To: Seena Carrington, Acting Commissioner

Division of Health Care Finance and Policy

From: Michael Weekes, President/CEO
The Providers’ Council
Re: Testimony re: 114.4 CMR 14:00 – Rates for Family Stabilization Services
Date: March 9, 2011
Commissioner Morales and members of the Division of Health Care Finance and Policy, thank you for
this opportunity to address you. The Providers' Council is a statewide association of home- and
community-based caregivers contracting with state purchasing agencies to deliver a wide array of
rehabilitation, education, health and social services.
Governor Deval Patrick signed Chapter 257, An Act Relative to Rates for Human and Social Service
Providers, into law in August 2008. Unanimously passed by the Legislature, this law is intended to
bring fairness, adequacy and transparency to the Commonwealth’s $2.1 billion purchase of service
system. More directly, it is an opportunity for the Commonwealth to set prices paid for social services
that adequately cover the costs of delivering safe, quality services to people who must turn to the state
for care.
Chapter 257
The Executive Office of Health and Human Services reported in October 2007 that: “…it is in the
Commonwealth’s interest to ensure that provider organizations are financially stable and that the
industry’s workforce is paid a fair living wage.” The state passed the landmark law Chapter 257 less
than a year after this report.
Section 4 of Chapter 257 requires EOHHS to establish rates of payment for social service programs
that are reasonable and adequate and meet the costs which are incurred by efficiently and
economically operated social service program providers in providing social service programs in
conformity with federal and state law, regulations, and quality and safety standards. Chapter 257 also
asked that the rates of payment be adjusted to take those into account:
• The reasonable cost to social service program providers of any existing or new governmental
mandates
• A cost adjustment factor to reflect changes in reasonable costs of goods and services of social
service programs including those attributed to inflation; and geographic differences in wages,
benefits, housing and real estate costs in each metropolitan statistical area of the
commonwealth, and in any city or town therein where such costs are substantially higher than
the average cost within that area as a whole.
Assessment of proposed rates
Our assessment of the proposed rate for these Family Stabilization Services indicates that Chapter 257
was not applied. We have reviewed the rate methodologies which provide limited information on the
basis of the numbers used:
1. While data other than the Uniform Financial Report were used in some instances, it is clear that
the UFR plays a role in these rates. The UFR, while a convenient numerical database, does not
reveal the decline in service quality our sector has consistently reported. UFR data only
captures partial costs, and fails to show true market costs for staff salaries, insurance, training,
maintenance and other reasonable costs. It basically mirrors years of level funding. At best, it
provides an incomplete picture and is insufficient for projecting true costs or fair rates.

2. There appears to be no adjustment for unfunded mandates.

3. There is no apparent calculation of the costs to meet state and federal regulations as required by
Chapter 257.

4. While a cost inflation factor is used, it is based on depressed date. At the minimum, it is not
sufficient to remedy the issues raised in the report by EOHHS – Financial Health of Providers
in the Massachusetts Human Service System issued in October 2001

5. There is no consideration for regional/geographic differences or competition providers face

with the private health care market.

6. The highly abbreviated methodology formulas do not indicate if any consideration has been
given to quality and safety.

7. Frequently the state and providers compete in “the market” for people with similar skills and
credentials. It is not unusual for the state to recruit our workers because it can pay market rates.
This differentiation in many salary categories essentially creates two standards of care. This is
not fair or reasonable.

8. The methodologies provided by the Division of Health Care Policy and Finance are highly
abbreviated. Full transparency is not offered by the materials sent in response to our requests.

In Summary
We respectfully request that you withdraw your rate calculation and revise to incorporate the directives
of Chapter 257 to provide proper funding. The reliance the Uniform Financial Report (UFR) – one
which is widely recognized as flawed – shortchanges the people the state wishes to serve, and their
service providers. Further, the rates being set are designed to further the state’s budget goals, not to
meet the needs of the people being served, provide an adequate salary for their caregivers or
adequately fund the operational needs of providers. I look forward to seeing any revisions you might
make in response to the testimony you receive here today.

Providers’ Council
Testimony on: CMR 114.4 CMR 14.00
March 9, 2011 – Page 2