COFAR blog

The state Senate’s Ways and Means Committee has revived a state budget provision for the coming fiscal year that would require that hundreds of millions of dollars be spent to boost direct care wages in the human services system.

A similar provision was rejected last month in the House.

But an amendment filed this past week in the Senate on behalf of the corporate human services providers would override the Senate Ways and Means provision requiring that 75% of funding in a reserve account for the providers go toward boosting wages for their direct care workers.

The Senate budget amendment, which was filed by Senator Adam Gomez, would significantly raise the reserve account level while eliminating the 75% direct care wage funding requirement.  Gomez is Senate chair of the Children, Families, and Persons with Disabilities Committee.

The Senate is scheduled to vote next week on the budget for Fiscal Year 2023 and on amendments filed to it.

Last month, a budget amendment filed in the House to impose the 75% funding requirement was killed by the House leadership even though it had garnered 107 cosponsors, an amount comprising more than two thirds of the House membership.

Last week, the Senate Ways and Means Committee approved an overall state budget bill that revives the 75% requirement. The Ways and Means Committee also approved an increase in the provider reserve account, known as the Chapter 257 reserve account, from $79 million to $230 million.

Senator Gomez’s amendment (Amendment No. 466) would add $350 million to the $230 million approved for the reserve account by the Senate Ways and Means Committee and previously by the House. The amendment’s total proposed funding of $581 million in the reserve account has been sought by a coalition of corporate human services providers.

However, Gomez’s amendment no longer contains any language that requires that the additional $350 million go toward direct care wages.

Like the previous House amendment, the Senate Ways and Means language requires that 75% of the reserve account funding amount be used for “compensation for direct care, front-line and medical and clinical staff,” and states that the funding may include “hourly rate increases, wraparound benefits, shift differentials, overtime, hiring and retention bonuses or recruitment.”

Under the Senate Ways and Means plan, the 75% funding provision would require that more than $170 million be earmarked by corporate human services providers for direct care wages.

The House amendment went a step further than the Senate Ways and Means Committee provision by requiring that the providers sign a form attesting to a plan for spending the $170 million. The Senate Ways and Means provision doesn’t have that attestation requirement.

COFAR is strongly supporting the 75% funding requirement because it would address a key reason for staffing shortages in the state’s human services system. COFAR has called for a minimum wage for direct care workers in the DDS system of $25 per hour. Right now, the average hourly rate for these workers appears to be $16 or possibly even less.

In an email I sent to Senator Gomez and his staff yesterday, I noted that we are concerned that without specific language requiring that funding in the reserve account be used for direct care wages, there is little or no assurance that adoption of his amendment would lead to higher wages for those workers. I haven’t yet received a response to my message.

IG and state auditor have both found a lack of controls over promised funding for direct care wages

I also noted in my email to Gomez that the Massachusetts Inspector General’s 2021 Annual Report stated that the IG had examined how human services providers spent $139 million in federal COVID relief funds that the adminiistration disbursed in April 2020.

The IG report said the $139 million was supposed to be spent on “staffing, PPE, and infection control activities.” However, the Bureau received several hotline complaints “that the vendors received excessive funding and misspent it on executive compensation.” (my emphasis)

The Annual Report stated that the IG investigated the complaints and “found evidence that some vendors may have used the funds for unauthorized expenditures.”

The IG Annual Report added that the IG recommended that providers provide detailed expenditure reports, and that the Executive Office of Health and Human Services “coordinate and share information with DDS and other agencies.” However, the report said that EOHHS did not fully implement these recommendations.

Also, in a 2019 report, State Auditor Suzanne Bump’s office reported that Chapter 257 funding, which was at least partly intended to boost direct-care wages, “likely did not have any material effect on improving the financial wellbeing of these direct-care workers.”

The bottom line is that additional funding is needed to ensure that direct care wages in the human service sector are boosted to competitive levels. But controls are clearly needed to ensure that the money gets where it’s supposed to go, and doesn’t go instead into executives’ pockets.

Unfortunately, Senator Gomez’s amendment doesn’t provide for needed controls or even a spending reqirement with regard to the provider reserve account. The Senate Ways and Means language does at least establish a requirement that the increased funding go to direct care workers.