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It’s time for the Legislature to investigate the privatized DDS system

November 13, 2017 1 comment

Although seven employees of a corporate provider have been found to be at fault in a case in which a developmentally disabled client nearly died in a group home after aspirating on a piece of cake, we hope the Baker administration, the Legislature, and the media will not treat this as an isolated case.

We understand that the Department of Developmental Services has issued an “action plan” in response to this incident, and the Legislature’s Children, Families, and Persons with Disabilities Committee is reviewing documents regarding the matter.

The Essex County District Attorney has opened an investigation that could result in the lodging of criminal charges against one or more of the employees of the Beverly-based provider, Bass River, Inc.

Both The Boston Globe and The Salem News have reported (here and here) on the DDS investigation of the case, which found that inadequate care by the staff of the group home caused the 29-year-old man, Yianni Baglaneas, to contract severe pneumonia nearly a week after he reportedly aspirated on the piece of birthday cake on April 9.

The DDS report also alleged that a high-level Bass River employee attempted to obstruct the investigation by instructing group home staff not to cooperate with the investigation and by removing records from the residence.

On April 15, Yianni was admitted to Addison Gilbert Hospital in Gloucester in critical condition, six days after aspirating on the cake, and then spent 11 days on a ventilator and a week in the Intensive Care Unit at Mass. General Hospital.

Despite the relatively quick response to the DDS report by the legislative committee and others, what we haven’t yet seen is evidence that those in administrative and other positions of authority understand or are concerned that Yianni’s case is a symptom of a larger problem. He is the victim of a dysfunctional system overseen and managed by the DDS that is rife with abuse and neglect and a disregard for the rights of developmentally disabled individuals and their families. It is also a system that has been subject to extensive and ongoing privatization.

On October 25, we emailed the chairs of the Children and Families Committee, urging them to hold hearings on those larger issues. Two days later, the chief of staff to Representative Kay Khan, the committee’s House chair, emailed back saying the committee chairs were taking “immediate action” and were requesting documentation from “a number of agencies in order to obtain more details about this serious incident.”

The email from Khan’s chief of staff said that as soon as Khan’s office had reviewed the documents, the chairs would “make a determination about pursuing next steps regarding the DDS group home system.”

We are glad that the committee chairs recognize the seriousness of Yianni’s case and that they are considering next steps regarding the group home system. At the same time, the chief of staff’s email doesn’t make clear that the chairs are cognizant that there is a system-wide problem involved here.

The chief of staff’s email states only that the committee chairs have requested documentation about Yianni’s particular case. I’m not sure how they get from there to being able to make a determination about next steps regarding the entire group home system.

It would seem that the committee should request a much broader set of documentation than the documents relating to just this one case. In our October 25 email, we offered to assist the committee in gathering information on the problems affecting the system as a whole. To date, the committee has not sought any further information or help from us.

Meanwhile, the Globe’s editorial page rejected an op-ed we submitted in which we similarly tried to place Yianni’s case in the context of the wider group home issues. It’s concerning that the most powerful media outlet in the state does not seem to be interested that there is a wider problem that potentially affects thousands of people in the DDS system.

As a nonprofit advocacy organization for persons with developmental disabilities and their families, we have followed this situation for many years. The association of increased privatization with poor oversight and abuse and neglect is not coincidental. The inadequate care and conditions in Yianni’s group home that led to his near-fatal pneumonia are all too common in group homes around the country.

In 2013, after The New York Times and The Hartford Courant both ran separate investigative series on abuse and neglect in group homes in their respective states, U.S. Senator Chris Murphy of Connecticut called for a federal investigation of deaths and injuries in privatized care. Unfortunately, such a comprehensive federal investigation has still not been undertaken.

It is important to place the present-day state of affairs within the DDS system in an historical context. Until the early 1990s, the system was dominated in Massachusetts and other states by large, poorly run institutions. Those facilities were grossly unsanitary and were essentially warehouses of abuse and neglect.

That all changed starting in the 1970s when federal courts around the country issued consent decrees in response to class-action lawsuits, and required substantial upgrades in care and conditions in the existing institutions. At that same time, a new system of smaller, privately run but state-funded group homes began to appear as residential options for many of the former residents of the larger institutions. A network of state-run group homes was created as well in Massachusetts.

During the past 20 years, the privatized group home system has overtaken and surpassed both the state-run group home network and the large facilities both in terms of state funding and number of residents. All but two of the large facilities have been closed in Massachusetts.

But the new system of thousands of dispersed group homes has its own set of structural problems. This system that replaced the large, centralized facilities has been much harder for the state to monitor with regard to care and conditions and with respect to the finances of the nonprofit agencies that directly operate the residences. In addition, the group home system operates today under a waiver of stringent federal Medicaid regulations that still govern the remaining large facilities.

The growth of the corporate provider system has also resulted in the creation of a largely hidden bureaucracy of highly paid executives of those nonprofit agencies. These executives have seen their own levels of compensation rise as the wages of direct-care staff have remained stagnant or failed to keep pace with inflation.

Due to the combination of poor oversight and and relatively low pay and training of direct-care staff, the privatized group-home system has for some time exhibited many of the warehouse-like characteristics of the former institutions prior to the 1980s. In addition to failing to address problems of abuse and neglect, the group-home system has not been able to provide promised openness and community integration. We hear about stories like Yianni’s all the time.

Yet, in Massachusetts, the private providers have established themselves as a powerful lobbying force on Beacon Hill and have essentially captured the system’s managerial and regulatory agency, DDS, which has continued to press for more and more privatization of services. The result today is a growing imbalance in state funding of DDS services. A priority has been placed by successive administrations and by the Legislature in Massachusetts on privatized care at the expense of state-run care.

In addition to worsening the problems of abuse and neglect, the funding imbalance has reduced the availability of state-run services as a choice to a growing number of people waiting for residential care and placements.

These issues need to be examined in a comprehensive way. That’s why we are calling for hearings by the Legislature’s Children, Families, and Persons with Disabilities Committee on problems with privatized care and what needs to be done to address them.

We’re urging people to call Rep. Khan (617-722-2011) or Senator Joan Lovely (617-722-1230), Senate chair of the Children and Families Committee, to ask the committee to schedule hearings on the privatized DDS group home system in Massachusetts.

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DDS report faults provider and charges cover-up in near-fatal, group home food aspiration case

October 25, 2017 1 comment

(Update: The Essex County District Attorney’s Office confirmed this morning (October 26) that they have opened a criminal investigation into this matter.)

As The Salem News reported this morning (October 25), an investigation by the Department of Developmental Services of the near death of a developmentally disabled man who aspirated on a piece of cake in his group home concluded that seven employees of the private provider that operated the residence were at fault in the matter.

The scathing report, which is dated September 8, also stated that a high-level employee of the Beverly-based provider, Bass River, Inc., removed key records from the facility concerning the matter and instructed staff not to cooperate with the DDS investigation. The findings have reportedly led to a criminal investigation by the Essex County District Attorney’s Office.

The report was released by the Disabled Persons Protection Commission, an independent agency, which investigates abuse and neglect of disabled individuals, and which had referred the case to DDS to investigate.

In August, we first reported that the staff of the group home had failed to react for nearly a week after the 29-year-old man, Yianni Baglaneas, reportedly aspirated on a piece of birthday cake in the residence on April 9. He was admitted to Addison Gilbert Hospital in Gloucester in critical condition on April 15, and spent 11 days on a ventilator and a week in the Intensive Care Unit at Mass. General Hospital.

Aspirating or inhaling food into the lungs is a particularly serious danger among people with intellectual disabilities.

The DDS report did not identify the Bass River staff and other employees by name, but one of the individuals cited for abuse and neglect is believed to be the group home director, and another is the provider’s residential director who had authority over all of the agency’s group homes.

According to the report, the residential director acknowledged instructing staff of  Yianni’s residence not to cooperate with the DDS investigation. The director also acknowledged removing records from the facility.  The DDS investigator was subsequently unable to locate key records relating to Yianni’s care.

The DDS report stated that charges of abuse and mistreatment were substantiated in the case because the group home staff was negligent in failing to ensure that Yianni, who has Down Syndrome, regularly used a portable breathing mask at night called a CPAP (continuous positive airway pressure) machine. Based on the input of a medical expert, the report concluded that the failure to use the machine was the cause of the aspiration that led to Yianni’s near-fatal respiratory failure.

A group home staff member did bring Yianni to a nurse practitioner  at Cape Ann Medical Center in Gloucester on April 13, four days after he aspirated on the cake. The nurse practitioner diagnosed Yianni’s condition as bronchitis and an upper-respiratory infection. She performed a nebulizer treatment on him and prescribed cough syrup and Mucinex and Robitussin, which are over-the-counter decongestants.

According to the DDS report, the nurse practitioner stated to the staff member that Yianni should be brought back if his condition worsened, but that Yianni was never brought back to the medical center.

The DDS report charged that the group home staff, including the house director, committed mistreatment for failing to ensure that Yianni received the prescribed decongestant medications. And the report charged that the house director committed mistreatment in failing to follow up on recommendations of Yianni’s day program staff on April 14 that the staff seek medical attention for him because he appeared to be very ill.

Yianni’s mother, Anna Eves, said she believes criminal charges should be filed in the case in light of the DDS report. “It’s easy for them (the provider and key staff) to abuse and neglect people in the shadows, and this needs to be brought out into the light of day,” she wrote in an email. “I have felt physically ill since reading this report and reading the absolute disregard for my son’s well being. I cannot believe I ever trusted them at all.”

The DDS report did not address the issue of possible criminal charges, but did recommend that DDS re-evaluate the group home’s license to continue to operate.

Yianni was actually taken to Addison Gilbert Hospital on April 15 by his mother, who had not seen him during the previous week. She met him at a Special Olympics track practice in Gloucester to which he had been brought by a staff member of his group home.

According to the DDS report, Yianni’s Special Olympics track coach stated that Yianni appeared to be extremely lethargic, coughing and having difficulty breathing. Yet no one from the group home informed either the coach or Yianni’s mother that Yianni was seriously ill.

That group home staff member told the investigator that Yianni had been taken to the track practice because the group home was closing for the weekend, and it did not matter how sick he was.

We do not think Yianni’s case is unique in Massachusetts. This morning, I sent an email to the House chair and Senate vice chair of the Children, Families, and Persons with Disabilities Committee, renewing a call we have made for a hearing into issues surrounding oversight of privatized human services. We have called for such hearings by the committee in the past, to no avail.

Alleged obstruction of the investigation

The DDS report described a number of instances of apparent obstruction of the DDS investigation of Yianni’s case.

According to the report, the Bass River residential director acknowledged to the investigator that she removed documents from the group home before the investigator could see them. She also acknowledged to the investigator in an initial statement that she had directed staff in the group home not to cooperate with the investigation. She later changed that statement, according to the report.

One witness told the investigator that he heard the residential director say to a staff member  that “there will be consequences” if he cooperated with the investigation.

The report stated that records that could not be found or obtained by the investigator included daily and after-hours shift reports, emails from the time-frame in question, medication-related documents, Yianni’s ISP or care plan reports, and staffing schedules.

Failure to use the CPAP machine

According to the DDS report, Yianni has been diagnosed with sleep apnea, a potentially dangerous condition that is characterized by interrupted breathing during sleep.

The report concluded that seven employees of Bass River were negligent in failing to administer prescribed medication and to ensure that Yianni used his doctor-ordered CPAP machine, and that this failure directly contributed to his “serious, life-threatening medical condition.”  That failure “more likely than not caused Yianni to aspirate while eating or sleeping, directly causing the aspiration pneumonia,” the report stated.

In a 180-day period between October 2016 and April, Yianni only used the CPAP mask on 36 days, or 20 percent of the time, according to the report.

The medical expert told the DDS investigator that without the nightly use of the CPAP machine, Yianni’s breathing would stop while he was sleeping, his heart rate would rise, and his red blood cell count would drop to levels that could be life threatening. In addition, this situation would have affected Yianni’s brain function negatively during his waking hours, causing him to have difficulty chewing and swallowing food and to aspirate on it.

The medical expert determined that Yianni could have either aspirated on food or fluids built up in his throat due to not using the CPAP machine.  According to the expert, there is a direct link between sleep apnea and aspiration pneumonia when the apnea is not treated with a CPAP mask.

At least two Bass River employees stated that they were aware the staff were not making sure Yianni used the CPAP machine, but failed to do anything about it.

One staff member stated that on the night of April 9, when Yianni reportedly aspirated on the piece of cake, she had heard him wandering through the house, but she did not direct him back to bed. She also did not see to it that he was wearing the CPAP mask because she knew he would remove it, and therefore, she said, “‘I don’t bother.'”

The report stated that Yianni’s mother became aware that the CPAP machine was not being used based on an internal reporting chip in the machine. As a result, she emailed the Bass River residential director in March, requesting that the group staff make sure to use the machine each night.

The residential director at first told the DDS investigator that she was not aware that Yianni was not using the CPAP machine, but she did not deny that she received his mother’s email and acknowledged that she apparently neglected to follow up on the issue with the group home staff.

The house director acknowledged that she was contacted by an unidentified group home staff member that Yianni was not feeling well and was also told on April 14 by Yianni’s job coach that he appeared to be very ill that day, but she did not follow up with either of these notifications.

The house director also admitted that she falsely told Yianni’s mother on April 13 that Yianni was not ill, but only had allergies. She said that she misled Yianni’s mother about that because she had confused Yianni with another resident.

The report also stated that, according to the staff, the house director, was rarely present in the group home. She told the investigator that she was frequently out at the Bass River office and at meetings, but she was unable to list meetings that would have taken up that much of her time, according to the report.

The report stated that other troubling characteristics of the group home include the fact that none of the staff were scheduled to be awake at night even though Yianni, in particular, was known to wander around at night and to take food from the refrigerator.

In addition, staff who were trained in administering medications, stated that they were only part time and that it was not their responsibility to do so.

Today’s Salem News article noted that Yianni grew up in Rockport and “appeared to thrive and was well-known in the community.” The article stated that a 2005 story in The Gloucester Times described how he had obtained his first job, at Smith’s Hardware, “where he greeted customers with a firm handshake or high-five and sometimes, a hug.” He was later voted king of his high school prom.

As noted, Yianni’s case is not unique. Poor quality care is a serious problem throughout the DDS system, and Yianni’s case is further evidence of that. The Children and Families Committee needs to take the first step in bringing official scrutiny to this system and beginning to suggest needed improvements to it.

 

State auditor has proposed regs that could weaken the Pacheco Law

October 3, 2017 Leave a comment

The Pacheco Law has over the years been one of the more effective available checks on the runaway privatization of state services.

But the law, which has been the target of continual attacks from privatization proponents, is facing a new challenge, and this time it’s from an unlikely source — the office of State Auditor Suzanne Bump herself.

Bump’s office is charged with overseeing the law, which requires that state agencies seeking to privatize services must first make the case to the auditor that doing so will both save the taxpayers’ money and maintain or improve the quality of the services. Given the prominent role her office plays, it isn’t surprising that Bump has been one of the law’s most effective and vocal defenders.

But COFAR is now joining with state employee unions in opposing a number of provisions in a set of regulations, which Bump’s office has recently proposed to govern the continued implementation of the law. Although the Pacheco Law, also known as the Taxpayer Protection Act, has been in effect since 1993, it is only now that the auditor’s office has proposed regulations regarding the law. The comment period on the regulations ends October 31.

We are in agreement with the unions that a number of provisions in the proposed regulations, as they are currently drafted, would appear to make the Pacheco Law less effective in ensuring that when agencies privatize services, they do so for the right reasons.

In recent years, the Pacheco Law has been embroiled in political battles over the privatization of services and functions at the MBTA. The law has also played a more limited, but still contentious, role in the ongoing privatization of human services in Massachusetts.

Last year, Bump’s office approved a proposal under the Pacheco Law to privatize mental health services in southeastern Massachusetts after the for-profit Massachusetts Behavioral Health Partnership (MBHP) claimed it could save $7 million in doing so.

Prior to the auditor’s decision in the MBHP case, we joined the SEIU Local 509 and the AFSCME Council 93 state employee unions in raising concerns about that privatization proposal. We saw some potentially troubling aspects of the proposal that we thought might be realized due to existing loopholes and ambiguities in the Pacheco Law. But we think the solution to that situation should be to strengthen the law, not weaken it.

The first and fourth objections below to the proposed Pacheco Law regulations have been raised by us in written comments sent last week to the state auditor. The second and third objections were raised in preliminary testimony submitted to the auditor last month by SEIU Local 509, and the fifth objection was raised in testimony submitted by AFSCME Council 93:

1.   A provision in the proposed regulations would appear to give state agencies an incentive to boost the actual cost of their in-house services if a Pacheco Law review determined that those services should not be privatized.

As part of the review process under the Pacheco law, a state agency seeking to privatize services must demonstrate to the auditor that contracted services would cost less than an In-House Cost Estimate, which is described as “a comprehensive written estimate of the costs of regular agency employees’ providing the subject services in the most efficient and cost-effective manner.”

That requirement lies at the heart of the Pacheco Law because it is meant to ensure that if services are privatized, taxpayers will indeed save money.

The proposed regulations appear at first glance to bolster that cost-saving purpose in stating that if the work is retained in-house after a Pacheco Law review, the state agency is expected make sure the actual work stays within the In-House Cost Estimate.

But the regulations then go on to state that if the agency fails to keep the actual in-house costs down, the agency may issue another request for bids or reopen negotiations with the contractor that would have been the successful bidder under the earlier request for bids.

This provision in the regulations is not in the language of the Pacheco Law itself. And rather than ensuring that costs of in-house services would stay below the In-house Cost Estimate, we think the provision might actually have the opposite effect.

That is because the penalty on the agency for failing to keep the in-house costs down is actually something that the agency would consider to be beneficial to it, i.e. the agency would now be free to privatize the service. It could either issue another request for bids or reopen negotiations with the contractor that lost out to the state employees in the previous review by the auditor.

The regulations do not state that a subsequent review by the auditor would be required under the Pacheco Law if the agency decided to reopen negotiations with the contractor.

In any event, the same state agency that filed under the Pacheco Law to privatize a service would be allowed to keep getting further bites of the privatization apple if it failed to keep in-house costs under control. Thus, this provision would appear to give the agency an incentive to allow in-house costs to rise or even to actively boost those costs in order to do what it wanted in the first place – privatize the service.

Further, there is no provision in the proposed regulations that would require the agency to restore the in-house provision of the service if the service were privatized and the agency was unable to keep the contracted service costs from rising. Thus, our concern is that this provision in the proposed regulations may actually encourage higher costs of both contracted and in-house services rather than serving, as the Pacheco Law intended, to keep those costs low.

2. The proposed regulations appear to weaken provisions in the Pacheco Law that are meant to ensure continuing quality of services.

The Pacheco law, as noted, requires that in addition to demonstrating a cost savings, a state agency seeking to privatize services must demonstrate to the auditor that the quality of the services provided by the private bidder will equal or exceed the quality of services done by state employees.

The proposed regulations state that the agency’s privatization proposal must include a Written Scope of Services that relies on one or more of six performance measures including quality, timeliness, quantity, effectiveness, cost and/or revenue.

Those enumerated performance measures are not in the actual language of the Pacheco Law. But that’s not the problem. The problem lies in the “one or more” statement regarding the performance measures.

As SEIU Local 509 notes, the regulatory provision implies that an agency could choose just one of the performance measures listed in the Written Statement of Services and ignore the rest, and still potentially be certified by the auditor as having satisfied the requirements of the statement.

For instance, a company might provide services that are provided in just as timely a manner as they are provided by state employees, but that does not mean that the private company will provide the services as effectively as state employees or provide the same quantity of services as the state employees provide.

We agree with Local 509 that the regulations should be reworded to require the vendor to demonstrate that it will either equal or exceed all six of the performance measures in the Written Statement of Services.

3. The proposed regulations fail to ensure that contractors will not cut wage rates or health benefits of staff after the contract is renewed.

Under the Pacheco Law review, an outside contractor’s proposed bid to privatize a service must specify a minimum level for wages and health care benefits for its employees.

However, the Pacheco Law does not require a new review by the auditor when a privatization contract expires after five years, and is renewed.  As a result, the SEIU and COFAR have raised the concern that a contractor that wins a contract under the Pacheco Law could cut its wage rates and health benefits once the contract was renewed at the end of its minimum five-year term.

According to the SEIU, the Pacheco Law, however, is written in such a way that regulations could be drafted that would require the contractor to maintain existing wage levels and health care benefits when the contract is renewed. The regulations, as drafted, however, do not address that potential outcome.

As the SEIU noted, the language in the regulations related to minimum wages and health insurance benefits of a successful bidder for privatized services avoids stating that these requirements continue on after the expiration of the original privatization contract.

We raised a concern along with the SEIU last year in the mental health service privatization case that the Baker administration was interpreting the Pacheco Law to allow MBHP, the for-profit company, to cut its proposed wage rates within roughly a year after starting to provide those services and potentially to pocket the extra profits. Citing that and other issues, the SEIU ultimately appealed auditor’s approval of the privatization case to the state Supreme Judicial Court, which upheld the auditor’s position.

The SEIU later noted that neither the auditor nor the SJC addressed the concern about potential cuts in wages and benefits under renewed contracts. We believe the regulations should state that a contractor cannot attempt to evade the intent of the Pacheco Law by reducing wages and benefits of employees when the contract expires or is renewed.

4. The proposed regulations require the In-house Cost Estimate to include equipment depreciation, which inappropriately reflects a sunk cost

The proposed regulations state that in determining the in-House Cost Estimate as part of a privatization submission to the auditor, the state agency must consider equipment depreciation, among other things, as a direct cost of in-house services.

The regulations state that depreciation is a calculated cost based on the acquisition cost of equipment or other assets plus transportation and installation costs.

It would seem that requiring depreciation to be included in the In-house Cost Estimate would make it easier for the contractor to beat that cost estimate. At the same time, an­­­­­­ acquisition cost is a sunk cost. As such, we do not believe it is relevant in any price comparison going forward.

As Investopedia notes in an article on sunk costs, a sunk cost is:

… a cost that cannot be recovered or changed and is independent of any future costs a business [or public agency] may incur. Since decision-making only affects the future course of business, sunk costs should be irrelevant in the decision-making process. Instead, a decision maker should base her strategy on how to proceed with business or investment activities on future costs.

It seems to us that the acquisition cost of a piece of equipment is a cost that cannot be recovered or changed and is independent of any future costs the agency may incur. More importantly, the depreciation expense associated with an asset cannot be avoided in the future through the privatization of a service.

Say an agency buys a van to transport clients as part of a service that it wants to privatize. Once the van is purchased, it’s a sunk cost even if that cost is depreciated for accounting purposes over the useful life if the vehicle.

As we understand it, the purpose of the Pacheco Law is to compare contractor bids with in-house costs that are considered likely to be avoided in the future if a service is privatized. As the auditor’s Guidelines for Implementing the Commonwealth’s Privatization Law (June 2012) state:

When determining the potential cost savings associated with the contracting out of a service, the appropriate in-house costs to use in the comparison are the avoidable costs (P. 13). (my emphasis)

Even if the agency privatizes the service for which the van is used, the sunk cost incurred in purchasing that van cannot be avoided even if the agency might avoid the cost of directly paying the driver, for instance.

The Pacheco Law itself does not specify which costs must be considered in calculating the in-house cost of providing services other than stating that those costs should include, but not be limited to, pension, insurance, and other employee benefit costs. For that reason, we believe that equipment depreciation costs should not be included in developing the In-House Cost Estimate.

5. The proposed regulations fail to define “permanent employee,” and therefore provide a loophole for circumventing the Pacheco Law 

Both the Pacheco Law and the proposed regulations define a “Privatization Contract” that is subject to the law as an agreement “…by which a non-governmental person or entity” provides services that are “substantially similar to” services provided by “regular employees” of the agency.

The problem here is that the law itself doesn’t define the term “regular employee,” and the regulations do not make things much clearer. In fact, the regulations simply state that a “regular employee” is a “permanent employee.” The regulations do not offer any further definition of “permanent employee.”

AFSCME Council 93 notes that the definition of “regular employee” as simply a “permanent employee” creates a potential loophole that could allow agencies to privatize services without a Pacheco Law review.

In fact, it appears that is exactly what happened earlier this year. AFSCME claims the lack in the Pacheco Law of a clear definition of a “regular employee” allowed the state Department of Conservation and Recreation to privatize parking fee collections at state beaches without a Pacheco Law review because the work supposedly involved short-term seasonal workers and not permanent employees.

AFSCME points out, however, that the DCR’s short-term workers are hired on a regular schedule each year in the same way as the department’s long-term seasonal employees who are covered by a collective bargaining contract.

Moreover, even though the contractor chosen by DCR sweetened the privatization deal by offering the department an upfront payment of $1.2 million, AFSCME stated that the privatization deal was still projected by the department to cost taxpayers $500,000 more than keeping the service in-house.

We support AFSCME’s suggestion that at the very least, the regulations should define regular or permanent employees as including any state or public higher education worker covered under a collective bargaining agreement.

In sum, we support the auditor’s efforts to clarify the Pacheco Law as much as possible through the issuance of regulations. We would just urge the auditor to make the changes that we and the unions are suggesting in this case.

 

 

Living wage in Massachusetts suffers a setback

In an apparently little-noticed setback to the effort to raise the minimum wage in Massachusetts, the legislative conference committee on the state budget rejected a living wage for direct-care workers in human services earlier this month.

The conference committee tossed out language that would have required corporate human services providers to boost the pay of their direct-care workers to $15 per hour.

That language had been proposed by Senator Jamie Eldridge and had been adopted in the Senate budget, but it wasn’t in the House budget, so it went to the conference committee. The conference committee chose not to include Eldridge’s language in its final budget even though the inclusion of the language would not have affected the budget’s bottom line.

In a press release issued in May when the Senate adopted his measure, Eldridge termed a $15-per-hour wage for direct-care workers “part of a growing movement to provide a living wage to every worker in Massachusetts.”

An aide to Eldridge said last week that the direct-care wage boost had been requested by SEIU Local 509, the state-employee union that represents human services workers. The aide said, however, that Eldridge had no immediate plans to file legislation to keep the momentum going for that living wage.

We have urged Senator Eldridge to keep the living wage movement going. In the human services arena, the lack of a living wage for direct-care workers appears to be closely related to the rapidly increasing privatization of care.

As state funding has been boosted to corporate providers serving the Department of Developmental Services and other human services departments, a large bureaucracy of executive-level personnel has arisen in those provider agencies. That executive bureaucracy is suppressing wages of front-line, direct-care workers and is at least partly responsible for the rapidly rising cost of the human services budget.

Ironically, a key reason for a continuing effort by the administration and Legislature to privatize human services has been to save money. However, we think that privatization is actually having the opposite effect.

In May, the SEIU released a report charging that major increases in state funding to corporate human services providers during the past six years had boosted the providers’ CEO pay to an average of $239,500, but that direct-care workers were not getting a proportionate share of that additional funding. As of Fiscal 2016, direct-care workers employed by the providers were paid an average of only $13.60 an hour.

Eldridge’s budget language stated that providers must spend up to 75 percent of their state funding each year in order to raise the wages of their direct-care workers to $15 per hour.

While the conference committee enacted deep cuts in DDS and other state-run programs as a result of a growing projected budget deficit, the Senate language on direct-care pay would have only required that providers direct more of the funding they were already getting from the state to their direct-care workers.

The SEIU’s report on the compensation disparity confirmed our own concerns in that regard. A survey we did in 2015 found that more than 600 executives employed by corporate human service providers in Massachusetts received some $100 million per year in salaries and other compensation.

Along those lines, we are concerned that the ongoing privatization of human services is having a devastating impact on state-run programs, particularly within DDS. As we recently reported,  funding for critically important state-run programs, such as state-operated group homes and service coordinators, is being systematically cut while funding is rapidly boosted to corporate providers.

This additional disparity in human services funding is resulting in the elimination of choices to individuals and families in the system and perpetuating a race to the bottom in care.

There appear to be few if any people in the Legislature who are questioning the runaway privatization of human services much less who are willing to buck the trend. An effort to require providers to offer a living wage to their direct-care workers would be a start in that direction.

We hope Senator Eldridge will continue to push for the direct-care living wage, and that he and others will begin to examine the connections that exist between low wages for direct-care workers and the ongoing, unchecked privatization of human services.

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.”

MassHealth audit casts doubt on claimed savings in privatizing state services

April 4, 2017 1 comment

Last year, State Auditor Suzanne Bump approved a proposal to privatize mental health services in southeastern Massachusetts after the for-profit Massachusetts Behavioral Health Partnership (MBHP) claimed it could save $7 million in doing so.

The auditor’s review under the Pacheco Law required Bump’s office to compare the proposed costs of privatizing the services with continuing to carry them out with state employees in the Department of Mental Health.

In a report released yesterday, the auditor maintains that MassHealth, the state’s Medicaid administration agency, made questionable, improper, or duplicate payments to MBHP totaling $193 million between July 2010 and 2015. Those allegedly improper payments appear to have been made under the same contract with MBHP that served as the vehicle for privatizing the mental health services last year.

Under that umbrella contract, known as the Primary Care Clinician Plan, MassHealth paid MBHP more than $2.6 billion between 2010 and 2015.

Given the finding that MassHealth’s total payments to MBHP include $193 million in questionable, improper, or duplicate payments, it would seem it has just gotten harder to argue that privatization of human services has been a great deal for the state.

In fact, it seems possible that one of the reasons MBHP was able to offer bids from two providers for privatizing the mental health services that were $7 million lower than what the state employees could offer was that the company knew it could more than make the money back in duplicate payments from MassHealth.

A description of the MBHP billing arrangement by the state auditor paints a picture of the company as a middle-man between MassHealth and providers of actual services under the Primary Care Clinician Plan (PCCP) contract.

According to the audit, the Commonwealth pays MBHP a fixed monthly fee under the PCCP contract for each member enrolled in MBHP.  MBHP then “recruits and oversees networks of third-party direct care providers who assume responsibility for providing a range of covered behavioral-health care.” MBHP subsequently “pays the providers using the monthly…premiums received from the Commonwealth.”

MBHP’s real role here appears to be as a pass-through of state funds. What MBHP really seems to add to the process is an apparently large layer of bureaucracy.

We have noted that MBHP is a politically connected company whose parent companies manage the behavioral health benefits of  70 percent of MassHealth members.  In April 2015, Scott Taberner, previously the chief financial officer at MBHP, was named Chief of Behavioral Health and Supportive Care in MassHealth.

As we pointed out, Taberner was put in a position to manage the contract with the company he used to work for.

State employee unions, including the Service Employees International Local 509, the Massachusetts Nurses Association,  and the American Federation of State, County, and Municipal Employees Council 93 did challenge Bump’s initial approval of the privatization arrangement with MBHP last year for the southeastern Massachusetts mental health services.

The unions maintained that the lower bids submitted for the privatization contract assumed major cuts in staffing at mental health facilities in southeastern Massachusetts, which would be likely to result in lower-quality services. They argued that the Pacheco Law requires that service quality not be affected.

The Pacheco Law requires a state agency seeking to privatize services to submit to the state auditor a comparison of a bid or bids from outside contractors with a bid from existing employees based on the cost of providing the services in-house “in the most cost-efficient manner.”  If the state auditor concurs that the outside bidder’s proposed contract is less expensive and equal or better in quality than what existing employees have proposed, the privatization plan will be likely to be approved.  If not, the auditor is likely to rule that the service must stay in-house.

In December, the state Supreme Judicial Court upheld Bump’s Pacheco Law review.

An SEIU official said to us yesterday the union is reviewing the auditor’s latest audit. We think that at the very least, the audit calls into question the savings claim in privatizing the southeastern Massachusetts mental health services.

More broadly, the audit of the MassHealth-MBHP contract calls into question MassHealth’s system of internal controls in managing state’s $13 billion Medicaid program.

It appears the MassHealth internal control system is so inadequate that the administration was unaware that hundreds of millions of dollars in improper payments were being made to its major contractor. Yet the administration was eager to reward MBHP’s efforts to eliminate state employees and cut staffing for mental health services in order to save a reported $7 million.

The MassHealth-MBHP debacle should serve as a warning to legislators and others that privatizing state services is not an automatic panacea to problems in service delivery and to high costs. Privatization comes with potentially high costs of its own, particularly when the state forsakes its role, as it appears to have done in this case, of adequately managing and overseeing its contracts with service providers.

 

 

Data show a recent decline in the developmentally disabled population in state-run residential care

March 27, 2017 Leave a comment

Data provided by the Baker administration show that the number of residents in remaining state-run residential programs for the developmentally disabled has begun to decline, raising questions about the state’s policy for the future of state-run services.

The data, which were provided under a Public Records Law request, indicate that the previous fiscal year (2016) may have been the peak year for the residential population in state-operated group homes and the Wrentham and Hogan developmental centers.

The graph below, which is based on the DDS data, shows the number of residents living in state-operated group homes each year since Fiscal Year 2008:

State-ops census graph

As we have frequently pointed out, the administration appears to have placed a priority on funding privatized residential services offered by corporate providers to the Department of Developmental Services. A question remains, however, as to whether the administration’s policy also entails phasing out state-operated care.

While Governor Baker’s Fiscal 2018 budget proposes $59.9 million in additional funding for privatized group homes, his budget proposes a $1.8 million cut in the state-operated group home account. That would amount to a $6.9 million cut in that account when adjusted for inflation.

Similarly, the governor is proposing a  $2.4 million cut in the state-run developmental centers line item. That’s a $4.9 million cut when adjusted for inflation.

DDS operates or manages both state-run and privatized systems of residential care in Massachusetts. The state-run system, which is now much smaller than the privatized system, includes the two remaining developmental centers and the state-operated group homes.

The ultimate elimination of state-run residential services would take away a key element of choice for individuals and families in the DDS system. State-run residential centers and group homes provide residential care to some of the most profoundly disabled persons in the commonwealth, and they tend to employ staff with higher levels of training and lower rates of turnover than do corporate-run facilities.

COFAR has sent a follow-up Public Records request to DDS, seeking any policy documents that concern the future of state-operated care in Massachusetts.

The administration of then Governor Deval Patrick began closing the remaining developmental centers in Massachusetts in Fiscal 2008, reducing the number of those federally overseen facilities from six to two. Most of the residents in the now-closed developmental centers were transferred either to the Wrentham center or to state-operated group homes, leading to an initial surge in the residential populations in those facilities. But those residential population numbers now appear to be dropping.

According to the DDS data, the number of residents in state-operated group homes rose from just over 1,000 in 2008, when four of the six developmental centers were targeted for closure, to roughly 1,150 in Fiscal 2016. As of the current fiscal year, that number had dropped to about 1,130.

As the graph below shows, both a population surge and drop-off have also occurred at the Wrentham Developmental Center since Fiscal 2008:

ICF census graph

The DDS data appear to provide further confirmation of COFAR’s contention that state-run residential facilities are not being offered as residential choices to persons waiting for residential care in the DDS system. We believe that if those facilities were routinely offered as choices, the number of residents in them would either continue to rise or remain steady,  but would not be declining.

If DDS is failing to offer state-run group homes and developmental centers as options to people waiting for residential care, that situation would appear to be in violation of federal laws, which require that all available services be offered as options.

The Home and Community Based waiver of the Medicaid Law (42 U.S.C., Section 1396), requires that intellectually disabled individuals and their guardians be informed of the available “feasible alternatives”  for care. In addition, the federal Rehabilitation Act (29 U.S.C.,  Section 794) states that no disabled person may be excluded or denied benefits from any program receiving federal funding.

We think the DDS data closely track the closures of the Fernald, Monson, and Glavin developmental centers, starting in Fiscal 2008, and the transfer of the residents of those facilities primarily to the state-operated group homes and the Wrentham center.

But as we reported in 2014, while 49 new state-operated group homes were built between 2008 and 2014, 28 state-operated homes were closed during that period. The new state-operated homes appear to have been intended to accommodate only the residents of the homes that were being closed and the residents transferred from the developmental centers.

Nevertheless, an undisclosed number of disabled individuals are reportedly waiting for residential services in Massachusetts, although the state does not maintain an official waiting list that would publicly identify the number of people waiting.  The Massachusetts Developmental Disabilities Council has continued to cite a 2010 survey indicating that some 600 people were waiting for residential services in the state, and up to 3,000 people were waiting for family support services.

As noted, the administration appears to be attempting to meet the demand for residential care by boosting funding to corporate residential providers. While that hasn’t prevented the budgets of state-run developmental centers from increasing, those budgets may be leveling off.

The DDS data, which includes information about the Wrentham and Hogan developmental center budgets, shows increases in those budgets between Fiscal 2008 and 2015. Wrentham’s budget, in particular, appears to have leveled off, starting in Fiscal 2015.

ICF budget graph

It is unclear if or when the administration intends to phase out state-run DDS residential care, but the initial data are cause for concern. If you have a loved one in a state-run facility or are seeking care in a state-run setting, please let your local legislators know about this situation.

You can find your legislators at this link.