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
Acting Commissioner Carrington 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.
In 2008, Governor Deval Patrick signed Chapter 257, An Act Relative to Rates for Human and Social
Service Providers, into law. This law, passed unanimously by the Legislature, 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 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
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 it 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 data. 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 nor 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 calculations and revise them to incorporate the
directives of Chapter 257 to provide proper funding. The reliance on the Uniform Financial Report
(UFR) – a document which is widely recognized as flawed – shortchanges 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