A Reimbursement Mystery
Opinion
By Dawn Forbes DiStefano
The Bermuda Triangle. Yawning. Dark matter. Pyramid alignment. These are just a few of the many unexplained mysteries that have perplexed experts for centuries.
Here in Western Mass., early-education and care providers have our very own unsolved mystery: how is it that our region, which is among the poorest in the Commonwealth, receives a fraction of what our peers in other parts of the state receive to provide programs and services to our highest-need populations, even when the costs are relatively the same?
According to the CDC Social Vulnerability Index (SVI), Hampden County has the highest SVI rate in the entire Commonwealth. Oddly enough, we have sustained the lowest subsidy rate for decades.
For example, providers who care for income-eligible toddlers in Boston are reimbursed at a rate of $85.90 per day. That same level of care in Springfield receives a reimbursement of $61.16.
At the root of the mystery is the system upon which the rates are set. For years, we have relied on a flawed market-rate study that does not account for regional nuances that impact the actual cost of care in our region, causing huge disparities from one region to another.
But that is not where the mystery lies. The real enigma is, how have we allowed this to go on for so long, even after realizing the indisputable flaws in our system? This is the question we have been asking for years.
Let me say, I truly believe we are heading in the direction of adjusting our reimbursement system in a way that will better reflect the needs of all children and families. Our current administration is aware and ready to implement change. Last fall, we witnessed for the first time the collection and dissemination of regional data on the true cost of providing care. For some regions, this exposed a staggering difference between today’s rate and a more accurate account of expenses.
However, there remains a great deal of work to do, even though our most recent rate increases reflected an approximate 10% increase. While I’m grateful for the additional funding, it is not enough, and it’s far from equitable. Some regions would stand to earn a rate that exceeds the current estimated cost of providing care and early learning, while Square One and providers throughout Western Mass. fall short, yet again.
Our most recent rate changes maintain the same inequitable rate structure, with our region still receiving the lowest rate in the Commonwealth and only 88% of true cost. Other regions would exceed the estimated cost of care by more than 130%. How can we continue to ignore the cries for help in the most vulnerable area of our state?
The solution is not complicated. We need a rate increase that allows for higher investment in our state’s most vulnerable areas. Standard percentage increases without sufficient additional investment in your most vulnerable regions is the definition of inequitable. The regions with children with the highest needs for food, early learning, and high-quality mental health supports should receive a rate that, at minimum, meets the estimated cost of care.
Mystery solved.
Dawn Forbes DiStefano is president and CEO of Square One.
