Chapter IV

DMR OVERSIGHT OF CLAs

There are two major ways DMR oversees CLAs and the services they provide:

• licensing and inspections of privately operated homes and certification and inspections of facilities operated by DMR; and
• contract monitoring of provider agencies and homes operated by them.

These oversight mechanisms are described in this chapter.

Licensing and Inspections

Background

• All privately run CLAs are required to have a state license and undergo periodic inspections by DMR. Inspections are to occur at the initial licensing/certification stage and at least biennially thereafter. Inspections and the licensing process help ensure the implementation of DMR health and safety regulations, as well as program-oriented regulation, for the overall health and safety of CLA residents.
• CLAs operated by DMR are "certified" rather than licensed, since they are operated by the state. State-run CLAs go through the same inspection process as private homes.
• State licensing regulations outline basic standards for operating a group home, including home safety, emergency planning, staff training, individual client records, financial records, agency policies and procedures, and compliance with local fire and building code requirements.
• Licensing and inspections are DMR central office functions within the Quality Assurance Division (QA). There are six inspectors (each with caseloads of roughly 130 homes) and one supervisor responsible for licensing and inspecting the roughly 780 CLAs statewide. The inspectors' backgrounds vary (although none is a registered nurse.) All inspectors have experience working with the developmentally disabled population.

Pre-License Inspection Process

• Figure IV-1 shows the process for obtaining an initial license to operate a group home.
• A provider must first submit an application to operate a group home. A preliminary inspection is then conducted by regional staff before a full inspection by the department's central licensing unit. The information is to be forwarded to the licensing unit at least 10 days prior to the anticipated open date of the facility.
• A licensing inspector reviews the information for completeness and accuracy before going to the home and conducting the initial licensure inspection. This inspection is conducted prior to residents moving into the home.

• Upon a successful initial inspection, a private home is given an operating license, while DMR-operated homes are "certified." This allows clients to move into the home. The inspector may revisit the home within six months of operation to conduct another review. If deficiencies are found, the provider is responsible for making the necessary corrections.

Post License Inspections and Renewals

• Figure IV-2 illustrates the license renewal process.

• Within one year of the initial inspection another full inspection is typically conducted for public and private homes. The inspection includes a check of the overall safety of the house and grounds, a review of the required files kept by the provider (medical information, residential logs, client information), and interaction with clients, if available. At this point, the inspector decides whether to recommend the next inspection be conducted one or two years from that time. The recommendation goes to the central office licensing supervisor and Quality Assurance Division director who make the final determination.
• Licenses must be renewed every year, with renewal applications submitted to the licensing unit.
• Full site inspections are made at the time of license renewal in the biennial inspection cycle. All site inspections at the time of license renewal are announced to the providers.
• Regular site inspections typically occur within two months before the license expiration date.
• Inspections usually take a day to complete and typically include: 1) a sample document review of client program, financial, medical, and incident records; 2) an environmental check, including physical plant and water temperature; 3) fire safety/emergency procedures; and 4) reviewing staff training records.

Plan of Correction

• Figure IV-3 outlines the steps taken when an inspection results in deficiencies on part of the provider.
• Deficiencies found during an inspection must be reported to the provider within 15 working days of the inspection. Issues found during an inspection involving the immediate health and/or safety of the clients (e.g., staffing complement too low) must be rectified while the licensing inspector is at the home. Generally, inspectors highlight the inspection results at an exit interview held at the end of the inspection.
• After the provider receives the inspection results from DMR, a plan of correction must be developed by the provider and submitted to the licensing unit within 15 working days. A plan of correction is to include:

_ a remedy for correcting individual citations;

_ the person/position responsible for implementing the plan;

_ the identification of a system in place in order to prevent the inspection deficiency from occurring in the future; and

_ an implementation and/or completion date.

• All plans of correction are reviewed by the DMR licensing supervisor and the QA director for approval. A subsequent plan is required if the first one is not approved.
• If a second correction plan is unacceptable, the inspector and a regional representative (typically the contract manager and an assistant regional director) meet with the provider to discuss any outstanding issues. A revised plan is submitted and if not approved, sanctions may be initiated, including an increased inspection schedule, a compliance order (requiring such measures as increased/specific training, a reduction in capacity, or increased staff support), or revoking a home's license. DMR informed the committee the vast majority of corrective plans are approved and additional sanctions used infrequently.

Monitoring

• After the plan of correction is approved, DMR determines which corrections can be verified through documentation submitted from the provider to the licensing inspector and which citations will need a department site visit to verify the proper corrections have been made.
• The licensing unit then sends a copy of the correction plan, indicating the citations requiring on-site verification, to the assistant regional director for appropriate action.

Private Sector Monitoring

• On-site monitoring for urgent matters relating to client health and safety, as determined by the licensing unit, is conducted immediately by the unit's inspectors. For all other matters, the DMR regional staff will verify corrective action has been taken at the time of the next formal site visit by the contract manager (described later in this Chapter.)
• The contract manager has been the contact person responsible for conducting the on-site monitoring. The process, however, recently changed whereby the DMR licensing inspector is responsible for conducting the monitoring visit for all urgent health and safety issues.
• The regional contract manager is to report the on-site visit results to the DMR licensing inspector. The inspection report, with the accompanying plan of correction, is used to determine if the provider has successfully corrected the citations. If additional action is needed, the licensing inspector will contact the contract manager.

Public Sector Monitoring

• The process for monitoring plans of correction for public homes is comparable to that for private homes, with several differences. Since contract managers are not responsible for public homes, a DMR residential manager makes the necessary monitoring visits to public homes. DMR requires residential managers not be responsible for their own homes, and that another residential manager -- as determined by the licensing unit -- conduct the necessary monitoring visits.

Unannounced Inspections

• Licensing inspectors began conducting unannounced inspections at the beginning of 2002. Each inspector is required to select two homes per month and complete a "revisit" inspection to ensure providers are implementing actions detailed in their plans of correction. Homes are chosen based on recent inspections and plans of correction.

Administrative Review

• Providers may request an administrative review by the QA director if they disagree with any part of their inspection results, including their one-year inspection status. The review offers providers an opportunity to be heard by the department's QA director. DMR notes approximately four appeals have been made in the past 10 years.

Licensing and Inspection Activity

• Table IV-1 outlines licensing and inspection data for FYs 97-02.

Contracts and Contract Monitoring

• DMR has statutory and regulatory authority to contract with private provider agencies for provision of services, including residential services, to DMR clients.
• DMR currently contracts with 81 agencies to provide residential services to almost 2,700 clients. Each provider has one contract which covers all the CLAs and other programs offered by that agency.
• Responsibility for contracting - including issuing the initial contract, contract monitoring, and contract renewal -- is primarily a regional function, although there is a central office role under the Director of Operations, and each contract is signed by the department's budget director.
• Staffing assigned to the contract management function varies among the regions - from six persons in the Southwest region to 10.5 full-time equivalent positions in the Northwest region.
• DMR contracts are issued for 12-month periods and coincide with the state's fiscal year.
• New contracts are issued only when there is new funding allocated from the legislature or when a provider agency terminates all or part of its contract. The vast majority of contracts are renewals and not initial contracts.

New contracts

• When new money becomes available, or when a new provider is being sought to take over an existing program, DMR follows the state's request for proposal process (RFP) as shown in Figure IV-4.
• Once the RFP is issued, a regional selection committee is appointed by the Regional Director, Assistant Regional Director, and Regional Self-Determination Coordinator (whose major role is to ensure client choice and independence in all processes). Once responses to the RFP are received (typically within 60 to 90 days), the selection committee reviews bids, and scores them using a statewide standard scoring scheme.
• Included in the RFP is specific information about the clients who will be served in the new home, or who already live in the home that is changing providers.

• The standards evaluated include a provider's:

_ previous performance record (may include a site visit to another program);

_ organization and staffing patterns;

_ overall budget and cost effectiveness; and

_ proposed financing and operations for the RFP services.

• Once the scoring is complete, the selection committee interviews the top agencies - typically the top three -- makes its final selection, and refers its recommendation to the Regional Director. The Regional Director reviews the selection and rationale with the Deputy Commissioner of DMR. Once completed, the region notifies the selected agency and final terms and conditions are negotiated. Agencies not selected are notified within 48 hours.

Contract Renewals and Amendments

• Once a contract has been issued it is renewed annually thereafter, except under rare circumstances where a provider gives up a contract (partially or entirely), or unless DMR takes action to reduce or terminate a contract. (See Table IV-3 later in this Chapter for such actions.)
• Each spring, as part of the contract renewal process, the provider and DMR regional contract staff discuss the contract and provision of services. Typically, increases in the contract are limited to percentage increases authorized through the state budget process.
• Contract discussions focus mainly on performance and meeting goals and objectives rather than on financial aspects because increases in overall contracts are established by the legislature via the budget. DMR also holds mid-year reviews with the contracted agencies, emphasizing services rather than financial matters.
• Cost settlements - recoupments to DMR because of overpayments - are adjusted at the time of contract discussions. Repayments to DMR are generally made through a reduction in the DMR payments to a provider over the ensuing three months, and generally limited to recoupment of 50 percent of the overpayment. DMR also has authority to reduce funding when utilization falls below 85 percent if the provider cannot adequately justify the reduced occupancy. DMR stated it has not used this authority.
• A contract can also be adjusted during the year with contract amendments. These may be for one-time expenditures for a set period of time or expansions to the contract, which would build in those expenses for ensuing years. Amendments are often attributable to the increasing needs of a specific client or clients, and the necessity to add staffing or other resources to address those needs.
• Table IV-2 shows amendment activities over the past three fiscal years. While some of these amendments are for contracts with agencies that provide other than residential supports, most of the amended amounts deal with community living arrangements.

Contracts and Monitoring

· Each contract includes:

_ a generic human services contract portion;

_ a section setting forth specific requirements for day and residential services including quality assurance, reporting and auditing requirements; and

_ a section outlining requirements for all DMR contracted programs which include requirements that providers: allow DMR access to its programs; maintain minimum training of staff, report all incidents as required, and not suspend or discharge clients from a program without DMR review and approval;

_ Attachment A, which includes specific contractual obligations for CLAs (see Appendix E for a listing);

_ agreed-upon performance objectives for the contract year;

_ a workforce analysis for affirmative action purposes; and

_ a financial summary of the contract, including number of persons to be served in residential and day programs.

• Provider agencies submit annual "operational plans" for all their major residential and/or day programs. DMR contract monitoring personnel use the plans submitted as a guide for how a provider agency intends to operate its programs and expend its funding.
• Contract managers monitor the provider's performance in a number of ways:

_ A contract monitoring book is kept on each provider agency operating in that region, which includes the contract, amendments, licensing information including deficiencies and plans of correction, reports of abuse/neglect, and the resulting investigations.

_ Site visits are conducted at least twice a year -- one announced and one unannounced - and monitors complete a site visit form, documenting visit findings.

_ Mid-year and year-end performance reviews are conducted by the monitors, which are included in the contract monitoring book and discussed in a limited way at contract renewal.

_ Contract monitors have also begun (as of 7/1/02) requiring providers to report on staffing levels in each CLA.

_ Conduct follow-up on providers' corrective action plans resulting from licensing inspections.

• A private provider agency must also submit annually to DMR its audited consolidated operational report (ACOR), which is a retrospective look at the provider's actual revenues, costs, and client data for the preceding year. The data from the ACOR are used for any cost settlements (mentioned above).

Contract Enforcement

• Contract issuance and adjustments can be used by DMR as an enforcement tool with private providers. Table IV-3 shows contract actions from FY 97 through FY 02. The most common contract enforcement action is to place the provider on a partial year contract (typically six months). During this time, DMR increases monitoring and oversight to ensure concerns are being addressed before returning the provider to a full-year contract.
• More rarely, a contract is terminated by DMR. As the table shows, in only 12 instances was a contract tied to residential services (either regional or statewide) ended by DMR. In two other cases, DMR recouped funds that were disallowed from agency principals and reduced management fees. In 11 other cases, the provider ended the service or merged with another agency.

Other Enforcement

• Rarely, cases involving private providers are sent to the Office of the Attorney General or the State's Attorney for enforcement for fraud or misuse of funds. In one case, the Attorney General's office was successful in recovering $1.25 million from one private provider who fraudulently billed for client services.
• Obviously, the same tools cannot be used to enforce standards in DMR homes; those CLAs are not under contract and individual auditing requirements. If there are problems at certification inspections, inspectors will issue citations, plans of correction are submitted and reviewed as with provider homes, and some DMR homes have been put on a one-year certification schedule.
• Twenty-five percent of DMR homes are also subject to unannounced site visits by DMR residential managers of homes other than ones they normally oversee.
• However, if problems continue to exist in a home, DMR as the employer can take personnel actions against its employees. DMR furnished data on disciplinary actions taken against its employees over an 18-month period, but "reason" categories were not refined enough for the committee to determine whether failing to meet or maintain certification standards was a cause for discipline.

Program Integrity

• A new oversight tool was implemented by DMR two years ago. The process is aimed at providing a "holistic" picture of the overall quality of services and management practices and examines the oversight results for selected providers.

Purpose

• "Program Integrity" (PI), as the process is named, is coordinated by the DMR central office to consolidate and integrate the system's various information sources regarding service quality and integrity.
• The PI process integrates and reviews information about a provider's (or providers') services, including the following areas: 1) financial, 2) contract, 3) health, 4) quality assurance, 5) special protections, 6) individual/family, and 7) case management.
• DMR utilizes the PI review process to ensure programs and services are in compliance with departmental policies and practices. The process is designed to:

_ assess agency programs and practices;

_ provide direction and recommendations to regions or ensure service standards with those providers; and

_ promote consistency across regions in contract review, management, and enforcement activities.

Team Membership

• A core team consisting of central office and regional representatives conducts program integrity reviews. Members from the central office include the directors of:

_ Quality Assurance (chairperson);

_ Audit;

_ Investigations;

_ Health Services; and

_ Operations Center.

• Regional members include:

_ the regional director; and

_ optional members as appropriate (e.g., assistant regional director, health services director, quality improvement director, contract managers, and the abuse/neglect liaison.)

Reviews Conducted

• The PI process can evaluate any provider(s) DMR licenses, certifies, or funds, including facilities operated by the department. Any provider(s) identified as having a program performance concern by a core team member can be scheduled for a PI review. A PI review may examine a single agency or multiple agencies covering different regions. To date, DMR has conducted seven program integrity reviews covering 35 agencies statewide. Most of the reviews have been of private agencies; one review was done of all public facilities in the South Central region in mid 2002. Another PI review of all public homes in the Eastern region was pending at the time this study was completed.

Reporting and Monitoring

• The current process includes a final report developed by the PI team at the conclusion of a review containing:

_ agency description;

_ financial status and issues;

_ physical plant and fire safety;

_ abuse/neglect information;

_ program review and human rights committees issues;

_ program/service issues;

_ health and clinical issues; and

_ other (e.g., management).

• The PI report identifies existing or potential conditions/patterns regarding organizational performance that have or may have harmful effects on DMR clients. Any necessary internal system changes to DMR's oversight process are also identified.
• PI reports are distributed to the applicable regional director, members of the core team, the DMR deputy commissioner, and the pertinent agency director. All applicable agencies are responsible for implementing any recommendations contained in the PI report. The regional director is responsible for ensuring implementation and periodically reports progress to the deputy commissioner, who has ultimate implementation responsibility.
• An automated system is currently under development to track implementation efforts of PI review recommendations.