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Children and Families Committee needs to show it’s serious about investigating the DDS group home system

January 22, 2018 4 comments

At the start of a legislative hearing last week on the Department of Developmental Services, state Representative Kay Khan made what seemed to be a major announcement about a new federal report on problems in group home care in Massachusetts and two other New England states.

Khan, who is House chair of the Children, Families and Persons with Disabilities Committee, said the committee will be guided by the report in whatever review or investigation her panel  undertakes of the DDS system in Massachusetts.

But if that’s the case, it doesn’t look as though the Children and Families Committee will be doing much of an investigation because there wasn’t much in the report, which was issued by the Inspector General for the federal Department of Health and Human Services.

I first developed the pessimistic assessment that the committee wasn’t going to do much of an investigation after listening to an hour of listless questioning by Khan and other legislators of the heads of DDS and the Disabled Persons Protection Commission during last Wednesday’s hearing.  Reading through the HHS IG’s report only strengthened that assessment.

The committee scheduled last week’s hearing in the wake of a case last year in which Yianni Baglaneas, a young man with Down Syndrome, nearly died in a DDS-funded group home after aspirating on a piece of cake.

Although the committee hearing room last week was filled with family members of DDS clients, including Yianni’s mother, Anna Eves, those family members were not permitted to testify verbally.  The Children and Families Committee wanted to hear only from Acting DDS Commissioner Jane Ryder and from Nancy Alterio, executive director of the DPPC, an agency charged with investigating abuse and neglect of disabled persons.

We hope the committee gets more serious about this investigation. We have submitted written testimony (here and here) to the panel and have read the written testimony from Anna and from many other family members and guardians who detailed harrowing experiences in a dysfunctional system.

During last week’s hearing, Ryder, in particular, painted a rosy picture of DDS’s role in managing and overseeing the group-home system. None of the Children and Families Committee members challenged Ryder’s assertions or asked any particularly probing questions of her.

Anna Eves and Michael Horn at hearing 1.17.18

Senator Joan Lovely, Senate chair of the Children and Families Committee, talks following last week’s committee hearing with Michael Horn, the father of Alexa, who suffered unexplained injuries while living in a group home. At left is Anna Eves, the mother of Yianni Baglaneas, who nearly died in his group home after aspirating on a piece of cake. Neither Eves nor Horn were allowed to testify verbally before the committee about those cases.

We have been calling for years for a comprehensive legislative review of the system of care for persons with developmental disabilities in Massachusetts. The last such review was done in the late 1990s by the House Post Audit and Oversight Committee, which found problems of abuse, neglect, and financial irregularities throughout the system.

When I first glanced through the latest federal IG report, I thought that agency had finally produced a report on the level of that Post Audit Committee report in Massachusetts.  The IG report looked comprehensive. But I was admittedly seduced by the color and graphics. After actually reading the report, my assessment of it changed.

First, it turns out the findings in the IG’s report about failures to report abuse and neglect incidents in Massachusetts were simply repeated from an earlier report issued by the IG in July 2016.

That previous report found that abuse and neglect incidents in Massachusetts were not being reported regularly to investigators. But that report was limited to that single issue about incident reporting. The IG had also previously issued a similar report about Connecticut.

Moreover, the new material in the latest IG’s report consists of a series of vague recommendations that don’t seem to fully address a request in 2013 by U.S. Senator Chris Murphy of Connecticut for a major investigation into abuse and neglect in privatized group homes throughout the country.

Sen. Murphy’s letter in 2013 to the IG concluded by stating:

Privatization of care may mean lower costs but without the proper oversight and requirements for well-trained staff. While individuals with developmental disabilities may not be able to speak for themselves, we are not absolved of the responsibility to care for them in a humane and fair manner. … Again, I respectfully request that you conduct an investigation into this issue. I believe that it would be able to shed light on the trend towards privatization and the impact that has on the care of the individuals. (my emphasis)

The IG’s report, however, doesn’t appear to address issues related to privatization such as low wages paid to direct-care staff, high turnover, denial of family rights to visitation, violations of federal law requiring that DDS provide state-run services and other care options to persons desiring them; or violations of federal law stating that families are the key decision-makers in the care of the intellectually disabled.

There is no reference anywhere in the IG’s report to problems accompanying the increasing privatization of services or to the resulting elimination of state-run programs, or the resulting lack of meaningful activities for participants in day programs, or the excess funding of salaries of nonprofit executives.  Murphy specifically stated in his letter to the IG that he hoped the IG’s investigation “would be able to shed light on the trend towards privatization and the impact that has had on the care of the individuals.”

One has to wonder if anyone from the IG’s office has read any of a number of media reports in recent years of the deeply troubling problems plaguing group home systems around the country.

Those reports include exposes in 2013 by The New York Times and The Hartford Courant,  (here and here)  and more recent exposes by papers such as The Chicago Tribune. That latter newspaper reported last year that while officials in Illinois continued to issue rosy accounts of the process of transferring clients from developmental centers being closed in that state to group homes, many of those group homes were “underfunded, understaffed and dangerously unprepared for new arrivals with complex needs.”

We reported that the HHS IG first produced a virtual joke of a report in 2015 on the group home system in New York State. That report had no critical findings and was a total of six pages long.

As noted, at least part of last week’s IG report was a rehash of those previous findings on incident reporting in Massachusetts and Connecticut. The latest report does purport to go further than the previous reports by including “suggestions for ensuring group-home beneficiary health and safety.”

For instance, the latest IG report includes recommendations on “quality assurance mechanisms” for community-based services.

But while those recommendations seem intended to get to the larger issues inherent in care in the provider system, they are still vague. The recommendations are presented in an appendix to the report, but little explanation and few specifics are provided even there.

Under a heading in the appendix on the “quality assurance mechanisms,” the report recommends “person-centered planning.” But there is no explanation provided of person-centered planning, which is an approach being promoted in Massachusetts by DDS. We’ve expressed concerns that person-centered planning has the potential to marginalize families and guardians in helping develop individual support plans or ISPs.

The same appendix in the HHS IG report also calls for audits done by providers that:

  • Include assessments of staff training (There are no specifics provided about this.)
  • Include assessments of performance evaluation (Again, no specifics.)

An additional category in the appendix is labeled “Assessment of the fiscal integrity of (provider) service billing and reimbursement.” This would appear to be a key recommendation regarding financial integrity, but it consists only of the following two statements, with no specifics or explanation:

  • Includes ongoing State desk audits
  • Includes periodic on site audits of select service providers and support coordination agencies

Finally, the report states that the federal Centers for Medicare and Medicaid Services should form a “SWAT team” in order to address “serious health and safety findings involving group homes.” But while that sounds impressive and urgent, the report provides no details about what such a SWAT team would consist of or do.

We hope the Children and Families Committee develops an investigative scope that goes well beyond that of the HHS IG. We also think the committee can demonstrate its seriousness by scheduling another hearing in which families would be invited to provide verbal testimony.

Last week, Senator Joan Lovely, the Senate chair of the committee, told some family members that she would speak to Rep. Khan about scheduling that additional hearing. We hope that happens soon.

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Families want legislative committee to know the value of places like the Wrentham Developmental Center

January 16, 2018 1 comment

As a legislative committee prepares for an oversight hearing Wednesday on the Department of Developmental Services system, several family members of residents of the Wrentham Developmental Center said they hope the committee will recognize the Center’s value and that of facilities like it.

In a COFAR membership meeting on Saturday, family members described harrowing accounts of their experiences in privatized, DDS-funded group homes, and the arduous paths they had to take in order to get their loved ones into either the Wrentham Center or state-run group homes.

Many of those family members, such as Pat and Michael Horn, plan to submit written testimony about those experiences to the Legislature’s Children, Families, and Persons with Disabilities Committee, which has scheduled an oversight hearing on DDS on Wednesday. (As we have noted, the committee announced that family members would not be allowed to testify before the committee in person, but could only submit written testimony.)

“The care here (at Wrentham) is exquisite,” said Pat Horn, whose daughter, Alexa, had suffered broken bones and other unexplained injuries in a corporate provider-run group home before they got her to Wrentham. “We’re so happy here.”

Pat and Michael Horn

Pat Horn (at right) and her husband, Michael, describe their experience in getting their daughter, Alexa, to the Wrentham Developmental Center. At left is Susan Tucker, a physician, whose brother, Danny, is also a Wrentham Center resident.

COFAR Executive Director Colleen Lutkevich, whose sister, Jean, is a Wrentham Center resident, said the legislators and others may not fully understand the true nature of the problems that afflict the DDS system today.

In recent decades, Lutkevich said, it has been the rapidly growing, privatized group home system that has exhibited serious problems with care and with abuse and neglect. State-run facilities such as the Wrentham Center and an existing network of state-run group homes have been relatively free of those problems.

Yet, the Wrentham Center has been “terribly misrepresented” in the media and by opponents of congregate care, who characterize it as an institution or as a warehouse, Lutkevich said. “What the media and many others don’t understand is that the care today is state of the art at Wrentham and Hogan (the second of the state’s two remaining developmental centers, also known as Intermediate Care Facilities or ICF’s).”

At Saturday’s COFAR meeting, some families expressed concern about rumors that DDS intends to close Wrentham and Hogan through attrition if not sooner. DDS data show that the residential population in each facility has leveled off and begun to drop. And despite the high level of care available in each, most clients waiting for care in the DDS system are not offered placements at either Wrentham or Hogan even if they ask for them.

Families waiting for residential care for loved ones are routinely offered placements only in DDS-funded, privatized group homes. The families are usually not informed even about the state-operated group homes even though those facilities have staff that tend to be better trained and better paid that than direct-care staff in the corporate-run homes.

Lutkevich and COFAR President Thomas Frain, who both attended Saturday’s membership meeting, discussed a DDS document that families waiting for residential care are required to sign, waiving their loved ones’ legal right to care in the state’s two remaining ICFs. Frain and Lutkevich maintain the document is coercive and possibly violates federal Medicaid law, which requires the state to offer all available residential facilities as care options to people who request them.

Frain went through a lengthy battle with DDS to get his brother, Paul, out of a provider-run group home, where he had been badly mistreated, and into a state-operated group home.

Families such as the Horns have been able to get their family members into Wrentham only because those family members were either literally facing life-and-death situations or because they were members of the original class-action lawsuit (Ricci v. Okin) that resulted in major upgrades to the Massachusetts DDS system in the 1980’s.

A disturbing litany of mistreatment

In the Horns’ case, their daughter, Alexa, who has Rett Syndrome, a neurological disorder, had lived at home until she was 16 and a half. At that time, the Horns explored the possibility of getting Alexa into the Fernald Developmental Center, but they were told Fernald was closing.

Pat Horn said they found a special needs residence for Alexa, but she developed a urinary tract infection and a subsequent sepsis infection there. The infections occurred after direct-care staff failed to tell the facility’s nursing staff that Alexa had not eaten or drunk anything for almost 24 hours.  Alexa was cared for in the intensive care unit at Boston Children’s Hospital for two weeks and was transferred to Franciscan Children’s Hospital for six weeks of rehabilitation.

When she turned 22, Alexa was placed in a DDS-funded group home near her family home in Watertown in which the care was quite good for a number of years. After five years, however, the residence started to experience a high degree of turnover of house managers, and new direct care staff were hired with little apparent training or qualifications.

Pat said the residence became dirty, clinician appointments were missed, protocols for administering Alexa’s medications and her feeding tube were not followed, and her personal hygiene degraded to the point that she had to be treated for ringworm, a type of fungal infection of the skin, on numerous occasions.

In 2014, Alexa fell out of her shower chair while a staff member was showering her because the staff member had undone her safety belt in order to wash her back. Her injuries required a trip to the emergency room and an MRI. Miraculously, Alexa did not sustain any serious injury in that incident, but she did suffer a significant amount of soft tissue damage to her face and broken blood vessels in her eye.

In another incident, the same caregiver failed to check the rate of the feeding pump when setting up her g-tube feed, and Alexa received 12 hours worth of food in a two-hour period, causing her to vomit and aspirate.

Early 2015, Pat said, she was informed by staff during a weekly Saturday visit that Alexa’s leg had been hurting her since the beginning of that week, but that the house manager had not taken her to be assessed by her doctor. The Horns called the manager on duty that weekend, who finally took Alexa to a hospital emergency room where an x-ray confirmed that Alexa had a fracture of the tibia.

Pat said the DPPC did a three-month investigation of the incident and substantiated a charge of mistreatment, but was unable to determine how the injury had happened. The DDS “action plan” recommended only staff retraining.

During the three-month period in which the family was waiting for the results of the investigation, Alexa suffered a fracture of her upper left arm. That injury was investigated by DDS, which concluded that she had broken her own arm as her medical record showed that she had osteoporosis. The Horns consider it highly improbable that Alexa broke her own arm.

The Horns then arranged to have Alexa sent to the Marquardt skilled nursing facility at the former Fernald Center rather than to have her discharged back to the group home.

A few weeks later, Pat said, she and Michael met with the DDS area director, Alexa’s DDS service coordinator, and administrators from the group home provider during which the Horns recounted six months worth of mistreatment that their daughter had endured. At the end of this meeting, the DDS area director said that since  Alexa would “‘undoubtedly be difficult to place,'” she might have to be sent back home to her parents. According to Pat, that “sounded very much like a threat.”

During her first months at the Marquardt, as she was recovering from her broken arm, Alexa contracted pneumonia and respiratory failure. After two weeks on a respirator at Mt. Auburn Hospital, she was transferred to a rehabilitation hospital where she contracted a ventilator-acquired pneumonia and a “C. difficile” gastrointestinal infection, and suffered from serious seizures because of the medications given to combat the infection. After two and half months, she was finally well enough to be transferred back to Marquardt.

In August of 2016, the Horns learned that the Marquardt center was going to be closed, and Alexa finally became a resident of  the Wrentham Center in February of 2017.

Yianni Baglaneas’s parents attend COFAR meeting

Also attending Saturday’s meeting were Anna and James Eves, the parents of Yianni Baglaneas, whose case sparked the Children and Families Committee hearing.

membership meeting 1.13.18

Attendees at Saturday’s COFAR meeting.

In her own written testimony to the Children and Families Committee, Anna Eves said that since the news got out that Yianni had nearly died in his group home after aspirating on a piece of cake, other people began contacting her about similar cases involving their loved ones. “As I looked further, I was shocked and saddened and outraged that this truly is an epidemic – the DPPC receives 10,000 calls a year – 10,000. And they only have five investigators, which tells you how much we as society care about this epidemic of abuse.”

During Saturday’s COFAR meeting, Kathleen MacKechnie described a difficult, eight-month process of getting her brother, Tom, into the Wrentham Center.  In her written testimony to the committee, she suggested that the committee “consider better funding
and monitoring (of DDS care) rather than budgetary cuts, and stop turning a blind eye to the problem.”

Also attending the Saturday meeting was Pat Feeley, who was nearly removed as guardian of her son, Michael, by DDS after she advocated for full-time nursing care for him.

Other attendees of Saturdays’ meeting who have family members at Wrentham included Mitch Sikora, whose brother has been at the Center for many years, and Mary McNamara, whose uncle has been a long-time resident there.

Lutkevich said she is organizing a legislative breakfast at the Wrentham Center for early March. The breakfast will be sponsored by COFAR and its affiliated family-based organization, the Wrentham Association.

Parents continually frustrated by DDS and group-home provider in advocating for adequate care for their son

January 9, 2018 2 comments

Ryan Tilly, who has Down Syndrome, had been living in his provider-operated group home in Haverhill for only four months in March of 2016 when he was allegedly assaulted by a staff member of the residence.

It was only the beginning of what would turn out to be a nightmare for Ryan, who turns 24 this month, and for his parents, Deborah and Brian.

The Tillys maintain that in addition to the assault, Ryan was subjected to neglect in the group home, which is operated by the NEEDS Center, a Department of Developmental Services provider.  He was also harassed by another resident of the group home so severely in 2016 that he has continued to isolate himself in his room there and was afraid for a period of time to take showers in the residence.

Ryan Tilly photo

Ryan Tilly

Yet, rather than working with the family to address those problems, both NEEDS and DDS initially turned against the parents, according to the Tillys and to documents in the case. The Tillys were accused of being “volatile and unpredictable,” and of fabricating a charge that the staff was failing to clean clothing that Ryan had soiled.

Ryan’s father, Brian, was banned for months from visiting Ryan in the NEEDS residence, while Deborah had to make appointments in order be able to see him.

A DDS investigation of the Tillys’ charge regarding Ryan’s clothing determined that there wasn’t sufficient evidence to charge the group home with neglect in the matter; but the report did not refute the parents’ allegations.  In September 2016, DDS recommended that NEEDS and DDS meet regularly with the Tillys to “foster cooperation,” and that DDS explore possible new residential options for Ryan.

Deb Tilly photo

Deborah Tilly

But neither NEEDS nor DDS appear to have fostered that communication, at least initially. The restrictions against the Tillys on visiting Ryan in the group home continued through at least October of 2016, according to emails from the provider.

In response to an email query from COFAR last week, Jim Sperry, NEEDS President and CEO, declined to comment on the overall case.

While the Tillys ultimately filed three abuse complaints against NEEDS involving their treatment of Ryan, DDS consistently maintained that there was a lack of evidence to support the complaints. Yet it appears that DDS failed to interview key witnesses in at least two of those cases.

In the assault case, the DDS report disclosed that the investigator never interviewed a witness who had also originally reported the incident. In the neglect case, DDS also found a lack of evidence to support the charge, yet never interviewed Deborah herself.

We have seen that dynamic many times in which parents and other family members have raised issues or made allegations about care; but rather than thoroughly investigating those allegations, DDS has turned against the family members and branded them as volatile or overly emotional.  In those cases, family members are made by DDS and its providers to feel as though they are to blame for the providers’ own failures in care.

For the Tillys, things began to improve only after they hired a lawyer to press their case to improve their son’s care and to overturn the restrictions on visiting Ryan. Their attorney, Thomas J. Frain, is COFAR’s Board president.

Nevertheless, the situation remains unpredictable, Deborah said, and the improvements could be reversed at any time. The Tillys have requested another residential placement for Ryan, including a possible state-operated residence, but DDS has so far not found one for him.

“We had to fight for Ryan’s rights to have us visit him at his residence without the restrictions the NEEDS and DDS placed on us, especially on his father,” Deborah said in an email to us. “We also had to get counsel to insure that the abuse, and neglect Ryan was subject to ended.”

Deborah’s email added that, “We as his parents know our son and can read his behaviors and actions very well….(Yet) the district DDS office continued to side with the providers, leaving parents and guardians fighting to keep their loved ones safe and cared for with dignity.”

Abuse neglect issues: 3 major cases

The following are details about the three complaints filed by the Tillys, based on interviews and documents provided by Deborah.  A NEEDS meeting minutes document from that period of time referred to a staff shortage in Ryan’s group home and to “a good deal of turnover” there.

Alleged assault by staff member

Deborah said Ryan had been living at the NEEDS residence for four months when Sperry, the NEEDS president and CEO, called her on March 31, 2016, to inform her that a report had been filed by an anonymous person to the Disabled Persons Protection Commission (DPPC) about an alleged assault on Ryan by a staff member. 

The alleged assault had actually occurred on March 17, two weeks earlier, while Ryan was being directed to a van to take staff and residents to a weekly community-based dinner. Ryan, who did not enjoy going on these outings, hit a female staff in the face when she got close to him. He was already agitated because of a previous dental appointment and because the staff member would not let him enter the home after the dental visit, but instead directed him to the van.

Deborah said that Ryan should not be seated near anyone within striking distance while riding in a vehicle. “He becomes very anxious and will hit those who are too close,” she said. This particular day, a male staff had seated another individual very close to Ryan. The female staff member whom Ryan had just hit, reminded the male staff that Ryan needed to sit by himself due to anxiety.

The male staff moved the individual, but the staff member himself sat next to Ryan even though there was room for him to sit elsewhere. Ryan struck the male staff and the male staff became angry. According to Deborah, a witness who was in the van said the male staff stood in front of Ryan and then punched Ryan in the face. The witness reported that Ryan had a swollen lip and a black right eye.

Deborah, who talked to the witness, said the witness had intended to report the incident the next day to the group home manager when she overheard the manager tell the male staff that he needed to “cover his tracks” in regards to a report about a prior incident the week before with a different victim. The witness decided not to talk to the manager at that time, and reported it instead to the DPPC, which referred the investigation to DDS.

According to the DDS report of the incident, staff and supervisors at NEEDS stated that they never saw any visible injuries on Ryan. Yet, at the same time, the report stated that a witness said Ryan suffered a black eye and swollen lip, and that the alleged abuser later stated that Ryan “had given himself a black eye.”

The DDS report also described the witness to the alleged assault as having “thought she saw ALAB (the alleged abuser) hit ALV (the alleged victim, Ryan).”

Despite that assertion, the DDS report stated that the reporter of the incident was never contacted because he or she was anonymous.

Deborah, who interviewed the witness herself, said the witness was the same person who reported the incident to the DPPC. If that is the case, it is unclear how the DDS investigator could seemingly identify this witness and report what she thought she saw, yet not contact her for an interview because the reporter was supposedly anonymous. 

“The NEEDS administration knew who the reporter was, as I gave them the information,” Deborah said. “DDS also knew who she was because I gave the information to Ryan’s (DDS) service coordinator. So the investigation was one-sided since the only people who were interviewed were the (remaining) staff from NEEDS.”

Although the assault allegedly took place on March 17, 2016, Deborah and her husband were not informed of it until March 31.  In an April 10, 2016, email to Sperry, Deborah wrote: “We have entrusted NEEDS and NEEDS staff to take care of our son in our absence. If we are not being informed about injuries, how can we trust those who are with him on a daily basis?”

 In an email response the next day, Sperry maintained that he had not been informed of the assault allegation until March 31. He stated that his agency had “interviewed all staff” who had worked during the time in question and none of them had said they observed an assault or that Ryan had a black eye. Yet, Deborah said Sperry had told her in a phone call that Ryan’s day program staff had reported the black eye.

Sperry added that if the abuse complaint was substantiated by DDS, the alleged abuser would be terminated, and that he would be transferred to another group home even if the alleged abuse was not substantiated. The alleged abuser was reportedly terminated by the provider even though the abuse allegation was not substantiated by DDS.

Alleged neglect

Deborah said that on June 13, 2016, she reported neglect charges against the NEEDS staff to the DPPC because of disturbing changes in his behavior when he came home every other weekend for visits.

She said that during the months leading up to that point, she had noticed that Ryan was afraid to use the shower at his home. He was also urinating and defecating in his room, in his clothing, and in his closet. There were several incidences where Deborah was finding soiled clothing at the residential home in his bureau.

Deborah sad she made several unannounced visits to the group home and found many times he had clothing rolled up in his laundry basket full of feces. Each time, she said, she alerted staff about those problems and followed up with emails to the NEEDS CEO, supervisor and house manager as well as the DDS service coordinator.

While plans were put into place to deal with the situation, the plans were not being followed by the staff, Deborah said. Things came to a head one weekend when Ryan came home smelling of body odor and very dirty. He refused to take a shower claiming he was afraid to go in the bathroom. “This is a young man who would take two showers a day and enjoyed being clean,” she said.

Deborah and her husband took him back to the group home on June 12, 2016. “We were very agitated and wanted to get to the bottom of the issue, and Brian at one point used profanity in suggesting that the “place should be closed down.”

Following the contentious meeting with the house manager, Deborah said, “they began accusing me of bringing the dirty feces into the NEEDS residences. Those accusations were outrageous and I had no alternative but to file abuse and neglect charges.”

However, a July 25, 2016, DDS decision letter found insufficient evidence to support the Tillys’ allegations of neglect, and stated that Sperry claimed Ryan was not exhibiting those behaviors at the group home and that he claimed the parents “are very volatile and unpredictable.”

Deborah said she was never contacted by the DDS investigator.  But despite the lack of substantiation of the neglect charge, a DDS action plan called for regular meetings between the Tillys and the NEEDS staff “to foster communication” and to “address any areas of concern that may arise.”

Unexplained head injury

Deborah said Ryan’s NEEDS Center day staff supervisor phoned her on September 29, 2016, to let her know that Ryan had a self injurious episode three days before in which he suffered a laceration on his forehead. She said the supervisor said he was concerned that Ryan might need medical attention to the injury because he believed it was infected.

Deborah said the day staff supervisor could not explain why no one from the day program nor the residential program had notified her of the injury at the time it happened.

On November 15, 2016, Deborah filed a complaint with DDS about the injury and the apparent failure of staff to treat it.  On July 21, 2017,the investigation was concluded. Again the charges came back as not substantiated. The only recommendation from the investigator was for NEEDS staff to report any injury to the parents/guardians on the date they occur.

Restrictions imposed on visitation. Family hires lawyer.

Deborah said that after she and Brian held the contentious meeting on June 12, 2016, with the NEEDS house manager over the staff’s alleged failure to clean Ryan’s soiled clothing, both NEEDS and DDS imposed severe visitation restrictions on the Tillys.

Brian was banned from the residence entirely and told that if he showed up at the house, the staff would call the police and that he would be arrested for trespassing. Although a DDS official stated that the ban would last 30 days, it actually lasted for months, Deborah said.

Deborah said that during that time, she was told she would need to make appointments to go to the house to visit Ryan.

Emails in October of 2016 from a group home staff member stated that Brian was still banned from the residence as of that time. On October 12, Deborah asked for clarification of the restriction because Brian had constructed a new bed for Ryan to replace one that was broken, and there was apparently no one else able to put the new bed together in the residence. No such clarification was forthcoming.

The visitation restrictions were lifted only after the Tillys hired Frain as their attorney.

Improvements and continuing issues 

As a result of the legal intervention in the case, there have been notable improvements in Ryan’s care, Deborah said.  Ryan now regularly sees a psychologist and has a clinical team. The team has started a program to address Ryan’s isolation and to control his behavioral issues with medication.

The staff at the residence has changed and are more open with Deborah about the events in Ryan’s day, she said. Ryan’s behaviors have improved dramatically to the point where his behavioral issues have almost disappeared. “We feel we brought to light the many injustices Ryan was subjected to,” Deborah said. “Things have improved but we still have a wary eye on them.”

Things still happen every now and then, she said. She still occasionally finds dirty clothing in Ryan’s room, and the staff still never seem to fully explain it.

Ryan is still afraid of the resident who had been harassing him and is still reluctant to leave his room.  He now must be sedated just to go to the doctor or dentist, and he requires two staff to bring him.

Deborah said she continues to be in daily contact with her son and will often visit unannounced.

Case should be considered by Children and Families Committee

This is one of the cases that we hope the Legislature’s Children, Families, and Persons with Disabilities Committee looks into.  The committee has scheduled an oversight hearing on the DDS system for January 17 at 1:30 p.m. at the State House in Boston.

A careful review of this case and DDS’s handling of it should provide much valuable information as to how DDS’s policies and procedures might be improved.

Committee to schedule one or more oversight hearings on DDS system

December 12, 2017 Leave a comment

In the wake of findings by the state of negligence by the staff of a human services provider that almost resulted in the death of a developmentally disabled man, a legislative committee plans to hold one or more hearings on the Department of Developmental Services system, starting next month.

A press release issued by the state Legislature’s joint Children, Families and Persons with Disabilities Committee referred to a single hearing and said it will concern “current  DDS policies, procedures, and responses to reported incidents.” The press release did not specify a date for the hearing, but said it will be held “in the New Year.”

A staff member of the committee said last week (on December 7) that a specific date had not yet been set for the hearing, but that it would be held sometime in January. Previously, another staff member had stated that more details about the scope of the committee’s review, including whether the committee would focus on the privatized system of DDS care and whether there might be more than one hearing still needed to be ironed out.

COFAR is inviting people with information about abuse or neglect in DDS-funded group homes in Massachusetts to testify before the committee. If you have information you would like to share, please contact us.

In the case that apparently sparked the committee’s interest, a DDS investigation concluded in September that seven employees of Bass River, Inc., a DDS provider, were at fault after Ioannis “Yianni” Baglaneas, a 29-year-old man with Down Syndrome, contracted severe pneumonia in his group home after aspirating on the cake.

The DDS cited the staff for failing to ensure that Yianni regularly used required breathing equipment that could have prevented the pneumonia; and the report stated that a high-level Bass River employee removed key records from the home and instructed the staff not to cooperate with the DDS investigation.

COFAR has urged legislators for several years to hold oversight hearings as part of a comprehensive legislative investigation of the DDS group home system.  To date, no such investigation has been undertaken by the Legislature since the late 1990’s when the House Post Audit and Oversight Committee examined the group home system and found systemic problems with abuse, neglect, and financial irregularities.

The Post Audit report stated that DDS’s oversight of the privatized system raised “grave doubts about (DDS’s) commitment to the basic health and safety issues and ensuring that community placements provide equal or better care for (DDS) clients.”

Now, 20 years later, it does not appear that much has changed in the system. The association of increased privatization with poor oversight and abuse and neglect is still the case, and inadequate care and conditions remain all too common in group homes in Massachusetts and around the country.

AFSCME Council 93, a union representing state, county and municipal workers in Massachusetts, recently endorsed COFAR’s call for hearings, sharing COFAR’s previous post on the subject on the union’s Facebook page on November 28.

COFAR is continuing to urge people to call Representative Kay Khan, the House chair of the Children and Families committee (617-722-1230), or Senator Joan Lovely, the Senate chair ( 617-722-2011), to express support for  multiple and comprehensive hearings. We are also, as stated, are urging people to contact us about testifying before the committee.

“We certainly hope that the committee will thoroughly investigate this very critical issue,” said Colleen M. Lutkevich, COFAR’s executive director. “We hope they will zero in on the key problems that have resulted from runaway privatization of services with inadequate oversight.”

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.

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

October 25, 2017 5 comments

(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.