DDS line items would get small increases while some MassHealth accounts would see cuts under governor’s FY ’27 budget
Governor Maura Healey has proposed relatively small increases in the Department of Developmental Services (DDS) budget for provider-run group homes, state-operated group homes, and for the Wrentham and Hogan Centers in the coming fiscal year, which starts July 1.
However, some of the state’s largest MassHealth accounts would face cuts under the governor’s budget proposal, raising the possibility of cuts in funding for Day Habilitation and Adult Foster Care programs and Personal Care Attendants for persons with intellectual and developmental disabilities (I/DD).
MassHealth is Massachusetts’ Medicaid program, through which the state administers and receives federal Medicaid reimbursement.
There appears to be no indication yet that the state’s 50% Medicaid reimbursement level from the federal government will be cut. But there have been proposals at the federal level to do so. At the same time, the Trump administration and Republicans in Congress have maintained the cuts won’t affect people with I/DD.
On January 28, Healey unveiled a $62.8 billion proposed budget for Massachusetts for the coming fiscal year. The governor’s budget legislation has been sent to the state Legislature’s House Ways and Means Committee; and from there it will proceed to votes in the full House and Senate.
Among the DDS line items we are concerned about are the following:
- The Wrentham and Hogan Intermediate Care Facilities (ICFs) (Line item 5930-1000):
Healey has proposed a $4.6 million, or 3.5%, increase in this line item, bringing it from $129.7 million to $134.3 million.
Despite that increase, we remain concerned that the Wrentham and Hogan Centers are being allowed to die by attrition, given that the administration routinely denies admission to them. Since Fiscal Year 2012, the ICF line item has been cut by more than $18 million, or more than 12%.
We visited the House Ways and Means and other key committees at the State House yesterday, asking them to support proposed language in the ICF line item that we think would open those facilities to new admissions. Our proposed language states that persons eligible for ICF-level care in Massachusetts have a right to that care.
- State-operated group homes (Line Item 5920-2010):
The governor has proposed a $25 million, or 7.2%, increase in this line item, which funds state-operated group homes. The increase would bring projected spending of $347.2 million in the current fiscal year to $372.3 million next year.
We believe the administration, while proposing modest increases in this line item, is also effectively allowing the state-run group home network to die by attrition. The data coming from DDS is inconsistent, however, regarding the trend in the total number of residents, or census, in those facilities.
The latest census data provided by DDS in September has produced confusion over whether the total census in state-operated group homes has been rising or falling. Data provided by DDS in previous years consistently showed the total census had been steadily falling. However, the new data set from DDS in September indicates that the census actually rose during the same fiscal years DDS had previously said it was falling – 2020 through 2023.
It seems most likely to us that the census in the state-operated homes has been steadily falling. We have heard that several homes have been closed in recent years, that staffing has been cut, and that it is difficult, if not impossible, to gain admission to those residences.
- Corporate provider-run group homes (Line Item 5920-2000)
The much larger corporate-provider-run group home system would receive a 2.4%, or $48.5 million, increase under the governor’s budget proposal, to $2.07 billion. While that increase is relatively modest, the provider line item has been on an entirely different funding trajectory for the past two decades than has the ICF line item. Since Fiscal 2012, the provider line item will have been increased by $1.3 billion, or 173 percent.
MassHealth programs would be cut
The Arc of Massachusetts, a key lobbying group for the corporate providers, is reporting that the MassHealth budget would see an across-the-board rate freeze, under Healey’s budget. According to the Arc, the proposed budget also includes significant cuts to Adult Foster Care, Personal Care Attendants, and Adult Day Health programs.
However, given that these programs are funded through large accounts, it’s not clear how much those specific services would be cut if the governor’s budget is adopted.
Healey has proposed cuts in the following MassHealth accounts:
- MassHealth Medicaid Administration (Line Item 4000-0300):
This account, which includes funding for Personal Care Attendants, would be cut by $3.2 million, or 2%, from $159.4 million to $156.2 million.
- MassHealth fee-for-Service (Line Item 4000-0700):
This account, which funds Adult Foster Care and Day Habilitation programs, would be cut by $268 million, or 6%, from $4.4 billion to $4.2 billion.
- MassHealth managed Care (Line Item 4000-0500):
This account, which also funds Adult Foster Care and Day Habilitation programs, would be cut by nearly $1 billion, or 14.2%, from $7 billion to $6 billion.
Many questions loom over the planned cuts in federal funding, particularly over the impact those cuts will have on people with intellectual and other disabilities. But over the long term, perhaps a more fundamental question is what will the Healey administration’s policy of promoting privatization of services mean for the future of Wrentham, Hogan, and other critically important state-run facilities and services for some of our most vulnerable citizens.
Even if Massachusetts is spared from devastating cuts in Medicaid reimbursement, the ongoing trend toward the closures of the ICFs and state-run group homes will still result in a race to the bottom of care for those persons in this state.
COFAR blog 
The Governor’s proposed FY27 budget includes deep cuts to MassHealth accounts that fund Day Habilitation and Adult Foster Care — $268 million from fee-for-service and nearly $1 billion from managed care. While the line items don’t specify how the cuts will be distributed, Day Habilitation is already in crisis. Programs are turning away high-acuity individuals, not because they’re ineligible, but because providers say they “cannot meet their needs.” That’s discriminatory, and it violates the Medicaid Act’s requirement to provide services sufficient in amount, duration, and scope to achieve their purpose. That purpose is habilitation. Not supervision. Not custodial care. Not “day services” in name only. And yet, habilitation itself has already been stripped from many programs – therapy hours slashed, goals abandoned, clinical staff eliminated. These cuts will make a bad situation worse. What’s most troubling is that there’s no evidence the administration considered whether these cuts would deepen the state’s existing violations of federal law. Massachusetts is already failing to meet its obligations under the Medicaid State Plan. Cutting Day Hab further – especially for those with the highest needs – increases the risk of civil rights violations, federal scrutiny, and litigation.
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