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Federal government reviewing group home data in MA and two other states

May 11, 2015 3 comments

The Inspector General in the U.S. Department of Health and Human Services has spent the past two years conducting a review of data on abuse and neglect in privatized group homes in three states, including Massachusetts.

In an August 21, 2013 letter written to U.S. Senator Chris Murphy of Connecticut, HHS Inspector General Daniel Levinson said his office had begun to examine data on admissions of persons from group homes and “nursing facilities” to hospital emergency rooms in Massachusetts, Connecticut and New York.

We obtained Levinson’s letter from the IG’s Freedom of Information Act Division.  The letter promised to share the results of the IG’s findings with Senator Murphy’s office and left open the possibility of expanding the review.  But the letter provided no details on how the review might be expanded.

Senator Murphy, who requested in March 2013 that the IG investigate group homes for people with developmental disabilities, has not responded to numerous requests from us for comment on the IG’s review.

It is not clear when the IG’s examination will be completed.

Despite what appear to be significant limitations in the scope of the analysis, the IG’s review appears to constitute one of the few instances in which the federal government has investigated the privatized group home system of care in the U.S.  In contrast to that relative free ride given to the group home system, the federal government has filed dozens of lawsuits in recent years alleging substandard care in state-run, congregate-care facilities around the country.

There has been mounting evidence that abuse and neglect has been a continuing and growing problem in community-based, group homes.  The IG investigation was requested by Murphy in the wake of a series of articles in The Hartford Courant that documented dozens of deaths, injuries, and other problems stemming from inadequate care and supervision in group homes in Connecticut.

Murphy asked the HHS IG to “focus on the prevalence of preventable deaths at privately run group homes across this nation and the widespread privatization of our delivery system.”

In his August 2013 letter in response to Murphy’s request, Levinson stated that for Connecticut, Massachusetts, and New York, “we are analyzing data to identify instances when Medicaid beneficiaries were transferred from group homes or nursing facilities to hospitals for emergency treatment.  We are analyzing data by facility to determine whether certain facilities have excessive rates relative to those of their peers.”

Due to the way states collect the data, the IG’s analysis would include all Medicaid patients and not only those with developmental disabilities, Levinson said.

Given the vagueness of Levinson’s description of his office’s review, we have a number of questions about it. Levinson’s letter, for instance, didn’t specify what he meant by “nursing facilities,” and didn’t indicate which “peers” the emergency hospital treatment rates are being compared to. Are the group homes and nursing facilities being compared to developmental centers, for instance? It’s also not clear what the data will mean if it lumps together people with and without developmental disabilities.

Moreover, it is not clear whether the IG’s review has included data on actual deaths in group homes, which is what Murphy specifically asked the IG to examine, or whether the review has included differences in mortality rates of persons transferred from state-run to privately run care.  A number of studies have shown increases in mortality rates among those transferred individuals.

The VOR, a national advocacy organization for the developmentally disabled, pointed out in recent testimony to a congressional subcommittee that higher mortality rates have been documented in Virginia, Nebraska, Tennessee, and Georgia in the wake of the DOJ’s deinstitutionalization settlements.

Based on Levinson’s letter, the IG’s review also doesn’t appear to have covered issues such as the quality of care in general in group homes, and it does not appear to be concerned with financial aspects of privatized care.  All of those things are long overdue for investigations at both the federal and state levels of government.  In the meantime, the federal IG’s investigation appears to be at least a step in the right direction.

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The federal government’s cruel pursuit of deinstitutionalization

May 5, 2015 7 comments

When is the federal government — particularly the Department of Justice — going to recognize or admit that deinstitutionalization of the developmentally disabled hasn’t worked as planned?

The DOJ seems to have closed its eyes to the realities on the ground in continuing to file lawsuits around the country to close state-run care facilities.  This has caused “human harm, including death and financial and emotional hardship,” according to information compiled by the VOR, a national advocacy organization for the developmentally disabled and a COFAR affiliate.

While the DOJ has not filed such a suit against the State of Massachusetts, that may be because the state has closed, or is in the process of closing, four out of six developmental centers that were in operation as of 2008.  But with two developmental centers remaining as well as other programs that the DOJ considers to be institutional, such as sheltered workshops, Massachusetts could well become a target for a lawsuit at any time.

The VOR filed testimony last month, urging a congressional subcommittee to adopt legislative language that would require the DOJ to do two very commonsense things before filing more lawsuits to close state-run facilities:

  • First consult with the residents or their legal guardians “to determine residents’ needs and choices with regard to residential services and supports,” and,
  • Second, do not “impose community-based treatment on patients who do not desire it.”  This second requirement is consistent with the 1999 U.S. Supreme Court decision in Olmstead v. L.C.

The DOJ’s continued pursuit of class-action litigation to close developmental centers and other facilities has led to the irony that those lawsuits are generally opposed by the families of the residents on whose behalf the suits are ostensibly filed. As U.S. District Court Judge J. Leon Holmes wrote in 2011 in dismissing a lawsuit brought by the DOJ against the State of Arkansas to close the Conway Human Development Center center there:

…the United States is in the odd position of asserting that certain persons’ rights have been and are being violated while those persons – through their parents and guardians – disagree. (U.S. v. Arkansas, June 8, 2011, dismissal order).

Judge Holmes’ decision noted that evidence in the case showed that the parents and guardians of residents of the Conway Center “are overwhelmingly satisfied with the services there and believe that the Center is the least restrictive, most integrated placement appropriate for their children and wards.”  Moreover, the judge’s decision stated that the weight of the evidence in the case failed to support the DOJ’s contention that care at the Conway Center was substandard.

The VOR notes that the DOJ’s Civil Rights Division has filed more than 45 legal enforcement actions in 25 states since 2009 to limit or shut down state care.  On a website listing all the litigation it has filed, the DOJ includes the heading “Olmstead: Community Integration for Everyone.”

It’s not true, though, that Olmstead requires community-based care for everyone.  The Supreme Court decision established a right to community-based housing and care only when:

1. The state’s treatment professionals have determined that community placement is appropriate,

2. Transfer is not opposed by the affected individual, and

3. The placement can be reasonably accommodated, taking into account the resources available to the state and the needs of others with mental disabilities.

Despite those clear conditions, the DOJ has plowed ahead with its community-integration lawsuits under the explicit assumption that all institutional care should be ended and everyone should be sent into community-based care, whether they want to go or not.

This viewpoint by the DOJ is a misinterpretation of the Olmstead decision, and it has had tragic consequences, according to the VOR.  The organization pointed out in its testimony that higher mortality rates have been documented in Virginia, Nebraska, Tennessee, and Georgia in the wake of the DOJ’s deinstitutionalization settlements.

Those problems have occurred because so many of the privatized group homes to which the people formerly in the state facilities have been transferred are poorly monitored and are afflicted by high turnover and poor training of staff.  Yet, that reality does not appear to have been recognized by the DOJ.

In Virginia, a state sued by the DOJ to close its state-run developmental centers, the risk of mortality for those individuals who left those centers was double that of those who stayed.

In Tennessee, DOJ lawsuits resulted in the closure of one developmental center in 2010 and the downsizing of two others.  In that state, deaths among people released from institutions nearly doubled between 2009 and 2013.  In addition, according to The Tennessean, a 2013 State Comptroller’s audit reported a lack of access to adequate medical and dental care, incarcerations, and hundreds of reports of abuse, and neglect and exploitation among the transferred developmental center residents.

In Nebraska, a 2014 monitoring team report found that of 47 persons considered to be “medically fragile,” who were transferred from a developmental center in 2009 as a result of a DOJ settlement, 20 (or 43 percent of them) subsequently died.

In Georgia, a 2010 a DOJ settlement agreement required the closure of all state-operated developmental centers and the transfer of 1,000 persons with developmental disabilities as well as 9,000 persons with mental illness from facility-based care.  In March, The Augusta Chronicle reported that of 499 individuals with profound developmental disabilities, who had been transferred from the state developmental centers under the DOJ settlement, 62 (or 12%) died unexpectedly.

The Augusta Chronicle article discussed the case of Christen Shermaine Hope Gordon, a 12-year-old girl who died in community-care after being transferred from the Central State Hospital in Milledgeville, GA.  The article recounted a litany of poor decisions and poor care that appear to have led to Christen’s death.

In a letter to the DOJ in January of this year, Margaret Huss, president of Intellectual Disabilities Advocates of Nebraska, urged the DOJ to ask critical questions about the mortality figures and other data regarding the transfer to community-based care prior to filing further lawsuits to close state facilities.  “An increased risk of death should not be the unintended consequences of the worthy goal of community integration,” Huss’s letter stated.  As of May 1, the DOJ had not responded to her letter.

That an increased risk of abuse, neglect, and death exists in community-based care has long been recognized, but few policy makers or people elected to office have been willing to stem the tide of deinstitutionalization.  In March 2013, U.S. Senator Chris Murphy of Connecticut did call for an investigation of abuse and neglect in privatized group homes around the country, in response to a series by The Hartford Courant detailing those problems in that state.

In a letter to the Office of the Inspector General in the U.S. Department of Health and Human Services, Murphy termed the level of abuse and neglect in group homes “alarming.”  Murphy asked the IG “to focus on the prevalence of preventable deaths at privately run group homes across this nation and the widespread privatization of our delivery system.”

But more than two years after Murphy’s request, it is not clear that the HHS Inspector General ever did undertake such an investigation.  The IG’s office has so far not released a report and did not respond to an email query from us on April 30, seeking information on whether an investigation has been undertaken and what its status might be.

Senator Murphy’s office also did not respond to repeated inquiries from us last week as to whether Murphy ever received a response from the IG to his call for an investigation or whether he ever followed up with the IG after his original request in 2013.

Unfortunately, lawmakers in the U.S. Senate, in particular, have also not been supportive of VOR’s proposed legislative language to require the DOJ to consult with families before filing further lawsuits against state care.  While language was inserted in a House appropriations bill for the DOJ last year at VOR’s request that protections for institutional care be considered by the DOJ as appropriate for those who desire it, that language was later watered down.

We can only hope that folks begin to wake up in Washington and elsewhere to overwhelming evidence that deinstitutionalization accompanied by privatization is not working, and that someone finally steps forward to slow both of those trends.

The HW&M budget has great news for sheltered workshops, not so good news for state care in general

April 20, 2015 2 comments

The great news is the House Ways and Means Committee re-inserted protective language last week in the proposed Fiscal Year 2016 state budget that would protect vital sheltered workshops from closure.

Representative Brian Dempsey, chair of the committee, who was instrumental last year in keeping the workshops open, has renewed his commitment to those facilities in this year’s budget go-round with the administration.

The bad news is that the House Ways and Means budget continues to squeeze state-run programs for the developmentally disabled and maintains the administration’s disproportionate increase in proposed funding for the corporate, provider-run group home system.  But let’s look at the good news first.

Last spring, after a lobbying campaign by advocates of the workshops, Dempsey placed language in the House Ways and Means version of the current-year budget, stating that DDS “shall not reduce the availability or decrease funding for sheltered workshops serving persons with disabilities who voluntarily seek or wish to retain such employment services.”  The protective language survived a House-Senate conference committee in June, largely due to Dempsey’s support.

While that protective language in the budget appeared to offer the workshops an indefinite reprieve, the proposed fiscal 2016 budget submitted by Governor Charlie Baker in March removed the language.  As a result, the workshop supporters went to work once again in the past month, calling Dempsey’s office and urging their local legislators to reinstate his language.

Dempsey did reinstate the language; and in a conference call last week concerning the House Ways and Means budget plan, DDS Commissioner Elin Howe indicated that the administration did not intend to file any amendments to remove the language from the budget legislation.  It also appears that organizations representing corporate DDS providers, such as the Association of Developmental Disabilities Providers, have not filed amendments to close the workshops.

It is now up to the Senate and specifically to Senator Karen Spilka, the chair of the Senate Ways and Means Committee, to follow Rep. Dempsey’s lead and insert the same protective language in the Senate budget.

The workshops first came under attack from the administration of then Governor Deval Patrick, which targeted them for closure as of this coming June, arguing that they were “segregating” disabled persons from their peers in the mainstream workforce.  But families of the workshop participants fought back.  They maintain that the facilities are fully integrated into the surrounding communities and provide the participants with meaningful activities and valuable skills.

Sheltered workshops provide developmentally disabled persons with a range of assembly jobs and other types of work, usually for a small wage.

Meanwhile, the bad news we were talking about largely concerns funding for DDS group homes, remaining developmental centers, and service coordinators.  The House Ways and Means budget proposal would cut the developmental center line item even deeper than Governor Baker has proposed and would reduce the service coordinator line item below the amount proposed by the governor.  It would also fund the state-operated group homes at a level below what DDS considers a “maintenance level.”

While the state has closed three of six existing developmental centers since 2008 and is in the process of closing a fourth, funding appropriated to run the remaining three centers may have dropped too fast to maintain existing services in those facilities.  As we recently noted,  years of cuts in the developmental-center line item have lately resulted in the closing of several cottages at the Wrentham Developmental Center, requiring residents to be moved from long-time residential locations.

The Wrentham Center has become a major destination for persons transferred from the developmental centers that have been closed in recent years.

While Governor Baker’s fiscal 2016 budget would cut the developmental center line item by about $375,000 from projected spending, the House Ways and Means budget would cut it by $1 million beyond that.

DDS-operated group homes would get the same amount in fiscal 2016 under the House Ways and Means budget as under the governor’s version of the budget, which amounts to a $2 million reduction from what DDS considers a “maintenance budget.”

Also, the House Ways and Means budget would fund the DDS line item that pays service coordinators at a level $538,000 less than what Baker has proposed.   In March, DDS Commissioner Howe had said Baker’s budget would fund the service coordinator line item at $1.8 million below what DDS had requested.  So the House Ways and Means budget further reduces that proposed funding for the service coordinators next year by more than half a million dollars.

The service coordinators, whom Howe has referred to as “the heart and soul” of DDS, are responsible for ensuring that clients throughout the system are receiving services to which they are entitled.  The service coordinators have seen their caseloads rise dramatically in recent years.

In last week’s conference call, Howe noted the shortfalls in funding under the House Ways and Means budget for the developmental centers, DDS-operated group homes, and service coordinators.  But in what may be a sign of the priority that this administration places on these services, Howe said the Department did not plan to seek amendments to the House budget to increase that funding.

At the same time, the House Ways and Means budget preserves a major funding increase to the corporate providers in the coming fiscal year.  The Ways and Means plan provides for the same $35 million increase from the current year for the DDS corporate residential line item that Baker has proposed.  As of July, this line item will have been increased by more than 28 percent since the filing of a lawsuit by the corporate providers in June 2014 against the then Patrick administration.

While we understand that direct-care workers in corporate, provider-operated group homes are woefully underpaid, it’s not clear how much of the additional funding being sent to the providers is, or will be, going to those workers.  As we have noted, the hundreds of executives working for those provider agencies in Massachusetts have been making out quite well.

The Baker administration is apparently fine with that state of affairs. Terming the House Ways and Means plan “a very reasonable budget,” Howe pointed out that it would add $17 million to the DDS bottom line compared to the governor’s budget.  Under the House Ways and Means budget, the Community Day and Work line item would be almost $10 million higher than what the governor proposed.

The House Ways and Means budget also would provide $12.4 million under a new DDS line item to implement the expansion of DDS eligibility to people with autism, Prader-Willi, and Smith-Magenis Syndrome.

While that expansion of eligibility funding is certainly needed, the Senate has a lot of other work in store for it as well.  We hope that in addition to protecting the sheltered workshops, the Senate begins to address the imbalance in the budget between corporate and state-run DDS care.

Human service providers’ lawsuit boosts their state funding despite deficit

April 7, 2015 4 comments

While programs and services are being cut throughout state government as a result of projected budget shortfalls, corporate human services providers have gotten hundreds of millions of dollars in additional state funding due, at least in part, to a lawsuit they filed against the state.

The irony is that the U.S. Supreme Court has just ruled in a separate case that providers cannot sue to raise Medicaid service rates. So, it’s not clear to us that the Massachusetts providers were on solid legal ground in filing their lawsuit.

In June 2014, the providers sued the then Patrick administration, arguing that the administration was not boosting state funding to them fast enough to satisfy a timetable set in a 2008 law known as Chapter 257.  Chapter 257 established formulas and timetables for increasing provider funding rates.

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 Department of Developmental Services budget, even as it was becoming clear the state was facing major budget shortfalls in the current and coming fiscal years.

In a press release issued on March 4, the day he submitted his Fiscal Year 2016 budget to the Legislature, Governor Baker stated that his administration had allocated $30 million “to resolve litigation and adjust Chapter 257 rates for human service providers.”

The $30 million referred to in the governor’s press release may have understated the impact of the lawsuit. Baker’s proposed funding for the provider group-home line item in the DDS budget for fiscal 2016 is more than $230 million higher than the amount appropriated for that line item in fiscal 2014 when the provider lawsuit was filed.  That is a 28 percent increase.

In contrast, the line item for the state developmental centers would be cut in that same period by almost 9 percent, and state-operated group homes would get an increase of about 13 percent in that time period.

In what sounds like a similar lawsuit to the the litigation in Massachusetts, service providers in Idaho had argued in federal court that Idaho had failed to raise Medicaid payments to them as outlined in a federally approved formula.   But the U.S. Supreme Court ruled on March 31 that private providers cannot sue for higher Medicaid reimbursement rates.

In the suit filed by the Massachusetts providers, state Superior Court Judge Mitchell Kaplan ruled in January that the state had violated Chapter 257 by not setting higher rates for providers.  In response to the suit, the then Patrick administration had initially argued that Chapter 257 could be fulfilled only if the state itself had adequate revenues to do so.

But Judge Kaplan ruled that the state had to comply with the higher rates required under Chapter 257 regardless of whether the funding was available or not.  That would mean that in order to fulfill the requirements of Chapter 257, funding would have to be cut in other areas, which is what has happened.

Like the Idaho providers, the Massachusetts providers had argued that the inadequacy of the state funding was causing them to fail to keep up with rising costs and was resulting in lower paid staff and high staff turnover as well as poorer quality services.  We have maintained, though, that the funding has been adequate to support high salaries for executives running the provider corporations.  Close to $100 million a year is spent on those executive salaries in Massachusetts.

As we’ve noted before, the major funding increases in the provider line item in the past year have increased an already existing imbalance in funding between that line item and accounts for state-run services.

One example of that imbalance is the state-run developmental center line item, which will be some $10.6 million less under Baker’s fiscal 2016 budget than it was in fiscal 2014.  This has led to the necessity of closing several cottages at the Wrentham Developmental Center in the past several months, requiring residents to be moved from long-time residential locations.

An April 2 memo sent to Wrentham Center staff referred to an “immense challenge” in meeting budget constraints facing the Center in the current fiscal year, and a “yet another difficult budget forecast for Fiscal Year 2016.”

At the time the Massachusetts providers filed their suit, a spokesman for the providers explained that they had rejected an offer from the then Patrick administration to meet them more than part-way by providing 90 percent of the full funding increase specified under Chapter 257 as of January 2015.

“…in the end, it wasn’t enough,” the spokesman for the providers said. “At this point, we’ve been as patient as we can be and the law is the law and we want the Commonwealth to abide by the law. Every day that full implementation is delayed, the imbalance and the unfairness grows.”

The providers and the Baker administration, however, do not seem to be as concerned about the continuing and growing imbalance in funding between provider and state-run services.

Public Health Department needs to release report on death of developmentally disabled man

February 13, 2015 7 comments

The Department of Public Health has completed an investigation of the case of a developmentally disabled man who died en route to Lowell General Hospital in February 2012 after having been turned away from the hospital twice without any significant treatment.

We may never know, however, what the result of the investigation is.  The Department, citing the deceased man’s privacy rights, won’t release the report.

We are appealing this denial to the state’s Public Records Division, arguing that the potential public interest in knowing what happened in this case outweighs the privacy rights of a deceased individual.  Our view is that the real potential wrong to this person was done when he was denied treatment by the hospital.  The public, we think, deserves to know what happened here and so do persons with developmental disabilities and their families and guardians.

This case suggests possible inadequate training of health care personnel in the treatment of developmentally disabled persons, which is an issue of concern to advocates for the disabled and to many policymakers.

The National Council on Disability, with which we have had our disagreements, maintains that:

The absence of professional training…for health care practitioners is one of the most significant barriers preventing people with disabilities from receiving appropriate and effective health care.

The man was a former resident of the Fernald Developmental Center.  He had been living in a group home in Chelmsford and was attending a day program in Lowell on the morning of February 6, 2012, when the staff at the day program made the first call to 911 to take him to the hospital.  He had reportedly been having difficulty breathing and was sweating profusely. The hospital released the man shortly after his arrival, however, and sent him back to his group home, according to sources.

By about 8 a.m. the following morning,  the man was slumped over in his wheelchair and sweating heavily, a source said.  A group home staff member called 911 shortly afterward.

A Disabled Persons Protection Commission (DPPC) complaint form stated that the man was observed at the hospital on the morning of February 7 to be sweating profusely, but his vital signs were good when he arrived.  According to the complaint form, the man was sent home with a prescription (the name of which was redacted).  According to sources, this was the second time he had been sent away by the hospital.

The DPPC complaint form stated that shortly after arriving back at the group home, the man began to vomit and then lost consciousness, and that the staff began mouth-to-mouth CPR until paramedics arrived.  The group home received a call from the hospital later that afternoon that the man had died.

Because the man’s death appeared to have been connected with his treatment or lack of treatment by the hospital, the DPPC referred the case to the Department of Public Health for investigation.

Did the apparent failure of Lowell General Hospital to properly diagnose this man’s illness and provide him with adequate treatment result from a lack of training in disability issues?  Did the Public Health Department consider that question in their investigation of this case?  Unless the Department releases its report, we will never know the answers to those questions.

While the Public Health Department’s position is that a state law [(M.G.L. c. 66A, s. 2(k)] prohibits them from releasing medical information about an individual, even if that person is deceased, we are not in agreement with their interpretation.

First, there do not appear to be consistent policies among state agencies in releasing investigative reports on deaths of developmentally disabled persons.  The Disabled Persons Protection Commission (DPPC) has released a number of these reports to us after redacting what they considered to be identifying information.

Secondly, while we have blogged about this case, we have never used the name of the individual involved or tried to publicly identify him.  A Department of Public Health attorney wrote to us, though, that even if we did not use the individual’s name in a blog post about the investigative report, “it is possible for someone to utilize the information that is available (age and date of death) and potentially come up with the patient’s name.”   While that is possible, we do not understand why anyone would do that in this case.  It seems farfetched.

Third, even if it were true that someone might reveal the identity of the individual involved, there appears to be case law that limits privacy rights of deceased individuals.  A Hofstra Law Review article notes that “while postmortem medical confidentiality exists, it is much narrower than the privacy protections guaranteed to the living.”  In Massachusetts, case law involving privacy rights after death does not appear to have been settled.  (See Ajemian v. Yahoo!, Inc.)

Finally, the privacy statute cited by the Public Health Department [(M.G.L. c. 66A, s. 2(k)] states only that the Department must:

maintain procedures to ensure that no personal data are made available in response to a demand for data made by means of compulsory legal process, unless the data subject has been notified of such demand in reasonable time that he may seek to have the process quashed.

This seems to imply that the person involved has to be living. And, as attorney Steve Sheehy notes in a comment to this post below, at most this statute would require notice to the deceased person’s executor or representative.

Prior to filing our appeal, I asked the Public Health Department attorney whether it might be possible to provide us with a copy of the investigative report with explicit personal data or medical information redacted.  As I noted, our interest is whether the Department has investigated or commented on the hospital’s procedures for training staff to treat persons with developmental disabilities.

To the extent that the Department’s report addresses hospital policies and procedures in this case, it would probably not be necessarily for us to know specific medical details about this individual.  To date, I have not received an answer from the Department to my query.

Unfortunately, this is not an isolated case of apparent institutional secrecy.  When it comes to deciding whether to make public reports of potential mismanagement by human services or health care facilities, the natural instinct of public managers and administrators seems to be to keep it all secret and cite privacy rights as the reason.  That has certainly been the practice at the DPPC, but at least, as noted, the DPPC has released redacted reports.

We hope the Public Records Division, which is part of the office of Secretary of the Commonwealth Bill Galvin, will make the right decision and order the Public Health Department to make known the results of its investigation of this troubling Lowell General Hospital case.

Compensation of provider executives in MA reaches $100 million

January 28, 2015 Leave a comment

More than 600 executives employed by corporate human service providers in Massachusetts received some $100 million per year in salaries and other compensation, according to our updated survey of the providers’ nonprofit federal tax forms.

By our calculations, state taxpayers are on the hook each year for up to $85 million of that total compensation.

We reviewed the federal tax forms for some 300 state-funded, corporate providers, most of which provide residential and day services to persons with developmental disabilities.

The following is a summary chart of our latest survey results (click on the chart to enlarge):

Vendor survey summary chart 1.22.15

For the complete survey chart, click here.

We first released our survey about a year ago, when we found that more than 550 executives working for some 250 state-funded corporate providers of services to people with developmental disabilities in Massachusetts received a total of $80.5 million in annual compensation.

COFAR has also previously raised concerns that increasing amounts of money going to provider executives have not translated into higher pay for direct-care workers in Massachusetts.

The latest survey reports on 635 executives who received total annual compensation of $102.4 million and average annual compensation per employee of $161,231.  The survey was based on provider tax forms filed in either the 2011 or 2012 tax years.  Those tax forms are available online at www.guidestar.org.

The survey sample included 100 CEO’s and presidents, making an average of $210,227 in salaries and benefits; and 107 executive directors receiving an average of $130,835 in compensation.  As the chart above shows, the survey also included 67 chief financial officers, 31 chief operating officers, 100 vice presidents, 110 directors, and 120 other officers, all earning, on average, over $100,000 a year.

A state regulation  limits state payments to provider executives to $158,101, as of fiscal year 2013. Money earned by executives above the state cap is supposed to come from sources other than state funds.

Based on this regulation, we calculated that provider executives are eligible for up to $85 million a year in state funding to cover those total salary and benefits costs.  Our calculation was based on identifying the companies paying executives at or above the state threshold of $158,101, and assuming that amount as the maximum state payment for each of those companies’ executives.

Among the top-paying providers in our latest survey was the May Institute, which paid two employees a total of $999,221 in the 2012 tax year.  Both employees were listed as president and CEO of the provider.  The May Institute’s federal tax form shows that one of the two employees, Walter Christian, worked for the company until December 2012 and received a total of $725,674 in salary and benefits in that tax year, which started on July 1, 2012. Christian was replaced as president and CEO by Lauren Solotar, who received a total of $273,547 in that same tax year, which ended on June 30, 2013.

Despite the regulation capping compensation payments by the state, the state auditor reported in May 2013 that the state had improperly reimbursed the May Institute, a corporate provider to the Department of Developmental Services, for hundreds of thousands of dollars paid to company executives in excess of that cap. COFAR had previously reported in 2011 that the state may have paid Christian and other executives of the May Institute more than the state’s regulatory limit on individual executive salaries.

The following charts show the top earning presidents/CEO’s and executive directors in our latest survey and the number of those executives holding each title in each company:

Pres.CEO top 10

Executive directors top 10

Most of the providers surveyed are under contract to the Department of Developmental Services, which manages or provides services to people with intellectual disabilities who are over the age of 22.  The providers operate group homes and provide day programs, transportation and other services to tens of thousands of intellectually disabled persons in the DDS system.

As we have noted, the state’s priority has been to boost funding dramatically to corporate residential providers, in particular, while at the same time slowly starving state-operated care, including state-run group homes and developmental centers, of revenue.

Funding to DDS corporate residential providers rose past the $1 billion mark for the first time in the current fiscal year.  The line item was increased by more than $140 million –or more than 16 percent—over prior-year spending in fiscal 2015 dollars.  At the same time, both the former governor’s and the legislative budgets either cut or provided much more meager increases for most other DDS line items.

More financial information about nonprofit corporate providers, including compensation of executives, can be found at www.guidestar.org.

It’s time to put a priority on state-operated care for the developmentally disabled

January 14, 2015 3 comments

Here’s our letter to the Baker administration, asking them to put a priority on state-operated care for the developmentally disabled:

Kristen Lepore
Secretary
Executive Office of Administration and Finance
State House, Room 373
Boston MA, 02133                                                                 January 12, 2015

 

Dear Secretary Lepore:

We are writing to urge you to consider making the funding of state-operated care for the developmentally disabled a priority of the Baker administration.

For too long, state government has been divesting itself of its responsibility to provide care for the most vulnerable of its citizens, and has failed to adequately monitor and control the handover of human services to state-funded corporate providers.

The state’s priority has been to boost funding dramatically to corporate residential providers, in particular, while at the same time slowly starving state-operated care, including state-run group homes and developmental centers, of revenue.  This has led to a gross imbalance in the Department of Developmental Services budget.  The chart below depicts this imbalance.

DDS budget comparison chart

As the chart shows, funding to DDS corporate residential providers (line item 5920-2000) rose past the $1 billion mark for the first time in the current fiscal year.  The line item was increased by more than $140 million –or more than 16 percent—over prior-year spending in FY 2015 dollars.  At the same time, both the former governor’s and the legislative budgets either cut or provided much more meager increases for most other DDS line items.

The state-run developmental center line item (5930-1000) was cut in the current fiscal year by more than 13 percent in inflation-adjusted dollars, while the state-operated group home line item (5920-2010) was raised by less than 7 percent.

We have calculated that if the increase in the provider residential line item had been reduced by just 2.1 percent – to a 14.7 percent increase – as much as $18 million could have been redirected to the state-operated group homes, DDS service coordinators, the Autism Division, Turning 22 program, Respite and Family Supports, and the remaining developmental centers in the state.

But the previous administration was not satisfied even with a $140 million increase in funding for the corporate provider line item.  In late November, despite a projected $329 million budget deficit in the current fiscal year, the Patrick administration proposed a supplemental budget increase of $42 million in the provider residential line item.  While the administration made more than $200 million in emergency “9C” cuts  and proposed additional cuts to address the projected deficit, it included the $42 million in proposed supplemental funding for the DDS corporate residential line item in the same bill (H. 4536) proposing mid-year cuts in local aid and other accounts.

In addition to the erosion of critical state-funded care, the state’s priority of boosting funding to corporate providers has created a poorly monitored system of DDS contractors that has financially benefited provider executives.  Our own survey of the DDS provider system has shown that the state has provided between $80 million and $90 million a year to a bureaucratic layer of corporate CEO’s, vice presidents, executive directors, and other executives.  At the same time, wages of direct-care workers in provider residences have been flat or have declined in recent years.

State-operated group homes and developmental centers

We believe the misplaced priority on funding of corporate providers ignores the wishes of family members and guardians around the state for more choice and availability in state-operated care.  DDS data show that close to 42 percent of the 372 individuals moved out of developmental centers in the state since 2008 were placed in state-operated group homes.  Another 45 percent of those residents were transferred, at the request of their families, to remaining developmental centers.  Just 13 percent of those individuals went to provider-run group homes.

Yet, since 2008, 157 new provider-operated group homes have been built in the state, according to information provided by DDS.  In that time, only 38 new state-operated group homes have been built, and three have been closed or converted to provider-operated homes.  DDS has projected that it will build an additional six state-operated group homes, but will close or convert five state-operated facilities to provider residences.

Additional funding is needed for the state-operated group home system to preserve it as a choice for people waiting for residential care in the DDS system.

State-operated developmental centers

As a result of class-action lawsuits dating back to the 1970’s, the State of Massachusetts dramatically improved care in its state-run developmental centers, bringing them to a world-class level of care with dedicated, highly-trained staff.  But starting in 2003, the Romney administration and subsequently the Patrick administration began efforts to close the state’s then six remaining developmental centers.

Starting in 2008, the Patrick administration stepped up the closure efforts and shut the Monson, Glavin, Templeton, and Fernald Developmental Centers, in many cases over the strong objections of families and advocates of the residents there.  And despite the demonstrated desire of families and guardians for the intensive and high-quality care that the developmental centers provide to the most profoundly developmentally disabled, the developmental center line item has been cut repeatedly since 2008.  The current-year DDS budget cut the developmental center line item by more than 13 percent in the current fiscal year alone, as noted.

We hope the Baker administration will consider restoring balance to DDS budget accounts by increasing funding to the developmental center and state-operated group home line items.  State-operated care continues to be better monitored than provider operated care; and training as well as pay and benefits provided to staff in state-run facilities continue to be higher than in provider-run residences.

Ultimately, only government is in a position to respond directly to the public interest and to the wishes of families and guardians of the most vulnerable people among us.  Federal law recognizes that fact by designating families as the “primary decision makers” in the care of individuals with developmental disabilities [(42 U.S.C. §2001(c)(3)].

Thank you for your consideration.

Sincerely,

Colleen M. Lutkevich               Thomas J. Frain, Esq.               Edward Orzechowski

Executive Director                     President                       President, Advocacy Network