The Providers’ Council testified at the Executive Office of Health and Human Services (EOHHS) rate hearing on 101 CMR 427.00: Rates for Certain Youth and Young Adult Support Services.
On behalf of nearly 220 member organizations across Massachusetts, the Council expressed appreciation for the Healey Administration and EOHHS’s continued partnership with community-based human services organizations and their ongoing efforts to set fair reimbursement rates.
In its testimony, the Council focused on how rate structures directly impact workforce development and the ability of human services providers to recruit and retain staff. Citing the sector’s high turnover rates and ongoing recruitment challenges, the Council urged EOHHS to take further steps to ensure rates reflect the true costs of service delivery.
The Council’s recommendations emphasized three key areas:
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Benchmark Salaries — The Council urged EOHHS to maintain, at minimum, the 75th percentile of Bureau of Labor Statistics (BLS) data when setting benchmark salaries, rather than lowering them to the 53rd percentile. Using higher percentile benchmarks, the Council noted, would ensure fair and competitive wages for essential workers who deliver critical care and services across the Commonwealth.
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Cost Adjustment Factor (CAF) — The Council thanked EOHHS for adopting the baseline scenario data for CAF calculations — a compromise between the previously used optimistic scenario and provider requests for the pessimistic scenario — and recommended continued evaluation to ensure it accurately reflects market conditions.
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Tax/Fringe and Administrative Allocations — The Council raised concerns about the proposed decrease in the tax and fringe rate from 27.38% in FY ’24 to 24.97% in FY ’25, noting that community-based providers are seeing double-digit increases in health insurance costs. The Council recommended including an additional 5.1% for retirement benefits and holding the tax and fringe rate harmless from the prior year, resulting in an overall rate of 32.48%, as well as raising the administrative allocation to between 15% and 18%.
The Council’s testimony also underscored the gender and racial equity implications of rate setting, highlighting that the human services workforce is 80% women and 36% people of color. “Depressed salaries promote inequity,” the Council stated, urging state leaders to consider the broader social impacts of wage policy.
Read the full testimony here.