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State to amend Surplus Revenue Retention, UFR regulations

As you know, Governor Baker issued Executive Order #562 initiating a regulatory review process, A Clearer Code, last March to undergo a complete and comprehensive review of all existing Executive Branch regulations. The Providers' Council sent a letter to Executive Office of Administration and Finance Secretary Kristen Lepore last year asking the Baker Administration to:

  • Eliminate the 5 percent annual cap and 20 percent lifetime Surplus Revenue Retention cap present in 808 CMR 1.03 (7).
  • Work with providers to discuss how to make the Uniform Financial Statement and Independent Auditor's Report more user friendly, less costly and useful for both providers and the state.
  • Codify Ready Payments in state code and protect the regulations at 815 CMR 3.00.

We're happy to report progress on all of these items thanks to the advocacy of our members and the work of Administration and Finance Secretary Kristen Lepore, Executive Office of Health and Human Services Secretary Marylou Sudders and other members of the Baker Administration for appreciating the need to revise regulations to better support provider organizations.

We also thank our member-driven Business Practices Committee and our staff for their numerous discussions and cogent arguments for change. 

"We value our partnership with the Providers' Council and are committed to ensuring that our regulations facilitate provider sound business practices and  financial stability, and meet the health and safety needs of our clients," said Secretary Sudders. "We look forward to continuing our work together to improve the efficiency and effectiveness of publicly supported human services."

The changes, which will go into effect at the beginning of the FY '17 fiscal year, include:

Surplus Revenue Retention
The 20 percent lifetime cap on Surplus Revenue Retention will be eliminated. Additionally, the 5 percent annual cap on Surplus Revenue Retention will be changed to a 20 percent cap per year. 

Uniform Financial Statement and Independent Auditor's Report (UFR)
Over the next couple of months, the Providers' Council will work with Secretary Sudders and her staff on approaches to increase the efficiency and reduce the cost of the UFR at the provider level.

Ready Payment System
The state will not be eliminating Ready Payments at the beginning of its 2017 fiscal year. While the state may seek to reduce reliance on Ready Payments in the future, the Council will continue to work with providers and the state to facilitate discussions on how to avoid damaging providers' financial health and achieving timely payments throughout the fiscal year.

This is a major achievement for providers; it would not have been possible without the support of our members, as well as the Governor and Secretaries Lepore and Sudders. Their willingness to work with providers on these issues is refreshing, and we appreciate their continued support of the community-based human services sector's desire to improve its financial health. 

Please direct any questions you may have to Bill Yelenak at the Providers' Council.