BILL ANALYSIS �
SENATE HUMAN
SERVICES COMMITTEE
Senator Leland Y. Yee, Chair
BILL NO: SB 137
S
AUTHOR: Emmerson
B
VERSION: January 28, 2013
HEARING DATE: April 9, 2013
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FISCAL: Yes
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CONSULTANT: Mareva Brown
SUBJECT
Developmental services: regional centers
SUMMARY
This bill requires that specified information about vendor
rates and payments to nonprofit housing corporations be
posted on each Regional Center's website, alongside other
existing information.
ABSTRACT
Existing law:
1) Establishes the Lanterman Developmental
Disabilities Services Act, which states that
California is responsible for providing an array of
services and supports sufficient to meet the needs and
choices of each person with developmental
disabilities, regardless of age or degree of
disability, and at each stage of life and to support
their integration into the mainstream life of the
community. (WIC 4500, et seq.)
Continued---
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2) Establishes a system of 21 nonprofit regional
centers to identify and coordinate services for
eligible individuals with developmental disabilities
who live in California. (WIC 4620 et seq.)
3) Requires each regional center to enter into a
contractual agreement with the state Department of
Developmental Services (DDS) to provide appropriate
services to eligible individuals and sets forth
specific performance objectives. (WIC 4629)
4) Requires each regional center, as a condition of
satisfying its contract with DDS, to adopt, maintain
and post on its website, a board-approved policy
regarding transparency and access to public
information. The policy shall provide for timely
public access to contract information, service
provider rates, documentation related to establishment
of negotiated rates, audits, and other information, as
specified. (WIC 4629.5)
5) Requires each regional center to post on its
website:
a. Regional center annual independent
audits.
b. Biannual fiscal audits conducted by the
department.
c. Regional center annual reports, as
specified.
d. Contract awards, including the
organization or entity awarded the contract, and
the amount and purpose of the award.
e. Purchase of service policies.
f. The names, types of service, and contact
information of all vendors, except consumers or
family members of consumers.
g. Board meeting agendas and approved
minutes of open meetings of the board and all
committees of the board.
h. Bylaws of the regional center governing
board.
i. The annual performance contract and
year-end performance contract entered into with
the department pursuant to this division.
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j. The biannual Home and Community-based
Services Waiver program review conducted by the
department and the State Department of Health
Care Services.
aa. The board-approved transparency and
public information policy.
bb. The board-approved conflict-of-interest
policy.
cc. Reports required pursuant to Section
4639.5, which require a regional center to post
its salary schedule and administrative
expenditures, as specified. (WIC 4629.5)
This bill:
1) Adds to the required information to be posted on
each regional center's website:
a. The actual rates paid to each vendor,
updated annually, except vendors who are
consumers, or family members of consumers.
b. Any regional center purchase of services
from, or operations funds provided to, a
nonprofit housing organization outside the
request for proposals process.
2) Clarifies that a vendor's business telephone number
must be provided on the website.
FISCAL IMPACT
This bill has not been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
Purpose of the bill
This is the third attempt in three years to add specific
data to existing vendor information that regional centers
are required to post on their websites. The first attempt
was vetoed by the Governor; the second was held last year
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in Assembly Appropriations. The author states that this
bill adds necessary information that would provide
transparency of actual vendor rates, which is not available
in the required public postings.
The requirement that regional centers post vendor rates,
enacted in 2011, followed an audit that highlighted some
improprieties in regional center contracting practices.
Because regional centers are nonprofit agencies that
contract with DDS to provide services, the public and
Legislature are not afforded the same level of transparency
in business that is required of state agencies. Despite the
required posting of vendor rates, which vary widely, the
author states that persistent questions about the range of
specific vendor rates require additional legislation to
ensure transparency.
"Several important data points were excluded from the
measure that would allow the taxpayer and the Legislature
to better understand how the regional centers are using
their public funds," the author states.
Regional Centers
Regional Centers are part of a system of care overseen by
the Department of Developmental Services (DDS). With a
proposed budget of $4.3 billion for community-based
services in 2013-2014, DDS is responsible for coordinating
care and providing services for more than 250,000 people
with developmental disabilities who receive services and
supports to live in their communities, as well as
approximately 1,560 people who resided in developmental
centers as of March 6, 2013.
California's 21 regional centers are non-profit
organizations that provide local services and supports to
individuals through contracts with DDS. Regional centers
provide diagnosis and assessment of eligibility and help
plan, access, coordinate and monitor the services and
supports that are needed because of a developmental
disability. Services for consumers are determined through
an individual program plan.
In order to receive funding from a regional center, service
providers first must be vendored by a regional center.
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"Vendorization" is the term used to describe the entire
approval process involved in preparing to provide services
to regional center consumers. While this process often
involves obtaining licenses or approvals from other State
and local agencies prior to becoming a vendor, the main
point of contact is the local regional center.
California Bureau of State Audits
In August 2010, the Bureau of State Auditors (BSA) released
a report examining the Regional Center system. Entitled, "A
More Uniform and Transparent Procurement and Rate-Setting
Process Would Improve the Cost-Effectiveness of Regional
Centers," the report noted concerns with the lack of DDS
oversight in vendor selection and rate setting.
Regional centers set rates using different
methodologies, often do not keep documentation
demonstrating how rates were set, and in certain
instances gave the appearance of favoritism or fiscal
irresponsibility.
The BSA examined 61 rates at six regional centers
statewide. In 26 of those samples, auditors could not
determine how the rates were set, and only 18 were
established using a detailed cost statement from the
vendor, which auditors cited as a best practice.
Additionally, five rates at four regional centers appeared
to violate a rate freeze required by law, and in two of
those instances the regional center approved rates almost
twice as high as the statewide median rate for the same
service.
Auditors recommended a number of reforms intended to
clarify and make transparent the vendor selection and
rate-setting process.
Committee hearing
On Nov. 4, 2010, the Senate and Assembly Human Services
Committees held a joint oversight hearing, "Oversight of
California's Regional Centers: Ensuring integrity,
Transparency, and Best Practices in a Challenging Fiscal
Environment." The hearing and audit came on the heels of
three years of significant budget reductions, including
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$100 million from the regional center system in 2009 and
$234 million, enacted in 2010. The reductions were based on
a series of stakeholder meetings that the legislature
required DDS to conduct, which explored ways to trim the
systems inefficiencies in order to reduce direct
elimination of services.
The 2010 oversight hearing focused on ways to increase
efficiency and cost-effectiveness within the system while
achieving the underlying purpose and keeping the promise of
the Lanterman Act including:
Whether regional center rate-setting and provider
selection practices were sufficiently transparent to
ensure accountability in their use of public funds.
Whether the right balance has been struck between
allowing flexibility in the operation of regional
centers and establishing statewide standards and
guidelines for regional center fiscal practices and
the IPP process.
Whether there is adequate communication - including
training and information sharing - between DDS and
regional centers, among regional centers, and between
regional center management and employees - about
efficient, cost-effective practices in rate-setting,
provider selection, resource development, and other
issues.
Related legislation
AB 1554 (Jeffries, Silva, 2012) contained identical
language to SB 137. It died in the Assembly Appropriations
Committee.
AB 862 (Silva, Jeffries, 2011) contained identical language
to SB 137. It was vetoed by the Governor.
SB 74 (Committee on Budget and Fiscal Review, Chapter 9,
Statues of 2011) required that DDS contracts include
provisions requiring each regional center to adopt,
maintain, and post on its Internet Web site a transparency
and public information policy containing prescribed
components, among other requirements.
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Arguments in support
"The intent and motivation of SB 137 to require the
Regional Centers to disclose information to the public is
simple: the Regional Center system is funded with
California taxpayer's monies; therefore, they should be
obligated to share information with the public, if
requested," writes Boyd Bradshaw, president of
ResCoalition, and the sponsor of the bill.
Comments
Should the bill move from this committee, the author may
want to consider better defining "actual rates," to
identify the scope of information being sought. This
language could be considered an overly broad requirement,
when the author may be satisfied with regional centers
providing categories of rates.
POSITIONS
Support: ResCoalition (sponsor)
Oppose: None received
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