PJ William J. Kayatta, Jr. 00]) One Monument Square Portland, ME 04101 A TTORNEYS .11" Law 207-791-1238 voice 207-791-1350 fax wkayatta@pierceatwood.com pierceatwood.com FACSIMILE AND U.S. MAIL August 21, 2003 F. Todd Lowell, Esq. Assistant Attorney General Of?ce of the Attorney General 6 State House Station Augusta, ME 04333-0006 Re: Risinger, et al. v. Maine Department of Human Services, et a1. Dear Todd: Thank you for sending along for our review the prOposed Implementation Plan enclosed with your letter of August 5 to Margaret O?Keefe. We have now had the opportunity to go through it, and send you this letter as our response. BACKGROUND We are now approaching the end of August 2003. As the expert report makes clear, the State has still yet to comply with the Settlement Agreement dated May 7, 2002. The extent of the non- compliance is both substantial and substantive. Hundreds of children are not receiving on a timely basis the necessary care to which they are entitled. These services, in the words of the State?s independent consultant, ?are of vital importance to families and children who are eligible for the services.? In the words of Mr. Sundram, the State?s ongoing neglect of these children results in ?the probable eventual outcome of requiring crisis services or an emergency hospitalization.? Such an outcome is an irreparable loss both for the children and their families and for the taxpayers of the State of Maine. Again, in the words of Mr. Sundram, ?these options are inevitably substantially more expensive for the State and usually undesirable for the child and family as well.? In short, on a global level, Mr. Sundram finds that the State is both driving up the total cost to taxpayers and at the same time failing to meet the vital needs of these children and their families. The Report also ?nds that the State?s failures are having a discriminatory effect on disabled children and their families who live in Regions 2 and 3. We have, in short, a failure to serve the needs of disabled children, an inefficient approach to the husbanding of taxpayer resources, and a ?two Maines? implementation that visits the brunt of the shortfalls on the northeastern two-thirds of the State. ORTLAND, ME AUGUSTA, ME PORTSMOUTH, NH NEWBURYPORT, MA BUDAPEST, HUNGARY THE PROPOSED RESPONSE TO MR. RECOMMENDATIONS Against the foregoing background, we respond to the specific recommendations and proposed implementation as follows: A. Expanding Service Capacity1 1. Worker Wage and Bene?ts The most insufficient aspect of the proposed Implementation Plan is its response to Mr. Sundram?s principal recommendation for expanding service capacity. Some history that precedes your involvement in this case is informative. Prior to and during the litigation, most frequently cited reason for failing to serve the needs of the children and class members was that there was not a sufficient number of quali?ed, trained and available workers willing to do the work. We agreed, but suggested the basic concepts of market economies made clear how to solve that problem: The front line position should pay a living wage, and provide a reasonable benefit package. In short, increasing the pay that goes into the pockets of the front line workers would increase the supply of such workers. In 1997, the State retained a consultant to look at this issue. She concluded as follows: If we stay with a ?at rate for B81 services, the committee felt it should be increased to either $29 or $30 per hour. Essex Dep., 11/20/01, Ex. 1. Notwithstanding this conclusion, BDS rejected the recommendation, not because BDS was meeting the needs of the children, but because it did not want to spend the money. DHS has not approved a rate increase. This year with a $50 million dollar deficit over the next two years, this administration feels it would be imprudent to grant rate increases. BDS Deep, 9/21/00, Ex. 16. Such an approach by BDS was one of the clear violations of applicable federal law that led to this suit. See, Alabama Nursing Home Ass?n v. Harris, 617'F.2d 388, 396 (5th Cir. 1980) (holding that ?a state may not circumvent its previous guarantee Of [Medicaid benefit payments] by failing to take requisite steps to ensure adequate funding of the program's projected expenditures?). BDS compounded its failure by launching a supposed study of provider cost requirements. The ?providers? that it studied, however, were not the front line workers. Rather, BDS asked the agencies who hired workers whether those agencies were making or losing money. Few agencies responded. 0n the basis of this reSponse and a supposed audit of the most rudimentary The paragraph numbers in this letter track those in Mr. Sundram?s report. kind, BDS concluded that the agencies themselves were not losing money. While we (and apparently Mr. Sundram) believe that is not likely to be the case, the important point is that focus on whether the agencies were making money is misdirected. The question isn?t whether the reimbursement rate enables an agency to ?nd atleast a few workers at rock bottom pay levels so that the agency can break even. The question is whether the reimbursement rate paid to the agencies allows the agencies to pay a high enough wage so that enough workers are attracted and retained. As is made clear by Mr. Sundram?s report, the inadequacy of the wages paid to the front line workers, and hence the labor shortage, has gotten worse since the State?s own prior consultant identified the problem in 1997. Against this background, Mr. Sundram specifically recommends, among other things, that: The front?line positions should pay a living wage, and provide a reasonable benefit package. The State should establish a policy on reimbursing, through its rate structure, the cost of travel and transportation for front-line workers who must travel beyond a normal commuting distance 15 to 20 miles, 20 to 30 minutes). In response, BDS proposes to simply complete its prior, incomplete study of agency costs and expenses. We repeat this is entirely misdirected. A rational agency will take whatever reimbursement rate is offered, subtract its non-labor costs, and then offer no more than the difference to workers. Such an agency will not find enough workers if the rate is too low. But it will not lose money. BDS itself knows there are too few actual workers. Mr. Sundram drives this point home. His focus is on the wage and benefit package paid to me worker. BDS need take such a focus. Additionally, the proposed implementation. deadline is too slow. Waiting until July of 2004 to increase the wages ensures yet another year of non-compliance. It is penny-unlawful, and pound?foolish. We therefore request that BDS commit now to taking concrete steps that provide now - not just in 2004 - wages and benefits suf?cient to attract an adequate supply of quali?ed workers. Further, if BDS wants to study the issue for the long term, we have no objection so long as it does not continue to assume that provider agency pro?ts or losses are indicative of whether wage levels are adequate, and so long as it does not delay addressing the current inadequate levels of compensation and supply. 3. Independent Contractors Mr. Sundram?s third recommendation is that the state "[d]evelop a mechanism authorizing families who have been waiting beyond the 180 day timeline for in-home support services in unserved and underserved secure the services of qualified independent contractors for an interim period." The Department's response is to submit an application to CMS for an Independence PLUS waiver, similar to that submitted by New Hampshire. While we have no objection to filing for an Independence PLUS waiver, such a filing does not address the current need given the length of time that CMS generally takes to act on waiver requests up to two years. Mr. Sundram?s recommendation therefore needs to be implemented in the interim. 4. ITPs The inconsistency you perceive between the Settlement Agreement and sound clinical practice only arises if BDS treats the ISO-day deadline as the norm, rather than the outside limit for the unusual case. If service begins within 90 days (a long time for a child in need of the service), the ITP can be prepared within 120 days. 5. Case Management Your proposed alternative is to do what BDS was supposed to be doing already. A commitment to a firm target and an agreement to implement Mr. Sundram's recommendation should that target not be met would be apprOpriate. CONCLUSION As we have before, we recognize that the new administration has approached the problems giving rise to this litigation with greater focus and commitment than was previously the case. We dohope that you recognize that the Plaintiffs? restraint and patience in the face of prolonged lack of compliance has been substantial. We want to work with you. That being said, the notion that Mr. Sundram's principal recommendation is to be met with a repetition of a misdirected study, plus another year of delay, is going to require that we return to Court. Perhaps we should all talk after you have a chance to digest the foregoing. Very truly yours, William J. Kayatta, Jr. cc: Patrick F. Ende, Esq. Peter M. Rice, Esq. Margaret Minister O?Keefe, Esq. I I82. 1 I