I was interviewed recently on Danvers cable access TV about my new book, Managing Public Sector Projects: A Strategic Framework for Success in an Era of Downsized Government.

The book has been moving steadily up the charts on Amazon. (It made it to 24th this weekend among books on public administration and government, before slipping a little.)

Here’s the TV video:  

The foundations warned that we mustn't falter in this reform effort, according to the Globe, because that would be a sign of “bureaucratic inertia, union resistance, or political malaise.”

It's difficult to question a policy juggernaut consisting of The Mass. Taxpayers Foundation, The Boston Foundation, the Patrick administration, and The Boston Globe.  But we'll give it a try.

Our question is: where did these findings in the MTF/BF report come from — particularly the finding that closing the state ICFs will save tens of millions of dollars a year?

Unfortunately, as noted, only an executive summary of the report is available yet on the websites of the MTF and the BF.  So, that's all we have to go by right now.

The executive summary (linked above) includes a table with an institutional-vs.-community-bed cost comparison.  According to the table, it costs $183,000 per bed in a DDS institution, such as Fernald, compared with a cost ranging from $95,000 to $150,000 per bed in the community system.

What's the source of that information?  Beneath the table in the executive summary, it states that the source is the “DMR (now DDS) Community Services Expansion and Facilities Restructuring Plan, Revised March 9, 2009.” 

In other words, the source of this cost comparison is the Patrick administration itself.  The Mass. Taxpayers and Boston foundations are apparently relying on the administration's cost-savings numbers in reporting to the administration that there are… get this…cost savings. 

Very nice arrangement.  The administration can then point to this presumably independent report and say, 'We told you so.  This report backs up our claim that closing state facilities will save us money.  In fact, we look moderate in only seeking to close four out of six facilities.  This report says we should close them all.'

Nevermind that groups supporting the developmental centers, such as the Fernald League, COFAR, and others, have been raising questions for years about these supposed cost savings, and pointing out the dangers in closing these critically important institutions.  Closing all of the remaining ICFs in Massachusetts would not only not save money, it would have devastating consequences for hundreds of the most vulnerable citizens of the commonwealth and their families.

Those questions and concerns have been conveniently ignored in the MTF/BF report, or rather, executive summary.

BTW, we're eagerly waiting for the full MTF/BF report, and will probably have more to say about it when we get to read it.

The question the authors leave unanswered is how far the Obama administration intends to go, or has gone, to de-politicize the office of the presidency.  They point out that Barack Obama made an early effort to avoid shows of excessive partisanship, particularly in his decision to retain a Bush appointee, Robert Gates, as secretary of defense.  But politicization of the presidency may only be in remission, they say.

I would suggest that in one respect, Obama appears to have shown the same impulse as Bush and other recent presidents; and that is the impulse to reduce the power of career bureaucrats though privatization of governmental functions.  (See Rick Cohen's interesting series in The Nonprofit Quarterly on the Obama administration's push for more privatization and free-market approaches in public housing services, education, and other governmental functions.) 

It may not be the case that Obama is pushing privatization for the same political-loyalty-inspired reasons as Bush.  But that may not make a lot of difference to the career employees who lose their jobs as a result.

Moynihan and Roberts state that starting with Andrew Jackson, the decision to politicize a presidency has been connected with a distrust of the federal bureaucracy and of career employees, who are seen as hostile to presidential goals because of professional and ideological biases.  

They suggest at least three basic characteristics of a politicized presidency: 1) Expansion of the number of political appointees in the administration, with more weight given to loyalty than merit in hiring; 2) the transfer or termination of career officials in the bureaucracy who are deemed untrustworthy; and 3) the centralization of key decision-making in the White House.

It would be hard for Obama to top George W. Bush in the politicization arena.  Moynihan's and Roberts' article doesn't provide new disclosures about  Bush.   But they put enough examples together that the case against the Bush presidency appears fairly persuasive.  We still clearly remember the debacle of the appointment of Michael Brown to head FEMA, for instance.  Brown and other senior appointees in FEMA lacked emergency management expertise, the authors note, but had “significant political campaign experience.”

Then there were the forced resignations of the U.S. Attorneys and the hiring at DoJ of politically connected yet inexperienced personnel such as Kyle Sampson, a classmate of Vice President Dick Cheney's daughter, and Monica Goodling, who had been an opposition researcher for the Republican National Committee.  

Moynihan and Roberts also recount the case of Bradley Schlozman, a political appointee at the DoJ's Civil Rights Division, who apparently had high-level personnel hiring and firing responsibilities there.   In email comments, Schlozman repeatedly referred to conservative applicants as “real Americans.”  He also wrote, regarding existing employees, that, “My tentative plans are to gerrymander all of those crazy libs right out of the section.”  He apparently had quite a bit of success in doing so.

And then there were the political considerations that colored the hiring of staff to manage the U.S. reconstruction efforts in Iraq.   Moynihan and Roberts rely heavily here on Rajiv Chandrasekaran's excellent book, “Imperial Life in the Emerald City: Inside Iraq's Green Zone,” for details on the White House's insistence that job applicants in the reconstruction management effort be screened for loyalty to the Republican Party and the president.

As I point out in my own book, Managing Public Sector Projects,” the Iraq reconstruction has been marred by poor to nonexistent planning, shoddy and delayed project work, and a failure to properly account for billions of dollars in U.S. taxpayer money spent there.

In addition to hiring politically connected personnel, there is also the “assault on rationality in decision making” that the Bush administration engaged in as part of its politicization efforts.  These ranged from alterations by the EPA of scientific reports on climate change to opposition by the Food and Drug Administration to the vaccination of young women against the human papillomavirus, the most common sexually transmitted disease in the United States.

Moynihan's and Roberts' article might be no more than an interesting discussion of recent history, were it not that they ask the larger question whether the politicized presidency is on the wane or in remission.  The article also started me wondering whether some of the characteristics of politicization may have also spread to the private sector.

In today's highly competitive job market, we hear, for instance, about applicants “dumbing down” their resumes in order to persuade potential employers that they won't leave for higher-level opportunities when the economy improves.  In other words, are employers looking these days–as the Bush administration did a few years ago– for loyalty over expertise and experience?

Both court decisions reject anti-institutional biases of groups and organizations ranging from state vendors to the U.S. Department of Justice.

In the Tennesse case (People First of Tennessee vs. Clover Bottom Developmental Center), a U.S. District Court judge ruled on May 28 that individuals and legal guardians can choose a large Intermediate Care Facility for their wards and loved ones even if professionals have determined that those residents should be transferred to community-based group-home settings.

The case concerns the pending closure of the Clover Bottom Developmental Center in Tennesse and the wish of guardians to move residents there to another ICF.  The DoJ had argued against that right of choice, contending professionals had determined the community system was “more integrated.”

The U.S. District Court decision quoted from the brief of the Parent Guardian Association, which argued that:

Conservators [and guardians] — who have the longest and most meaningful relationship with their loved ones and the greatest investment in their well-being — are in the best position…to assess the risks…of the less protective environment of community settings…and to make an informed decision…to decline community placement.

It would have been nice had the First U.S. Circuit Court in Boston similarly recognized the validity of the Fernald guardians' argument that transferring residents from Fernald would not result in equal or better care for them.

In the California case, a state appellate court ruled on June 22 against a state vendor agency, which was seeking to block admission of Michael, a profoundly developmentally disabled man, to the Sonoma Developmental Center, an ICF.

In 2008, an administrative law judge in California had sided with Michael's parents, who had sought to have him admitted to the Sonoma Center because his existing ICF was slated to close.  However, the admission had been blocked by the San Andreas Regional Center (SARC), a state vendor that contracts to develop individual care plans for California citizens with developmental disabilities.

The administrative law judge stated in her decision that:

…it was evident Michael's family was motivated by their love and devotion to him…[and] given his very severe and significant developmental disabilities and medical issues, a developmental center is the least restrictive and best environment for him…

The administrative law judge's decision was appealed by the state public defender, who was purporting to represent Michael, and who wanted him placed in a community-based group home. (You'd think, given the state budget problems in California, that the public defender's office there would stick to representing defendants in criminal cases.) 

A trial court judge sided with the public defender, and against Michael's parents.  But the appellate court reversed the trial court and described the public defender's appeal as “ostensibly on behalf of Michael but effectively on behalf of SARC (the vendor that had blocked his admission to the Sonoma Center).”

It should be noted that, according to the appellate court decison, Michael has an IQ of 10, is legally blind and is paralyzed in all four limbs.  Nevertheless, the SARC objected to the Sonoma Center because it was “a locked facility where Michael would not be free to leave on his own.” 

Michael's parents and the administrative law judge pointed out that given Michael's level of disability, the relative freedom of the group home proposed for him was irrelevant to him.  Moreover, they argued, unlike the group home, the Sonoma Center would be able to provide 24-hour medical and nursing care, which Michael did need.

We're not legal experts, but we hope these two court decisions do reflect a return to common sense in the care of the developmentally disabled and a recognition of the rights of families and guardians in these very senstive cases.

CITIZENS FOR PUBLIC SCHOOLS ISSUES CONFERENCE: “Taking Back Our Schools: Promoting Equity and Excellence in Public Education.” Rep. Carl Sciortino, Melissa Colon, (Gaston Institute), Jose Lopez (co-chair Boston Coalition for Quality Education, Boston Teacher) and others will speak at CPS’s conference at Bunker Hill Community College in Charlestown. Speakers, panels and workshops will address a broad range of issues, including CPS President Ruth Rodriguez Fay on “Countering the Attacks on Public Education,” FairTest’s Monty Neill on “Federal Standardized Tests. Dangers? Opportunities?” as well as “Social Pressures on Public Schools.” Workshops will address MCAS reform, privatization and profiteering, budget cuts and addressing the achievement/opportunity to learn gaps. CPS is an organization of parents, teachers, students and other citizens whose mission is to promote, preserve and protect public schools and public education. Find out more and register on the CPS web site. (Saturday, Oct. 16, 9 a.m. to 3 p.m., Bunker Hill Community College, Lecture Hall C202, 250 New Rutherford Ave., Charlestown)

Lisa Guisbond

Citizens for Public Schools

Got to go back to headline writing school…

“Of what avail are any laws, where money rules

       alone,

Where Poverty can never win its cases?

Detractors of the times, who bear the Cynic’s scrip,

       are known

To often sell the truth, and keep their faces!”

–Ascyltus, from Petronius’ “The Satyricon“

In 1981, Chile adopted a privatized Social Security-like (pension) program that requires most workers to contribute 10% of their income to a private investment account. They may contribute up to 20%. These accounts are maintained by a number of private companies (known as Administradoras de Fondos de Pensiones, or AFPs) that compete for the business by advertising directly to the investing public.

These providers charge commissions and fees for certain services which are paid on top of the contributions.

An additional 3% is collected from most workers for Disability Insurance; 7% more is deducted from wages for health care.

At retirement, the money is either used to purchase an annuity from a private provider to provide a steady source of income or it’s withdrawn at a set rate over time directly from the account.

Those who are self-employed do not have to pay into the system, but they have the option to do so if they’re so inclined.

If you don’t have enough in your private account to purchase an annuity or to withdraw steady amounts over time, but you’ve been contributing for more than 20 years, you will receive a minimum pension from the Chilean Government…but you will also lose any contributions you made to your private account.

AFPs are regulated as to how they may invest; if, through investment losses, they do not have enough money to capitalize the accounts they carry they must provide the money out of their own cash reserves. If they follow the rules, and still lose so many assets they can’t continue to operate, a government bailout is in order.

At the same time, a second “welfare” program (PASIS) was established to create a “safety net” that would provide a benefit of 75% of the poverty level or 25% of your last 10 years’ earnings, whichever is higher.

You can’t collect from both programs, but it is possible to collect from neither. More about that later.

Employers do not contribute to funding the system, however, all employers were forced to give 17% pay raises to their workers to come up with the money for the workers to make their contributions. (Chile was a military dictatorship at the time, making the “forcing” process much easier than it would be in the US today.)

The system is just turning 30 years old, and we’re now seeing the first big wave of workers who are eligible to retire.

So how has all this been working out for Chileans?

The first thing we learn is that the poorest workers probably won’t do well enough to qualify for “top tier” pensions, even though it’s projected that they’ll tend to pay for the benefit over their working lives…which will reduce their income over their working lives. (It’s also projected that workers with higher incomes should do reasonably well.)

Since most workers are poor (Chile has some of the most unequal income distribution on Earth), in the end it’s starting to look like the problems of finding enough money to support the social safety net are actually getting worse, and not better.

Additionally, other problems have come to light:

–You have to find money to “transition” from one system to another, and transition costs have been quite expensive indeed: 6.1% of Gross Domestic Product (GDP; that’s a measure of the total output of an economy) in the 1980s, 4.8% in the 1990s, and 4.3% until 2037. If we were to duplicate the Chilean experience in the US economy, 6% of the 2008 GDP (about $15 trillion) means about $900 billion annually in transition costs for the first ten years, and something north of $600 billion annually for the last 37 years of the exercise.

(Keep in mind that Chile only provides 2/3 of their population with either PASIC or a pension; since we cover a higher number than that in the US, expect those numbers to come in higher than we’re guessing here.)

Why are so many not covered? Lots of workers are working outside the “official” economy to avoid making contributions that they won’t get back later (in 1994, it was estimated that only 52% of workers regularly contribute to their accounts); additionally, many women have never participated in the labor force.

–Because the service providers are competing for the business, administrative costs (read: advertising and sales commissions) have been far higher than in the US Social Security system, where administrative costs have been at .07% of distributions, or lower, since 1990. To put this another way, during the 1990s the US Social Security Administration was paying $18.70 per year to administer a claim; at the same time Chile’s various providers were paying an average of $89.10 to do the same thing.

–All that competition, some say, has lead to lots of changing of providers, which tends to make any investment program less efficient over time. (In 1996, half of Chilean workers switched providers; it’s estimated that reduced pension accumulations across the entire system by about 20%.) The Chilean Government made changes in 1997 to try to work through this problem, and they seem to have had some considerable effect.

Evidence suggests most of the switching not related to consolidation in the AFP business is being done by a small percentage of account holders, with some switching as much as eight times in a year; today the average Chilean seems to change AFPs about once every five years. Unemployment also seems to be related to switching; this because the unemployed can establish a new account with a lower set of fees if they move to a new provider.

–Many Chileans, despite living in a system that has, for almost 30 years, required them to manage their own money, actually know very little about that money.

Less than half know that the contribution rate is 10%, only 1/3 know how much (within 20%) is in their accounts, and, according to work done at the University of Chile, “few” actually know what they pay in fees and commissions.

–Those who end up in the welfare program are guaranteed 75% of the poverty level; that suggests that if you’re elderly and on welfare, you’re living in poverty. Because of limited funding, there are qualified elderly poor in Chile who do not receive any benefit.

Today, in the US, about 12% of the elderly live in poverty. Without
the current Social Security system in place, it’s estimated that 49.9% of the elderly would have been living in poverty in 2002.

–In Chile, taxes to cover the transition costs tend to rise faster than the “assets under management” for most workers, leaving them less well-off than before-an effect that is most common among the “financially illiterate”…meaning, of course, most Americans. In other words, reform, in Chile, tends to help the wealthiest and best educated at the expense of those who are less of either.

That’s a whole lot of detail, so let’s pull pack and look at the “macro” picture:

Chile has operated a version of a privatized system since 1981, and for the most part the working poor will never see any benefit from the transition. Since Chile doesn’t have much of a middle class, it’s hard to see how the Chilean experience would affect our middle class.

The US Social Security system has reduced the estimated rate of elderly poverty from nearly 50% to roughly 10%; such a reduction in poverty did not occur in Chile with their privatization.

The costs of moving to the same system here, if our experience were the same as Chile’s, would run anywhere from $600-900 billion annually for at least 50 years. Of course, since we provide a Social Security safety net to almost all of our citizens, as opposed to 2/3 of the population, as Chile does, it’s reasonable to assume our costs would be more or less 1/3 higher.

Chile forced its private-sector employers to raise wages to cover the workers’ costs of transition; I’m aware of no proposals that would, or could, impose such a cost on employers in the US.

It appears that Chilean-style privatization encouraged about half the population to engage in “under the table” work, making the funding problem for the system even worse that it would be otherwise.

Frequent switching of account providers is great for the providers, as it creates lots of chances to collect fees for opening and closing accounts and the like-but it’s not so great for the account holders, who are losing up to 20% of their potential earnings more or less because maintaining a sales force and running lots of ads are effective business practices.

It is unknown what happens when a shock like the recent recession hits the system, and we are awaiting research that will help us understand what happens when and if the State is required to refund losses incurred by the AFP if they “follow the rules” but still lose so much money that they lack sufficient capital to operate.

The costs of operating the PASIS program go up even as the cost of operating the retirement accounts are also still high, and the question of whether Chile can continue to expend “safety net” coverage to the 30% of the elderly poor who are not covered remains unknown.

So there you go: there are going to be lots of proposals to privatize Social Security this year, “getting a Chilean” may well be one of the options you hear Conservatives promote-and hopefully by now you have some idea why this doesn’t look like nearly as good an idea as some folks would tell you it is.

Next time, we’ll talk about proposals to invest Social Security money in Treasury debt, and whether such an effort is actually an investment at all.

It’ll be at least medium geeky…and hey, who doesn’t love that?

The administration’s cost analysis in shutting the Monson, Templeton, and Glavin developmental centers was submitted in July to the House and Senate Ways and Means Committees and to the Joint Committee on Children, Families, and Persons with Disabilities.  The submittal was required by language in the Fiscal Year 2010 state budget.

Just to reiterate, our two main objections to the administration’s cost analysis are these:

1) The administration’s cost analysis appears to compare apples to oranges:  It compares developmental center residents to community-based residents in concluding that community-based care is less expensive.  But community-based residents are, on average, younger, less medically involved, and less intellectually disabled than are the residents of the Monson, Glavin, and Templeton Centers. Thus, it’s not that care in the community system is less expensive, it’s that the community system serves people who, on average, need less expensive care.

2) The administration’s cost analysis projects only capital expenditures needed for keeping the three developmental centers open.  It doesn’t appear to include any projections for the costs of building new group homes in the community that will be needed when the developmental centers are closed.

The Springfield Republican, on Sunday, reported on our overall objection to the validity of the administration’s cost study.

The newspaper went on to quote Senator Gale Candaras, co-chairman of the Legislature’s Children and Families Committee, as saying she accepts the administration’s savings projections in closing the centers. Candaras would not, therefore, appear to be a likely vote in favor of a mutually credible, independent study of the cost issue.

On the other hand, Senator Stephen Brewer, Vice Chairman of the Senate Ways and Means Committee, is quoted as promising to scrutinize the administration’s transition plan for Monson residents.  “If we don’t have a level of comfort, she (DDS Commissioner Elin Howe) will have a fight on her hands,” Brewer said.  It’s not clear, though, if Brewer was referring to having a level of comfort with the cost analysis itself.

I put in calls in the past week to key staff members of the three legislative committees that received the administration’s cost analysis. I asked if they had all received a letter we had sent rebutting the cost analysis and whether they thought an independent analysis might be needed.

All of the committee staff said they were aware of our letter, and I got the impression that all at least view the point we’ve raised about the failure to compare equivalent populations as a potentially valid criticism of the administration’s analysis.  One staff member said we had provided “helpful information” to his committee and indicated that committee members may ask DDS about our concerns during upcoming budget hearings.

At the same time, I didn’t get the impression that there was much if any sentiment among the committee staff I talked to, to recommend that an independent agency undertake a new cost analysis.

One staffer acknowledged that the administration has not provided any “specific information” to her committee about how it had calculated a cost for community-based care in its report.  She said she assumed figures in the the administration’s cost report did indeed represent an average cost of care the community system.  

The staffer said, though, that the administration had previously given her committee some rough cost comparisons between the facilities and the community system for persons with different levels of intellectual disability.  Those comparisons, she said, showed a lower community cost for people with equivalent disability levels.  But she said she had no information on how the administration had derived those figures.

That same staff member said she believed the administration’s overall claim that there would be a savings in closing the developmental centers because of what she views as the high cost of heating and maintaining the centers.  I responded that the Fernald Center budget, which we examined a few years back, showed that the cost of the physical plant was only about 8 percent of the facility’s projected budget for Fiscal Year 2010 and that the cost of staffing was the big cost item, at more than 75 percent of the projected budget.  (I later faxed her a Fernald budget document that shows this.)

The committee staff member then asked me what we believe the real figure for community based care would be for people now living in the developmental centers.  I said we don’t have a figure on that because we aren’t privy to all of the administration’s numbers, but that we think the cost would not be lower in the community for a number of reasons.  I cited the centralization of services in the developmental centers as the number one reason for possible lower costs in the facility system.

In sum, as I suspected, the three committees that received the administration’s cost analysis have, up to now at least, accepted the administration’s savings claims and figures at face value. We may have made them a little more aware of that, but it’s not clear they are willing to do anything about it.

Meanwhile, in order to shed as much light on this issue as possible, we have asked the administration under the Public Records Law for additional documents and analyses backing up its cost-savings projections in shutting the three developmental centers.

It would indeed be great if an independent agency such as the Inspector General or the State Auditor were to step in to put the cost savings debate to rest once and for all.  But given the apparently low likelihood of that happening, we’ll try to be as credible about the issue as we can.

Obama, Cooper says, is a talented politician and leader who came to office with major policy ideas and a plan to improve government performance by using technology, in particular.   All of these things require a commitment of resources,  including expertise, planning and coordination, by public agencies and their employees.

Yet, due to the “the actions and inactions of his predecessors of both political parties,”  President Obama “has inherited a capacity crisis that will stand in the way of the accomplishment of his constitutional duty and the obligations of the federal government,”  Cooper writes.   It’s a capacity crisis of which the president “has not demonstrated an awareness.”

Moreover, during his campaign for the presidency and after taking office, Obama has used what Cooper characterizes as “unhelpful rhetoric” regarding public employees such as talking about ”bloated bureaucracies” in Washington and promising to cut the budget deficit significantly by eliminating “too many layers of managers” and excessive paperwork.  Whether you agree or not that there is significant waste and inefficiency in the public sector, this is the type of rhetoric that has driven the downsizing of government and the increased outsourcing of government functions since the 1970′s.

Cooper notes that the result of this continual downsizing has been a loss of capacity in the executive branch — and the regulatory agencies, in particular — to function effectively.   Government downsizing began in the 1970s;  and Cooper tracks this trend from the Carter administration through Bush 2.  During this same period of time, he points out, work demands on these agencies increased substantially.

By 2003, the Government Accountability Office was reporting that contracting out of public functions had risen dramatically across federal agencies while the federal workforce available to manage those contracts had decreased just as dramatically.   Failures in government performance began to mount  — notably, the poor contract management of the U.S. reconstruction effort in Iraq and managerial fiascos in the Department of Homeland Security and in the response to Hurricane Katrina.

In my own book, “Managing Public Sector Projects: A Strategic Framework for Success in an Era of Downsized Government,” I discuss some of the consequences of this downsizing at the federal and state levels, from the lack of control over Big Dig project in Boston to the government’s reliance on contractors themselves to manage other contracts in Iraq.  (I sent a copy of the book to the White House, by the way.)

Cooper discusses a number of President Obama’s policy initiatives since taking office, including his advocacy of the economic stimulus package that emerged from Congress as the American Recovery and Reinvestment Act of 2009 (ARRA), and his health reform law and Wall Street reform legislation.  Each of those policy initiatives requires effective and coordinated management by public agencies, including “massive service delivery, payment and regulatory systems,” which simply don’t exist at the present time.  Moreover, key appointments to high-level administrative posts that could help bring about that coordination were delayed for months.

Cooper notes, in particular, a 10-month delay by the Obama administration in naming a director of the Office of Federal Procurement Policy, an agency vital to the effective management of ARRA.  There were also significant delays in naming directors of the Office of Personnel Management and the Office of Information and Regulatory Affairs, an agency critical in addressing failures in the regulatory system.

Even President Obama’s laudable initiatives to improve transparency in government through the introduction of new websites on agency performance were not carefully implemented or effectively staffed, Cooper maintains.  For instance, Grants.gov, a website intended to track grant applications and spending, was quickly overloaded by ARRA expenditures and faced the possibility of a shutdown.

Cooper concludes that:

The capacity challenge is…sufficiently grave, not only across the federal government but throughout the intergovernmental system, that it requires serious and direct presidential attention and commitment. 

Thus far, we haven’t seen that commitment from this White House.  Let’s hope we do, and that it ultimately affects all levels of government.  A real commitment by this president to restoring the government’s capacity to function effectively would go a long way toward achieving the goals for which thousands of people are now fighting in Wisconsin and Ohio.

Why might this be a problem?  Because the state Operational Services Division (OSD) depends on the information in the UFRs to determine how much in state funds to apply to that compensation.  By regulation, state funds going towards an indivdual contractor executive's compensation are capped at $143,986 a year, according to OSD. 

Take the May Institute, for instance.   According to its UFR, the nonprofit contractor took in roughly $105 million in revenues in 2009, of which about 66 percent came from the Department of Developmental Services and a variety of other government agencies in Massachusetts.  About 79 percent of the total revenues came from all government sources.

As of April 8, 2011, the online UFR states that Walter Christian, the May Institute CEO, made $509,798 in salary and other compensation in the year ending June 30, 2009.  Based on that number and on information from OSD, we calculate that OSD would have been required to “disallow” about $366,000 of that total compensation, meaning that amount would have to come from other sources than the State of Massachusetts.

However, the IRS Form 990 for the May Institute for the same 2009 fiscal year lists Christian's total compensation as $1.087 million.  That's a difference of more than half a million dollars between Christian's compensation as listed on the state's UFR and on the IRS 990 form.   If Christian really earned $1.087 million in compensation, we calculate that the state should have disallowed more than $940,000 of it, not just $366,000 of it.

All of this suggests that based on the 2009 UFR, the commonwealth may mistakenly think that more than half a million dollars in potential state funds went into direct care or other operations at the May Institute, when it really went toward Christian's compensation.

I would note that the UFR website stated as of April 8, 2011, that the latest online version of the May Institute 2009 UFR  had been submitted by the contractor on March 22, 2010, more than a year ago, and still hadn't been reviewed by OSD.  A previous version of the UFR had been submitted in December 2009.  The website stated that there were “no issues pending” regarding that version.

On March 21, I submitted a written question to OSD about the discrepancy in the listing of Christian's compensation on the UFR and Form 990, and followed up with a phone call and an email on April 5, saying I was preparing a blog post about the issue.  I still haven't received a response.

An OSD official told me in the April 5 phone conversation that he had been too busy to get an answer to my question (and a few related questions about the UFR) and was going on vacation the following week.  He said he didn't know when he would be able to get the answers.

It's not just with Christian's compensation that there are discrepancies between the UFRs and the Form 990s, however.  The May Institute UFR lists only Christian and one other executive as making over the $143,986 compensation threshold, above which compensation must come from sources other than the state.  The Form 990 lists a total of 13 employees of the May Institute as making over that threshold amount.  The discrepancy in listed compensation between the two forms was $3.4 million.

For Vinfen, the 2009 Form 990 listed a total of 10 employees as making over the threshold compensation for a total of $2.2 million, whereas the UFR lists a total of only  four employees making only $997,000 — a difference of $1.2 million.

The UFR website stated as of April 8, 2011, that the latest online version of the Vinfen 2009 UFR  had been submitted by the contractor on December 10, 2010, and was found by OSD to be “deficient.”  No further information was provided. 

For Seven Hills, the 2009 Form 990 lists four employees making over the threshold, for a total of $1.2 million in compensation, compared with the UFR, which lists only two employees making a total of $816,000.  That's a difference of $385,000.

The latest online version of the Seven Hills 2009 UFR was submitted to OSD on April 21, 2010.  The OSD website stated that there were “no issues pending.”

Last month, The Globe published a letter I wrote on behalf of COFAR, suggesting that Governor Patrick scrutinize the salaries of human services contractors as part of an overall crackdown he had announced on salaries in the state's independent agencies.

In response, Michael Weekes, president of the Providers' Council, accused me  of  attempting to “smear the leaders” of the human services sector and of “making scurrilous attacks that distort the facts and mislead taxpayers.”   Weekes said my concern over executive compensation was “moot” because state law caps the amount of state funds that can be applied to executive compensation.  He added that my “real concern” should be over the low pay of direct-care workers in the human services contract system, many of whom only make $12 an hour and have gone three years with no increase.

I agree with Weekes that we should be concerned over the low pay to those direct care workers.  That's exactly why we're asking these questions about the salaries of executives making as much as $1 million or more a year, and whether those executives' salaries may be soaking up state funds that should be going to the direct care workers.

(Cross-posted from the COFAR blog)

The administration, which also has no time to listen to people like Joan Douty, claims Glavin and the other centers must be closed because they’re too expensive to operate.  But COFAR has maintained that the administration’s claimed cost savings in closing the centers appears to be based on an apples-to-oranges comparison of the average community-based resident and the average facility-based resident.  Developmental center residents are older, more medically involved and more intellectually disabled on average than community-based residents.

Moreover, as COFAR and other advocates have noted, the centralized services model of the developmental centers is highly cost-efficient when compared to the dispersed clinical, medical, and day services that characterize the community system. 

COFAR has called since last year for an independent study of the cost of closing or maintaining the developmental centers because previous budget amendments have resulted in flawed analyses done by the administration itself, concluding, of course, that the facilities should be closed.

But here’s the problem.  In the Massachusetts Legislature, a handful of people make all the decisions, and Rep. Dempsey is one of them.  There was no floor vote this week on Rep. Gobi’s amendment for the independent study.  In a closed-door meeting in his office, Dempsey simply ordered that Gobi’s amendment be scuttled.  It was not included in a catch-all budget amendment boosting human services line items that will be voted on this week.

Among those who Rep. Dempsey apparently has been listening to are the human service vendors in Massachusetts, who run most of the community-based group homes in the state and who are seeking more business when the developmental centers are closed.  In a letter sent to Dempsey and other legislators a day before Gobi’s amendment was thrown out, the Association of Developmental Disabilities Providers continued to pump out misinformation about the developmental centers.

The ADDP letter called for rejection of Gobi’s amendment and repeated the dubious claim that the developmental centers are “expensive and inefficient to operate.”  So why not agree to an independent study which would settle the question as to which system is most efficient?  To that, the ADDP letter made the ridiculous assertion that “this issue has been the subject of study for 30 years.”

Among the other pieces of misinformation in the ADDP letter was the claim that the developmental centers aren’t needed because “families overwhelmingly choose community settings for their loved ones.”  The ADDP letter didn’t mention that that’s because admissions to the developmental centers have been effectively blocked since the 1980s. 

The fact is that families that are being transferred from the developmental centers targeted for closure have overwhelmingly chosen to be placed at other developmental centers or in state-operated group homes.  They are avoiding the vendor-run system because they know it is beset with problems of poorly paid and under-trained staff.

The Senate now remains the only real hope for this sorely needed independent cost study.  We believe the study should be done by a non-governmental entity selected by either the State Inspector General or State Auditor.  Once again, though, the question remains whether Senate leaders will allow such an amendment to be debated in the light of day or whether they will do what the House did and quietly kill it in the proverbial smoke-filled room.

(Cross-posted from the COFAR blog)

Patrick administration officials appear to be admitting we may be on to something when we pointed out the state may be getting different information than the federal government gets about salaries earned by human services contractors in Massachusetts.

In an email sent to us on May 11, Terry McCarthy, director of audit in the state Operational Services Division (OSD), acknowledged there were discrepancies between executive salary information provided to the OSD and to the federal Internal Revenue Service for the same contractors.

McCarthy stated that the OSD will “reexamine the cited (federal and state salary reports) for proper compensation disclosures,”  and will seek explanations from two of the contractors we identfied for apparent discrepancies in their numbers.

At the same time, McCarthy put forward at least three explanations for the discrepancies, none of which fully satisfy our concerns about them.

First, a bit of background.  Concern has mounted around the country about salaries of executives of nonprofits.   In Massachusetts, that concern has largely centered around the pay of executives of hospitals and health insurers, but it has also extended to the hundreds of nonprofit vendors that contract with the state to provide human services to people with disabilities.

The OSD, which oversees the contracts with these vendors, requires them to provide detailed financial reports that disclose, among other things, the salaries made by their executives.  In addition, a state regulation caps the amount of state funding that goes to pay these salaries at $143,986 a year, meaning that sources other than the state would have to fund salaries higher than that amount.

One of the purposes of this regulation capping executive salaries is to ensure that an adequate amount of state funding is put towards wages of direct-care workers.

COFAR examined state Uniform Financial Reports (UFRs), which are filed with the OSD, and Form 990s, which are filed with the IRS,  for the May Institute, Vinfen, and Seven Hills, three of the largest contractors to the Department of Developmental Services.  In each case, the UFRs for the Fiscal Year 2009 listed lower salaries and other compensation for the same executives than did 2009 IRS tax filings for the same firms. 

The UFRs also listed a lower number of executives earning high levels of compensation than were listed on the Form 990s for the same firms.   These discrepancies imply that OSD may be unaware of the total amount of state funding potentially being used to pay salaries of these executives.

In his response, McCarthy acknowledged that the total compensation of four of five identified Vinfen executives appeared to be underreported on the UFRs by $101,539, while the compensation of two executives of Seven Hills appeared to be underreported by $18,509.  McCarthy said OSD will seek explanations from those contractors about those differences.

COFAR also reported that the 2009 IRS form for Seven Hills listed four employees making over the $146,986 threshold, while the state UFR listed only two employees making over that amount.  The difference in reported compensation between the two forms was $385,000. 

For Vinfen, the 2009 IRS form listed a total of 10 employees earning more than the threshold compensation amount, while the UFR listed only four employees earning more than that amount.  The difference was $1.2 million. 

McCarthy, as noted, stated that the OSD will reexamine the compensation disclosures made by these vendors.  However, he also offered two explanations for the differences in the numbers of executives listed on the state and federal forms.  One is that there are different filing deadlines for the two forms: the IRS forms lag behind the UFRs.

That may be, but it doesn’t seem a sufficient reason to list different salary numbers on each report or to report salaries for more people on the 990 forms than on the UFRs.   Moreover,  the 2009 Form 990 for Vinfen was signed by its president on May 14, 2010.  The UFR was first submitted to OSD in November 2009 and refiled in April 2010 and then in December 2010.  Again, there’s no apparent reason why the final UFR, which was submitted after the Form 990, would have less executives listed and lower salaries than the Form 990.

The second explanation offered by McCarthy was that the Form 990 has “more expansive” compensation disclosure requirements than the UFR.  McCarthy said the UFR is limited to including individuals in policy making positions, and would therefore not include a highly paid clinician, for instance. 

That doesn’t seem to jibe, however, with the OSD’s reimbursable cost regulation, which doesn’t say anything about exempting non-policy making individuals from the salary cap.

Also, all of the 13 individuals listed in the May Institute Form 990 as making over $150,000 are executive-level employees, starting at senior vice presidents on up to the president and CEO.  Those people are all clearly policy-making individuals, yet only two of them are listed on the UFR. 

Finally, McCarthy addressed our finding that there was more than a half million dollar difference in the reporting of the compensation of the CEO of the May Institute on the state and federal forms in 2009.  This, he said, appeared to be largely due to a one-time $682,343 distribution to the CEO on a vested deferred compensation plan that had been previously reported annually as deferred compensation. 

It wasn’t clear, however, whether McCarthy was saying that because this was a one-time distribution on a previously reported deferred compensaton plan that it didn’t need to be reported on the 2009 UFR.   But even if the CEO’s compensation isn’t counted, the difference between the total compensation for the 12 other May Institute executives listed on the IRS form and the compensation for the one other executive listed on the state UFR is $2.8 million.

We’re glad the OSD will go back to these three vendors and check to see that their UFRs were filled out accurately.  But we’re concerned that there is a potentially larger problem here.  It seems OSD does not have the capacity to adequately oversee the contracting system in this state.  One indication of that is that the latest online version of the May Institute 2009 UFR  had been submitted by the contractor on March 22, 2010, more than a year ago, yet it still hadn’t been reviewed by OSD as of today’s date. 

This administration needs to get a better handle on the human services contracting system in Massachusetts.

(Cross-posted from the COFAR blog)

The Patrick administration claims that the average per-person cost of Department of Developmental Services vendor-run group homes  is less than the average per-person cost of state developmental centers for persons with intellectual disabilities.

But we’ve now identified some specific missing group home costs that we think the administration overlooked in its analysis.

An apparently typical DDS vendor contract, which we have reviewed, did not specify any psychological or therapeutic services, and only specified minimal nursing services.  Developmental center budgets, on the other hand, do provide for all of those services.

This appears to be the first major confirmation we’ve been able to obtain, after months of Public Records Law requests from DDS, that the Patrick administration’s savings claims in closing four developmental centers in Massachusetts are based on an apples-to-oranges comparison.  The administration has not fully responded to our follow-up questions about these costs.

I asked DDS Commissioner Elin Howe on June 16, after we had first reviewed the $1.2 million contract, whether medical, clincal, and therapeutic services were available to the residents of the program, and, if so, how those services were funded.

The email I received in response from DDS General Counsel Marianne Meacham, dated July 2, stated the following:

With regard to your questions regarding clinical services available to individuals in the particular…program site, as you know, a full array of clinical services (medical, physical therapy, speech therapy, occupational therapy, psychological, etc.) are available to the individuals in the program through community providers as needed and set forth in the individual’s individual support plan.

This carefully worded answer states only that medical, clinical, and therapeutic services “are available to individuals in the program,”  but it doesn’t say how those services are funded — in other words, where the money comes from.  Here’s why that is a key question:

In July 2010, the adminstration provided a cost analysis to the Legislature, which claimed a $20 million annual savings in closing the Templeton, Monson, and Glavin Developmental Centers and transferring most of their residents to vendor and state-operated group homes.  In the cost analysis, the administration specified a “community residential” cost per client of $107,689.  After adding an average “day services” (work and daily living skills programs) rate to that cost and an average transportation rate, the administration computed a total “community services cost” of $140,955 per client.

The administration then compared that $140,955 total community cost to an average per-person cost at the Templeton, Monson, and Glavin centers of $233,902.  The administration’s conclusion was that serving a client in the community was $92,947 less expensive than in a developmental center.

After we asked DDS, starting last December, for all documents supporting its community residential cost figure, DDS provided, among other things, a spreadsheet listing total costs of close to 1,000 vendor contracts in FY 2009.  We selected one of those contracts for closer review and asked DDS for a copy of it.

The Fiscal Year 2009 vendor contract with the May Institute, Inc. specified  24-hour staffing in a program serving 14 individuals.  The contract further stipulated a rate per client of $286 per day, or $104,400 per year.  This was quite close to the $107,689 community residential rate in the administration’s analysis.

However, as noted, the $104,400 community residential cost did not include clinical, therapeutic, or full medical costs of care available to community-based residents.  The budgets of the Templeton, Monson, and Glavin centers do provide for those services.

On July 6, I emailed back to Meacham at DDS, asking once again how the medical, physical therapy, speech therapy, occupational therapy, psychological, etc. services available to residents of the May Institute program were funded for the residents of the May Institute program.  To date, I’ve received no reply to my question.

This is why we need an independent study of the cost of closing the Templeton, Monson, and Glavin Centers.

(Cross-posted from the COFAR blog)

It has been more than a month since we asked Secretary of Health and Human Services JudyAnn Bigby for public records detailing the costs of specified services in a particular group home program for intellectually disabled persons in Massachusetts.

It has been almost two months since we asked Commissioner of Developmental Services Elin Howe for the budgets of the Templeton, Monson, and Glavin developmental centers.

To date, we’ve received neither set of records.

As we’ve previously noted here, we’ve been attempting to compare the cost of an apparently typical vendor-run group home program with the three developmental centers.  We wanted to see whether the Patrick administration was comparing apples to apples in claiming to the Legislature in the last two fiscal years that closing the Templeton, Monson, and Glavin centers will save tens of millions in state funds.

As we reported,  a group home contract, which we did receive last May from DDS, specified a yearly cost per resident of $104,400.  In its cost savings analysis, the administration compared a very similar residential cost based on group home contracts with an average calculated cost of care at Templeton, Monson, and Glavin.

The potential problem with the administration’s analysis that we found in examining the single group home contract was that it specified budgeted costs for only direct-care, supervisory, and minimal nursing staff.  What about the extensive nursing, medical, clinical, and therapeutic staffing that exists at the developmental centers and to which the residents of DDS group homes are entitled? 

The fact that those additional medical, clinical, and therapeutic costs were not in the group home contract we examined appeared to raise the question whether the administration’s savings analysis was accurate.   One immediate question was: if those additional costs are not paid through DDS contracts, how are they paid?  Secondly, what is the total amount of those community-based costs that the administration may have missed in its analysis?

Once we get the answers to those questions, we can determine for ourselves whether there would be a savings or not in closing the developmental centers.

On July 29, we sent Public Records requests to both Secretary Bigby and Commissioner Howe, asking for copies of any documents detailing funding for medical, nursing, clinical, and therapeutic services for individuals residing in the community-based group home program we had selected for review.  About three weeks prior to that, we had asked DDS for the Templeton, Monson, and Glavin budgets for the same time periods as the group home contract. 

On August 9, I received a letter from the records custodian at EOHHS, stating that the agency was in the process of identifying the records we had requested regarding the group home contract.  Last week, I called the records custodian, and was told EOHHS was still working on our request.  He wasn’t able to tell me when the records would be found.

We’ve appealed to the Public Records Division for the Templeton, Monson, and Glavin budget documents.  We’re close to filing an appeal for the group home contract records.

But one piece of useful information may have emerged here.  The fact that the August 9 response to our request came from EOHHS and not from DDS does appear to confirm that it is not DDS, but some other source at EOHHS, that funds medical, clinical, and therapeutic services in the DDS vendor-run group home system.  We believe that other source of funding is MassHealth. 

In any event, it’s getting clearer and clearer that the administration wasn’t counting all the community-based costs of care it incurs when it told the Legislature there would be major savings in closing the developmental centers.

(Cross-posted from the COFAR blog)

After a month and a half, it’s troubling that the Patrick administration is apparently still unable to locate cost records we requested pertaining to a single community-based group home contract.

I just received a letter from the Department of Developmental Services, dated September 14, that they are in the process of searching for the documents, which I had requested on July 29.   Meanwhile, the MassHealth Privacy Office in the Executive Office of Health and Human Services has been searching for these same records since August 9.

To recap, we’ve been trying to find out the sources of state funding for medical, nursing, clinical, and therapeutic services in a single DDS group home program run by the May Institute, a private provider.  We have a copy of a $1.2 million contract with the May Institute, which provides for 24-hour residential services under the program for 14 individuals in four residences in the DDS Central Middlesex Area.

The FY 2009 contract, however, only provides for direct care and limited nursing services for the 14 residents.  It does not mention medical, extended nursing, clinical or therapeutic services.

From what we’ve been able to determine, the administration has been basing its $20 million annual cost savings estimate in closing the Templeton, Monson, and Glavin Developmental Centers on a comparison of their budgets with the cost of community-based group contracts such as the May Institute contract.  But here’s the rub.  Our understanding is that the Templeton, Monson, and Glavin budgets do provide for medical, extended nursing, clinical, and therapeutic services. 

Naturally, the community system will appear to be less expensive than the developmental centers if certain community-based costs are not taken into account.  That’s why we want to find out exactly how much is being paid to fund those additional services to which the May Institute residents are reportedly entitled, and where that money is coming from.

By the way, we originally asked DDS on July 7 for the budgets of the Monson, Templeton, and Glavin Centers.   A month later, we received a one-page document from the department with single, line-item amounts representing the total annual spending for each facility.  There was no budgetary breakdown whatsoever for the facilities.

We appealed to the state’s Public Records Division for help, explaining that a budget of a state facility involves more than just a single line item.  As a result, I received a second letter from DDS, also dated September 14, stating that the department was in the process of searching for the “additional (budgetary breakdown) information” I had requested. 

I guess DDS considers a budget and a “budgetary breakdown” to be entirely separate concepts.  Stay tuned.

(Cross-posted from the COFAR blog)

We’ve long maintained that the Patrick administration’s agenda of phasing down and closing state developmental centers would ultimately fail to free up additional funding for the community based system.

It’s been nearly three years since the administration announced its plan to close the Fernald, Templeton, Monson, and Glavin Centers and reportedly plow back as much as $45 million a year in the “savings” into beefing up the largely privatized community-based system of care.  That $45 million savings projection was a cornerstone of the administration’s “Community First” initiative.

So far, the administration has succeeded in moving hundreds of residents out of developmental centers, starting with Fernald, which is now emptied of all but 14 of  its residents, who have filed appeals of their transfers.  But nothing remotely close to the $45 million in savings has materialized.  In fact, the opposite has been the case — the administration has continued to cut community-based line items in the Department of Developmental Services budget.

In a November 20 email to members and other advocates, the Association of Developmental Disabilities Providers, which has wholeheartedly supported the closures of the developmental centers, stated the following :

For the last four fiscal years, in order to cope with the effects of the economic collapse of 2008, the Commonwealth’s budget has:

• deeply cut Family Support programs, leaving 10,000 families without service,  
• inadequately addressed Chapter 257 rate reform by not introducing sufficient funding to rate making but instead forcing existing programs to redistribute already inadequate funding
• failed to address historically low salary needs of the community workforce (though the Legislature has recently added the first salary reserve dollars in four years)
• continued to require community programs to implement state mandates without sufficient funding, including closing sheltered workshops without funding to replace this model in favor of a more inclusive and empowering model.
• not backed it’s professed interest in Community First and Employment First with funding to make these efforts successful. (my emphasis)

Not exactly a ringing endorsement of the success of the administration’s community-based care delivery model and its promised use of of the savings from the developmental center closures.  We hope the ADDP and the Arc of Massachusetts will reach the next logical step in their argument and urge the administration to cease and desist from closing the centers.

Unfortunately, the ADDP and the Arc of Massachusetts are supporting H.984, known as “The Real Lives Bill,” which appears to continue to rely on the premise that DDS clients should not be given the choice of living in developmental centers.

The bill, sponsored by Rep. Tom Sannicandro,  is intended to provide for more choice for persons with intellectual disabilities.   But it appears to specifically deny consumers the choice of “congregate services.”  In other words, everyone should have a choice, as long as they choose only small, community-based settings.  We believe, however, that the congregate services provided by developmental centers are appropriate for certain people who are unable to benefit from community based care.  And now we’re seeing that closing the congregate care centers is not freeing up community-based funding.

Sannicandro’s bill does appear to recognize that the community-based system has not thus far benefitted from the developmental center phase-downs.  The bill’s text reads:

Too many people are not receiving the assistance they need. The public Medicaid system is reeling from cost pressures. The time has come for individuals with disabilities, families, advocates and providers to work together with policy makers in the administration and legislature in crafting a support system that both increases quality and on average reduces costs whenever possible.

We agree with the language in Sannicandro’s bill on that last point.  We just disagree that closing the developmental centers is the right way to go about it.

Yesterday, the Mass. PTA, the American Civil Liberties Union of Mass., the Campaign for a Commercial-Free Childhood and Citizens for Public Schools wrote to education officials and Governor Patrick demanding they reconsider a plan to share private student information with a Gates Foundation partnership. Here’s the press release that went out about the letter.

Date of Release:

(Cross-posted from The COFAR Blog)

More than 550 executives working for some 250 state-funded corporate providers of services to people with developmental disabilities in Massachusetts received a total of $80.5 million in annual compensation as of Fiscal Year 2012, based on nonprofit federal tax reports surveyed by COFAR.

The average compensation among all 559 executives surveyed was $143,969 per year. Among CEOs, the average compensation was $185,809, while executive directors were paid an average of $127,164 in salary and benefits.

According to the COFAR survey, provider executives making over $100,000 a year on average included 97 executive directors, 92 CEOs, 71 chief financial officers, 31 chief operating officers, and 83 vice presidents.  CEOs or presidents of 14 providers made over $300,000 each.

“I think few people realize what the real cost of privatized care is in Massachusetts,” COFAR President Thomas Frain said.  “Do Massachusetts taxpayers really need to be paying hundreds of corporate executives millions of dollars for grossly duplicative duties?  This makes no sense at all.”

COFAR has long been critical of efforts by the Patrick administration and the Romney administration before it to outsource residential and other services to providers without adequate oversight of the growing privatized system. The system appears to have become top-heavy with corporate executives who do not provide direct-care services, but who nevertheless draw large salary and benefits packages.

Most of the providers surveyed are under contract to the Department of Developmental Services, which manages or provides services to people with intellectual disabilities who are over the age of 22.  Frain noted that DDS pays more than $1 billion a year in contracts to service providers, which operate group homes and provide day programs, transportation and other services to tens of thousands of intellectually disabled persons in the DDS system.

State regulations capped state payments to provider executives at approximately $149,000, as of Fiscal Year 2011.  The average compensation among the surveyed executives was slightly less than that amount.  Money earned by executives above the state cap is supposed to come from sources other than state funds.

But while the state cap on executive salaries is intended to limit the total amount of state funds going into the pockets of provider executives, COFAR has reported that the state may not receive complete information on the total compensation paid to provider executives and may not have the capacity to oversee their finances adequately.  Also, COFAR has raised concerns that increasing amounts of money going to provider executives has not translated into higher pay for direct-care workers in Massachusetts.

The state auditor reported last year that in one case involving the May Institute, a DDS provider, hundreds of thousands of dollars in state funds had been paid to company executives in excess of the regulatory cap. COFAR’s executive compensation survey found that the May Institute CEO received $404,900 in compensation in FY 2011 and that a total of 12 company executives were paid a total of $2.5 million that year.

At $404,900, the May Institute CEO was the fifth highest paid CEO on COFAR’s list. Community Systems, Inc. topped the COFAR list of the highest paid CEOs, with two employees listed on the company’s federal tax filing as serving as company CEOs in FY 2011 and drawing combined compensation of $526,755.  Second on the list was Morgan Memorial Goodwill, whose CEO was listed as making $464,572 in FY 2012.

Community Systems federal tax filing states that the company, which is based in Forestdale, MA, took in $14.4 million in revenues in Fiscal Year 2011.  Of that amount, the company received $11.6 million from DDS, according to a 2011 financial report filed with the state’s Operational Services Division.

(The Community Systems OSD report lists only compensation in FY 2011 for two executive directors and does not list the company CEOs.  As a result, OSD appears to have disallowed only $21,000 in funding to the company as having been earned above the regulatory compensation cap.  This appears to confirm COFAR’s  finding that the OSD receives incomplete information from providers on executive compensation.)

In addition to the CEOs listed on the Community Systems federal tax report, two employees were listed as executive directors of the company that year and made a combined total of $276,538.  The OSD report lists the two executive directors of the company as having made only $154,473.

The following chart, based on COFAR’s survey of some 250 providers, shows 30 of the providers with the top earning CEOs (click on it to enlarge).

[Cross-posted from The COFAR Blog]

As The Boston Globe reported last week, Governor Patrick has “unveiled an ambitious and potentially costly plan” to reform the way the state’s criminal justice system handles mentally ill people.

The governor has proposed both a major increase in staff at Bridgewater State Hospital and a new facility there where potentially violent patients could receive care, according to the Globe.

We support the administration’s commitment to expanding care at Bridgewater State.  But we wonder whether this is yet more evidence of what appears to be a double standard on the part of the administration with regard to care of the mentally ill versus persons with developmental disabilities.

The administration appears to believe that congregate settings are necessary and appropriate for the mentally ill, but not appropriate for the developmentally disabled.  In fact, we think Governor Patrick will be known as a builder of major institutional facilities for the mentally ill, yet as a closer of facilities for the developmentally disabled.  This appears to us to reflect the absence of a comprehensive plan by this administration for care of all disabled people in the commonwealth.

Why are we building new state facilities and expanding state-run care for one group, yet tearing facilities down, eliminating an intensive care model, and privatizing most services for another group?

In addition to the plans for expansion of Bridgewater State for the mentally ill, the administration has taken major credit for the construction of the new Worcester Recovery Center and Hospital.  That facility, which opened in August 2012 at a cost of $302 million, has 320 beds for persons with mental illness.  The administration has billed it as “the largest non-transportation construction project (the state has) undertaken in more than 50 years.”

The administration has also apparently realized that intensive treatment models are necessary for the mentally ill.  According to the Globe, the administration has declared that mentally ill people “should receive the appropriate care in the appropriate setting.”   The Bridgewater proposal includes a plan for spending $10 million for an additional 130 full-time mental health clinicians at the complex. Patrick administration officials told the paper that if the Legislature approves this funding promptly, the additional staff could be working at Bridgewater by September.

The Bridgewater proposal further calls for $500,000 to study the possibility of retrofitting an existing state facility such as Taunton State Hospital or building yet another a new facility to treat and evaluate potentially violent people accused of committing crimes, according to the Globe.  The plan gives no cost estimate for the new facility.

At the same time, the administration is closing or has closed four of six developmental centers for people with profound levels of intellectual disability and severe medical conditions, contending these centers are too institutional.  Developmental centers provide an intensive level of care that must meet federal Intermediate Care Facility (ICF) standards.  ICF rules specify more staffing and monitoring than do federal and state requirements for privatized, community-based care in group homes.

Even sheltered workshops are considered by the administration to be too institutional for the intellectually disabled, and the administration has announced plans to shut those down by June of next year.  The administration is, at the same time, pouring additional funding into privatized group homes for the intellectually disabled, scattered in communities throughout the state.

The argument could be made that the administration views institutional care as appropriate for people with mental illness who are violent, and that’s why it is expanding facilities such as Bridgewater State.  But that doesn’t explain the construction of the Worcester hospital center; and it doesn’t explain why the administration is eliminating the ICF care model at facilities for the developmentally disabled such as the Templeton Developmental Center, where many people with behavioral problems live.

The alleged assault by a Templeton resident that caused the death last year of Dennis Perry shows that even that facility may not be fully equipped to meet the needs of all the people who live there, and keep them safe.  And yet, the administration is closing Templeton as an ICF and converting the facility to group homes, which will only reduce the level of staffing and supervision there.   Also, the attempted rape of a woman by a resident of a group home in Chelmsford in 2011 shows that there are intellectually disabled persons with potentially violent impulses who live in the DDS community system.

It has been argued that another difference between facilities for the mentally ill, such as the Worcester hospital center, and developmental centers for the developmentally disabled is that the Worcester facility is meant to help people make a transition to independent living in the community, whereas developmental centers are not intended to do so.  Therefore, according to this argument, the developmental centers should be closed, and the remaining system will be devoted either to serving all disabled people in the community or helping them get there.

Our response to that argument is that we have consistently stated that residents of developmental centers who want to benefit, or can benefit from community-based care should be encouraged to do so.  As far as we know, there has never been any rule or policy that prevented anyone who wanted to leave a developmental center from doing so and moving into the community system.

As we argued in connection with the Chelmsford group home incident, the real issue is the care model.  The administration wants to eliminate the intensive, ICF care model for people with developmental disabilities.  The administration does acknowledge that people with mental illness should receive the appropriate care in the appropriate setting.  And they appear to understand that the community system is not the appropriate setting for all mentally ill people.  But for some reason, the administration hasn’t yet figured out that the community system isn’t the appropriate setting for all people with intellectual and developmental disabilities either.

We do believe that one day, the state will come to realize that institutional care for a certain segment of the developmentally disabled is needed, and there will be an effort to reconstruct our institutional facilities for them.  Unfortunately, we’re making that future job much more difficult and expensive by tearing down the system that we have had in place and which we spent so much money to upgrade from the 1970’s onward.

(Cross-posted from The COFAR Blog)

The history of what is now known as the Fernald Developmental Center hasn’t been free of some serious blemishes or controversy.  But from 1889 to the present time, Fernald’s 200-acre campus in Waltham has been the site of a facility providing residential care for persons with intellectual disabilities.

That’s all about to change permanently.

Under legislation negotiated among representatives of the Patrick administration, the City of Waltham, and local legislators, the state will sell the campus to the city for $3.7 million, which comes to 18,500 per acre — a price that has been described as “dirt cheap.”  It appears there is also a requirement that the city pay the state up to half the proceeds from the re-sale of any of that land to developers.

There is just one group of people that seems to have been left out of the plans and negotiations. That group is the developmentally disabled — the very persons who had been living at Fernald all along.  Other than keeping the therapeutic swimming pool open at Fernald and maintaining a 29-bed nursing home on the campus, there appear to be no plans to continue to provide care or services at the Fernald site for persons with disabilities who live in the surrounding community.

This is an unfortunate oversight, not only for the residents who have been forced to leave Fernald, but for developmentally disabled people in the community.  As I’ll explain, the lack of a plan for integrated, community-based care at the Fernald site has been, and will continue to be, both a missed opportunity to help those waiting for services and a potential waste of taxpayer money.

First, I would note that the Fernald Working Group, a coalition of local organizations, had recommended that a portion of the campus remain the site of residential care and services for the intellectually disabled.  Similar proposals have been made over the years by the former Fernald League and COFAR.  Both of those latter groups suggested a “postage-stamp” arrangement under which existing residents would live in housing situated in a small area of the campus while the rest of the campus was converted to other uses.  And Waltham Mayor Jeannette McCarthy, the chair of a Fernald Reuse Committee, also publicly supported the continued use of part of the campus for institutional, residential and health care.

But the then Romney and subsequent Patrick administrations were interested only in one thing — closing Fernald and three other developmental centers in the state, contending the state would save tens of millions of dollars a year in doing so.  They never considered any of the proposed alternatives to the closures, and have never done what administrations in other states have done, which is to propose the integration of congregate care facilities for the developmentally disabled with their surrounding communities.

The result is that since 2008, two of six remaining developmental centers in Massachusetts have been closed; a third center is being converted to state-run group homes, and just two residents of the Fernald Center remain on the campus out of a total of 160 who were there at that time. Most of the residents living in the four facilities targeted for closure were dispersed around the state, with the majority going either to state-operated group homes or to the Wrentham Developmental Center.  Why has all of this been a missed opportunity and a potential waste of taxpayer money?

First, with regard to the cost to taxpayers, the administration projected that Fernald would be closed by July 2010, but the closure was blocked for four years by administrative and court appeals filed by guardians on behalf of some 20 remaining residents there.  The administration elected to keep Fernald open only for the remaining residents there, pending resolution of their administrative and court appeals.  This turned out to be an extremely inefficient way to proceed.

Not only has there been an undisclosed cost to the state in fighting the legal battle to close Fernald over the past decade, but as the population dwindled in all four targeted facilities, the cost per resident of care there shot up due to fixed costs such as heating and other utilities in larger buildings.  This was particularly true for Fernald, which has remained open for more than four years with 20 or fewer residents.

The administration could have saved millions of dollars a year since 2010 had it been willing to consider and negotiate an alternative to outright closures of the facilities. The legal battle over Fernald would have ended immediately, and instead of continuing to house the remaining residents in several locations on campus, the state could have built small, cost-efficient housing in one location for the residents.  That proposed alternative to closure has rarely if ever been reported on by the media, which has instead adopted the position of the administration and its corporate providers that the high cost of continuing to operate Fernald has been solely the fault of the residents remaining there.

Moreover, dozens of the Former Fernald residents were sent, as noted, to the Wrentham Center, which amounted to transferring residents from one developmental center to another.  Not only was there no real savings in doing this, but the administration was forced to undertake renovations at Wrentham in order to accommodate the former Fernald residents — a project that cost taxpayers at least $3.2 million.

There is a second, and potentially greater, cost to taxpayers in closing Fernald and the other developmental centers without planning for any continuation of care at those sites that could be integrated with their surrounding communities.  As we have noted, an undisclosed number of developmentally disabled people throughout the state have been unable to access services or care from DDS due to a lack of resources.  The state has tried to address this problem by expanding the provider-run residential system, which has involved building more than 150 group homes spread around the state since 2008 and substantially increasing rates paid to the providers.

But there is no centralized system of care in the provider-run system.  People have to be transported to day programs and for medical and other types of care — a process that is potentially much more expensive than if all of this care were available in centralized locations. Continuing to provide centralized care at developmental center sites could both allow more people in the surrounding community to receive services and provide those services more cost-effectively than is the case in a system consisting almost entirely of disbursed group homes.

We have also pointed out the potentially high cost of privatized care in Massachusetts and elsewhere due to the thick layer of highly paid corporate executives in that system.

That there isn’t necessarily a long-term savings in transferring people from developmental centers to decentralized, provider-based care has been acknowledged even by one of the leading proponents of deinstitutionalization in the Obama administration.  I’ve blogged about a law journal article written by Samuel Bagenstos, a former top litigator in the Justice Department’s Civil Rights Division, in which Bagenstos stated that any cost savings in closing developmental centers “will shrink as people in the community receive more services.” He added that a significant part of the cost difference between institutional and provider-based care “reflects differences in the wages paid to workers in institutional and community settings — differences…that states will face increasing pressures to narrow.”

All of this is why we supported the vision of the Fernald Working Group, which described “a progressive site at Fernald where open space and greenways can be matched with an equal vision of integration for individuals with disabilities.” That vision encompassed both existing residents and disabled persons in the surrounding community.  The Working Group specified that this vision included new housing and the preservation of the therapeutic pool and gym at Fernald as well as the chapel and programs for physical therapy, dental and medical services.  As the vision statement noted, “all of these services could become part of the community and economic life of the Fernald redevelopment.”

But as far as we can tell, the Working Group’s vision has not been adopted by either the administration or the Legislature.  While the newly signed legislation to sell the Fernald land to the city provides incentives for adopting “smart growth principles” and affordable housing in the development of the site, it makes no mention of continued services or care for persons with developmental disabilities.

Last week, I emailed Senator Michael Barrett and Representatives Tom Stanley and John Lawn, the key sponsors of the land sale legislation, to ask whether the continued use of a portion of the Fernald campus for individuals with disabilities was considered in the negotiations over the bill and whether any provisions for that might be made in the future.

A staffer in Barrett’s office said that no proposals to serve the developmentally disabled at Fernald were made at a public hearing on the land sale bill that was held in July by the Legislature’s State Administration Committee, and the idea was therefore not considered. But while the Village at Fernald concept for the disabled may not have been raised at a public hearing earlier this summer, most, if not all, of the negotiating parties to the legislation have long been aware of that concept.  It should have been a part of the legislation from the beginning.

Tuesday’s Democratic primary in Malden includes the choice between two candidates to replace Chris Fallon as our MA state-house rep: Steve Ultrino, a true democrat/Democrat; and Neil Kinnon, a less-than-democratic ‘Democrat’ . Both men are city councillors currently. Steve has been a teacher and principal, and works for the Middlesex Sheriff’s office as director of education programs for the incarcerated  . Neil works in financial records and is the main executive of the Mystic Valley Charter School.

Many Maldonians view Kinnon as having an ongoing obvious conflict of interest between his role in the Charter School and his voting on issues concerning the regular public schools of Malden.  I  have wondered for a long time if Kinnon is getting funding/investment or other backing from larger charter-school supporters outside of Malden, as major properties have been purchased for the Charter School’s expansion, and his explanation that economies in the School’s operations have provided the necessary funds, seems unlikely.

In this last weekend before the primary, everyone gets many mailers from different candidates. We just received one supporting Kinnon from a group that is clearly aligned with privatization of public education, and with other groups including collections of hedge-fund managers working to cash in on such privatization.  This group is “Democrats for Education Reform-Independent Expenditure-PAC“, with Patrick van Keerbergen listed as treasurer on the mailer. I remembered having seen this name in the Nation recently, in a discussion of groups seeking to profit from privatization of public education.

The aim of this group is to influence the Democratic Party to support privatization of education, and to destroy teachers as professionals, and destroy teachers unions. This is the Arne Duncan (Chicago) line of ‘Democrats’.

I don’t know if Kinnon & Co. have been getting investment monies from some of the board members or advisory board members of Democrats for Education Reform, but I wouldn’t be surprised. Below is a  list of hedge-fund executives associated with Democrats for Education Reform, taken from a UFT webpage explaining what the organization is:

<<http://www.uft.org/feature-stories/who-are-democrats-education-reform>>

Among the group’s eight-person board :

hedge-fund manager John Petry of Gotham Capital, who with Eva Moskowitz co-founded the Harlem Success Academy Charter School;

Tony Davis of Anchorage Capital, the board chair of Brooklyn’s Achievement First East New York school;

Charles Ledley of Highfields Capital Management;

Tilson, chief of T2 Partners and Tilson Funds and vice chairman of New York’s KIPP Academy Charter Schools.

Of DFER’s seven-person advisory board, five manage hedge funds:

David Einhorn of Greenlight Capital, LLC;

Joel Greenblatt, founder and managing partner of Gotham Capital and past protégé of fallen junk-bond icon Michael Milliken;

Vincent Mai, who chairs AEA Investors, LP;

Michael Novogratz, president of Fortress Investment Group;

Rafael Mayer, the Khronos LLC managing partner and KIPP AMP charter school director.

Orbiting the group:

billionaire “venture philanthropist” and charter school funder Eli Broad, whose foundation gave upwards of $500,000 to plug advocacy related to the documentary “Waiting for Superman,” and another charter-touting film, “The Lottery.” Though not himself a DFER board member, Broad is a major funder of Education Reform Now, DFER’s nonprofit sister organization, also headed by Joe Williams.

Meanwhile, Andrew Rotherman, recently retired DFER director and EduWonk blogger, is co-founder of and a partner in for-profit Bellwether Education, described as “offering specialized professional services and thoughtful leadership to the entrepreneurial education reform field.” Rotherman sits on the Broad Prize Review Board, while DFER board member Sara Mead is a senior associate partner at his Bellwether Education and sits on the Washington, D.C., Public Charter School Board.

——

May I see your passport, please

(Cross-posted from The COFAR Blog)

More than 600 executives employed by corporate human service providers in Massachusetts received some $100 million per year in salaries and other compensation, according to our updated survey of the providers’ nonprofit federal tax forms.

By our calculations, state taxpayers are on the hook each year for up to $85 million of that total compensation.

We reviewed the federal tax forms for some 300 state-funded, corporate providers, most of which provide residential and day services to persons with developmental disabilities.

The following is a summary chart of our latest survey results (click on the chart to enlarge):

For the complete survey chart, click here.

We first released our survey about a year ago, when we found that more than 550 executives working for some 250 state-funded corporate providers of services to people with developmental disabilities in Massachusetts received a total of $80.5 million in annual compensation.

COFAR has also previously raised concerns that increasing amounts of money going to provider executives have not translated into higher pay for direct-care workers in Massachusetts.

The latest survey reports on 635 executives who received total annual compensation of $102.4 million and average annual compensation per employee of $161,231.  The survey was based on provider tax forms filed in either the 2011 or 2012 tax years.  Those tax forms are available online at www.guidestar.org.

The survey sample included 100 CEO’s and presidents, making an average of $210,227 in salaries and benefits; and 107 executive directors receiving an average of $130,835 in compensation.  As the chart above shows, the survey also included 67 chief financial officers, 31 chief operating officers, 100 vice presidents, 110 directors, and 120 other officers, all earning, on average, over $100,000 a year.

A state regulation  limits state payments to provider executives to $158,101, as of fiscal year 2013. Money earned by executives above the state cap is supposed to come from sources other than state funds.

Based on this regulation, we calculated that provider executives are eligible for up to $85 million a year in state funding to cover those total salary and benefits costs.  Our calculation was based on identifying the companies paying executives at or above the state threshold of $158,101, and assuming that amount as the maximum state payment for each of those companies’ executives.

Among the top-paying providers in our latest survey was the May Institute, which paid two employees a total of $999,221 in the 2012 tax year.  Both employees were listed as president and CEO of the provider.  The May Institute’s federal tax form shows that one of the two employees, Walter Christian, worked for the company until December 2012 and received a total of $725,674 in salary and benefits in that tax year, which started on July 1, 2012. Christian was replaced as president and CEO by Lauren Solotar, who received a total of $273,547 in that same tax year, which ended on June 30, 2013.

Despite the regulation capping compensation payments by the state, the state auditor reported in May 2013 that the state had improperly reimbursed the May Institute, a corporate provider to the Department of Developmental Services, for hundreds of thousands of dollars paid to company executives in excess of that cap. COFAR had previously reported in 2011 that the state may have paid Christian and other executives of the May Institute more than the state’s regulatory limit on individual executive salaries.

The following charts show the top earning presidents/CEO’s and executive directors in our latest survey and the number of those executives holding each title in each company:

Most of the providers surveyed are under contract to the Department of Developmental Services, which manages or provides services to people with intellectual disabilities who are over the age of 22.  The providers operate group homes and provide day programs, transportation and other services to tens of thousands of intellectually disabled persons in the DDS system.

As we have noted, the state’s priority has been to boost funding dramatically to corporate residential providers, in particular, while at the same time slowly starving state-operated care, including state-run group homes and developmental centers, of revenue.

Funding to DDS corporate residential providers rose past the $1 billion mark for the first time in the current fiscal year.  The line item was increased by more than $140 million –or more than 16 percent—over prior-year spending in fiscal 2015 dollars.  At the same time, both the former governor’s and the legislative budgets either cut or provided much more meager increases for most other DDS line items.

More financial information about nonprofit corporate providers, including compensation of executives, can be found at www.guidestar.org.

(Cross-posted from The COFAR Blog)

When is the federal government — particularly the Department of Justice — going to recognize or admit that deinstitutionalization of the developmentally disabled hasn’t worked as planned?

The DOJ seems to have closed its eyes to the realities on the ground in continuing to file lawsuits around the country to close state-run care facilities.  This has caused “human harm, including death and financial and emotional hardship,” according to information compiled by the VOR, a national advocacy organization for the developmentally disabled and a COFAR affiliate.

While the DOJ has not filed such a suit against the State of Massachusetts, that may be because the state has closed, or is in the process of closing, four out of six developmental centers that were in operation as of 2008.  But with two developmental centers remaining as well as other programs that the DOJ considers to be institutional, such as sheltered workshops, Massachusetts could well become a target for a lawsuit at any time.

The VOR filed testimony last month, urging a congressional subcommittee to adopt legislative language that would require the DOJ to do two very commonsense things before filing more lawsuits to close state-run facilities:

• First consult with the residents or their legal guardians “to determine residents’ needs and choices with regard to residential services and supports,” and,
• Second, do not “impose community-based treatment on patients who do not desire it.”  This second requirement is consistent with the 1999 U.S. Supreme Court decision in Olmstead v. L.C.

The DOJ’s continued pursuit of class-action litigation to close developmental centers and other facilities has led to the irony that those lawsuits are generally opposed by the families of the residents on whose behalf the suits are ostensibly filed. As U.S. District Court Judge J. Leon Holmes wrote in 2011 in dismissing a lawsuit brought by the DOJ against the State of Arkansas to close the Conway Human Development Center center there:

…the United States is in the odd position of asserting that certain persons’ rights have been and are being violated while those persons – through their parents and guardians – disagree. (U.S. v. Arkansas, June 8, 2011, dismissal order).

Judge Holmes’ decision noted that evidence in the case showed that the parents and guardians of residents of the Conway Center “are overwhelmingly satisfied with the services there and believe that the Center is the least restrictive, most integrated placement appropriate for their children and wards.”  Moreover, the judge’s decision stated that the weight of the evidence in the case failed to support the DOJ’s contention that care at the Conway Center was substandard.

The VOR notes that the DOJ’s Civil Rights Division has filed more than 45 legal enforcement actions in 25 states since 2009 to limit or shut down state care.  On a website listing all the litigation it has filed, the DOJ includes the heading “Olmstead: Community Integration for Everyone.”

It’s not true, though, that Olmstead requires community-based care for everyone.  The Supreme Court decision established a right to community-based housing and care only when:

1. The state’s treatment professionals have determined that community placement is appropriate,

2. Transfer is not opposed by the affected individual, and

3. The placement can be reasonably accommodated, taking into account the resources available to the state and the needs of others with mental disabilities.

Despite those clear conditions, the DOJ has plowed ahead with its community-integration lawsuits under the explicit assumption that all institutional care should be ended and everyone should be sent into community-based care, whether they want to go or not.

This viewpoint by the DOJ is a misinterpretation of the Olmstead decision, and it has had tragic consequences, according to the VOR.  The organization pointed out in its testimony that higher mortality rates have been documented in Virginia, Nebraska, Tennessee, and Georgia in the wake of the DOJ’s deinstitutionalization settlements.

Those problems have occurred because so many of the privatized group homes to which the people formerly in the state facilities have been transferred are poorly monitored and are afflicted by high turnover and poor training of staff.  Yet, that reality does not appear to have been recognized by the DOJ.

In Virginia, a state sued by the DOJ to close its state-run developmental centers, the risk of mortality for those individuals who left those centers was double that of those who stayed.

In Tennessee, DOJ lawsuits resulted in the closure of one developmental center in 2010 and the downsizing of two others.  In that state, deaths among people released from institutions nearly doubled between 2009 and 2013.  In addition, according to The Tennessean, a 2013 State Comptroller’s audit reported a lack of access to adequate medical and dental care, incarcerations, and hundreds of reports of abuse, and neglect and exploitation among the transferred developmental center residents.

In Nebraska, a 2014 monitoring team report found that of 47 persons considered to be “medically fragile,” who were transferred from a developmental center in 2009 as a result of a DOJ settlement, 20 (or 43 percent of them) subsequently died.

In Georgia, a 2010 a DOJ settlement agreement required the closure of all state-operated developmental centers and the transfer of 1,000 persons with developmental disabilities as well as 9,000 persons with mental illness from facility-based care.  In March, The Augusta Chronicle reported that of 499 individuals with profound developmental disabilities, who had been transferred from the state developmental centers under the DOJ settlement, 62 (or 12%) died unexpectedly.

The Augusta Chronicle article discussed the case of Christen Shermaine Hope Gordon, a 12-year-old girl who died in community-care after being transferred from the Central State Hospital in Milledgeville, GA.  The article recounted a litany of poor decisions and poor care that appear to have led to Christen’s death.

In a letter to the DOJ in January of this year, Margaret Huss, president of Intellectual Disabilities Advocates of Nebraska, urged the DOJ to ask critical questions about the mortality figures and other data regarding the transfer to community-based care prior to filing further lawsuits to close state facilities.  “An increased risk of death should not be the unintended consequences of the worthy goal of community integration,” Huss’s letter stated.  As of May 1, the DOJ had not responded to her letter.

That an increased risk of abuse, neglect, and death exists in community-based care has long been recognized, but few policy makers or people elected to office have been willing to stem the tide of deinstitutionalization.  In March 2013, U.S. Senator Chris Murphy of Connecticut did call for an investigation of abuse and neglect in privatized group homes around the country, in response to a series by The Hartford Courant detailing those problems in that state.

In a letter to the Office of the Inspector General in the U.S. Department of Health and Human Services, Murphy termed the level of abuse and neglect in group homes “alarming.”  Murphy asked the IG “to focus on the prevalence of preventable deaths at privately run group homes across this nation and the widespread privatization of our delivery system.”

But more than two years after Murphy’s request, it is not clear that the HHS Inspector General ever did undertake such an investigation.  The IG’s office has so far not released a report and did not respond to an email query from us on April 30, seeking information on whether an investigation has been undertaken and what its status might be.

Senator Murphy’s office also did not respond to repeated inquiries from us last week as to whether Murphy ever received a response from the IG to his call for an investigation or whether he ever followed up with the IG after his original request in 2013.

Unfortunately, lawmakers in the U.S. Senate, in particular, have also not been supportive of VOR’s proposed legislative language to require the DOJ to consult with families before filing further lawsuits against state care.  While language was inserted in a House appropriations bill for the DOJ last year at VOR’s request that protections for institutional care be considered by the DOJ as appropriate for those who desire it, that language was later watered down.

We can only hope that folks begin to wake up in Washington and elsewhere to overwhelming evidence that deinstitutionalization accompanied by privatization is not working, and that someone finally steps forward to slow both of those trends.

(Cross-posted from The COFAR Blog)

In what has been widely viewed as a setback for state employee unions in Massachusetts, state legislators last week approved a state budget for Fiscal Year 2016 that includes a provision freezing the Pacheco Law for three years with regard to the MBTA.

(Note: While the Pacheco Law does not appear to have had a role in preventing the past privatization of human services, which we are primarily concerned with, the Baker administration’s next step, with the support of the Pioneer Institute and like-minded organizations, might well be to exempt future privatization of human services from the law.)

A second major complaint about the Pacheco Law in the Pioneer report is that the law requires the winning bidder to offer jobs to public agency employees whose jobs are terminated by privatization.  But that requirement is also in A-76.

The Pioneer report claims that under the cost analysis requirements of the Pacheco Law, any outside bidder must offer to pay the same wage rates and health insurance benefits to its employees as the incumbent state agency. This, according to the report, “neutralizes any potential advantage the outside bidder may have based on cost of labor.”

The Pioneer report, in fact, appears to be quoting from the law verbatim in including the following statement under the heading “Restrictive Elements of the Pacheco Law”:

Every privatization contract must include compensation and health insurance benefits for the contractor’s employees no less than those paid to equivalent employees at the public contracting agency; (my emphasis)

But I could find no such language in the Pacheco Law!  Regarding wages, the Pacheco Law states that the outside bidder must offer to pay the lesser of either the average private sector wage rate for the position or step one of the grade of the comparable state employee.  That could mean that the bidder could stipulate a lower wage cost in its bid than the state’s wage.

Regarding benefits, the Pacheco law says the bidder must offer a comparable percentage of the cost of health insurance plans as the state agency.  This is consistent with the policy of the Defense Department, for instance, which prohibits private bidders in A-76 competitions from offering to pay less for health benefits than the DoD pays for its employees.

Despite his chamber’s action last week to freeze the Pacheco law, Senate President Stanley Rosenberg has appeared to be less than enthusiastic about the efforts to discredit the law and either freeze or repeal it.  “There’s an ideological-slash-political component to this,” Rosenberg said. “We ought to be driving policy based on outcomes and data and how things actually work.”

Unfortunately, the latest attacks on the Pacheco Law seem to be more about ideology and politics than about real outcomes and data.

(Cross-posted from The COFAR Blog)

While proponents of privatizing the MBTA point to the rising cost of in-house operations there, the cost to the agency of contracting out appears to have risen even faster.

The annual cost to the MBTA of contracting for commuter rail services has risen by 99.4 percent since 2000, compared with a 74.9 percent increase in the annual cost of the agency’s in-house bus operations, according to cost information we’ve compiled from public online sources (see below).

In our view, the rising cost of the commuter rail contracts since 2000 casts further doubt on the claims by the Pioneer Institute and other privatization proponents that contracting out for services will automatically save hundreds of millions of dollars at the T.

In case you missed it, the Pioneer Institute issued a report earlier this month that compared the actual cost of MBTA bus operations to a proposal based on bids from outside contractors to undertake those functions.

The Pioneer report concluded that had the state auditor allowed the planned privatization of the bus operations to go forward, the MBTA would have saved $450 million between 1997 and 2015. The report claimed those allegedly foregone savings were the fault of the Pacheco Law, which the auditor had cited in objecting to the outside contract proposal.

(As discussed below, the state auditor did not definitively reject the MBTA’s contract proposal, but rather asked the agency to resubmit its proposal after addressing concerns raised by the auditor about its cost calculations. The MBTA never did resubmit its proposal, but instead chose to sue the auditor in state superior court to reverse the auditor’s decision, and lost.)

The Pacheco Law requires state agencies seeking to privatize existing operations to show that bids from private contractors would be lower than a calculated cost of continuing to perform specified work by regular state employees “in the most cost-efficient manner.”  The state agencies must submit their calculations to the state auditor, who has the final say as to whether the functions can be privatized.

Largely due to unrelenting political pressure from the Pioneer Institute and other privatization advocates, the Legislature approved a 3-year freeze earlier this month on invoking the Pacheco Law with regard to privatizing MBTA functions.

Last week, we raised a number of concerns about the methodology of the Pioneer report, including criticizing its comparison of actual in-house MBTA costs to bids.  We argued that it’s meaningless to compare actual costs to hypothetical costs over a nearly 20-year period.

We think it would make more sense to compare actual in-house costs to actual contract costs over a multi-year period.  An obvious candidate for an evaluation of actual contracting costs appears to be commuter rail.

The MBTA has contracted out for commuter rail service since the 1980s, according to a state audit report on the agency. Beginning in 1987, Amtrak began providing commuter rail services to the T under a cost-plus-overhead and profit contract. In 1995, this was changed to a negotiated fixed price contract with a three-year term and two one-year options.

In May 2000, according to the audit report, the MBTA was given permission by the federal government to extend the Amtrak contract without bidding for an additional three years.  The total cost of the three-year contract extension, plus additional work that was in included in subsequent contracts, came to $168 million per year.

The Massachusetts Bay Commuter Rail Company (MBCR) subsequently won a competitive RFP process to operate the commuter rail system, starting in 2003.  The cost per year of that fixed-price contract was $217.4 million, which amounted to a 29.4 percent increase over the cost of the Amtrak contract three years earlier.  In that same period, the in-house cost of MBTA bus operations rose by just 12.8 percent, based on the Pioneer report’s figures (See chart below).

In 2008, the MBTA granted MBCR a three-year contract extension at a cost of $246 million per year, which amounted to a 46.4 percent increase in commuter rail contracting costs to the MBTA since 2000.  In that same time, the in-house bus operations cost had risen 40.4 percent.

In 2011, MBCR received a final 2-year commuter-rail contract extension costing $288.5 million a year.  By that time, the MBTA’s cost of contracting for commuter rail had risen by 71.7 percent since 2000, whereas the in-house cost of MBTA bus operations had risen by 55.7 percent.

Finally, the MBTA signed an eight-year contract last year with Keolis Commuter Services at an annual cost of $335 million, according to The Boston Globe.  (Note: the headline on the linked Globe story appears to be wrong.)  As a result, by the time Keolis began operations last July, its annual contract cost was 99.4 percent higher to the MBTA than the Amtrak contract cost had been in 2000. In contrast, the cost of in-house bus operations at the MBTA was only 74.9 percent higher in 2014 than it had been in 2000.

By the way, it may be only a matter of time before the Keolis contract cost rises above the $335 million annual amount, given that the company is reportedly already losing money operating the MBTA commuter system.

The Pioneer report characterized the in-house cost of MBTA bus operations as “inordinately expensive,” and concluded that for that reason, replacing that in-house service with contracted work in 1997 would have saved hundreds of millions of dollars.  But the Pioneer report failed to consider the actual experience that the MBTA has had with contracting.

One might argue that you can’t legitimately compare the cost of commuter rail operations to bus operations.  But at the same time, we think our comparison shows that entering into contracts for services doesn’t guarantee that the costs won’t rise dramatically.  Since 1995, the commuter rail contracts have all been fixed-price contracts.

The Pioneer report misrepresented the state auditor’s objection to the MBTA’s 1997 privatization proposal as a “ban” on the award of the contracts

The Pioneer report referred in different places to the state auditor as having “banned” or “blocked” or “barred” the MBTA’s proposal to privatize the agency’s bus services in 1997.  According to the report, this adverse decision, which was based on the Pacheco Law, not only thwarted the MBTA’s attempts to save costs and improve quality of its bus service, but the MBTA never again attempted to privatize that service.

But the actual decision by then State Auditor Joseph DeNucci did not ban or block or bar the MBTA from privatizing its bus services.  Instead, DeNucci invited the MBTA to resubmit its proposal after addressing a number of issues raised in his decision letter and in a previous letter regarding the proposal.   Among those issues were alleged failures by the MBTA to support specific cost savings in its bid proposal and to provide measurable indicators of service quality as a baseline for comparison, such as information about on-time performance.

It does appear that the MBTA was not happy with the issues and inquiries DeNucci’s staff was raising about the MBTA’s privatization proposal.  According to DeNucci’s letter, the MBTA objected at one point to the auditor’s questions about how claimed savings in contracting out functions at garages in Charlestown and Quincy could be achieved since a third facility in Everett was providing services to support the two other garages.

When the auditor inquired as to how costs would be reduced at the Everett facility, the MBTA responded that the auditor’s inquiry was “of no significance,” and “beyond the scope” of the Pacheco Law.

DeNucci’s final letter to the MBTA stated the following:

Recommendation:
We believe that the MBTA should seriously address each of the above substantive issues disclosed
by our review. A carefully considered objective analysis of these matters, such as the Everett and
Arlington facilities, quality of service, changes and extra work, pension costs, 13(c), and bid price
changes, should be undertaken prior to privatization. A hasty, ill-considered, rather than a thorough
analysis, would not well serve the MBTA’s ridership and the taxpaying public.

Conclusion:
Therefore, pursuant to Section 55(a) of Chapter 7, MGL, this office hereby notifies the MBTA of
its objection to the awarding of these contracts. In accordance with Section 55(d), this objection is final
and binding on the MBTA, until such time as a revised certificate is submitted and approved by this 
office. As always, this office is available to discuss our findings and provide further assistance to the
agency. (my emphasis)

Whatever reasons the MBTA had for not answering the auditor’s questions, the fact that those questions remained unanswered was the reason that the auditor objected to the MBTA’s privatization proposal.  Nevertheless, the auditor clearly invited the MBTA to try again and to resubmit a revised privatization plan that addressed the issues in the auditor’s review.

The Pioneer report implies that it is somehow the fault of the Pacheco Law and the state auditor that the MBTA never did revise or resubmit its proposal, and never again attempted to privatize its bus services.  That seems to us to overlook the MBTA’s responsibility for failing to comply with the auditor’s reasonable requests for information.

If you want someone in authority to grant a request you’ve made, and they say they may well grant it, but first they would like some more information about it, do you then say “it’s none of your business?”  That, in effect, appears to be what the MBTA told the auditor in the the bus privatization case.

It was the MBTA’s choice not to answer the auditor’s questions and subsequently to sue the auditor rather than resubmit its proposal.  It was also the MBTA’s choice never to submit another privatization proposal to the auditor for those services.

Now, not only is the Pioneer Institute continuing to complain about the auditor’s 1997 decision, we think the Institute has failed to make the case that the decision cost the taxpayers money over the intervening years.

And one more thing about the Pioneer report’s calculation of the alleged foregone savings 

As noted above, the Pioneer report’s figure of $450 million in lost savings from 1997 to the present, due to the Pacheco Law, is based on comparing the T’s actual in-house operating cost for bus service to an outside contract bid.  The report stated that as a means of comparison, it escalated the proposed contract bid between the years 2002 and 2013, the last date for which in-house cost data on the MBTA was available. The Pioneer report escalated the contract bid by the same percentage rate that it escalated the in-house cost each year.

But why did the Pioneer report not escalate the contract bid for the first five years of the comparison (from 1997 to 2002)? For no readily apparent reason, the report lists the same hourly contract rate for those first five years of its comparison. Yet, the report shows in-house MBTA costs rising by over 18 percent during that same initial five-year period. Had the report applied the same escalation rate to the contract bid as it did to the actual in-house costs throughout the comparison period (1997 to 2015), it would reduce the alleged $450 million in foregone savings by about $72 million.

If there was a reason that the Pioneer report assumed the bus contract costs would remain flat for the first five years, but would escalate after that, it isn’t stated in the report, as far as I could tell. But even if the report had assumed the same escalation rate throughout the comparison period, we would still reject the entire comparison of actual to proposed numbers.

(Cross-posted from The COFAR Blog)

Critics of the Pacheco Law overlook the costs of privatization 

In its single statement about the Pacheco Law’s impact, the Special Panel contends that privatized services are inherently more cost-effective than in-house services, and implies that even requiring a comparison between in-house and contracted services is unnecessary.

While the Special Panel provides no explanation for its assertion about the Pacheco Law, the Pioneer Institute, one of the chief critics of the law, argues that the major flaw in the cost-competition process under the law is the following: if the state employee bid is found to be lower than the contract bid, there is nothing in the law that requires the state agency to adhere to the state employees’ bid costs going forward.

But this argument overlooks the fact that there is little to prevent contract costs from rising over time as well.

As we pointed out previously, the cost of contracting at the T appears to have risen even faster than in-house services there.  The T’s budget history appears to bear this out as well.  The budget shows contracted commuter rail expenses rising by 122.5 percent between fiscal 2001 and 2016, compared with a 75.6 percent increase in-house wages during that same period. The budget also shows “purchased (contracted) local service expenses” rising by 336.3 percent between fiscal 2001 and 2016.

One of the reasons that privatization can be expensive is that the private sector tends to pay higher salaries than the public sector for upper-level management positions, and lower wages than the public sector for lower-level positions.  So, allowing unfettered privatization of an already quasi-privatized organization such as the T would seem likely to exacerbate the problem of high executive salaries.

The Special Panel appears to have played political games with its report

I would venture to guess that at this point, some members of the Special Panel are wishing they hadn’t signed on to the product that the Panel ultimately delivered.  Whenever the final report of a panel or commission is a PowerPoint presentation, as was the case with the Special Panel’s report, it may be a tipoff that the product isn’t first-rate.

(Cross-posted from The COFAR Blog)

Despite the fact that an unknown number of intellectually disabled people are waiting for residential services in Massachusetts, new data provided by the state appear to show that virtually none of those people are getting into state-operated group homes.

According to the data, provided by the Department of Developmental Services in response to a Public Records Law request, the number of people living in state-operated group homes in Massachusetts increased by a total of 144 between fiscal 2008 and 2015.

Previously, DDS had provided data showing a total of 156 persons had been transferred from state-run developmental centers to state-operated group homes between fiscal 2008 and 2014.

These numbers seem to imply that the entire increase in population in the state-operated homes since 2008 came from the developmental centers. Also, the numbers appear to imply that up to 12 of those transferred residents have either died or been transferred for a second time to some other location since 2008.

We’ve written previously that DDS data appeared to show that the Department was failing to inform people seeking residential care of the option of state-run services.  Families and individuals appear to be directed almost exclusively to group homes run by corporate providers to DDS.

In addition to provider-run group homes, DDS maintains a network of group homes that are staffed by departmental employees.  State workers have better training on average than do workers in privately run residences, and have lower turnover and higher pay and benefits.

There are an unknown number of people in Massachusetts waiting for residential care and services from DDS.  This number is unknown because DDS doesn’t officially acknowledge a waiting list.  The Massachusetts Developmental Disabilities Council has cited a 2010 survey indicating that some 600 people were waiting for residential services in the state, and up to 3,000 people were waiting for family support services.

Despite the apparent lack of sufficient housing and services for all of those who need it, DDS appears to be steadily phasing out state-run services and transferring those services to private providers.  Yet, the capacity of the provider-based system is clearly inadequate to meet the entire need for services.  And as we’ve recently noted, privatization of state services doesn’t automatically result in lower cost or better quality.

Some other highlights of the new DDS numbers:

1. There were a total of 266 state-operated homes in Massachusetts as of April 2015, which amounted to a net increase of 40 homes over the total number in 2008.  Previous data from DDS indicated that DDS had closed 28 state-operated residences since 2008.
2. Virtually all the (97 out of 99) people living in the state-operated homes that were closed were transferred to the new state-operated homes.

Thus, there has been a total of 253 people who have been transferred since 2008 from the developmental centers and the closed state-operated homes, apparently all to the new state-operated homes.

This raises a further question about DDS’s priorities.  Given the hundreds waiting for residential care in the state, why did DDS close 28 state-operated group homes in the past eight years?

3.  DDS has no projections on the number of people who will be living in state-operated homes in the next five to 10 years.

The bottom line is that it appears the state-operated DDS system has been expanded only enough to accommodate people already receiving services.

The situation may violate the federal Medicaid Law, which requires that intellectually disabled individuals and their guardians be informed of the available “feasible alternatives”  for care. In addition, the situation appears to violate the federal Rehabilitation Act, which states that no disabled person may be excluded or denied benefits from any program receiving federal funding.

On July 27, I sent an email to DDS, asking for information on the number of people who have been admitted to state-operated group homes who were not transferred there from other state-operated homes or from the developmental centers.  I haven’t yet received a response to that question, but I will be very surprised if the answer is more than a handful of people.

As this post attempts to demonstrate, it is virtually impossible for anyone seeking DDS services to be admitted to a state-operated group home.  One of the few people who was able to accomplish it in recent years had to file a federal lawsuit to do so.

Both the administration and the Legislature have provided disproportionate increases in funding to the provider-operated residential system in Massachusetts, and have continued to short-change state-operated care.  Now that it turns out that the previous fiscal year ended with a $200 million surplus and not the deficit that had been projected, we hope the Legislature will begin to consider restoring some balance to the DDS system, and begin to fund state-run care adequately.

(Cross-posted from The COFAR Blog)

Based on our blog posts earlier this year defending the scrutiny of the privatization of state services that is provided under the Pacheco Law, I’ve been asked to present a defense of the law at an upcoming forum sponsored by the Boston Bar Association.

Arguing in opposition to the Pacheco Law at the January 7 forum will be Charles Chieppo, a senior fellow at the Pioneer Institute, one of the state’s leading proponents of privatization and leading critics of the Pacheco Law.

Also participating in the forum will be two presenters from the State Auditor’s Office, which administers the law, and Michael LaGrassa, assistant vice chancellor for administrative services at at UMass Dartmouth.

The Pacheco Law has borne the brunt of much bad press and political criticism over the years; but we have argued that most of that criticism has been based on misinformation about the intent of the law and what it actually does.

The law requires a state agency seeking to privatize services to compare bids from outside contractors with a bid from existing employees based on the cost of providing the services in-house “in the most cost-efficient manner.”

If the state auditor concurs that the proposed contract is less expensive and equal or better in quality than what existing employees have proposed, the privatization plan will be likely to be approved.  If not, the auditor is likely to rule that the service must stay in-house.

Earlier this year, in the wake of a critical report about the Pacheco Law by the Pioneer Institute, the state Legislature suspended the law’s provisions for three years with regard to the MBTA.

While the Pacheco Law does not appear to have had a role in preventing the past privatization of human services, which we are primarily concerned with, we are concerned that the Baker administration’s next step might well be to exempt future privatization of human services from the law.

At Blue Mass Group, where we often cross-post our blog posts, I and other commenters have already engaged in quite a bit of online debate (here and here) over the Pacheco Law with Greg Sullivan of the Pioneer Institute. I’m looking forward to continuing to set the record straight about this important law at next month’s forum.

(Cross-posted from The COFAR Blog)

In what may be one of the first tests of the Pacheco Law in the privatization of human services, the Baker administration is seeking to contract out existing emergency mental health services in southeastern Massachusetts.

What concerns us about this situation is that the administration is reportedly interpreting the Pacheco Law to allow a for-profit company, the Massachusetts Behavioral Health Partnership (MBHP), to cut its proposed wage rates within roughly a year after starting to provide those services and potentially to pocket the extra profits.

This is not surprising given that a key executive from MBHP was appointed to a new position in the Baker administration that appears to have at least a supervisory role over contracts with the company. (More about that below.)

The administration’s interpretation of the Pacheco Law has drawn a rebuke from the law’s author, state Senator Marc Pacheco.

First, however, a bit of background: The Pacheco Law requires a state agency seeking to privatize services to submit to the state auditor a comparison of a bid or bids from outside contractors with a bid from existing employees based on the cost of providing the services in-house “in the most cost-efficient manner.”

If the state auditor concurs that the outside bidder’s proposed contract is less expensive and equal or better in quality than what existing employees have proposed, the privatization plan will be likely to be approved.  If not, the auditor is likely to rule that the service must stay in-house.

Two key provisions of the Pacheco Law that potentially apply here are:

1.  Under the law, an outside contractor’s proposed bid must specify wages at the lesser of either the average private-sector wage for the equivalent position or the lowest public-sector wage level for the position. In other words, the law establishes a minimum wage rate that the outside contractor must propose.
2. The Pacheco Law does not apply when contracts for privatized services are renewed.  In other words, if a private bidder wins a contract under the Pacheco Law process, that contractor does not have to undergo another review by the auditor in order to renew the contract.

The reason that Provision 2 above is pertinent to this case is that MBHP currently has an ongoing Primary Care Clinician (PCC) contract with MassHealth for separate clinician services that is scheduled to run through June 30, 2017.

As we understand it, the administration intends that the current PCC clinician services contract with MBHP will become the overall contract for the emergency services that the administration is now seeking to privatize.  And the administration’s interpretation of Provision 2 above is that if the privatization plan is approved by the auditor, all of the contract provisions in the contract bid will cease to exist when the current PCC contract is renewed.

Thus, it is reportedly the administration’s position that after the MBHP’s PCC contract with MassHealth officially ends in June 2017, MBHP will be legally free to cut the wage levels it is stipulating in its bid.  If so, we believe it is unlikely that the company would pass along the savings in cutting wages to state taxpayers, but would instead pocket those savings as profit. As a for-profit, MBHP has an incentive to pocket any operating cost savings as retained earnings.

The administration’s interpretation of the Pacheco Law is ironic because one of the main objections to the law from the law’s most vocal opponent, the Pioneer Institute, is that the bidding contractor in a privatization proposal is required to stick to the terms of its bid whereas there is nothing in the law to ensure that the terms of a state employee bid are enforced.

As Pioneer stated in an influential report last year (linked above):

 The Pacheco Law does not contain any requirement that agency employees subsequently provide service in the most cost efficient manner or in an improved manner if the proposed privatization contract is rejected.

But in fact, it appears that it is the administration’s interpretation that it is the outside contractor that doesn’t have to stand by its bid once its contract is renewed.

Sen. Pacheco himself has warned that the administration’s interpretation of the law that was named for him would “undermine” the intent of the law.  In a letter sent to Attorney General Maura Healey in November, Pacheco stated that:

Although renewal contracts for validly privatized work do not need to be resubmitted to the Auditor (for a Pacheco Law review), it was never my or the other supporters’ intent that wages and health benefits could sink lower than the “minimum wage” established by the Taxpayer Protection Act (the Pacheco Law) once the initial contract expired.  If that is permitted, the statutory purposes of preserving the quality of publicly funded services and providing minimum protections for private sector and public workers would be completely undermined.

Moreover, it seems to us that the Pacheco Law does prevent the state employees from submitting an artificially low bid and then subsequently ignoring it. The Pacheco Law states that if the employees want to submit a bid with wage costs that are lower than what are in a collective bargaining agreement, they must negotiate a change in that agreement with the applicable state agency.  That new collective bargaining agreement is binding on the state employees and cannot be changed unless the state agency agrees.

A potential decline in service quality

As we understand it, the Baker administration is projecting a savings of $5 million a year in privatizing the emergency mental health services in Southeastern Massachusetts.

SEIU Local 509, a state employee union, has put in a bid on behalf of the state employees currently providing the emergency services that envisions saving about $500,000 per year.  So, the state auditor may well determine that there would be a greater savings in privatizing the services.  However, the union is arguing that the quality of those services is likely to decline under the privatization plan because the financial savings will depend on major cuts in staffing.

The administration’s reported interpretation of the Pacheco Law’s contract renewal provision appears to bear out the SEIU’s concerns about a potential drop in the quality of the privatized services offered by MBHP. If MBHP or its subcontracting firms are legally free as of mid-2017 to cut the wage rates proposed in MBHP’s bid for the emergency services, it seems to us to be very likely that the quality of those services will suffer.

Political connections appear to have played a role in the MBHP case

It’s hard to overstate how politically connected MBHP is.  There appear to be a number of close relationships between the company and the Baker administration and with previous administrations — and in particular with the Executive Office of Health and Human Services, which will oversee the privatized mental health services.

Last April, Scott Taberner, previously the chief financial officer at MBHP, was named Chief of Behavioral Health and Supportive Care in MassHealth, the division of EOHHS that administers Medicaid and healthcare for low income and disabled persons.  Taberner’s position in Masshealth was created by the Baker administration.  MassHealth is seeking the privatized mental health services contract with MBHP.

Prior to that, in late May 2014, Beacon Health Strategies (Beacon) announced its plan to merge with ValueOptions, the parent company of MBHP.  Under the arrangement, Beacon will be 50 percent owned by Bain Capital and 50 percent owned by Diamond Castle Holdings.

Bain Capital was formed by former Massachusetts Governor Mitt Romney.  Last April, the same month that Taberner joined the Baker administration, former Massachusetts Governor Deval Patrick joined Bain as a “social impact” investment advisor.  That doesn’t appear to have any direct connection to the proposed MBHP privatization contract, but I thought I’d throw that in.

According to the Mass. Psychological Assn. (MPA), ValueOptions and Beacon both hold a large market share in programs in Massachusetts that are paid for through public funds.  As noted, MBHP manages benefits for the PCC program.  The MPA estimated that once the merger was finalized, Beacon would manage the behavioral health benefits of  78 percent of the Massachusetts Group Insurance Commission members and of 70 percent of MassHealth members.

A coalition of health care advocacy groups signed onto an MPA letter in August 2014 to the Mass. Health Policy Commission, expressing concern about the proposed merger of Beacon and ValueOptions.  The letter stated that the merger “will limit the already narrow choices offered to insured individuals whose primary diagnosis is related to behavioral health…”

It does appear that the merger went through.  Now it appears that MBHP is being primed by the administration to run the privatized emergency mental health contract via MassHealth; and Taberner, a former MBHP executive, appears to be involved in that effort or is at least in a position to oversee it.

The administration itself has described Taberner’s new position at MassHealth as follows:

…Taberner will lead reforms to better coordinate and integrate care for behavioral health, physical health and long-term services and supports for elders and persons with disabilities.

The Baker administration wants to make the emergency mental health services part of the MassHealth PCC contract with MBHP.  A former MBHP executive is now in a high-level position in the state agency contracting with his former company.  And now the administration is interpreting the Pacheco Law in MBHP’s favor by indicating that if the privatization plan is approved, MBHP will be legally free to cut wage levels as of June 2017 when its PCC contract up for renewal.

(Cross-posted from The COFAR Blog)

It’s amazing how little real understanding the mainstream media has of the issue of privatization and of legislative responses to it such as the Pacheco Law.

You only have to read this Boston Globe editorial from 2011 to begin to realize how many misconceptions supposedly savvy journalists have about these issues.  (More about that below.)

Privatization is one of the most important and controversial aspects of state and federal policy. When I googled the phrase “privatization and public policy,” I got 2.7 million results.  The state auditor’s administration of the Pacheco Law has become a key item of controversy in Massachusetts politics as well.

1. The Pacheco Law was based on federal policy (OMB Circular A-76)
2. The law never barred or banned the award of bus contracts by the MBTA, and the law has not stopped privatization of most human services in Massachusetts

Chieppo of the Pioneer Institute argued that the Pacheco Law is different than A-76 because A-76 requires a binding letter of obligation if the public employees win the bid competition with the private sector.  (I disagreed with his assertion that no such obligation binds state employees under the Pacheco Law.)

LaGrassa of UMass said the Pacheco Law review that the university did to privatize their bookstore helped them to better understand the costs involved in running it.  He said that the process involved a lot of work and back-and-forth with the auditor’s office; but in his words, “you should do a lot of work” if you are going to privatize a public service.

Regarding the 2011 Globe editorial referred to above:

Memo to Globe editorial writer: Contractors bidding to privatize services don’t have to pay public sector wages under a Pacheco Law review.  They can pay the lesser of the lowest public sector wage or the average private sector wage for the equivalent position.

And no, a privatization initiative doesn’t have to “produce savings” over what the state employees could achieve under ideal conditions.  The privatization initiative must project such savings, but no one has to — or is expected to — actually produce them.   The Pacheco Law requires a competition between private and public sector bids, both types of which are based on projected results that might be achieved under ideal conditions.

The bottom line, it seems to me, is that people in the mainstream media still occupy influential positions as opinion makers regarding politics and government, in particular.  As such, they have an obligation to get their facts straight on these matters.  The state auditor’s “Primer” on privatization last week presented a convenient opportunity to do that.

But with two exceptions, the mainstream media blew their opportunity by missing the class.

(Cross-posted from The COFAR Blogsite)

In his proposed Fiscal 2017 budget, which he filed last week, Governor Baker is continuing to boost funding for privatized care for the developmentally disabled at the expense of state-run care.

This continues a pattern that has crossed party lines — the Patrick administration did the same thing — of reducing both the available choices and the quality of care for people with developmental disabilities.

Privatization of human services reduces the quality of care because it reduces money spent on direct-care staffing.  Direct care workers of corporate providers get lower pay and less benefits than their counterparts in state-run facilities.

Privatization reduces choice in care because it results in the closures of state-run facilities and consequently eliminates them as an option for people who might want that higher level of staffing and care.

Of course, as the linked New York Times article points out, privatizing services doesn’t necessarily result in long-term fiscal savings for state taxpayers.  The money saved in hiring lower-paid workers is usually offset by higher costs such as unemployment insurance and by Medicaid and other public assistance for workers earning low incomes.  We also believe any savings in privatization is also offset by the often inordinately high compensation provided to executives of the corporate providers.

Yet it appears the Baker administration still believes it will save money in using lower-paid direct-care workers.  That seems to be the case with the administration’s proposal to privatize mental health services in southeastern Massachusetts.  In that case, the administration appears to be implicitly backing a reduction in wages to direct-care workers after an initial contract period.

Governor’s FY ’17 DDS budget numbers

Here are some of the key numbers in Baker’s Fiscal 2017 budget proposal for the Department of Developmental Services.  Note: All numbers below are adjusted for inflation using the Mass. Budget and Policy Center’s CPI index numbers.  The CPI numbers show inflation running at about 1.8 percent for Fiscal 2016.

We believe that in order to gauge the level of the administration’s commitment to privatization of services for the developmentally disabled, it’s necessary to compare what has happened and is happening to the corporate provider line item with what happens to other DDS line items.

Here’s how it looks graphically, with more detailed explanation below:

Corporate provider residential line item (5920-2000): This is the main DDS line item supporting privatized services.  It has become by far the largest line item in the DDS budget — funding under this line item exceeded $1 billion for the first time in Fiscal 2015.

(Cross-posted from The COFAR Blogsite)

In one of the few investigations of the community-based system of care for the developmentally disabled, the Inspector General for the U.S. Department of Health and Human Services last week disclosed critical shortcomings in the process in Massachusetts for reporting abuse and neglect.

A report issued by the IG found that incidents of abuse and neglect in group homes were not regularly reported to investigators.  The report noted that of a sample of 587 visits by group home residents to hospital emergency rooms, the group homes had failed to report 88 –or 15 percent — of them to the Department of Developmental Services.

In addition, DDS itself and the group homes did not report 58 percent of 175 “critical incidents” to the Disabled Persons Protection Commission, as required by state regulations.  And 29 percent of incident reports sampled by the IG did not contain “action steps” to protect individuals involved from future injury.

COFAR has long maintained that the state’s privatized group home system is inadequately overseen and prone to abuse and neglect due to relatively low levels of pay and training, and high turnover among staff.   Even the providers themselves acknowledge those problems.  Yet the state routinely relicenses  the providers to operate homes even though there are clear gaps in the prevention and reporting of abuse and neglect.

The Massachusetts report is the third report issued by the HHS IG thus far on abuse and neglect in individual states.  Last year, the IG issued a report on New York State; and in May, the agency issued a report on Connecticut.

U.S. Senator Chris Murphy of Connecticut, who originally requested in 2013 that the HHS IG investigate abuse and neglect in group homes around the country, commented this week on the findings, at least concerning Connecticut and Massachusetts.  In a statement issued on Monday, Murphy said he will introduce federal legislation to require reporting of incidents of abuse and neglect, and training of direct care staff in group homes.

Murphy’s office did not respond to a request from COFAR earlier this year for comment on the New York report. As we noted in February, the New York report contained no recommendations and no critical findings, and was only six pages long.

The Massachusetts report, in contrast, was 33 pages long.  Like the Massachusetts report, the Connecticut report, which was issued in May, found numerous failures to report abuse and neglect to state authorities.

Despite its thoroughness in examining the incident reporting process in Massachusetts, we believe even the IG’s Massachusetts report was limited in its scope. We think it could have gone much further in investigating the major problems posed by the privatized residential system.

In requesting the IG investigation, Murphy’s 2013 letter to Daniel Levinson, the HHS IG, emphasized the role of privatization in causing “a race to he bottom in our health care system. Privatization of care may mean lower costs but without the proper oversight and requirements for well-trained staff,” Murphy stated.

In limiting its report primarily to findings of failures to report instances of abuse and neglect, the IG has focused on a small piece of the overall problem.  The larger issue concerns not only the level of abuse and neglect in the privatized system, but the overall adequacy of care that exists in it.

The HHS IG  report did not examine the impact of privatization on the quality of care in the group home system, and did not specify whether the residents whose emergency room visits the IG sampled lived in privatized or state-run group homes.

We have found that the state’s ongoing privatization of residential services has resulted in a corporate, bottom-line approach to care of the disabled. Moreover, DDS has insisted on steering people waiting for residential care to the privatized group home system, all the while failing to provide state-run homes as an option.

The case of Kathleen Murphy is an example.  As we have previously reported, Kathleen’s sister and guardian, Patricia Murphy, and members of her family began trying to move Kathleen from a corporate provider-operated group home to a state-operated residence in 1998.  DDS continually declined to move her, despite a federal law requiring that the Department provide disabled individuals with a choice among all available alternatives for residential care.

Patricia Murphy finally filed a federal lawsuit in 2013, which resulted in the placement of Kathleen in a state-operated residence.  (By way of disclosure, Kathleen Murphy is represented in the case by Tom Frain, who is COFAR’s Board president.)

Patricia Murphy contends that Kathleen suffered nearly 16 years of physical abuse, sexual assaults, emotional torment, and medical neglect in provider-operated group homes.  She says her sister was also grossly over-drugged in those facilities, and her clothing, jewelry and spending money were stolen.

The state-operated residence to which Kathleen was finally placed is “the best thing that ever happened to her,” Patricia said.  She said that since moving to the state-operated group home, Kathleen has lost 45 pounds, is being fed nutritious food, is off all psychotropic drugs, and her blood pressure is under control.

Yet these experiences as reported by families are apparently of little interest to the federal government, in particular, which, like the state, is committed to further privatization of residential services for the developmentally disabled.  While the U.S. Department of Justice has placed a major emphasis in recent years on investigating and closing down state-operated facilities and services for the disabled, there have been few if any comprehensive investigations of the privatized group home system.

Unfortunately, the Massachusetts Legislature has adopted a look-the-other-way attitude regarding these problems.  As far as we know, no legislative committee has scheduled any hearings in recent memory on the problem of abuse and neglect in the DDS system.

Both the Legislature and the Baker administration have continued a policy of boosting funding for further privatization of services while slowly starving the much more responsive state-run group home system of budgetary support.

We hope that the IG report, limited as it was, spurs the Legislature to finally pay attention to the big issues that surround the care of persons with developmental disabilities in Massachusetts. Those issues concern privatization and its impact on abuse, neglect, and the quality of care in general.

(Cross-posted from The COFAR Blogsite)

In responses to comments made to a federally required plan for community-based care of the developmentally disabled, the Baker administration is conceding that not all congregate care is bad or should be banned.

Yet, the administration’s draft Statewide Transition Plan (STP) still appears to prohibit or restrict most new group homes from housing more than five residents; and it would apparently restrict funding for most other congregate settings, such as farm-based residential programs.  The administration is currently asking for further comments on the draft STP.

The STP is a requirement of the federal Centers for Medicare and Medicaid Services (CMS), which issued a new regulation in 2014 governing community-based care receiving Medicaid funding. The CMS regulation is intended to reduce reliance on congregate care, but Massachusetts originally appeared to go even further than the CMS regulation in banning congregate care almost entirely.

Along with hundreds of people and other organizations, COFAR submitted comments in late 2014 to the original draft of the STP.  It appears that like us, most of the commenters to that original plan were concerned that the state was going too far in banning virtually all possible forms of congregate care.

As we noted in our comments to the administration in 2014, the Department of Developmental Services appeared to be proposing a ban on new and potentially existing residential settings such as farmsteads, residential schools or settings that are part of residential schools, settings “that congregate a large number of people with disabilities for significant shared programming and staff,” and even new group homes with more than five residents.   Not even CMS was advocating a complete ban on all of those residential options.

Now, after having received those critical comments, the state seems to be willing to continue to fund some forms of congregate care.

In its response to the comments, the Baker administration made the following statement:

The state acknowledges that CMS… has indicated that ‘it is not the intent of this rule (CMS’s 2014 regulation) to prohibit congregate settings from being considered home and community-based settings.’ The …characteristics of any setting (location, geography, physical characteristic and size) are not necessarily determinative of whether a provider can achieve compliance… (my emphasis).

Despite that apparent concession, the Baker administration’s STP states that DDS has determined that 14 corporate providers operating 57 group home sites are not complying with the new CMS regulation. This lack of compliance is because these residences apparently have “institutional qualities,” either because they house more than five residents or not enough services are provided by community-based providers.

The STP also states that some of these homes may have provided insufficient staff training in “person-centered planning.”  (We have voiced concerns that while person-centered planning is touted as giving developmentally disabled individuals more control over the services they receive and how they pay for them, the process appears to put control over an individual’s funds into the hands of private companies.)

By the way, the administration stated in its responses to the STP comments that the state’s Building Code limits group home capacity to five residents.  Our reading of the applicable Building Code regulation, however, is that it does not set a 5-person limit on all group homes, but rather specifies only that DDS group homes with five residents or less must be classified as single-family or two-family homes (see amendments to 780 CMR. 310.2).

These are, moreover, group homes, and not developmental centers, that DDS has identified as being too institutional. This raises a concern for us that the federal government and the state are pushing for ever smaller and more dispersed residential settings — a process that diverts more and more taxpayer money appropriated for the developmentally disabled into a grossly unregulated corporate-run service system.

While it appears under the STP as though DDS will allow these 14 providers some leeway in complying with the provisions in the plan, the providers will have to make a range of changes, including potentially relocating their residents to smaller residences.  The STP indicated that this may result in an unspecified additional cost to the state.

The STP also noted that the Association of Developmental Disabilities Providers (ADDP), an influential lobbying organization for state-funded DDS providers, will be in charge of providing assistance to the providers in complying with the plan.

Anti-eviction agreements

One piece of potential good news is that the administration’s STP states that DDS will require providers to sign contractual agreements with residents of group homes that prevents arbitrary and capricious evictions.  This is apparently another CMS requirement.  This could address one of the key problems we’ve identified with provider-operated group homes, which is that they can currently evict residents with minimal notice, particularly in cases in which guardians or other advocates are seen as being pushy or meddlesome.

A portion of the STP also deals with non-residential care.  What stood out was that DDS found that 170 community-based day programs operated by 98 providers did not meet CMS standards due to inadequate daily activities, staffing, and funding.

Administration still steeped in community-first ideology

Despite the apparent softening of its anti-congregate-care position, the administration’s STP still appears to be ideologically opposed to anything not considered sufficiently community-integrated, and therefore too institutional. In its response to some of the comments to the STP, the administration stated that it is its belief that:

…all individuals, regardless of their level of impairment, can benefit from integration and access to the community. (my emphasis)

The administration made this statement after noting that it recognized that “…individuals with significant disabilities live in some settings that presumptively do not satisfy the (CMS) community regulation.”  The administration stated that it is not its intent “to force individuals to move from settings or to take away needed services and supports.”  But that is exactly what DDS did when it closed or downsized four developmental centers in Massachusetts, starting in 2008.

So, in effect, while the administration says in the STP that it recognizes that some individuals live in non-community-based settings, it still maintains that all developmentally disabled individuals, regardless of their level of disability, could benefit from being moved to the community system.  It is a community system, however, in which at least some of the services and supports available in “institutional” settings would most probably be taken away.

On the one hand, the administration acknowledges that it is not the size of a care setting that determines whether it is institutional or not, but rather the services provided and the commitment of the staff.  Yet the administration consistently overlooks the fact that just because a care setting is small, that doesn’t guarantee it will be integrated into the community.

In a perceptive post, Jill Escher, president of The Autism Society San Francisco Bay Area, notes that the real purpose of the new CMS regulation is not to eliminate institutional care, but rather “to put the brakes on the creation of new residences and programs that cater specifically to adults with autism and other intellectual and developmental disabilities.”

In other words, programs for the developmentally disabled cost money, and the CMS is looking to save money by simply eliminating those services.

Here’s Escher’s very apt description of the impact of the CMS regulation and the transition plans of states like Massachusetts:

Though the (CMS) rules talk of “person-centered” and “outcome-oriented” services, where individuals are not “isolated” and are free from coercion and restraint, in Orwellian doublespeak fashion, civil rights and liberation is not the true endgame here. The overwhelming goal is to restrict out-of-home options.

In practice the rules mean if you’re sitting at your parents’ home doing nothing, or in your own apartment without on-site staff, that’s “community integration.” Meanwhile if you prefer a well staffed adult autism program or housing complex, where you are cared for and safe, engaged in the community, and in the company of your friends who may have similar disabilities, your choice is ironically deemed “isolating” by bureaucrats. And therefore subject to the CMS axe.

Jill Barker, who writes The DD News Blog, adds:

Congregate care, providing services to people with disabilities in group settings, is one of many practical solutions to the need for long-term care. It allows for the sharing of resources and lessening of feelings of isolation. It should not be ruled out as an option, although that appears to be the intent of many advocacy organizations.

In my opinion, there is also a quiet war on families who are offered no other alternative but to keep their adult child with DD at home with services that may not be adequate to provide the family with the relief they need and a good quality of life for their disabled family member for the long term.

(Cross-posted from The COFAR Blogsite)

The major lobbying organizations for corporate providers to the Department of Developmental Services appear to be pushing the Baker administration and the Legislature to privatize more and more state-run care.

And the administration and Legislature have so far appear to have been more than willing to accommodate the providers.

Governor Baker’s Fiscal Year 2018 budget, which he submitted to the Legislature last month, further widens a spending gap between privatized and state-run programs within the Department of Developmental Services. In doing so, it appears largely to satisfy budget requests from both the Arc of Massachusetts and the Association of Developmental Disabilities Providers (ADDP).

In fact, the increase proposed by the governor in funding for privatized group homes is $26 million more than the $20.7 million increase the Arc had sought. The ADDP may be a little disappointed only because that organization had asked for a $176 million increase in that account!

The chart below shows the widening gap in funding for key privatized and state-run DDS services over the past several years, adjusted for inflation. Under this trend, funding for corporate-run, residential group homes, in particular, has risen steeply while funding for state-operated group homes and developmental centers continues to be stagnant or cut.

For Fiscal 2018, the Arc requested a $20.7 million increase in funding for privatized group homes (line item 5920-2000), and the governor obliged with an even higher $59.9 million, or 5.4 percent, increase, as noted.*  The ADDP, as noted, wanted a $176 million increase in that line item.

In the privatized community day line item (5920-2025, not shown on the chart), both the Arc and ADDP asked for a $40.2 million increase, and the governor responded with a proposed $13.6 million increase.

At the same time, both the Arc budget request for Fiscal 2018 and the  ADDP request effectively asked for zero increases in funding for the state-run DDS accounts. Those include accounts funding state-operated group homes, developmental centers, and departmental service coordinators. (The column labeled “Request” in the linked Arc budget document is left blank for those state-run program line items. The ADDP budget request simply doesn’t include those line items.)

The governor appears to have more than obliged the provider organizations regarding those state-run accounts as well. His Fiscal 2018 budget proposes a $1.8 million cut in the state-operated group home account (5920-2010). This amounts to a $6.9 million cut when adjusted for inflation.

In addition, the governor is proposing a  $2.4 million, or 2.2%, cut in the state-run developmental centers line item. (5930-1000). That’s a $4.9 million cut when adjusted for inflation.

And the governor is proposing a cut of $96,000 in the DDS administration account (5911-1003). That is a $1.7 million cut when adjusted for inflation, and means a likely cut in funding for critically important DDS service coordinators, whose salaries are funded under the administrative account.

It’s well known that the Arc and the ADDP oppose developmental centers because those two organizations oppose congregate care for the developmentally disabled and support only care in group homes or smaller settings. What may not be as well known is that the Arc and ADDP appear to have no interest in more funding for service coordinators or state-run group homes, in particular.

Late last month, Baker submitted his proposed Fiscal 2018 budget to the Legislature’s House Ways and Means Committee. In a letter to Representative Brian Dempsey, the chair of the budget panel, COFAR requested that, at the very least, the committee approve a plan to redirect some of the governor’s proposed increase in the corporate residential account to the state-operated group home, facilities, and service coordinator accounts.

(We would note that we have been urging this kind of redirection of funding for the past two years, and neither the governor’s office nor the Legislature are listening.)

Service coordinators

Service coordinators are DDS employees who help ensure that clients throughout the DDS system receive the services to which they are entitled under their care plans. In recent years, funding for service coordinator salaries has failed to keep up with their growing caseloads.

A reason for the Arc’s apparent disinterest in service coordinators may be that the organization has long promoted privatized “support brokers,” in which the Arc is financially invested.

The job descriptions of the Arc support brokers and the DDS service coordinators appear to be quite similar. The Arc notes on its website that “consumers or families hire a support broker to help them find appropriate services and supports to thrive in their community.”

The job description of DDS service coordinators states that they are responsible for  “arranging and organizing DDS-funded and generic support services in response to individual’s needs.”

COFAR Executive Director Colleen M. Lutkevich terms the DDS service coordinators “the eyes and ears that make sure that the providers who report to DDS are doing their best for the residents in a large, confusing system. Without them, the provider agencies have total control, and families do not even have a phone number or a name to call outside the provider they are dealing with.”

Underfunding of state-operated group homes

In addition to provider-run group homes, DDS maintains a network of state-run group homes that are staffed by departmental employees. State workers receive better training on average than do workers in corporate provider-run residences, and have lower turnover and higher pay and benefits.

State-operated group homes provide a critically important alternative to the largely privatized residential care system that DDS oversees. But we have found that DDS routinely fails to offer state-operated homes as an option for people waiting for residential care, and instead directs those people only to openings in the privatized residences.

To be clear, we do not object to a highlight of Governor Baker’s budget — his proposed $16.7 million increase in the  DDS Turning 22 account, which would amount to a 222% increase in that account over the current year appropriation.  Turning 22 funds services for a growing number of developmentally disabled persons who leave special education programs at the age of 22 and become eligible for adult services from DDS. This account has been historically underfunded.

But our concern is that as they enter the DDS system, those 22-year-olds will be placed almost exclusively in privatized programs. An important choice is being taken away from them and their families.

As we noted in our letter to the House Ways and Means chair, the pattern of privatization in Massachusetts state government has become almost permanently established even though the benefits of privatization are highly debatable.  Many questions have been raised about the privatization of prisons  and the privatization of education in Massachusetts and elsewhere around the country.

The privatization of human services may be the biggest prize of all for government-funded contractors.  We need to preserve what’s left of state-run services.

(*The $59.9 million figure for the governor’s proposed increase in the corporate provider line item is based on numbers provided by the nonpartisan Massachusetts Budget and Policy Center. The Arc’s budget document claims the governor’s requested increase was $46.7 million.)

[Note: I tried to insert an image here of the cover of Naomi Klein’s book, “The Shock Doctrine,” but nothing seems to show up.]

From the continuous barrage of propaganda emanating from President Trump and his administration, it seems more and more the case to me that their agenda is to hollow out our constitutional institutions and implement a form of dictatorial, corporate-controlled government in the U.S.

And it is becoming clear from the ongoing chaos of their statements and actions that they are trying to use the time-honored technique of political shock to reduce the nation to a state of helplessness so that they can impose their will as quickly as possible.

But a few things appear to be holding them back. One is our Judicial Branch, which has stopped Trump’s attempt so far to ban at least some people from getting into this country. Trump’s immigration ban would seem to be rather ineffective in any event in achieving its stated purpose of curtailing terrorism. But it might achieve a symbolic effect of closing the laboratory doors, as it were, in order to carry out the shock treatments.

It appears our constitutional institutions are holding up so far under the onslaught. Trump may effectively control two of the three branches of government right now, but it appears he needs all three.

Secondly, the press is finally waking up to at least some of what Trump has been up to, and is starting to question whether he came to power legitimately or was in cahoots with a foreign power. This is apparently so threatening to Trump that he has resorted to the dictator’s usual response of labeling the press as the enemy of the people.

And thirdly, and maybe most importantly, the shock treatments so far haven’t really worked. Many people are indeed terrified by the Trump administration, but they haven’t curled up into the required fetal ball. First there was the Women’s March and then the town hall resistance as thousands of constituents of Republican members of Congress showed they aren’t cowed by what’s been going on. And there has been a steady stream of resistance on social media.

Whether these three elements of resistance will be enough to neutralize Trump and his agenda remain to be seen. But any success in slowing that agenda can be seen as causes for hope.

What about Trump’s agenda, though? Is he really out to become a corporate dictator? It may be difficult to discern that from his statements, which are often contradictory and incoherent. But some around him occasionally paint a clearer picture.

Learning from Pinochet

For instance, there is chief strategist Steven Bannon’s statements that his goal is to “dismantle the administrative state,” and to “destroy all of today’s establishment.”

What Bannon is saying here isn’t all that new, even in the U.S. The destruction of the administrative state implies full implementation of efforts by many previous U.S. administrations to establish three principal legs of the corporate-friendly free-market stool — privatization, deregulation, and deep cuts in social spending. In other words, what Bannon apparently wants is a government completely devoted to corporate-friendly policies.

What is different with Trump and Bannon are the lengths to which they apparently intend to go, and the way in which they intend to achieve their aims. It seems that Bannon intends to bring the country to a state of complete corporatism through a massive destructive effort.

In her book, “The Shock Doctrine,” Naomi Klein’s description of the actions of Chilean dictator Augusto Pinochet sounds remarkably similar to what Trump and Bannon are now planning. In the 1970’s, when Pinochet assumed power in a violent coup, his key economic advisor was University of Chicago economist Milton Friedman.

As Klein noted, Friedman advised Pinochet to impose a regimen in Chile that seems familiar now: tax cuts, free trade, and that three-legged stool of massive privatization, deregulation, and cuts in social services.

And Friedman advised Pinochet to accomplish his goal quickly, using surprise and what Friedman termed “shock treatment.” As Friedman stated at the time, “a new administration has some six to nine months in which to achieve major changes; if it does not seize the opportunity to act decisively during that period, it will not have another such opportunity.”

Pinochet of course used torture and the abductions and disappearances of thousands of people in order to carry out Friedman’s economic program. While Trump also likes to talk about torture, he is obviously not in the position Pinochet was to terrorize this country in that way.

But it does seem that Trump and Bannon have tried to induce a state of shock and confusion and even panic in this country through an unending series of outrageous statements, and through disruptive actions such as detentions of people in airports and deportation raids around the country. All of that has been accompanied by nearly daily announcements of actions to reduce or eliminate regulations on the financial and banking sector, to curb regulations protecting the environment, to roll back transgender rights, and even to gut programs for free school lunches.

Trump and Bannon appear to be trying to sow confusion about their real aims, partly by accusing their perceived enemies of the very same things that they have been doing. Bannon, for instance, has decried the “corporatist” and “globalist” media.  But Trump is building a corporatist administration.  His own global corporate interests are well known. And consider his cabinet, which is stocked with corporate players from former Exxon CEO Rex Tillerson to Goldman Sachs executive Steven Minuchin.

It could be argued that Trump and Bannon are not acting in the corporatist mode because Trump is against free-trade agreements such as the Trans-Pacific Partnership. But Bannon’s destruction of the administrative state is a corporatist vision, and many of Trump’s past positions and statements have been decidedly pro-corporation.

If Trump is against free-trade agreements, it doesn’t appear to be for the same reasons that many progressives oppose those agreements.

The McGill experiments

In one of the most interesting chapters in her book, Klein recounts the devastating impact on one particular individual of electric shock and sensory deprivation experiments that were begun in the 1950s by Ewen Cameron, a then eminent psychiatrist at McGill University in Montreal. The brutal experimental techniques, many of which were later adopted by the CIA, were intended to break down cognitive functioning in the subjects and make them susceptible to suggestion.

In a related series of psychological experiments at McGill, a Dr. Ronald Hebb, director of psychology there, subjected volunteers to prolonged sensory deprivation during which he played recordings of voices “talking about the existence of ghosts or the dishonesty of science…”

It would seem that the ultimate purpose of these experiments — and of the CIA’s later interrogation techniques, which Trump strongly supports — was to get the subjects to lose the ability to distinguish fact from fiction, truth from lies. The idea was that the mind would be reduced to a tabula rasa or clean slate upon which a new set of truths could be imposed.

It could be argued that that Trump and Bannon are similarly attempting to impose their shock treatments, interspersed with “alternate facts,” on the nation in order to destroy the concept of truth and to impose their version of reality. That new version is Bannon’s corporate controlled government.

It would seem that Trump and Bannon are proceeding along the same political path that Naomi Klein ascribed to Milton Friedman, only Trump and Bannon are prepared to go further down that path than any U.S. administration ever has.

As Klein explained it, Friedman wanted to “dismantle” the “mixed, regulated economy” that created the New Deal in this country following the Great Depression. In trying to carry out that vision to its absurd end, Trump and Bannon are exhibiting Friedman’s “signature desire for unattainable purity, for a clean slate on which to build a reengineered model society.”

In the final analysis, Trump and Bannon are trying to scare the hell out of the country in order to obtain their clean slate; but so far at least, a majority of people in this country aren’t lying down for it.

(Cross-posted from The COFAR Blogsite)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Cross-posted from The COFAR Blogsite)

A 2008 state law, which substantially raised funding to corporate agencies running group homes for people with disabilities, has resulted in only minimal increases in wages for direct-care workers in those facilities, according to a new report from the SEIU Local 509, a Massachusetts state employee union.

Since the law known as Chapter 257 took effect, the average hourly wage for direct-care workers rose by about 14.8 percent to just $13.60 in Fiscal Year 2016, according to the SEIU report, which was released last week (and got little media coverage, btw).

In contrast, the report noted, the law helped boost total compensation for CEOs of the corporate providers by 26 percent, to an annual average of $239,500.

According to the SEIU, raising wages of direct-care workers employed by provider agencies was a key goal of Chapter 257, and yet those workers “are still struggling to earn a living wage” of $15 per hour. The union contended that the funding increases made possible by Chapter 257 “did not come with any accountability measures, leaving it up to the private agencies to determine their own spending priorities.”

The SEIU report found that human services providers in the state received a total of $51 million in net or surplus revenues (over expenses) in Fiscal 2016, which would have been more than enough to raise the wages of all direct-care workers to the $15-per-hour mark.  Yet, the providers have chosen not to do so.

Last week, the state Senate approved a budget amendment that would require human services providers to spend as much as 75 percent of their state funding each year in order to boost the pay of their direct-care workers to $15 per hour.  The amendment had not been approved in the House, so it will now go to a House-Senate conference committee.

The SEIU report provides confirmation of a report by COFAR in 2012 that direct-care workers in the Department of Developmental Services’ contracted system had seen their wages stagnate and even decline in recent years while the executives running the corporate agencies employing those workers were getting double-digit increases in their compensation.

In January 2015, a larger COFAR survey of some 300 state-funded providers’ nonprofit federal tax forms found that more than 600 executives employed by those companies received some $100 million per year in salaries and other compensation. By COFAR’s calculations, state taxpayers were on the hook each year for up to $85 million of that total compensation.

The SEIU report stated that during the past six years, the providers it surveyed paid out a total of $2.4 million in CEO raises. The highest total CEO compensation in the union’s survey was that of Seven Hills Foundation’s CEO who received a total of $797,482 in Fiscal 2016.  Seven Hills received $125 million in state funding that year, with most of that funding coming from DDS.

The SEIU report stated that the average direct-care employee at Seven Hills makes just $12.47 per hour, more than a dollar less than the average wage for workers across all the organizations analyzed in its report.

Vinfen, the third largest provider in the state, provided its CEO with a total of $387,081 in compensation in Fiscal 2016. Vinfen spent a total of $1.7 million on compensation for its top five executives in that fiscal year.

The potential for double-digit increases in CEO compensation was not mentioned by provider-based advocacy organizations that  actually sued the then Patrick administration in 2014 to speed up the implementation of higher state funding under Chapter 257.

According to the plaintiffs in the lawsuit, the higher state funding was needed quickly in order to keep up with the rising costs of heat, rent and fuel, and to increase wages to direct-care staff in order to reduce high staff turnover.

In comments in support of the provider lawsuit in 2014, one key provider lobbyist contended that time was of the essence in boosting provider funding. “…Every day that full implementation (of Chapter 257) is delayed, the imbalance and the unfairness grows,” the lobbyist said.

Yet, according to the SEIU, the providers made 3.2 percent, 2.7 percent and 2.3 percent respectively in surplus revenues on average in the Fiscal 2014, 2015 and 2016 fiscal years. The imbalance that existed was actually between executive-level salaries and direct-care wages in those provider organizations.

As a result of the lawsuit, both the Patrick administration and the incoming Baker administration approved major funding increases to the provider-run group-home line item in the DDS budget, even as it was becoming clear the state was facing major budget shortfalls in the 2015 fiscal year.

“This all suggests,” last week’s SEIU report concluded, “that the amount of state funding is not at issue in the failure to pay a living wage to direct care staff, but rather, that the root of the problem is the manner in which the providers have chosen to spend their increased revenues absent specific conditions attached to the funding.”

(Cross-posted from The COFAR Blogsite)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(Cross-posted from The COFAR Blogsite)

Yianni Baglaneas, who has Down syndrome, had a great time at a Special Olympics bowling tournament in Peabody on April 9, the day after his 29^th birthday.

But later that night in his group home, he apparently aspirated on a piece of birthday cake and nearly died of pneumonia almost a week later because the staff in the residence allegedly did not react to his constant coughing.

“It was like Yianni was drowning while surrounded by people, and  no one gave him a hand,” his mother, Anna Eves, said.

Aspirating or inhaling food into the lungs is a particularly serious danger among people with intellectual disabilities, and caretakers are normally trained to take measures to prevent it from happening and to recognize the symptoms when it does happen.

However, the staff of the Beverly-based group home run by Bass River, Inc., a Department of Developmental Services provider, allegedly failed to take Yianni to a doctor for three days while his coughing continually got worse. In addition, a nurse practitioner at the Cape Ann Medical Center, who finally saw Yianni, apparently misdiagnosed his condition as bronchitis.

Yianni Baglaneas (center) at his Special Olympics bowling tournament on April 9. Hours later, he aspirated on a piece of cake in his group home.

The nurse practitioner prescribed cough and cold medicine for Yianni and sent him back to his group home.  She did not do a chest x-ray even though his blood oxygen level was low and his white blood cell count was high, indicating the presence of an infection due to the aspiration.

It was two days after the doctor’s office visit that Anna, who had  no idea of the seriousness of her son’s condition, saw him for the first time since the bowling tournament. She was so concerned about how ill he looked that she took  him to Addison Gilbert Hospital in Gloucester where he was immediately admitted in critical condition. That was on April 15, six days after he had apparently aspirated on the piece of cake.

No one from the group home had informed Anna or her husband of Yianni’s worsening condition during that week. The house director had only emailed Anna at one point that Yianni was being taken to the doctor with a cough and a runny nose, and later told her the doctor said her son was suffering from allergies.

“I will never forget the ICU doctor telling me he was in critical condition and asking me if I wanted him to do everything he could to save his life,” Anna said. A nurse told her that her son had been hours away from dying when he was admitted to the hospital.

COFAR emailed Larry Lusignan, executive director of Bass River, Inc., to ask whether he would comment on the case and whether his agency was taking steps to better train staff in how to recognize and react to symptoms of aspiration pneumonia and other illnesses among group home clients.

Lusignan declined to comment, stating in a reply email that “…issues of confidentiality prevent me from disclosing information of any kind regarding our service delivery to individuals, or even the identification of any individuals served.”

Anna said the episode has made her “distraught about the level of abuse and negligence that happens in group homes in Massachusetts.” She said she has begun looking for other parents “to join with to shine a spotlight on this and change things so that these things stop happening.”

COFAR has long sought a state investigation of group home conditions in Massachusetts – particularly in privatized group homes. Abuse and neglect in the DDS system is a topic that now and then appears on the political agenda, but rarely attracts sustained legislative attention.

In 2013, after The New York Times and The Hartford Courant both ran separate series on abuse and neglect in privatized group homes in their respective states, Senator Chris Murphy of Connecticut called for a federal investigation of deaths and injuries in privatized care. But Murphy later appeared to back off his call for a comprehensive federal review.

“The bottom fell out”

Anna Eves described her son as  a “sweetheart of a guy” and a beloved figure in his hometown of Rockport. He was so popular in high school that he was named the school’s prom king, and he attended graduation and received a standing ovation there even though he didn’t receive a diploma.

But the “bottom fell out” of his care after he turned 22, his mother says. That was when his eligibility for special education funding ended and he became eligible for DDS services.

For several years after turning 22, Yianni lived at home with his parents.  But even though he is nonverbal, he wanted independence and was lonely after most of his siblings moved away to start their lives, his mother said. He was excited when in June 2016, he moved into the DDS-funded group home operated by Bass River.

But after what happened in April, less than a year into his residence in the group home, his parents have taken him back home.

A timeline of inattention

Anna had to piece together what had happened to her son in April by talking to caregivers, doctors, and others. She filed a complaint with the Disabled Persons Protection Commission (DPPC) on April 17, and was still waiting as of today (August 23) for the results of the investigation of the matter. That investigation was actually referred by the DPPC to DDS.

Based on Anna’s account, we have pieced together the following timeline of events involving her son before and after he developed symptoms of apparent aspiration:

Saturday, April 8: Yianni’s 29th birthday. He spent most of the day with his parents.

Sunday, April 9: Yanni’s parents took him to a Special Olympics bowling tournament in Peabody. He showed no sign of illness. 

Back in his group home later that night, Yianni is believed to have aspirated on a piece of birthday cake, which he had gotten out of bed to eat. His roommate, who had made the cake, was concerned about him. 

Anna said her son has had a history of putting too much food in his mouth and not chewing it sufficiently before swallowing. She said the group home staff was aware of that. Yet, to his mother’s knowledge, no one in the group home was aware that he had gotten the cake out of the refrigerator that night.

Monday and Tuesday, April 10 and 11: Yianni was continually coughing in his group home. His roommate, who is verbal, was worried enough that he told his mother he thought Yianni was very sick and that it had been caused by the cake he had made. But no one from the group home apparently made that connection, took any action, or called Yianni’s parents.

Wednesday, April 12: Yianni was sent as usual to his day habilitation program in Beverly, run by EMARC, a DDS provider. He was coughing so much that the day program nurse sat with him at lunch because she was afraid he was going to choke on his food. The nurse reportedly later suggested to the Bass River group home staff that Yianni be taken to a doctor, but the nurse did not arrange for that herself.

Anna said the nurse later changed her story and told her Yianni had been coughing only moderately at his day program.

Thursday, April 13:  Anna received an email that morning from the group home director, stating that Yianni had woken up that morning not feeling well and that he was being taken to see a nurse practitioner at his doctor’s office that afternoon.

The email from the house director said that Yianni had congestion, a cough and “a bit of a runny nose,” so Anna was not overly concerned. The email did not indicate that Yianni’s coughing had been going on for days or that it was getting worse. It was the first time anyone in the group home had sent any message to Anna that week indicating that her son was not well.

The house director added that the medical appointment was at 1:30 p.m. and that she would update Anna with the results. A staff member did finally take Yianni to his primary care doctor’s office at the Cape Ann Medical Center in Gloucester.

Anna said she learned that the group home staff member told the nurse practitioner falsely that Yianni had started coughing only that day. The nurse practitioner took a blood sample, but did not do a chest x-ray.

According to Anna, the blood test showed a high white blood cell count consistent with an infection, and a potentially low blood oxygen level of 90. She said the blood oxygen level should be 99 or 100.

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. Despite the results of the blood test and the low blood oxygen count, the nurse determined that Yianni could return to his residence.

Anna said she later learned that the group home staff had removed her name and phone number as her son’s primary medical contact and substituted the group home phone number without her permission even though she is her son’s legal guardian. As a result, no one at the medical center had any means of contacting her regarding her son.

That same afternoon, Anna said, the house director called her, but it was actually by accident. The director had meant to call Yianni’s roommate’s mother. But Anna pressed her during the phone call about her son’s doctor’s visit. The house director appeared to be rushed, she said, and told her only that her son had allergies.

Friday, April 14: The group home director took Yianni as usual to meet with his job training coach at Community Enterprises, Inc., a DDS provider, in Salem. The job coach later told Anna she was alarmed at how sick Yianni appeared. However, the job coach did not take any action or contact anyone about him at the time.

Saturday, April 15:  A group home staff member dropped Yianni off at a Special Olympics track practice in Gloucester. His parents were there to meet him, and it was the first time they had seen him since Sunday, April 9, the day after his birthday.

Anna said that when she first saw the group home staff member at the Special Olympics event, her son was in the bathroom. “She (the staff member) didn’t say anything,” Anna said. “She just handed my husband, James, his overnight bag and drove away.”  When her son emerged from the bathroom, Anna said, she and her husband were shocked at how ill he appeared. “He was coughing and his eyes were sunken,” she said. A Special Olympics coach approached her and said her son did not appear well enough to participate in the practice.

Anna took her son home and tried to give him lunch, but he wouldn’t eat. Then she looked into his overnight bag and saw the Mucinex for congestion. “I thought he just had allergies, but when I saw the Mucinex, I thought right away something was not right.”  At that point, Yianni appeared lethargic and didn’t want to move.

Anna thought about calling an ambulance, but then drove him to the emergency room at Addison Gilbert Hospital in Gloucester.  There, his blood oxygen was measured at 50, which is not compatible with long-term survival. His right lung was completely filled with fluid. He was admitted directly to the ICU in critical condition.

Monday, April 17: Yianni was placed on a ventilator on which he would remain for 11 days. Anna called the group home in the morning and left a voice message that Yianni was in the hospital ICU in critical condition on a ventilator with severe pneumonia.

Yianni in the ICU at Addison Gilbert Hospital in Gloucester

Tuesday, April 18: The group home director returned Anna’s call from the previous day. “She said she heard Yianni was sick and was sorry to hear it,” Anna said.

Anna said she asked the house director why she had not informed her during the previous week that her son was sick and why she had told her falsely that he only had allergies. She said the director responded by saying she didn’t know why she had not told her the truth about the situation. She said the director then said to her, “’It’s all my fault.’”

Thursday April 20: Larry Lusignan, executive director of Bass River, Inc. called Anna “to ask what happened,” she said. She said she told him her son would not be returning to the group home and that she had made arrangements to pick up his belongings from the residence. She said Lusignan never acknowledged any wrongdoing.

Sunday, April 23: Yianni was moved from Addison Gilbert to the ICU at Mass General Hospital.

Sunday, April 30: Yianni was moved out of the ICU at Mass General and into the hospital’s Respiratory Acute Care Unit.

Anna said that Yianni spent about a week in the Respiratory Care Unit at Mass General and then spent about three weeks at Spaulding Rehabilitation Hospital. 

Thursday, May 25: Yianni was released from Spaulding Rehab and went home to his parents’ house in Rockport.

The ordeal is not over for Yianni. Anna said she was told it could take six months to a year for him to fully recover. His parents are not sure, in fact, that he will ever completely recover. Since his hospitalization, he has continued to need an inhaler and gets out of breath from walking. He needs to sleep at night with supplemental oxygen.

Anna is not sure what is next for her son or what type of residential care would be appropriate for him. “He’ll be home with us until I am 100 percent confident in any placement,” she said.

We think Yianni might be a good candidate for a state-operated group home in which the staff  is more highly trained than is largely the case in privatized residences. As we have noted, however, the administration appears to be phasing out state-operated residential options for people.

We hope this case will demonstrate the continuing need for state-run residential programs and that it will lead to better training of staff in all DDS residential facilities. Unfortunately, however, incidents like this seem to continue to happen with regularity in the DDS system.

We would also hope this case will finally spark a hearing by the Legislature’s Children, Families, and Persons with Disabilities Committee into issues surrounding oversight of privatized human services.

(Cross-posted from The COFAR Blogsite)

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.

(Cross-posted from The COFAR Blogsite)

(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 Timesdescribed 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.

(Cross-posted from The COFAR Blog)

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.

(Cross-posted from The COFAR Blogsite)

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.”

(Cross-posted from The COFAR Blogsite)

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

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.

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.

(Cross-posted from The COFAR Blogsite)

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.

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.

(Cross-posted from The COFAR Blogsite)

We hope a federal investigation of Triangle, Inc., a corporate provider to the Department of Developmental Services for alleged anti-union activity brings public attention to the potential for privatization of DDS programs to result in low pay for provider staff and poor care.

In our view, the alleged efforts by Malden-based Triangle’s management to block staff from unionizing imply an implicit acknowledgement by the management that it wants to keep direct-care wages low. Low wages, in turn, result in lower-quality care.

In preventing their workers from organizing, providers like Triangle appear to be pitting themselves against the growing movement in Massachusetts for a $15 living wage for workers.

The Boston Globe reported earlier this month that the National Labor Relations Board has issued a formal complaint against Triangle after at least three former employees of the provider were allegedly fired for helping organize the agency’s staff to unionize with SEIU Local 509.  The union represents both state workers and staff of state-funded providers to agencies such as DDS.

Triangle’s chief executive, Coleman Nee, allegedly stated that anyone in the agency who even voiced support for the union could be fired. Nee is a former Cabinet secretary under then Governor Deval Patrick.

The relatively low level of pay and benefits to direct-care staff in human services has been a long-standing issue in Massachusetts and elsewhere around the country.

“Nonprofit DDS providers do not want to pay a living wage to their direct care workers because their CEOs are keeping the money for themselves,” COFAR Executive Director Colleen Lutkevich wrote in a comment on the Globe site. “It can only benefit people with developmental disabilities if unions help these workers to earn more money. The management is a disgrace and it’s not the people they serve that benefit, it is their own pocketbooks.”

COFAR and SEIU Local 509 have tracked both corporate provider executive and direct-care compensation in recent years. Last May, the SEIU released a report charging that major increases in state funding to corporate human services providers during the previous six years had boosted the providers’ CEO pay to an average of $239,500, but that direct-care workers were not getting a proportionate share of that additional funding.

As of Fiscal 2016, direct-care workers employed by the providers were paid an average of only $13.60 an hour, according to the SEIU report.

The SEIU further noted that the increases in funding to the providers, known as “Chapter 257” rate setting reforms, had actually allowed the providers to earn  $51.8 million in net or surplus revenues (over expenses) in Fiscal 2016.  As the report stated, those surplus revenues would have more than covered the estimated $34 million cost of boosting all direct-care workers’ wages to $15 per hour.

Based on that report, state Senator Jamie Eldridge filed a budget amendment last year to require human services providers in Massachusetts to spend some of their surplus revenues on raising direct-care wages to $15 per hour. The measure was rejected, however, by a House-Senate conference committee on the budget.

It was not clear whether Eldridge intends to refile his amendment this spring. The SEIU as well has turned its attention away from that proposal and toward proposed legislation and a proposed ballot question in November that would raise the minimum wage for all workers in Massachusetts to $15 per hour.

While we support the legislation and ballot question aimed at all workers, we would also hope that Eldridge’s amendment would be reintroduced given that the funding apparently already exists to fully fund a $15 per hour living wage for human services workers.

Privatized human services reflect larger inequities

The privatized human services system in Massachusetts, in fact, reflects income inequities and other problems with privatized services in other areas of the economy.

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

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

Triangle executives are lavishly compensated

Triangle Inc. appears to be a microcosm of the human services system in Massachusetts, and to reflect many of its problems.

The Globe reported that Triangle had some 3,900 people enrolled in various programs and services during Fiscal 2017. The agency received $10.2 million in revenue in Fiscal 2017, including $6.9 million in funding from DDS, according to the state’s online UFR database.

Coleman Nee, the Triangle CEO, is listed on the UFR database as having received $223,570 in total compensation in Fiscal 2017. That may not cover an entire year with the agency.

It appears Nee started with Triangle sometime in 2016. Prior to him, the CEO was Michael Rodrigues, who made $257,442, according to IRS Form 990 for Fiscal 2016. That year’s Form 990 lists six executives, including Rodrigues, as making over $100,000 at Triangle.

It is unconsionable that executives of nonprofit agencies who are making six-figure incomes paid for with state funds are engaging in efforts to supress the pay of their direct-care employees. The fig leaf offered by a nonprofit moniker does not protect those executives from either charges or the appearance of profiting inappropriately off the taxpayers.

Its’s time for the Legislature to take steps to reform the DDS system, starting with a concrete action to raise direct-care wages.

(Cross-posted from The COFAR Blogsite)

A Channel 5 investigative report earlier this week disclosed that group homes and other providers of services to the developmentally disabled are often not informed about substantiated abuse allegations against individuals they hire as caregivers.

The TV news report also made the important point that abusers of disabled persons in Massachusetts are rarely prosecuted for those crimes.

In no way are we criticizing Channel 5 in saying they have uncovered the tip of an iceberg with their findings. Their report revealed more to the public about the Department of Developmental Services system than the rest of the media in the state and most state and legislative investigative authorities have revealed in recent years.

At the same time, it is important to keep in mind that abuse and neglect are only the most outward and visible signs of an overall breakdown in DDS’s largely privatized system.

It is a system that is not adequately monitored by DDS, that underpays and provides inadequate training to direct-care staff, and that overpays a padded layer of corporate provider executives. Moreover, when family members and guardians attempt to question the care and conditions in the system, they are ignored, or worse, intimidated and subjected to retaliation by both the providers and DDS.

One of those family members who has suffered apparent retaliation is Susan Fernstrom, who we just wrote about last week. Susan was banned by her daughter’s provider agency from entering her daughter’s group home after she raised concerns about poor care and conditions in the residence. The provider then sought to evict Susan’s daughter from the home.

In cases in which family members do not have guardianship rights, those persons can find themselves restricted from all contact with their loved ones, apparently indefinitely.

In the past several months, we have tried to make the Legislature’s Children, Families, and Person’s with Disabilities Committee aware of these interrelated issues. In January, the Committee did hold a brief hearing on DDS; but, as we have noted, family members and other members of the public were not allowed to speak before the panel.

We continue to hope that the Children and Families Committee will show that it is taking this situation seriously.  If the Committee were serious, it would get behind legislative reforms.

One of the first pieces of legislation that we think needs to be enacted is the guardian rights bill (H. 887), which has been stuck in the Judiciary Committee, effectively since 1999. The bill would require that probate judges presume that parents of developmentally disabled individuals are the proper guardians for them. That bill, if it ever passed, would give basic rights to family members that are not currently extended to them.

We think that proposed legislation to impose fines on providers that provide substandard care or that otherwise fail to adequately respond to instances of abuse could follow from that.

The Channel 5 report discussed the need for an additional piece of legislation (S. 2213), which would establish a registry containing the names of individuals who have had abuse or neglect allegations substantiated against them by the Disabled Persons Protection Commission or other agencies that investigate those issues.

As Channel 5 noted, persons applying for caregiver positions in the DDS system currently must undergo criminal background checks, which disclose previous convictions for abuse and other crimes in Massachusetts and other states.

However, even when abuse against persons with developmental disabilities is substantiated by agencies such as the DPPC, it does not usually result in criminal charges. As a result, those findings of substantiated abuse are not made known to providers or other agencies seeking to hire caregivers. That’s why an abuse registry is needed in Massachusetts.

We would note that such a registry needs to be designed to take into account the larger issue of the dysfunctionality of the system. Most if not all abuse occurs because upper management in both provider agencies and DDS itself doesn’t care enough about the problem to ensure that staff are properly trained and supervised.

Until executives within provider agencies are held accountable for the abuse that occurs by low-level agency employees, those low-level employees will simply continue to be replaced by other equally bad personnel.

One other thing to keep in mind is that even though the DPPC does have a backlog of abuse investigations, as the Channel 5 report pointed out, the Commission refers the vast majority of its complaints to DDS for investigation. This creates a conflict of interest for DDS, which is also supposed to be overseeing the same providers that it is now investigating.

We think the DPPC needs to be given the resources necessary to allow it to serve as a truly comprehensive and independent investigatory agency.  The DPPC also needs to make its investigative process more transparent and, in that vein, make its reports available to the public.

The Channel 5 report this week demonstrates that at least one media outlet in the state recognizes that there is a serious problem with the oversight of care for a large segment of the disabled population in Massachusetts. We hope the report serves to wake up the rest of the media, the Legislature, and the Baker administration to this problem.

(Cross-posted from The COFAR Blogsite)

Despite a broadly worded state regulation that gives residents of state-funded facilities the right to be visited, a human services provider agency is upholding a directive barring a guardian of a developmentally disabled woman from entering her group home.

Yet, the Department of Developmental Services does not appear to be pushing the provider to rescind its months-long ban.  Instead, the Department appears to have decided to ignore the fact that the ban exists.

The August directive from the provider, Toward Independent Living and Learning, Inc. (TILL), stated in writing that the guardian, Susan Fernstrom, “will not go into the residence” even to bring food or other items to her daughter, Holly. “Anything you need to deliver to the residence must be given to the staff or the manager and they will see that it is properly put away,” the directive stated.

In their most recent exchange about the situation, Susan emailed Jennifer Killeen, DDS area director, on May 4, stating that the ban was restricting her ability to serve as Holly’s guardian. In an email in response to Susan on May 8, however, Killeen did not address that concern or mention the ban.

Instead, Killeen’s email described the TILL directive as simply “calling for coordination and notice of any visits to the home…” As such, Killeen said, the directive was “reasonable and compliant with DDS regulations concerning visitation.” This was exactly the same language used by DDS Regional Director Kelly Lawless in an email to Susan in April regarding the TILL directive.

Killeen had also advised Susan in an email on May 2 to establish “regular discussions with TILL and the DDS Service Coordinator about your concerns.”  But when Susan raised the issue of the ban in a phone call with Dafna Krouk-Gordon, TILL’s president, two days later, she said Krouk-Gordon flatly refused to rescind the ban.

It is abundantly clear that the TILL directive goes further than calling for coordination and notice of visits. It bans Susan outright from entering the home.

We have previously noted that we have heard of no evidence that Susan ever acted in a disruptive way either inside the home or in any other location. It appears that the only reason for TILL’s prohibition against her from entering the home and for a subsequent notice of eviction of Holly is that Susan pointed out deficiencies in the staff’s compliance with Holly’s medically necessary dietary restrictions and with conditions in the residence on a number of occasions.

DDS regulations, which give DDS clients the right to receive visitors, specifically state that family members and guardians shall be permitted private visits “to the maximum extent possible.”

The regulations add that clients and their family members and guardians must be allowed to meet “under circumstances that are conducive to friendships and relationships,” and that the location must be suitable “to confer on a confidential basis.”

Enforcement of the ban raises further questions

Enforcement of the ban on entering the home appears to be up to the discretion of the staff and to Krouk-Gordon. Susan said she was allowed three visits in Holly’s room in April, two of which were used to help Holly pack for an upcoming trip and to try on clothes.

Susan noted that not only was she not allowed in the kitchen in the three instances in which she was admitted to the house since August, she wasn’t even allowed in the living room with Holly. Her visits were confined to Holly’s bedroom. She said she has not been allowed for nearly a year into the basement where Holly keeps seasonal clothes and personal items.

In most instances since last August, Susan has been made to wait outside the house for Holly, even in the dead of winter. She said she has even been made to stand outside the house while signing paperwork involving Holly’s care.

As we have reported, in addition to having an intellectual disability, Holly has a serious genetic metabolic condition called galactosemia, which requires a diet free of galactose, a form of sugar found in milk and cheese. That diet must be strictly adhered in order to avoid complications including brain and kidney damage. Holly must also eat multiple servings of vegetables because she does not metabolize all the nutrients in her food.

Susan has in the past raised concerns that the group home staff was not following her instructions either in buying food for Holly or preparing and serving it to her. Her complaints appear to have led directly to the issuance of the directive banning her from the residence.

Susan said that in the phone call she had with Krouk-Gordon on May 4, Krouk-Gordon declined to discuss Susan’s concerns about Holly’s diet or other issues involving care and conditions in the group home.

Because Susan has only been provided sporadic access to the house since last August, she has been unable since then to determine what Holly is being fed. That has impeded her ability to function effectively as Holly’s guardian and to assure her health and wellbeing.

Krouk-Gordon has not returned phone calls or emails from COFAR for comment on the case.

Susan said said Holly’s dietician at Children’s Hospital had come to the house when Holly moved in, in June 2015, to help management and staff and to also explain why Holly’s diet was so important.

“During Fran’s (the dietician’s) presentation, she stressed to management and staff they should defer to me on Holly’s diet because I knew as much as she did about a galactose-free diet,” Susan wrote to us in an email. She added that she was involved in helping recruit subjects for a first-ever study on adults with galactosemia.

Susan said that to the extent the TILL directive has specified coordination of communication with TILL, the agency hasn’t followed the directive. For instance, Susan said she has not been able to get in contact with the group home’s current nutritionist.

“I’m very worried about what’s going in that house with her food,” Susan said. She said that while Holly is supposed to eat a lot of vegetables, she is concerned, based on Holly’s own reports to her, that she is not getting the food she needs.

During her May 4 phone call with Krouk-Gordon, Susan said Krouk-Gordon also wouldn’t say whether she would rescind the eviction notice for Holly, which she had also issued in apparent violation of DDS regulations. After only a short discussion, Susan said, Krouk-Gordon ended the phone conversation, saying, “‘Your time is up.'”

On April 24, DDS Commissioner Jane Ryder responded to an April 17 email I sent her regarding the TILL ban on entering the residence and a number of Susan’s other concerns. Ryder stated that DDS cannot comment on the specific matters I raised because that would violate client confidentiality. Ryder stated only that, “DDS has been working with the provider and families involved to address any issues and will continue to do so.”

On May 7, I emailed Ryder back, asking whether she could comment generally as to whether providers are permitted to ban guardians from access to residential facilities when there has been no demonstrated disruption of the facilities by those guardians. To date, Ryder has not responded to my query.

Tens of millions of dollars in government funding

As a recipient of state funding, TILL is obligated to comply with state law and DDS regulations.

TILL received $38.6 million in “government grants (contributions)” in Fiscal Year 2017, according to the organization’s IRS 990 form, although the form doesn’t specify which agency or agencies the funding came from. We are assuming the funding is primarily from DDS.

According to the IRS form, Krouk-Gordon received $321,772 in compensation as president of TILL in Fiscal 2017.  Kevin Stock, TILL vice president, received $229,988 in total compensation.

I’ve checked back to Fiscal 2015 so far, and TILL does not appear to have filed the standard online Uniform Financial Report with the state that contractors are supposed to file. That report is supposed to show how much the agencies get in state funding from identified agencies.

I called the state Operational Services Division earlier this month to ask why TILL’s UFR reports don’t appear to contain required information. I haven’t received a call back.

TILL’s financial and business practices have in the past been the subject of controversy.  A January 2002 report by the state auditor stated that TILL, under Krouk-Gordon’s management, had spent more than $4 million in state funds in “unallowable, undocumented, and questionable business activities.” We reported on this in The COFAR Voice in 2005.

In an email to Jennifer Killeen on May 9, which was copied to Commissioner Ryder, I urged DDS “to fully acknowledge the facts and the truth” about TILL’s treatment of Susan and Holly. In particular, I urged DDS to acknowledge the existence of the ban on Susan from entering the group home.

This is an important test for DDS, in our view. If the agency isn’t even willing to acknowledge the clear facts of the cases before it, it cannot effectively carry out its mission of supervising the care of the most vulnerable among us.

(Cross-posted from The COFAR Blogsite)

Although we are an advocacy organization that focuses on human services, we have at times waded into the ongoing controversy over the operation of the MBTA in Boston.

The reason for that has to do with a now decades-long debate over privatization of public services and the implications of the Pacheco Law in that regard.

On Sunday, The Boston Globe reiterated its support for the privatization of T functions with an editorial that defended the current contracted operation of the T’s problem-plagued commuter rail system.

As a supporter of privatization, the Globe has, in recent years, been at the forefront of the long-running criticism in political and journalistic arenas of the Pacheco Law. But in calling on Sunday for a cost-benefit analysis prior to any proposed move to bring the T’s commuter-rail system in house, it seems to us that the Globe is also endorsing, if inadvertently, the principles and intent of the law.

The Pacheco Law requires state agencies seeking to privatize existing operations to do a cost-benefit analysis that demonstrates that the cost of privatizing the service would be lower than continuing to do the service in-house, and that the quality of service would be equal or better if it were privatized.

The Pacheco Law, which was enacted in 1993, has been a lightning rod for political criticism and controversy over the years. Much of the state’s political establishment and prominent journalistic institutions have been harshly critical of it.

We have supported the law because we see it as providing a potentially important layer of oversight and analysis in the ongoing privatization of services for the developmentally disabled in Massachusetts.

In a 2011 editorial, the Globe called the Pacheco Law “an affront to common sense,” and charged that it was allowing public employee unions to place their “demands” above “the obligation to run government efficiently.”

But in its editorial on Sunday, the Globe actually put forth an argument that appears, without directly admitting to it, to endorse the precepts of the Pacheco Law. In criticizing calls by Democratic candidates for governor for in-house operation of commuter rail when the current contract with Keolis expires in 2022, the editorial states:

Whoever is in charge in 2022, though, here’s a suggestion: Since in-house management is an idea that refuses to die, [and I would add, so is privatization, for that matter!] the state should ask the T to submit a plan showing what it would entail. If nothing else, that would clarify for the public the costs and benefits, and bring some specifics to what is now little more than a vague applause line for Democrats. (my emphasis and insertion in brackets)

That is exactly what the Pacheco Law calls for when state agencies seek to privatize services. What the Globe is calling for is the same type of cost-benefit analysis, only in reverse — from privatized services to in-house. To me, it actually sounds like a good idea.

The Sunday editorial further states that while the state “can definitely do a better job with commuter rail after its current contract with Keolis expires in 2022…the goal of better service, not adherence to ideological precepts, should guide the next governor.” (my emphasis)

Agreed, and that is also the goal of the Pacheco Law, which is to ensure better service and lower cost rather than privatizing based on ideological precepts.

The editorial contends that:

…the T doesn’t have — and never has had — the in-house ability to operate the commuter lines itself, and dumping the commuter rail system directly into an already overburdened agency risks disruption. It could also raise thorny union issues, probably raising labor costs. And there’s no reason to expect running the commuter rail in-house would result in better service. (my emphasis)

Maybe not, but in-house operation of commuter rail might actually result in cost savings.

We reported in 2015 that the annual cost to the MBTA of contracting for commuter rail services had risen by 99.4 percent since 2000, compared with a 74.9 percent increase in the annual cost of the agency’s in-house bus operations, according to cost information we compiled from public online sources.

Finally, the Globe editorial suggests that rather than bringing management of commuter rail in house, the T should consider offering the next contractor “a longer-term deal, to better align the incentives of the contractor and the state and potentially bring in private-sector money for capital investments.”

I would note here that long-term contracts are not necessarily better deals for the state or consumers. It is difficult if not impossible to project financial risks over long periods of time. As a result, long-term contracts tend to have provisions that protect private contractors from those risks while transferring the risks to the public.

Also, private investments for capital improvements must be repaid by taxpayers and riders, and those deals can be very expensive to the public. Often there is little transparency in the terms and provisions of private investment arrangements in public infrastructure.

All of these are reasons why the Pacheco Law is necessary and important to the continued efficient and effective operation of government. The law provides for an open and detailed analysis and discussion of costs and benefits when public and private services and functions come together. 

(Cross-posted from The COFAR Blogsite)

It apparently took the threat of a major strike, but the Connecticut Legislature passed a bill and the Connecticut governor signed it earlier this year to raise the minimum wage of direct-care workers in that state’s Department of Developmental Services system to $14.75 an hour, starting January 1.

A similar effort fell short last year in Massachusetts when a budget amendment to raise direct-care wages to $15 was killed in a budget conference committee in the Massachusetts Legislature.

While Governor Charlie Baker signed separate legislation in June to raise the minimum wage across the board in Massachusetts to $15, that wage level won’t actually be reached until 2023. The minimum wage will rise to only $12 next year, whereas it will be close to $15 in Connecticut for human services workers as of January 1.

It seems that even though legislators and the administration of Governor Dannel Malloy in Connecticut are equally as tolerant of runaway privatization as they are here in Massachusetts, the Connecticut Legislature and governor have shown a greater recognition that increased privatization has resulted in low wages for direct care human service workers, and that low wages have had a negative impact on services.

In May, after the Connecticut Senate voted overwhelmingly in favor of setting the minimum direct-care wage at $14.75, Malloy made a statement that we have yet to hear Governor Baker make:

“For far too long,” Malloy said, “the people who provide care to our most vulnerable neighbors have been underpaid for their critical work.”

In fairness to Baker, Malloy made that statement only after 2,400 employees of nine corporate provider agencies in Connecticut voted in April to authorize a strike that was set to begin in early May. The workers in Connecticut are represented by the SEIU 1199 New England union.

Clearly hoping to avert that strike, the Malloy administration proposed raising the minimum wage for human services workers to $14.75 an hour and providing a five-percent raise for workers earning more than $14.75 an hour effective January 1.

The Malloy administration’s proposal, which was endorsed by the SEIU union and ultimately signed into law, applies to 19,000 union and non-union caregivers that staff some 170 group homes and other nonprofit agencies that receive Medicaid funding in Connecticut, according to The Connecticut Mirror.

As Connecticut Senate President Pro Tempore Martin Looney noted:

The work (those caregivers) do is among the most important in our state in terms of humanity.  If we are to consider ourselves a humane and caring society, at long last we should begin at least to recognize the value of that work.

In Massachusetts, SEIU Local 509 helped organize a five-day strike  for a living wage in July at CLASS, Inc., a DDS-funded day program provider based in Lawrence. The workers there were getting paid about $13 an hour and wanted a $1 increase. The company was offering an increase of only 40 cents.

The president of CLASS, meanwhile, was making about $187,500 a year, according to the state’s online UFR database.

In July, workers at CLASS, Inc. reached a settlement with management to raise the workers’ wages by 60 cents an hour. That would still leave the average worker there well below what direct-care workers will be earning in Connecticut.

The Massachusetts strike, moreover, didn’t have the impact on legislators and other policy makers here that the threat of the Connecticut strike apparently did in that state. Thus far, it isn’t apparent that there is any political will in Massachusetts to raise the minimum wage of direct-care workers to Connecticut’s level.

That is concerning because five years is a long time to wait for the minimum wage for direct-care workers to reach $15. Due to inflation alone, that $15 will be worth less to Massachusetts workers in 2023 than it would be if they were to receive it starting this January.