Transcript JVGA/DDD Rate-Setting Slide Presentation

New Jersey Department of Human Services
Division of Developmental Disabilities
Johnston, Villegas-Grubbs and
Associates LLC (JVGA)
Rate Construction for New Jersey
Developmental Disability Services
July 18, 2014
Agenda
• 10:00 am - 12:00 pm
• Welcome and Acknowledgements
– Elizabeth M. Shea, Assistant Commissioner, NJ Division of Developmental Disabilities
• Rate Setting Presentation
– JVGA Team
– Thomas Papa, Chief of Staff, NJ Division of Developmental Disabilities
• Submission of Questions
• 12:00 pm – 1:30 pm
• Lunch Break
• 1:30 pm – 3:00 pm
• Review of Questions
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The Conversion to Fee for Service:
Key Questions
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Why are we converting to Fee for Service (FFS)?
Why do we need a standard rate schedule?
How will FFS work?
How does FFS fit in with the other reforms?
When will the conversion to FFS take place?
What else needs to happen to implement FFS?
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Principals of Rate Architecture
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Fairness and Equity
Portability
Affordability
Reform
Simplicity and Practicality
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The Rate Setting Project:
Background
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Role of Advisory Committees
Role of Other Stakeholders
Data Collection and Analysis: GLs and Calls
The Committee Meetings
Budget Work
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Basis of the Rate:
Four Components of “THE BRICK”™
1. Direct Care Staff Wage
Staff time to deliver service (based on BLS
assumption inflated to January 2015)
• The BLS category chosen varies by service and provides
the basis of each rate as closely as possible
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Basis of the Rate:
Components of “THE BRICK”™
2. Employment-Related Expenditures
Combination of discretionary (health benefits,
retirement, etc.) and non-discretionary costs
(unemployment, social security, workers
compensation, etc.)
• Each General Ledger provided to JVGA was analyzed to
arrive at a 39% factor
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Basis of the Rate:
Components of “THE BRICK”™
3. Program Support
Expenditures needed to support consumers that are
not assignable to a single consumer (supplies,
supervision, equipment, training)
• These percentages vary by service
• Acuity differentiated rates may have higher Program
Support percentages due to the increased need for
staff supervision
• Training & staff recruitment costs were included in
this component based on Committee
recommendations (as opposed to G/A)
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Basis of the Rate:
Components of “THE BRICK”™
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General and Administrative (G/A)
– Costs of doing business that are common across all
industries (Legal and Accounting, Administrative
salaries, etc.)
– G/A is calculated as a percentage of the cumulative
total of Direct Care Staff Wage, Employment Related
Expenditures and Program Support
• An analysis of the current DDD provider inventory indicates
that, on average, G/A is being applied at 10.5%
• In most federal programs, G/A is typically applied in the 10%
range
• Based on input from the Advisory Committees and other
stakeholders, JVGA recommends a 12% G/A factor in the
rate structure.
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Developmental Disability Services:
Rates
• Scope of work included all DDD waiver services –
both Community Care Waiver and Supports
Program
• The only exception is the CCR model
• Services fall into four categories
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Existing and Re-engineered services
New Services
Services still under construction
Services where there is no standard rate to be set
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Developmental Disability Services:
Service Categories for Rate Construction
1. Existing and Re-engineered Services
• Day Habilitation, Respite, Individual Supports, Supported
Employment, Support Coordination
2. New Services
• Behavioral Supports, Career Planning, Cognitive
rehabilitation Therapy, Community Based Supports,
Community Inclusion, Interpreter Services, Physical
Therapy, Prevocational Training, Speech Therapy
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Developmental Disability Services:
Service Categories for Rate Construction
3. Services that are still under construction
• Transportation, Supports Brokerage
4. Services where there is no standard rate to
be set
• Assistive Technology, Case Management, Community
Transition Services, Environmental Modifications, Fiscal
Intermediary, Goods and Services, Natural Supports
Training, PERS, Vehicle Modifications
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The Rate Sheet
• Walk Through
 There are different rate structures
 The billable unit also needs to be considered
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Other Key Assumptions Related to
the Rate Setting Project
• Demographic Differential
• Studied the need for differentials based on
geographic characteristics, size of provider, and
offsets.
• JVGA concluded that one standard rate can be
used statewide and ensured that these issues were
factored into the sample
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Other Key Assumptions Related to
the Rate Setting Project
• Acuity Differential
• Studied the need for an acuity differential to account
for the higher costs associated with serving individuals
with significant medical and/or psychiatric needs
• This differential is only applied in cases where
specialized staff, usually with higher credentials, is
necessary based on assessment
• Application of the differential is used to address the
need for a higher level of a particular service, not more
staffing hours
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Other Key Assumptions Related to
the Rate Setting Project
• Housing
• Current contract funding (~$75M) was set aside
• Approach will be two-fold:
– Existing residential placements - combination of (1) Service
Funding (FFS, rate model), (2) Contribution to Care (SS,
through rep payee), and possibly (3) DHS housing subsidy
(used to help bridge gaps)
– New placements - long-term goal is to collaborate with the
community to build a housing model that is sustainable and
can be supported via Service Funding and Contribution to Care
• With rates now available for modeling, this will be an
area of immediate discussion with the community and
the new DHS Housing Unit (to determine both process
and criteria around any potential use of subsidy)
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Other Key Assumptions Related to
the Rate Setting Project
• Transportation
• For licensed settings (GH, SA), the value of
transportation has been added as a factor to the
Individual Supports rate
– Transportation needs will be met by residential provider,
except where transportation is factored into the rate for
another service
• For all others, transportation will be billed
primarily on a mileage reimbursement model
• Parking and tolls included
• Further discussion is needed
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Other Key Assumptions Related to
the Rate Setting Project
• Respite
• There are significant variations in this service within
our current system
• Service definitions and provider qualifications
between waiver programs will be aligned
• Further collaboration with families and providers will
be needed to line up current programs and services
with the upcoming FFS model
• Reminder: CCRs not included in this rate project
• Important takeaway: There is no habilitation
component in respite
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Other Key Assumptions Related to
the Rate Setting Project
• Self Hires
• Need to finalize list of services for which self hires
will be an option
• Rates are equal but components of rate will need
to be utilized to compensate the FI
• RFP for DHS FI issued 6/23/14; bidding closes
8/12/14
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Key Recommendations with
Stakeholder Input
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Individual Supports (Blocking)
Self Hires
Transition Period / Banding the Loss
G/A
Training & Recruitment costs
Inflation adjustment of BLS wage assumptions (2015)
Parking and tolls included in transportation rate
5% Absence Factor
Acuity Levels*
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Future Rate Influences
• Data collection/utilization
– As data improves, the system improves
• Advocacy
– Transparency = opportunities
• Affordable Care Act (ACA)
– There are some things that we know can happen but
we cannot measure their effect
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Final Decisions
• Blocking Assumptions
• Transition Period / Banding the Loss
• Components of the Brick
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BLS Assumptions (including inflation adjustment)
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Program Support %
General and Administrative %
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Upcoming Discussions
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Housing policies and licensing regulations
NJCAT Crosswalk: Service Access & Acuity Factor
Out of Program Days
Transportation
Respite
Supports Brokerage
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Using Rates in a Fee for Service System
• What does it mean
For Providers
For Families
For Consumers
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Wrap-Up and Next Steps
• Timeline / FFS Implementation Schedule
– Upcoming Policy meetings
– Webinars / Stakeholder conference calls
• A FFS dedicated web page and Helpdesk will
be in place beginning in August 2014.
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