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State law that boosted human services funding has helped provider CEOs more than direct-care workers

May 30, 2017 2 comments

A 2008 state law, which substantially raised funding to corporate agencies running group homes for people with disabilities, has resulted in only minimal increases in wages for direct-care workers in those facilities, according to a new report from the SEIU Local 509, a Massachusetts state employee union.

Since the law known as Chapter 257 took effect, the average hourly wage for direct-care workers rose by about 14.8 percent to just $13.60 in Fiscal Year 2016, according to the SEIU report, which was released last week (and got little media coverage, btw).

In contrast, the report noted, the law helped boost total compensation for CEOs of the corporate providers by 26 percent, to an annual average of $239,500.

According to the SEIU, raising wages of direct-care workers employed by provider agencies was a key goal of Chapter 257, and yet those workers “are still struggling to earn a living wage” of $15 per hour. The union contended that the funding increases made possible by Chapter 257 “did not come with any accountability measures, leaving it up to the private agencies to determine their own spending priorities.”

The SEIU report found that human services providers in the state received a total of $51 million in net or surplus revenues (over expenses) in Fiscal 2016, which would have been more than enough to raise the wages of all direct-care workers to the $15-per-hour mark.  Yet, the providers have chosen not to do so.

Last week, the state Senate approved a budget amendment that would require human services providers to spend as much as 75 percent of their state funding each year in order to boost the pay of their direct-care workers to $15 per hour.  The amendment had not been approved in the House, so it will now go to a House-Senate conference committee.

The SEIU report provides confirmation of a report by COFAR in 2012 that direct-care workers in the Department of Developmental Services’ contracted system had seen their wages stagnate and even decline in recent years while the executives running the corporate agencies employing those workers were getting double-digit increases in their compensation.

In January 2015, a larger COFAR survey of some 300 state-funded providers’ nonprofit federal tax forms found that more than 600 executives employed by those companies received some $100 million per year in salaries and other compensation. By COFAR’s calculations, state taxpayers were on the hook each year for up to $85 million of that total compensation.

The SEIU report stated that during the past six years, the providers it surveyed paid out a total of $2.4 million in CEO raises. The highest total CEO compensation in the union’s survey was that of Seven Hills Foundation’s CEO who received a total of $797,482 in Fiscal 2016.  Seven Hills received $125 million in state funding that year, with most of that funding coming from DDS.

The SEIU report stated that the average direct-care employee at Seven Hills makes just $12.47 per hour, more than a dollar less than the average wage for workers across all the organizations analyzed in its report.

Vinfen, the third largest provider in the state, provided its CEO with a total of $387,081 in compensation in Fiscal 2016. Vinfen spent a total of $1.7 million on compensation for its top five executives in that fiscal year.

The potential for double-digit increases in CEO compensation was not mentioned by provider-based advocacy organizations that  actually sued the then Patrick administration in 2014 to speed up the implementation of higher state funding under Chapter 257.

According to the plaintiffs in the lawsuit, the higher state funding was needed quickly in order to keep up with the rising costs of heat, rent and fuel, and to increase wages to direct-care staff in order to reduce high staff turnover.

In comments in support of the provider lawsuit in 2014, one key provider lobbyist contended that time was of the essence in boosting provider funding. “…Every day that full implementation (of Chapter 257) is delayed, the imbalance and the unfairness grows,” the lobbyist said.

Yet, according to the SEIU, the providers made 3.2 percent, 2.7 percent and 2.3 percent respectively in surplus revenues on average in the Fiscal 2014, 2015 and 2016 fiscal years. The imbalance that existed was actually between executive-level salaries and direct-care wages in those provider organizations.

As a result of the lawsuit, both the Patrick administration and the incoming Baker administration approved major funding increases to the provider-run group-home line item in the DDS budget, even as it was becoming clear the state was facing major budget shortfalls in the 2015 fiscal year.

“This all suggests,” last week’s SEIU report concluded, “that the amount of state funding is not at issue in the failure to pay a living wage to direct care staff, but rather, that the root of the problem is the manner in which the providers have chosen to spend their increased revenues absent specific conditions attached to the funding.”

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A look at the struggles of two families to cope with closures of sheltered workshops in Massachusetts

May 1, 2017 5 comments

When Massachusetts closed its remaining sheltered workshops for people with developmental disabilities last summer, deeming the programs “segregated,” the impact of the closures on workshop participants Mark Garrity and Danny Morin was pretty much the same.

The two men continued to go every day to their respective facilities where their sheltered workshops had formerly been operated by providers funded by the Department of Developmental Services. But while the providers continued to manage the same facilities, each provider now began offering their clients traditional, DDS-funded day program activities instead.

Paid piecework and assembly work that had been given to Garrity and Morin to do in their sheltered workshops were taken away and replaced by day program activities that they couldn’t relate to. In each case, their provider agency managed to come up with a makeshift solution to the problem that allowed the men to continue doing work similar to what they had done before.

Patty and Mark Garrity photo

Patty Garrity and her brother, Mark Garrity

But in each case, the solutions were implemented despite a lack of clear, written standards or guidance from the federal and state governments on the type of work and activities that were now permitted for the men. Their family and guardians were confused as well, often having to rely on information passed along from program staff or family of other clients.

Even some providers acknowledge that the system functioned more smoothly for everyone when the providers were operating their programs as sheltered workshops. At that time, participating companies would ship materials to the providers, and everyone at the workshop sites would have work to do — usually simple assembly jobs or packaging or labeling tasks.

Now, those providers must either send their clients to companies that offer to provide “integrated” work for them, or must try to continue to provide some on-site work under unclear rules that sometimes result in work arrangements that are adopted verbally and on a case-by-case basis. Moreover, most of their clients are now offered only day program activities that do not involve productive work and do not pay anything.

For Barbara Govoni, the mother of Danny Morin, and for Patty Garrity, the sister of Mark Garrity, the sheltered workshops were not only easier for them to deal with, they provided meaningful and satisfying activities for their respective loved ones.

“My argument is whether it was federal or state, they should not have taken away the workshops for those who can’t function in the community and disrupted their lives,” Govoni said. “I’m not opposed to finding jobs in the community or expanding day programs. I get it all has to do with money, but I feel that a group of people are being discriminated against based on the fact they had no voice or vote. They have been taken out of their element where they were comfortable.”

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Barbara Govoni and her son, Danny Morin

Govoni views the policy of providing integrated employment to all developmentally disabled people as a “misguided one-size-fits-all” approach to a complex social need.

State cites federal pressure to close workshops

All sheltered workshop programs were closed in Massachusetts as of last summer as a result of requirements by the federal Centers for Medicare and Medicaid Services (CMS) that developmentally disabled people work in “integrated employment” settings in which a majority of the workers are not disabled, and that they be paid the minimum wage in those settings. Sheltered workshops were deemed “segregated” settings because they were offered solely to groups of developmentally disabled persons, and the clients were often paid only a nominal amount for the work they did.

In Massachusetts, the Baker administration claimed it had no choice but to follow the CMS rules and close all of the workshops in the state, or else the federal government would bring a lawsuit against them.  But many other states have apparently not acted in the haste that Massachusetts did in shutting the programs down. DDS Commissioner Elin Howe stated late last year that Massachusetts was one of the first states in the country to close all of its workshops.

DDS and its major policy advisors, the Arc of Massachusetts and the Association of Developmental Disabilities Providers (ADDP), had actually wanted to close all of the sheltered workshops in Massachusetts as early as June of 2015. But in the wake of strong protests by families of workshop participants, the state Legislature temporarily slowed the closure process by inserting budget language in fiscal years 2014 and 2015, stating that DDS must continue to make sheltered workshops available for those clients who continued to want them.

But at the same time, the Legislature approved funding for the transfer of the participants out of the workshops and into day programs or employment programs. That move ultimately allowed the workshops to close while enabling legislators to claim they had acted to save the programs.

The closures of the sheltered workshops in Massachusetts resulted in the removal from those programs of close to 2,000 participants, but those closures do not appear to have translated into a steady flow of people into integrated employment.

Verbal permission given for on-site work

At the Road to Responsibility day program site in Braintree, which Mark Garrity attends, I met in late March with Patty Garrity and with senior staff of the provider and DDS officials to discuss Mark’s experience in making the transition from his sheltered workshop to the new system.

Like Barbara Govoni, Patty Garrity said the transition from the sheltered workshop has been difficult. Before RTR ceased operating as a sheltered workshop, Mark did a range of activities there, including collating, packaging, and other production work.

For months, after the workshop was closed in September of 2016, Mark was frustrated and angry, Patty said. RTR provided day program activities for him, but, as Patty put it, they “went over his head.” He wasn’t interested in nature walks or painting or cooking. In particular, he didn’t understand the class on money management.

In addition to his intellectual disability, Mark Garrity had suffered a traumatic brain injury in 1995 after having been hit by a car.  He underwent years of rehabilitation from that accident, which had nearly killed him.

In a letter written before Mark’s sheltered workshop program was ended, Mark’s neurologist, Dr. Douglas Katz, a member of the Department of Neurology at Boston Medical Center and a professor at the Boston University School of Medicine, stated that participating in the workshop had been “an important part of his (Mark’s) rehabilitation effort…and…his life before his injury. It is an activity that is highly rewarding for Mark. He looks forward to it on a daily basis.”

Katz added that, “I understand this program is …likely to close because of new rules passed by the CMS. I think this would be a big loss for my patient Mark. I would support efforts to maintain this structured workshop for Mark and others that benefit from this service.”

As of March 2 of this year, when I first talked to Patty, RTR still had no work for Mark to do that was similar to the work he had done prior to RTR’s changeover from a sheltered workshop to a day program site. But as of March 20, RTR officials said they had found paper shredding work for Mark for two out of the four hours a day that he attended the program.

The paper shredding arrangement at RTR was done after DDS southeast regional director Richard O’Meara determined that it would not violate the CMS rules. O’Meara said the permission he gave to RTR to offer paper shredding to Mark was purely verbal. There was nothing placed in writing about it.

Hearsay information on piecework eligibility requirement 

In January 2016, Govoni said, the Agawam-based Work Opportunity Center, her son’s former sheltered workshop provider, temporarily operated day programs in a function room in a local church after having closed its sheltered workshop program. “I walked in there one day (the temporary day program site),” she said, “and it appeared chaotic, with no structured activities.”

All of the Work Opportunity Center’s clients are now back at the agency’s facility. Govoni’s son gets sent out occasionally to integrated work sites and has some piecework to do at the Work Opportunity site as well. But the work is intermittent. She said she has also heard that those who want to do piecework at the Work Opportunity location will have to take a class explaining what piecework involves.

However, once again, Govoni said she has received nothing in writing about the reported class. She heard about it “through the grapevine.”

In the meantime, Govoni’s son receives a schedule of activities every month at the Work Opportunity Center.  “I’m not saying it’s bad,” Govoni said, “but it’s not what he is interested in.” She said many of the activities are educational, such as lectures on geography or cooking demonstrations. Volunteer work is available as well at a local homeless shelter, and residents are taken on walks to the local library and other locations. “Danny doesn’t want to do that,” she said. “He wants to work.”

Both Govoni and Patty Garrity said Danny and Mark respectively didn’t care about making the minimum wage, and would rather work at their day program sites than get sent out to jobs in the community.

Disagreement over client and family satisfaction

If, like Barbara Govoni and Patty Garrity, family members are confused or dissatisfied by the current situation, O’Meara said, they aren’t letting him know about it. O’Meara said that he and DDS Area Director Colleen Mulligan, who was also in attendance at the March 20 meeting at RTR, are generally the first people whom family members and guardians call when there are problems with DDS care.

“I haven’t gotten a lot of complaints (about the closures of the sheltered workshops in his region),” O’Meara said. “Generally, if people are not happy, we know about it.  These issues are addressed through the ISP (Individual Support Plans). I haven’t had many calls.”

Mulligan added that if problems were occurring like the ones Garrity has described, “I’m not hearing about it.”

But Garrity and some other advocates believe there may be few complaints now because the vocal protests that did occur when the workshop closures were first announced largely died down when families and guardians saw that their protests were having little effect.

A debate over integrated employment

At RTR, Chris White, the agency’s chief executive officer, maintained that even if the CMS requirements have been difficult to comply with, the requirements make sense because he believes that “everyone is capable” of working at integrated employment sites.

White’s viewpoint is in line with an August 2010 DDS policy document that states that “it has now been clearly demonstrated that individuals who were previously considered unemployable in integrated community settings can work successfully.”

But Govoni and Garrity maintained that the ideological viewpoint that the workshops segregated their participants and that integrated employment is feasible for everyone does not apply in their cases. “My son couldn’t wait to go to work (at his former sheltered workshop),” Govoni said. “He was not discriminated against. It was not a sweatshop for him, but the opposite. He doesn’t thrive in integrated sites. He would much prefer staying at the workshop where he was more comfortable. He doesn’t care what he gets paid.”

Govoni said that efforts to place her son in integrated work settings often did not work. In one case, she said, Danny was not able to do the work fast enough to satisfy the employer, and was terminated from the job. The speed of his work did not matter in the sheltered workshop.

Moreover, Govoni and Garrity maintained that even if integrated employment arrangements were feasible for everyone, there are not enough such jobs available to fulfill the demand now that the sheltered workshops are no longer available.

White said there were about 109 clients at RTR who were involved in “integrated group employment” at various job sites. That number was expected to rise this spring to about 120, he said.

At the same time, some 200 clients remained in RTR’s day program. White maintained, however, that those clients were happy with the activities they were doing, and that some were “on a retirement track.”

But it may be an open question whether all or most former workshop clients are really happy in day programs, or whether they simply have no choice but to remain in them.

Even DDS Commissioner Elin Howe appears to acknowledge that the state and its providers have been unable to find mainstream workforce jobs for a significant number of former workshop participants. While Howe made public remarks last year that we believe painted an overly rosy picture of the integrated employment situation, she did acknowledge that “many people transitioned (from sheltered workshops) to Community Based Day Support programs,” although she did not say how many.

Meanwhile, the Legislature has slowed funding for the transition to integrated employment. In order to carry out the administration’s integrated employment policy, the Legislature initially increased funding of the community-based day program line item in the state budget, and created a new line item to fund the transfers from the sheltered workshops.  The idea was to increase both day program and job development staffing and training.

The new sheltered workshop transfer budget line item was initially funded in Fiscal 2015 with $1 million.  That amount was raised to $3 million in Fiscal 2016, and the governor proposed to boost it to $7.6 million in Fiscal 2017.  But the House and the Senate did not go along with the governor’s plan. The Legislature level-funded the line item for Fiscal 2017. The line item was not included in the governor’s budget for Fiscal 2018.

We agree with Garrity and Govoni that the case has not been made that integrated employment is suitable for all people with developmental disabilities, and it is apparent that not enough integrated work opportunities even exist for all of those that could benefit from it.

We think the federal government needs to rethink its flawed ideology regarding sheltered workshops, particularly the questionable claim that they are discriminatory and segregate their participants.  The experience of Mark Garrity and Danny Morin provide further evidence that that claim is untrue.