform

• Overview of Youth Intermediate-Term Stabilization Service Class • Definition and Overview of Department Programs• Procurement Approach• Timeline for Implementation

• Facilitated Breakout Sessions (two rounds)• Session A: Linking program structure, process, and client outcomes• Session B: Future direction of Youth Intermediate-Term Stabilization Services• Session C: Administrative & operational considerations regarding MA structure

• Reporting Back and Concluding Comments

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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 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.

FY10 FY11 FY12 FY13

Statutory Requirement: Percent of POS System with Regulated Rates 10% 30% 30% 30%

Spending Base Associated with Statutory Percentage (based on $2.3B FY10 POS Baseline) ~ $230M ~ $690M ~ $690M ~ $690M

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Chapter 257 requires successful achievement of three strategies.

• Number of different POS contracts

• Cost reimbursement contracts

3. Reform Contracting

• Use of Master Agreements

• Contracts w/ performance features

• Contracts shared across departments

1. Create Service Classes

Minimize

Establish new cross-Secretariat organizational and governance structure

• Develop Service Class structure to group similar services & programs

• Build out process & technology to manage codes & classes

• Align activity codes to Service Classes

Enabling

• Rate analysis and establishment

• Contract consolidation across agencies

• Improved reporting

2. Develop Reimbursement Methodology & Rates

FY09 Develop Implementation Plan

Develop Service Classes

Statutory Requirement

Service Value

FY10 10% of system ~$230M




Maximize

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The Chapter 257 Implementation plan is organized by newly defined POS Service Classes

Why were Service Classes Created?

• DHCFP cannot meet the mandated schedule by setting specific rates for all of the individually procured services purchased throughout the POS system

• Rate setting and procurement reform require an overall organizing structure for the classification of POS services

• There were no Secretariat standards for categorizing or describing similar services within or across Departments. The use and functionality of MMARS codes vary widely from Department to Department– as a result, it is very difficult to report on the performance, costs, and volume of services delivered across EOHHS.

How were Service Classes Created?

Departments formed POS Service Classification

Working Groups

Working groups met with the EOHHS POS Policy Office over the course of three months

Current POS Services

Reviewed, Described, and

Catalogued

EOHHS Suggested

Service Groupings

Departments Verified /

Modified and Developed Definitions

Current MMARS Codes were

“Mapped” to New Service Classes

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• The Service Classification System groups like POS programs together into “Service Classes”

• Every Service Class is describes with standardized “Descriptors” and “Service Elements”.

Service Classes

• A grouping of programs with similar cost drivers, general outcome purposes, and sometimes service populations

• There are 32 Service Classes

• Service Classes contain programs from one or more agencies

Descriptors

• Standard characteristics that describe a Service Class: desired outcomes, populations served, and service delivery locations.

• These allow for cross agency management and reporting for rate setting and contract reform.

Service Elements

• Defined “components” of a given program

• Programs have multiple elements - not all programs within a Service Class have all the same elements

• Service elements facilitate pricing & differentiate programs within a Service Class

The new Service Classification System groups POS programs in cross-secretariat Service Classes.

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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


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

• Improved capacity for rate management

• Streamlined, centrally-managed procurement cycles

• 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 cross-agency coordination, performance assessment

In many cases, contract reform is necessary to implement Chapter 257

Today Vision for FY13

Purchasing Department






Providers

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Dept

Providers

Secretariat Master

Agreements

• By Service Class

• DHCFP rate schedules

Secretariat Master

Agreements

• Panel of qualified providers

• Departments purchase via rate agreements

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Putting it all together: How will this work?

Departments Form Service Class

Strategy Teams

(Staffed by EOHHS)

Iterative proposal and review of procurement

models and approaches to

implemented contract and rate reform

Service Class Strategy Teams Work Through a Number of Considerations

Discussion of program strategies, content,

trends and Department vision

Determine procurement plan and

pricing approach

Pricing Analysis, Rate Development, Approval, and Hearing Process

As necessary, RFR and Procurement Plan Developed (possible types of activities)

Data sources identified or developed

Cost analysis & rate option development



Dept/EOHHS/ANF

Review/ Approval

Public Comment

and Hearing

Possible Revision /

Promulgation

Program definitions / outcomes

defined

RFR Development


Public Information

Session

RFR Posting and Response

New Contracts Reference C.257

Rates

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Agenda





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Youth Intermediate-Term Stabilization Overview

Service Class Definition: Programs that provide a child, adolescent, or young adult a place of overnight housing in a specialized residential or hospital setting for a limited period of time to promote stabilization and transition to a less restrictive setting, to a permanent family home, to independence, or to another adult serving program.

DepartmentActivity

Code Program NameProjected FY10

Spending *

DCF

FNGH Family Networks Group Homes $ 88,870,785

FNRS Residential Schools** $ 87,755,729

RESG Teen Living Program $ 9,104,970

RES0 Res Service $ 1,779,430

FNST Family Networks STARR $ 40,250,309

DMH

3079 Child/Adol Residential Service $ 22,745,098

3080 Intensive Residential Treatment $ 15,256,911

3081 Clinically Intensive Resid Treatment $ 1,936,286

3075 Individualized Support, Residential** $ 4,318,145

DPH 3470 Youth Residential $ 3,098,078

DYS

2503 Group Care $ 18,687,243

2500 Secure Treatment $ 11,775,661

2512 Long Term Group Care $ 5,037,680

2516 Trans. Indep. Living Program $ 1,010,316

2505 Revocation $ 3,170,238

Total Projected FY10 Spending $ 314,796,879

* Potential 9c implications for DCF, DMH, and DPH not reflected in projected spend amount

** Through 808 CMR 1.00, the Operational Service Division (OSD) maintains statutory authority to set tuition prices for Chapter 766 approved private special education programs. Although the Chapter 766 components of DCF’s FNRS and DMH’s 3075 will be included in the procurement for this Service Class, the DHCFP POS Pricing Unit will not establish rates for these services.

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Volume & Percent of POS Spending on Purchases from the Same Providers

Source: MMARS Vendor Payments 11/09

How to Read Chart

• In FY09, DMH and DCF together spent $190M on Youth Intermediate Stabilization (Residential) services purchased from the same providers. This represented 69% of the total POS business of DMH and DCF for Youth Intermediate-Term Stabilization.

DMH DPH DYS

DCF

$190M

69%

$1.4M

1%

$116M

43%

DMH

--

0%

$44M

50%

DPH

--

0%

Youth Intermediate-Term Stabilization Service Class is the strongest candidate for procurement reform

• The activities within this Service Class share many cost drivers, client populations, delivery locations, and intended service outcomes for children.

• 86% of all spending in the Youth Intermediate-Term Stabilization Service Class goes to providers under contract with multiple Departments, which is the highest overlap among all Service Classes.

• Each purchasing Department operates on a different procurement schedule so Providers must manage multiple RFR and contracting processes.

Why?

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Procurement Management

Master Agreements: Approach, Opportunities, and Decision Points

• Goal: Replace multiple, individually-negotiated and procured contracts with a single contract model that:

• Maximizes procurement and contract management efficiency for providers and departments and

• Maintains necessary department decision making and governance authority

• Initial Procurement: EOHHS and Departments will develop the RFR to reflect current program design(s) unless Departments elect to make changes

• Scope will be sufficiently broad to enable the addition of new service models and segments over time as needed by departments

• The RFR will have a core of service requirements as well as secondary requirements specific to the needs of participating departments

• The RFR and response requirements will be simple and streamlined

• Meeting the qualification threshold is not a guarantee that a provider will be selected by a participating department to deliver services under the MA

POS Contract Reform Goals: Efficiency, simplification, departmental flexibility and governance authority

Contract Management

Departmental Selection Process

Initial Procurement

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Contract Reform goals: administrative simplification, flexibility, departmental governance

Departmental Selection Process:

• Once EOHHS qualifies providers, participating Departments may employ a Department- level selection process to engage any provider from the qualified list based on criteria determined relevant to that department

• EOHHS is exploring how to establish a new protocol to guide departmental selection of qualified providers to ensure a degree of consistency among departments

• The purpose of these guidelines will be to ensure that MA procurements do not double the work (requiring a qualification bid and a departmental selection hurdle)

Contract Management:

• Departments can elect to use the MA as a rate agreement with or without provider-specific obligations in MMARS.

• Departments encumber and manage their own funds under the MA

• Ready payment is optional but supported based on a departments choice

Procurement Management

• MA procurements are re-opened regularly to enable new providers to qualify

• Re-opening may also involve amendment of the procurement to include a new program model and/or DHCFP regulated rate schedule

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Planned timeline for implementation

Pricing Analysis, Rate Development, Approval, and Hearing Process: DHCFP Lead

Shared EOHHS POS and DHCFP Lead

Secretariat-level MA RFR and Procurement Plan Developed: EOHHS POS Lead

Fall 2010Fall 2009 Winter 2010 Spring 2010 Summer 2010

Program Definitions/ Outcomes

Defined

RFR Development, Review, and Approval Notice of Intent

Response Evaluation, Recommendations, and

Qualification

RFR Posting and Response

Cost Analysis

Provider Session B

Purchasing Agency

Approval

DHCFP/EOHHS/ANF Review and Approval Public Hearing

Adoption

Service Class Review Provider Session A

Agency and DHCFP

Rate Options Development

Contract Execution

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Agenda





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Breakout Session A: Linking program structure, process, and client outcomes

Discussion of the continuum of care, the range of needs of children involved, and how providers structure programs to achieve an array of outcomes in each level of care.

• Questions for Providers:• How are the programs, populations served, and levels of care included in this

Service Class similar to and different from one another?

• How similar or different are the intended outcomes between levels of care in this Service Class?

• What types of staff, intensity of staff, and other program components are necessary to achieve the intended outcome in each program?

• What are the core processes that cut across all levels of care? What processes are different?

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Breakout Session B: Future direction of Youth Intermediate-Term Stabilization Services

Discussion of the nature and impact of the service landscape for children’s services in Massachusetts, given the rollout of the Children’s Behavioral Health Initiative, new resource constraints, and other changes.

• Questions for Providers:

• Do these residential programs need to focus on new or different services? If “yes”, why and what should these be?

• How can we maximize flexibility to better serve the children in our care and custody?

• What potential changes in types of services and business models do providers anticipate, if any?

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Breakout Session C: Administrative & operational considerations regarding MA structure

Discussion of the Master Agreement contract structure, anticipated RFR response process, and anticipated provider selection process.

Questions for Providers:• What opportunities and challenges do providers anticipate in transitioning to the

MA structure?

• What supports need to be in place to assist providers in making this transition?

• How can EOHHS further streamline administration and contract management functions?

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APPENDIX: Service Element ReviewYouth Intermediate-Term Stabilization

Cost Category DCF DMH DYS DPH

Housing ServicesProvider-owned and rented housing

State-owned Facilities; Hardware Security

Food ServicesProvision of Prepared Meals

Groceries

Transportation Costs

Group Transportation Service

Individual Transportation Service

Secured Vehicle Transportation Service

Driver Driver

Non-Specialized Direct Care Staff Services

Supervision; Service Coordination and Planning Services; Individual and Group Para-professional Support; Basic Personal Care, Daily Living, and Skills Building Training

Job Targeted Educational and Skills Development; Financial Management and Budgeting Skills Training; Individual Advocacy Services

Job Development and Placement; Recreation

Individual advocacy services

Witness and Post Placement Supports

Community Outreach, Education, and

EngagementHousing Search

Community Outreach, Education, and Engagement

Housing Search

Community Outreach, Education, and

Engagement

Respite ServicesGuardianship Services

Homemaking Supports

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Cost Category DCF DMH DYS DPH

Specialized Non-Clinical Staff Services

Interpreter services Interpreter services

Specialized Clinical or Medical Staff Services

Nursing, Psychological, Psychiatric, and Counseling Services; Clinical and Safety Screening and Testing Services; Safety Planning; Substance Abuse Services

Nutrition Services, Medical Screening and Testing; Behavioral Counseling Services; Emergency Mental Health Care; Primary Care Services

Physical and Occupational Therapy; Medical Care Training;

and Emergency Medical Care

Educational Staff Services

In-House K-12 Education

Professional Tutoring (school mandated) Professional Tutoring (school mandated)

In-House or Subcontracted Formal

Vocational Training

In-House or Subcontracted Formal

Vocational Training

Other Program Costs

Material Goods

StipendEmergency Assistance


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Service Information DCF DMH DYS DPH

Population

Adolescents (13-17); Young Adults (18-21); Individuals

Child (0-12)

Families and Caregivers Families and Caregivers

Setting

Provider Setting

Hardware Secure Setting

Public/Community Setting

Public/Community Setting

Client’s Own-home

Outcomes

Community Support; Education; Security; Mental Health; Physical Health

Basic Skills Development; Personal Growth; Evaluation and Diagnosis; Recovery; Awareness

Housing Housing

EmploymentFinancial Well-being


chapter 257 of the acts of 2008

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