Management Audit Committee Report - Court-Ordered Placements at Residential Treatment Centers - Chapter

CHAPTER 3 DFS Has Not Justified Its Rates for Residential Treatment Chapter Summary DFS pays RTC providers individually-negotiated rates but it does not have a methodology justifying the price differentials. DFS also does not have contracts with RTC providers specifying the services to be delivered to children in placement. By not DFS does not specify specifying what costs the rates should cover and what services what services providers should deliver, DFS lacks assurances as to the quality providers should and quantity of services for which it is paying. Without leadership deliver for its rates. on rate-setting from DFS, providers, both individually and in groups, are developing cost-based methodologies and attempting to set the terms for future rate increases. The three state agencies funding RTC services for COPs are independently determining their methodologies for rates. Acting separately, the three cannot determine whether they have the same allowable costs, may be making duplicate payments for the same services, or may be inadvertently encouraging providers to act in ways that undermine the other agencies’ objectives. Rate-setting for RTCs, especially now that Medicaid has become a major funding source, needs to be done in a collaborative manner. Providers Seek Increases in Six-Year Old DFS Rates to Reflect Their Actual Costs The current DFS daily rates for providers (see Figure 3.1), which cover room, board, ...