Secretary Bigby Testimony

Dr. JudyAnn Bigby
Secretary of Health and Human Services
Commonwealth of Massachusetts

March 4, 2009

Thank you, Representative Fox and Senator Hart for hosting us today. I would also like to acknowledge Chairmen Murray and Panagiotakos, and the distinguished members of the House and Senate Ways and Means Committees.

In his state of the Commonwealth address in January, Governor Patrick noted the many successes of this Administration in the past year that have made Massachusetts a better place and also better prepared for tough times ahead.

Because of our partnership with the legislature:

  • We have an increase in support for public education, a Life Sciences Bill and a Clean Energy package - to grow jobs and shape a new economic and environmental future - and funding and initiatives to end homelessness and move people from shelter to permanent housing.

  • Health care reform has been sustained even in these challenging times. Not only do we have more than 440,000 newly insured in Massachusetts, but we now know that about 98% of everyone in the state has insurance and our best estimates suggest that every child in the Commonwealth is covered. As a result, 90% of people in Massachusetts now have a regular health care provider. This is even true for some of the hardest to reach populations. The percent of Hispanics who report having a regular health care provider has increased from 66% to 74%.

  • In December, we announced that Massachusetts finalized a highly-favorable agreement with the federal government to renew the state's Medicaid waiver for 3 years bringing more than $21 billion to Massachusetts and about $4.3 billion more than the last 3-year period. This agreement means the Commonwealth will be able to continue our highly successful health reform model and that we will continue to provide health care coverage to individuals who had previously been uninsured.

  • Health Care Reform has had a real impact on health. The U.S. Centers for Disease Control and Prevention released a report showing that Massachusetts had the fourth-lowest adult smoking rate in the nation in 2007. The 2007 rate, showing that 16.4% of adults smoke in Massachusetts, is the lowest rate ever recorded. We believe this is in part due to health care reform and people's access to providers who counseled them to stop smoking.

But we know that there is a lot of work to do and we have challenges ahead because of the devastating effect of bad policies on this state's and the nation's economy.

In October, as part of Governor Patrick's Emergency Recovery Plan, we made $1.4 billion in budget cuts across state government, including within Health and Human Services. While these cuts were difficult and painful, we made them following a key set of principles focused on protecting the most vulnerable in our state.

Since October the economy has continued to decline. Tens of thousands of people in Massachusetts have lost their jobs. Houses, disproportionately in communities of color, are in foreclosure proceedings or have been foreclosed. Achievement gaps in the schools persist in poor communities. And, Black men are killing other Black men at ever more alarming rates.

But from crisis comes opportunity.

Federal Stimulus

At the federal level, we have worked hard to help shape the federal stimulus package to bridge us to a better economy.

The American Recovery and Reinvestment Act includes a number of provisions that will provide critical fiscal relief to the Commonwealth and to Heath and Human Services.

We are still assessing the fiscal impact and opportunities for EOHHS as a result of the federal stimulus package, but we tentatively expect to see relief in the following areas:

  • Enhanced federal reimbursement for Medicaid (FMAP increase);

  • Enhanced federal reimbursement for Title IV-E (Department of Children and Family services);

  • WIC funding and Immunizations for the Department of Public Health;

  • Senior Nutrition funding for Elder Affairs;

  • Supplemental Nutritional Assistance Program (Food Stamps) and Emergency Assistance funding for the Department of Transitional Assistance; and

  • Vocational Rehabilitation services funding for the Massachusetts Rehabilitation Commission.

In addition, the American Recovery and Reinvestment Act makes available considerable funding, primarily on a competitive grant basis, for Electronic Health Records and other e-health initiatives, available to state agencies, health care providers and institutions of higher education.

These resources will help avert continuing deep cuts, but we will not be out of the woods even after the stimulus package. That's why the Governor has ensured that we are not just standing still waiting for the federal government to solve our problems.

The Governor has filed a balanced budget proposal for the coming fiscal year. Given the decline in state revenue, spending must be at levels significantly below what they have been in better times.

Over this and the next fiscal year, we will continue to work on many priorities in spite of the economic challenges. This crisis presents us with opportunities.

We all know that state government is not perfect and that we can always realign our priorities to reflect what the future requires instead of what the past dictates. Change is difficult and it can be uncomfortable as we transition from the old paradigm to the new. But we must reform the way we do things in order to better serve the people of Massachusetts and to provide the needed care and support.

House 1

The Governor's fiscal year 2010 H.1 budget proposal includes new revenues and additional cuts from within EOHHS. The budget proposes $27.97 billion in spending, approximately $200 million below the FY09 GAA. Some areas, like MassHealth, will experience growth, but other areas of the budget were cut nearly $1 billion, including $621 million to executive branch agencies.

In terms of new revenues, the Commonwealth Wellness Fund was established in FY09 and eliminates the sales tax exemption on alcohol, candy and sweetened beverages. As a result, an estimated $121.5 million in new revenue will be deposited into a new Commonwealth Wellness Fund in FY10. These resources will pay for addiction and tobacco control services, as well as health promotion, violence prevention and workforce expansion programs.

Line Item Account Consolidation

Over the past 2 years, Governor Patrick has worked with his Cabinet to explore opportunities for a more efficient way to develop the annual budget. Those discussions have focused on developing budgets based on programs rather than individual line items, which are inconsistent in that they fund partial or multiple programs.

The line-item approach does not allow for agencies to develop their budgets based on programs and priorities. As a result, the fiscal year 2010 budget includes line-item consolidations that are a step in that direction.

This structure is not meant to disguise the significant reductions in agency budgets, a reality we readily acknowledge. Rather, it is meant to provide maximum flexibility for Secretariat and Agency heads to manage within limited resources.

The FY09 GAA includes 176 accounts for Health and Human Services agencies. Through consolidation, FY10's H.1 budget reduces the account total to 74 - a reduction of 102 or 58%.

Health Care Reform and Cost Containment

Building upon the tremendous success of health care reform, the Administration's fiscal year 2010 budget continues to fully fund expansions in coverage through state health insurance programs for low- and moderate-income families.

These investments reflect a continuing commitment to health care reform and the recognition that the MassHealth and Commonwealth Care programs are core components of the safety net for low-income residents of our state, including individuals who may have recently lost their jobs or private health insurance due to the economic downturn.

Despite the significant fiscal pressures facing the Commonwealth, the budget does not cap enrollment or cut benefits for state health insurance programs, as has been done in prior fiscal crises.

The budget also includes $880 million for Commonwealth Care, a 7.3 percent increase over current fiscal year 2009 projections, to provide coverage to approximately 180,000 residents. Enrollment is expected to resume moderate growth in fiscal year 2010 - the result of the loss of employer-sponsored insurance that typically accompanies negative economic conditions. Under a new payment methodology, rate increases have been limited well below medical inflation.

MassHealth's budget for FY10 includes $8.97 billion. Excluding spending that was previously off-budget, MassHealth's fiscal year 2010 budget totals $8.68 billion - a 3.14 percent increase over estimated fiscal year 2009 spending. Through eligibility expansions and enrollment of eligible individuals through the Virtual Gateway, a more streamlined member-tracking system, MassHealth has seen caseload increases in recent years. The fiscal year 2010 budget continues to fund projected enrollment growth in the MassHealth program.

The MassHealth budget also reflects a total of $357 million in gross savings ($178 million in net savings) that includes $25 million in gross ($12.5 million net) targeted investments needed to achieve many of these savings. Categories of savings include limiting rate increases, expanding pay-for-performance, service program changes (providing coordinated care in appropriate settings), utilization management (e.g., expedited claims review), pharmacy savings and other savings (e.g., elimination of certain grants and pilots).

On the flip side, health care cost containment is on everyone's mind.

We are committed to reforming the way we pay for health care away from a fee-for-service system that rewards providers who do more, especially more high-tech and tertiary care, while primary care, behavioral health services and community hospitals continue to be under funded. We are engaged in a process that will result in recommendations about reforming the payment system.

But we are focused right now on using our MassHealth authority to design and implement models for the patient-centered medical home. Our hope is that by focusing on a Patient-Centered Medical Home we will see improvements in the quality of care, enhanced patient experiences and reductions in health care spending trends.

The goal is to transform primary care practices so that they provide continuous, comprehensive and coordinated care to their patients, with broadened access and greater use of multi-disciplinary teams and electronic health records to care for the chronically ill.

Accomplishing this will require both payment reform and an investment of resources to help physicians re-engineer their practices. Because this reform is aimed at practices rather than populations, it is by nature a multi-payer effort.

POS Reform

We are making significant progress implementing Chapter 257, the statute first introduced as Senate Bill 65. As you know, it places authority for development of social service reimbursement rates with the Secretary of Health and Human Services. Our responsibility is to ensure that these rates are fair and adequate, and that providers of these services are afforded a regulatory and public hearing process to ensure transparency and adequate venues for feedback.

The Division of Health Care Finance and Policy has responsibility for implementing rate reform according to the four-year timeframe specified in the statute. As HCFP implements the law, we will simultaneously reform procurement and contracting within the purchase of service system. This will simplify these activities for human service providers and our agencies, while also lead to significant administrative efficiency, improved internal controls and better ways of measuring quality and performance. All of these measures will ensure that the dollars allocated to these services are spent well and with efficiency.

Obviously, implementing this statute comes at a difficult time. In many cases, we anticipate that HCFP analysis that will result in reimbursement rates that are higher than what they are today. In order to implement this law in the current budget environment - where new funding is not available - we may be required to reduce the volume of services we purchase. Or, we may need to re-design services to make them less intensive, and therefore, less costly. We will continue to monitor the impact of all of these forces on Chapter 257 throughout FY10.

Competitive, Integrated Employment Services Program

Also in the reform arena, last week EOHHS released an RFR to human service providers for proposals to deliver employment placement and support services to individuals served by four of our agencies.

This joint procurement is our first work under Chapter 257 and our procurement and contracting reform initiative. With a shared approach to contracting, the Competitive, Integrated Employment Services Program extends significant administrative simplification to both providers and HHS agencies.

It replaces six different employment services programs - all of which shared the same essential program components to begin with - with a single model that has the flexibility to address different levels of client need. With this program, we have eliminated six different procurement cycles, six different service reporting requirements, six different contracting approaches and six different payment processes. The end result will be a greatly simplified approach to service management and delivery in FY10 and beyond.

This is also a performance-based program. Providers of services are paid for their effectiveness in supporting clients to achieve a series of milestones along the way to employment. In this economic environment, rather than pay for slots and service delivery regardless of whether our clients are getting jobs, we've placed a clear set of incentives for job placement. This will ensure that we are doing all we can to bolster the economic stability and welfare of the individuals and families we serve.

Agency Collaboration: Case Management within CYF

Another collaborative effort across our agencies is case management services within the Children, Youth and Families cluster.

Breaking down silos has been a major goal of mine, as well as the Governor's. We have begun to accomplish this through improved data sharing and an innovative care coordination model, One Family One Plan.

The goal of One Family One Plan is to coordinate planning for children and their families who receive services from more than one of the Children, Youth and Families agencies. As a result, care plans are coordinated and aligned; benefits are offered earlier in transition when a child is returning home from DCF custody; and case workers are learning about the myriad of benefits available outside of their agencies and connecting their clients to these services.

As we work with agencies outside of, such as Education, the information provided about the educational progress of children served by the Department of Children and Families and the Department of Youth Services is used to provide support services.

Governor Patrick to realize that working together across agencies and across secretariats, we can accomplish great things. During these difficult economic times, we will continue to work together to pool resources and streamline to be effective, efficient and responsive to the needs of families.

IT Consolidation

Within the FY10 budget proposal, the Administration's has also identified the Commonwealth's current decentralized IT management and funding structure as inefficient in many ways. In response, IT leaders from across the Commonwealth collaborated in developing a plan titled: "IT Strategy for the Commonwealth: 2009-11."

The plan identifies Secretariat consolidation as one of seven key initiatives that must be pursued to build the foundation for the Commonwealth's technology future.

The goals of Secretariat consolidation are to:

  • align Secretaries' IT resources with their business strategies and priorities;

  • standardize IT resources and create efficiencies; and

  • align Secretariat IT plans with the Commonwealth IT Strategic Plan.

A successful consolidation will streamline IT operations to reduce costs, improve data-security and enable agencies to provide efficient and easily accessible services for all constituents. Additional benefits include:

  • Improved Service Delivery - Residents increasingly expect a seamless experience when dealing with government. Secretariats will now be able to more easily create a single point of entry for multiple services from multiple agencies.

  • Improved Decision-Making - Accurate and timely data on our IT systems will enable better decisions and strategies to manage the Commonwealth's increasingly complex IT resources.

  • Reinvestment of Funds - Cost savings will enable Secretaries to reallocate resources to address immediate needs or create long-term benefits.

  • Infrastructure and Maintenance Upgrades - By simplifying our networks and standardizing our systems, the Commonwealth will be able to better monitor, maintain and upgrade major systems.

The H.1 recommendation for EOHHS includes a new account, 4000-1700, for secretariat IT consolidation. Consistent with the Commonwealth's Strategic IT plan, H.1 reflects a consolidation of agency IT resources at the secretariat level, with the goal of streamlining IT operations, improving efficiency and better aligning IT with the Administration's strategic goals.

The $94.4 million new direct appropriation at EOHHS incorporates transfers of IT resources currently budgeted at all 16 of our agencies.

Other Properties

Community First

We remain committed to making the Olmstead Plan that we announced last year more than a paper document, but a reality for people with disabilities and elders. Our comprehensive Olmstead Plan ensures that people with disabilities and elders have access to the full range of services and supports they need in the community so that they can live with dignity and independence.

As part of this plan, we announced a plan to close four of the state's six institutions for people with mental retardation over the next four years. Reconfiguring the Department of Mental Retardation's facilities system to focus more on community-based living options will significantly enhance community integration and improve quality of life for people with disabilities.

We are fully engaging with family members and guardians in a thorough, person-centered planning process to ensure that all of our consumers in these institutions receive equal or better care in their new settings.

Elders

At the Executive Office of Elder Affairs, we have received four grants from the United States Administration on Aging totaling more than $1 million - all of them intended to expand and support ways to keep seniors at home or in their communities for as long as they wish to be there.

These grants will:

  • Develop a statewide Aging and Disability Resource Center network to provide for the development of a sustainable Long Term Care Options counseling model.

  • Evaluate at-risk veterans, connecting them with home- and community-based services, thereby avoiding or delaying nursing home placement.

  • Fund the development of a partnership between Elder Affairs and the Alzheimer's Association to help persons with Alzheimer's avoid or delay nursing home placement.

  • Develop three surveys that examine outcomes over time for clients receiving home-based services; to identify predictors of nursing home placement; and to construct a model that would predict the likelihood of nursing home placement.

DMH

The Department of Mental Health is also making ground-breaking advancements in its work by transforming its adult community system. The Community Based Flexible Supports transformation is shifting the agency to one that sets standards, provides oversight, monitors and assures that the same level of quality services are being provided to everyone who needs them as we create a mental health system that is based in recovery, resiliency, partnership and consumer choice.

Some of the features of the transformation include person-centered care; integrated treatment planning; a peer workforce; enhanced clinical expertise; and service and pricing models that facilitate flexibility.

It also includes age appropriate services for transition-age youth who have taught us that services for this population are specialized and different than adult services.

Working Together

These are hard times and for those of us who come to this work because we believe we can make a difference it is particularly difficult. As I physician I know that people who care often ask "What more can I do?" Doctors believe they have not healed enough. Parents want to do more to protect their children and build for their future. Community leaders cannot stand one more tragedy, one more community trauma. Those of us in government cannot stand by knowing that we cannot protect all of the vulnerable because of a lack of financial resources.

I joined the Patrick Administration because I believe that government should play a role in making sure that everyone has opportunity, safety and health, and that government must assure that the most vulnerable achieve these goals. I know that we are all committed to getting to the same goals. I believe, as the Governor does, that we can do this together.

In the coming year we must work together to face the challenges ahead. I look forward to working through these challenging times with all of you and your colleagues in the Legislature, spreading hope for the future and celebrating what I know will be our successes together.

Thank you.