Highlights of RCPA’s Response to ODP Proposed Rates

While we continue to develop our submission for the Office of Developmental Programs (ODP), we wanted to share a summary of the comments that we will be submitting on January 31. We know that some of you would like to be able to utilize these comments in developing your own. The following are some of our major points of concern.

It is understood that the basis for the rate setting methodology are several assumptions of average costs of doing business. We have several concerns about the assumptions. By far the biggest expense lines for providers consist of staffing costs: salary and benefits. Several of these assumptions have a significant impact on the rates, and we believe that they are not based on accurate data.

• The proposed rates will not support increasing wages (and does not even cover the 7% annual inflation experienced each of the past two years). Providers have calculated that this increase may allow them to raise wages to $13–$14 an hour, far less than what is stated in the proposed rates. The fact that these rates may be in place for up to three years increases our concern with this range for pay rates.
• The estimated health insurance at $571.29 per employee is not at all accurate of the true cost of health insurance. This is actually a 7% decrease from the current assumption. The assumed cost decrease is also inconsistent with a Mercer report published in December 202. Mercer published a National Survey of Employer-Sponsored Health Plans, finding employer-sponsored health insurance costs rose sharply in 2021, the highest annual increase since 2010. Mercer’s analysis of actual health benefit costs reported a cumulative 16.3% average increase over the last four years and, including their 2022 cost projection, expects the five-year cost increase to approximate 20.7%.
• It also appears that employee benefits do not include dental or vision coverage and that the cost of any portion of dependent healthcare coverage is also excluded. Additionally, the assumptions do not include any benefits for part-time staff.
• The assumption for staff turnover is 24%. RCPA conducted a recent survey of providers in PA that showed despite the overwhelming need for direct support professionals, these individuals separated from their positions within three months of hire at an annual turnover rate of more than 130% during the pandemic. While these are unusual times, our members have reported that pre-pandemic, the turnover rate was closer to 45%.
• The overtime assumption of 5% is also significantly lower than what providers are actually experiencing. In the same survey, providers’ vacancy rate for direct support professional positions was 24.0%. Also, using a salary threshold for positions to determine the number of employees eligible for overtime is not an accurate measure. Salary alone does not allow for exemption, and some of these positions do not also meet the duties test that allows for exemption from overtime in labor laws.
• Administrative costs are assumed to be 10%. None of our members report that their administrative costs are only 10%. It would be helpful to understand what ODP considers as part of their Administrative costs. A more reasonable estimate is 13–14%. In an already highly-regulated system, providers have been faced with increasing administrative responsibilities in the past 3–4 years with Incident Management requirements, increased need for Certified Investigators, Incident Management Representatives, Human Rights Teams, completion of HRSTs and the follow-up included, and Quality Improvement activities, to name a few. ODP has recognized the need to increase oversight staff in the department in order to keep up with these additional duties. Providers need additional staffing to manage these responsibilities. These responsibilities also have a direct impact on Supports Coordination Organizations due to their increased responsibilities and provider oversight. Lastly, providers are experiencing increased costs for cyber insurance with the increased use of technology and D&O insurance.
• The assumptions for training days for employees is inadequate (especially residential services staff, which was estimated lower than other services). In order for staff to complete new orientation training that covers all of ODP regulatory requirements and annual training for all services, the amounts included do not cover what is needed.

Specific Service Rates

• In reviewing specific service rates, a major concern expressed by our members is the inequity of increases across services.
• The most concerning are the CPS Facility rates (with the exception of the 1:1 rate). These rates are not sustainable and will likely result in the closure of facility-based services. Facility-based services are necessary to many individuals for various reasons, including personal care needs, behavioral issues, personal choice, etc. Ultimately this will result in individuals losing this choice and potentially being without services.
• The proposed increase to Supported Employment Services is also a disappointment to our members who provide these services. Given the fact that PA is an “Employment First” state, an increase of just less than 1% does not show support to these providers, particularly in light of the likelihood that these rates will be in place for up to three years.
• Supports Coordinator Organizations have concerns with the proposed rates for many of the reasons already discussed: additional responsibilities that have been added to their roles, benefits and salary levels, amount of training that is required for their positions, and the impact on their ability to complete billable work due to all of the above. Also, the population eligible for services has expanded, which increases the demand for SC services. The competition for SCO staff has increased greatly in PA with the implementation of CHC, and the MCOs have been able to offer a much higher salary, making it nearly impossible for the SCOs to compete, leading to a high level of turnover in the SC positions. SC positions require a BS degree, but the SCOs cannot compete for qualified staff. A 6.6% increase is not adequate to address staffing needs.
• Agency with Choice rates do not meet the new wage rates. Most significantly, there is a mismatch between W1726 and W1726 U4, as the wages went up by 69% and 80% respectively, while the reimbursement rate went up by only 34% and 35%.
• Home and Community-Based Services face the same concerns regarding the staffing pay rate assumptions, as well as the ongoing issue of lost billable time when the service is short of the 15 minutes captured by the EVV system. We implore ODP to adopt the rounding policy as implemented in the Office of Long-Term Living for comparable services. As it currently stands, the only rounding of units for HCBS is rounding down, to the great disadvantage of the providers.

Overall, our concerns of the impact these rates will have on services not only relate to the provider system in our state, but also to the individuals and families who need and rely on these services to live an everyday life. As we have experienced throughout the pandemic and the undeniable staffing crisis, when families and individuals do not have the needed support from staff in their homes, it has an impact on their quality of life, their mental health and the family members’ abilities to keep their employment outside of their home. Individuals who have complex needs will be even more at risk since the services that are necessary to support those who have more intense support needs due to medical or behavioral challenges are not equitably considered in these proposed rates.

The rates act as disincentives to providers to serve those who are in need of higher levels of staff care. Providers cannot recruit and maintain a stable work force with competitive wages if there is not some type of annual CPI or COLA Rate increase.