Judge Orders State to Update Human Service Provider Rates

The new Baker administration has been ordered by a Superior Court judge to fully implement Chapter 257 by the beginning of the state’s 2016 fiscal year.  The State has 60 days to appeal.
Chapter 257 is a 2008 law aimed at updating rates paid to human service providers, and places authority to update these rates with the Secretary of Health and Human Services (EOHHS).  The EOHHS’s Division of Health Care Finance and Policy (DHCFP) was charged with completing the determination of rates for all human services affected by Chapter 257 governance by October of the State Fiscal Year 2013.  This did not happen.
Last week’s ruling is welcomed news for human service providers who have contracts with the Commonwealth of Massachusetts and have been eagerly awaiting the impact of the Chapter 257 rate adjustments.
We suggest you do the following:
Human services providers should review their contracts to make sure you have captured all programs that may shift to Chapter 257.  Additionally, make sure your general ledger contains sufficient information to capture financial data in the detail that may be needed to prepare the Uniform Financial Report (UFR) given these new rates.  If it does not, consider breaking it down further or, at a minimum, creating supplemental spreadsheets to gather the necessary data.
As the EOHHS complies with the court order, we expect they will send further instructions regarding combining and breaking out programs to each State Department who will, in turn, send them to each provider that receives funding from them.  Therefore, please be on the lookout for these specific instructions and be sure to share them with your AAF audit team when you receive them as these notices are not currently sent to us as your auditor.
If you have any questions regarding Chapter 257, please contact your AAF Partner or Robin Kelley at 774.512.4011 or rkelley@nullaafcpa.com.