BILL ANALYSIS Ó
SB 74
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SENATE THIRD READING
SB 74 (Budget and Fiscal Review Committee)
As Amended March 14, 2011
2/3 vote. Urgency
SENATE VOTE :Vote not relevant
SUMMARY : Contains necessary statutory and technical changes to
implement changes to the Budget Act of 2011. Specifically, this
bill :
1)Outlines the process and parameters for the Department of
Developmental Services (DDS) to develop purchase of service
best practices. The best practices developed shall not
endanger the health and safety of consumers or compromise the
state's ability to meet its commitment for federal funding and
must be submitted in a report by no later than May 15, 2011,
for Legislative approval.
2)Increases Regional Center accountability and transparency
through several measures:
a) Requires Regional Center Boards to adopt written
policies to review and approve contracts of $250,000 or
more, before entering into the contract;
b) Adopts the federal requirement, which declares certain
individuals or entities ineligible to be Regional Center
vendors if convicted of prescribed crimes or have been
found liable for fraud or abuse in any civil proceeding
within the previous 10 years;
c) Requires Regional Centers to maintain and post on its
Internet Web site information such as request for proposals
and contract awards, service provider rates, negotiated
rates, audits and their IRS form 990;
d) Requires the Department of Social Services and
Department of Public Health to notify the DDS of any
administrative action initiated against a licensee serving
consumers with developmental disabilities;
e) Restricts for the 2011-12 fiscal year and subsequent
years, Regional Center audits to be conducted by the same
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accounting firm more than five times in every 10-year
period. Additionally, it specifies that an entity
receiving payments in more than or equal to $250,000 but
less than $500,000 from one or more Regional Centers shall
contract with an independent accounting firm for an audit
or review of its financial statements. When the amount
exceeds $500,000 the entity shall obtain an independent
audit;
f) Provides the DDS and Regional Centers the authority to
institute legal proceedings against a Third Party payer, as
a result of an injury in which the Third Party payer is
liable. Recovery of reasonable value for services provided
is similar to Third Party payer language contained within
the Medi-Cal Program administered by Department of Health
Care Services. Lastly, the language establishes procedures
for the enforcement of a lien by the DDS or Regional Center
upon a judgment or award in favor of a consumer for a Third
Party injury. This change effectively underscores that DDS
and Regional Centers are the payers of last resort when
Third Party payment is liable;
g) Requires the DDS to adopt emergency and other
regulations to establish standard conflict-of-interest
reporting requirements regarding Regional Center board
members, directors, and identified employees. Each
Regional Center must submit a conflict-of-interest policy
to the DDS by July 1, 2011 and post the policy online by
August 1, 2011; and,
h) Requires all Regional Center contracts or agreements
with service providers in which rates are determined
through negotiations between the Regional Center and the
Service Provider, to expressly require that not more than
15% of Regional Center funds be spend on administrative
cost. It also specifies that direct service expenditures
are those costs immediately associated with the services to
consumers being offered by the provider. Similarly, it
requires that all contracts between the DDS and Regional
Centers spend no more than 15% of all funds appropriated
through the Regional Center's operations budget on
administrative costs.
3)Makes the appropriate date changes to extend the 4.25%
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reduction to Regional Center Operations and Purchase of
Service Payments. The bill also extends the dates for
measures adopted to allow for provider relief such as the
suspension of staffing ratios and expertise; modification of
personnel requirements, functions, qualifications, staff
training requirements; and prescribed annual reviews and
reporting requirements. As in prior years, temporary
modifications may not affect the health and safety of a
consumer, impact the availability of federal funds, or violate
licensing or labor laws or other provisions of Title 17.
These changes are applicable until June 30, 2012.
4)Adds an urgency clause allowing this bill to take effect
immediately upon enactment.
Analysis Prepared by : Daisy Gonzales / BUDGET / (916) 319-2099
FN: 0000058