AuditReview of Certain Aspects of the Implementation of Chapter 257 of the Acts of 2008

This is a State Auditor performance audit reviewing parts of how Chapter 257 was put into practice for human-service payment rates from July 1, 2015 through June 30, 2017.

“In this performance audit, we reviewed certain aspects of the implementation of Chapter 257, including rate development, provider financial stability, wages paid to direct-care workers, and monitoring of provider quality, for the period July 1, 2015 through June 30, 2017.”

Auditors looked at whether the state had a good process for setting rates, whether adult residential service providers were monitored, and whether the law improved provider finances and worker pay.

“Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.”

These rates affect billions of dollars in public spending on services for people who rely on human and social services in Massachusetts.

“In fiscal year 2017, nine EOHHS departments spent more than $2.39 billion on services subject to Chapter 257, representing 11% of EOHHS’s $21 billion budget.”

For an ordinary resident, this matters because the state uses taxpayer money to buy services from private providers, and the way rates are set can affect service stability, worker pay, and care quality.

“In addition to providing some of these services directly, EOHHS departments also purchase services through contracts with a large network of private, mostly not-for-profit, organizations.”

The audit found mixed early results: provider finances improved in some ways, but direct-care worker pay rose only modestly, and EOHHS needed written rate-setting policies.

“Has the implementation of Chapter 257 improved the financial positions of providers and positively affected salaries for direct-care workers?”

The Auditor recommended that EOHHS write down its rate-setting policies and procedures, and EOHHS said it agreed and would do so by July 1, 2019.

“EOHHS agrees with the recommendation and will develop written policies and procedures on or before July 1, 2019, for its existing process for establishing rates for social-service programs.”

The biggest significance is accountability: without written procedures, the state cannot fully show that it sets human-service payment rates consistently.

“As a result, there is no assurance that a consistent method is used to develop the rates paid to human-service providers.”

Chapter 257 is the state law that moved many social-service program prices away from individually negotiated rates and made EOHHS responsible for setting them.

“To address these issues, on August 8, 2008 the Legislature enacted Chapter 257 of the Acts of 2008, establishing that pricing for social-service programs2 other than special-education programs would be set by the Secretary of EOHHS.”