1. Commonwealth of Massachusetts Executive 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

2. 2 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

3. 3 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. Department Activity CodeProgram Name Projected FY10 Spending * DCF FNGHFamily Networks Group Homes$ 88,870,785 FNRSResidential Schools**$ 87,755,729 RESGTeen Living Program$ 9,104,970 RES0Res Service$ 1,779,430 FNSTFamily Networks STARR$ 40,250,309 DMH 3079Child/Adol Residential Service$ 22,745,098 3080Intensive Residential Treatment$ 15,256,911 3081Clinically Intensive Resid Treatment$ 1,936,286 3075Individualized Support, Residential**$ 4,318,145 DPH3470Youth Residential$ 3,098,078 DYS 2503Group Care$ 18,687,243 2500Secure Treatment$ 11,775,661 2512Long Term Group Care$ 5,037,680 2516Trans. Indep. Living Program$ 1,010,316 2505Revocation$ 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.

4. 4 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

5. 5 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. FY10FY11FY12FY13 Statutory Requirement: Percent of POS System with Regulated Rates 10%30% Spending Base Associated with Statutory Percentage (based on $2.3B FY10 POS Baseline) ~ $230M~ $690M

6. 6 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 FY09Develop Implementation Plan Develop Service Classes Statutory Requirement Service Value FY1010% of system ~$230M FY1130% of system~$690M FY1230% of system~$690M FY1330% of system~$690M Maximize

7. 7 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

8. 8 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.

9. 9 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 Provider Consultation Review/ Approval: Departments, Secretariat, and Admin & Finance Public Comment and Hearing Possible Revision / Promulgation

10. 10 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 TodayVision for FY13 Purchasing Department Providers Dept Providers Secretariat Master Agreements By Service Class DHCFP rate schedules Secretariat Master Agreements Panel of qualified providers Departments purchase via rate agreements

11. 11 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 Provider Consultation Dept/EOHHS/ ANF Review/ Approval Public Comment and Hearing Possible Revision / Promulgation Program definitions / outcomes defined RFR Development Provider Consultation Public Information Session RFR Posting and Response New Contracts Reference C.257 Rates

12. 12 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

13. 13 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. Department Activity CodeProgram Name Projected FY10 Spending * DCF FNGHFamily Networks Group Homes$ 88,870,785 FNRSResidential Schools**$ 87,755,729 RESGTeen Living Program$ 9,104,970 RES0Res Service$ 1,779,430 FNSTFamily Networks STARR$ 40,250,309 DMH 3079Child/Adol Residential Service$ 22,745,098 3080Intensive Residential Treatment$ 15,256,911 3081Clinically Intensive Resid Treatment$ 1,936,286 3075Individualized Support, Residential**$ 4,318,145 DPH3470Youth Residential$ 3,098,078 DYS 2503Group Care$ 18,687,243 2500Secure Treatment$ 11,775,661 2512Long Term Group Care$ 5,037,680 2516Trans. Indep. Living Program$ 1,010,316 2505Revocation$ 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.

14. 14 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. DMHDPHDYS 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?

15. 15 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

16. 16 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

17. 17 Planned timeline for implementation

18. 18 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

19. 19 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?

20. 20 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?

21. 21 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?

22. 22 APPENDIX: Service Element Review Youth Intermediate-Term Stabilization Cost Category DCF DMH DYSDPH Housing Services Provider-owned and rented housing State-owned Facilities; Hardware Security Food Services Provision of Prepared Meals Groceries Transportation Costs Group Transportation Service Individual Transportation Service Secured Vehicle Transportation Service 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 Engagement Housing Search Community Outreach, Education, and Engagement Housing Search Community Outreach, Education, and Engagement Respite Services Guardianship Services Homemaking Supports

23. 23 Cost Category DCF DMHDYSDPH Specialized Non- Clinical Staff 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) In-House or Subcontracted Formal Vocational Training Other Program Costs Material Goods Stipend Emergency Assistance APPENDIX: Service Element Review Youth Intermediate-Term Stabilization

24. 24 Service Information DCF DMHDYSDPH Population Adolescents (13-17); Young Adults (18-21); Individuals Child (0-12) Families and Caregivers Setting Provider Setting Hardware Secure 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 Employment Financial Well-being APPENDIX: Service Element Review Youth Intermediate-Term Stabilization