n n t1 n October 2004 n Final Report October 2004 n r: State of Delaware n Division of Developmental G Disabilities Services n n n n r: n n n MERCER n Human Resource Consulting r: n g Marsh & McLl'!nnanCompanies n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services M n n n n Contents n I. Introduction 2 G 2. Executive Summary and Recommendations 3 n n 3. Direct Services Staff Rate System 6 n 4. Individual Service Authorization Protocols 17 n Attachment #1 n Futures Health Corporation Biographical Summaries 29 n Attachment #2 n Florida Service Algorithms .53 n Attachment #3 tJ Montana Service Utilization Standards 59 n n n n n n n ("j n n n n n Mercer Human Resource Consulting n 9,lwork\sod01h\projecllpm-ddIIinallllpor1oc12004\delaware1lna!report,do(: n n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services M n n n n n n n 1 n n Introduction r: This document describes the technical aspects of the State of Delaware Rate System and associated Inventory for Client and Agency Planning (ICAP) formulas used to assign r: rates to individuals. As such, it is intended to serve as a user's manual for future reference n and updates. The document is divided into two parts. The first part describes the Direct Service Staff Rate System (DIRECT SERVICE STAFF), and the second part describes n the Individual Service Authorization Protocols. Additionally, an Executive Summary and n Recommendations are offered as background for the User's Manual. n n n n n n [] n (J tl n n n n Mercer Human Resource Consulting Page 2 n n n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services n n n n n n n 2 n n Executive Summary and Recommendations n The State of Delaware is committed to shifting the focus of support for people with developmental disabilities from a system based on program capacity to a person-centered n approach. This approach emphasizes the development of a rate methodology that n connects reimbursement rates to individual need. The rate methodology will be consumer-driven, family-oriented, choice-based, and market-focused. To further this n initiative, in 2001, the State of Delaware Division of Developmental Disabilities Services (DDDS) selected Mercer Human Resource Consulting (Mercer) to conduct a study to n assess DDDS's current Medicaid Home- and Community-based Services (HCBS) rate n structure, and to conduct the following tasks: n . assess the current rate methodology and individual needs assessment approach for residential habilitation, day habilitation, respite, and transportation services offered n under HCBS; . assess alternative rate methodologies and individual needs assessment tools; n . determine, and recommend from these assessments, options for applying a rate methodology based upon self-determination principles and individual needs; n . develop a detailed rate model which is cost effective to DDDS and the Division of n Social Services (DSS), which recognizes the varying needs of individuals with developmental disabilities, and allows for adequate cost recovery to DDDS contract n providers; and n . implement the rate model and individual needs assessment approach. n To accomplish these tasks, Mercer conducted the following activities: 1. Conducted analyses of cost, vacancy factors, and service utilization data for all provider and agency services to include facility and non-facility costs, and established financial baselines for each provider. n 2. Designed reimbursement rates for residential and day habilitation programs offered n under the Medicaid HCBS Waiver. n n Mercer Human Resource Consulting Page 3 r: n n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services n 3. Designed transportation rate methodology and associated rate matrix. n 4. Conducted analyses of housing costs and determined standardized market-based pricing approach to room and board reimbursement practices as well as assisting in n negotiating future housing contracts with ARC. r: 5. Coordinated the design and implementation of rate reporting requirements with EDS, r: provider leadership, and DDDS. n 6. Conducted analyses of ICAP scores and current provider staffing and support patterns and developed usual and customary service standards and associated service n algorithms for determining individual authorization levels. n 7. Designed an Individual Cost Guideline (lCG) instrument using the ICAP as the n defining criteria for cost allocation. n 8. Conducted analyses of special populations and outlier situations and developed n exception protocols. 9. Facilitated Pilot Committee meetings and conducted fact finding and consensus- building activities on behalf of DDDS. In completion of the project, Mercer respectfully offers the following recommendations n for further refinement of the reimbursement rate and individual needs assessment G processes: n I. Develop clear standards to determine eligibility for group home residential services. There appear to be persons within those settings whose needs are minimal and could r: be supported in a manner that is equally appropriate but less costly. n 2. Review and alter, as appropriate, current prerequisites for supported/supervised r: living. Current practices may result in people directed to group living who could be supported in an apartment. n 3. Amend the HCSS Waiver to expand options and alternatives to the current limit of n services, specifically services that expand options to more non-traditional services n (i.e., community guides). n 4. Introduce outcome measures within provider contracts to gauge whether appropriate n services are being provided. 5. Eliminate the "special population" designation and use individual needfor support as n the determination for higher rates. n 6. Phase out of the ARC group home purchase arrangement; allow all providers to n secure their housing supports and encourage leasing rather than purchasing. n n Mercer Human Resource Consulting Page 4 n n n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services n 7. Therapy services should be individually authorized and not bundled in a therapy n contract. n n n n r: n n n n n n n n n n n n n n n n n r: Mercer Human Resource Consulting Page 5 [l n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services n n n n n n r; 3 n n Direct Services Staff Rate System n Description n The DIRECT SERVICE STAFF approach is a model where a single rate is developed for a unit of time provided by a staff person who provides care for a person receiving the n service. The service is expressed as a unit of time spent in the service by an individual, n but the costs are based on the time spent by people providing the service. The billable unit remains a day or an hour (depending on the service), but each rate will vary in exact n relationship to the level of Direct Service staffing. In this way, a published rate environment is created, but variability according to the needs of each individual is n maintained. n The rates are built using the hourly wage of the staff person, then adding percentages for n Employment-related Expenditures (FlCA, FUTA, Workers Compensation), Program-related Expenditures (program supplies other than food, direct staff n supervision, and other categories), and General and Administrative (G&A) (all other n indirect costs of operating a business). n History The DIRECT SERVICE STAFF was originally developed as a published or standardized n rate schedule that seeks to be responsive to the needs of the individuals receiving services and fair to the agencies providing them. It accomplished this by the approach to rate n construction itself. This system is completely predicated on the people who will be tl providing the service in a "hands on" manner with the people receiving them, and varies according to the quality and quantity of that staff time. Behind the entire system is the n belief that the most prominent and important variable in the determination of quality and the successful adherence to standards is the DIRECT SERVICE STAFF profile. By no n means does it imply that this is the only cost component necessary to create rates, only n that it is the most prominent in the furtherance of standards of quality care. n n n Mercer Human Resource Consulting Page 6 n n n Final Report October 2004 State of Delaware Division of Developmental Disabilities Services n The rate system also depends on the belief that all other cost components, which are [j equally necessary although less directly variable in response to the needs of the individuals who will receive the services, can be expressed in relationship to DIRECT n SERVICE STAFF costs. n The rate system finally depends on the belief that if all the compensation components are studied and their relationships to DIRECT SERVICE STAFF cost profiles can be n determined, a standardized rate system can be produced by establishing DIRECT SERVICE STAFF profiles and then building the total compensation (rate) according to r: the relationships of the other components to the service staff costs. n Methodology n There are four standard cost components that are assumed to be common to all (if not n most) residential and congregate social and medical services. These include: n . direct service (or care) staff wage, . Employment-related Expenditures, n . program-related but not direct expenditures, and r; . G&A Expenditures. n An understanding of these components is critical to an understanding of the rate system n as a whole and hence, the components are defined in some detail in the section below: n Direct Service Staff [j The definitionof DIRECT SERVICESTAFF consists of two elements: 1. The staff must be people who are performing their tasks in the furtherance of the n objectives of the service.