BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 468 (Emmerson) - Developmental services: statewide Self-Determination Program. Amended: April 15, 2013 Policy Vote: Human Services 6-0 Urgency: No Mandate: No Hearing Date: May 13, 2013 Consultant: Brendan McCarthy This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 468 would require the Department of Developmental Disabilities to establish a Self-Determination Program, which would allow regional center consumers to use an individual budget to purchase services and supports at the consumer's direction. Fiscal Impact: One-time costs likely in the hundreds of thousands for the Department of Developmental Disabilities to establish program requirements and apply for federal approval to draw down federal matching funds (General Fund). Ongoing administrative costs by the regional centers of about $6 million per year (General Fund). Because the bill requires the program to be cost-neutral, eventually these administrative costs may be offset by reduced administrative costs or proportional reductions in participating consumers' individual budgets. Because the bill requires the program to be implemented in a manner that is cost-neutral to the state, the overall demand for services and supports under the program is not expected to increase. Potential ongoing state savings of about $2.8 million per year from additional federal funding for current services (General Fund). See below. Background: The Department of Developmental Services is responsible for coordinating services and supports for about 250,000 people with developmental disabilities. The vast majority of these people are served by 21 regional centers, SB 468 (Emmerson) Page 1 which are non-profit entities that contract with the state. The regional centers, in turn, contract with vendors to provide direct services to the developmentally disabled. Under current practice, regional center staff (in consultation with consumers and their families) will develop an Individual Program Plan for each consumer. The Individual Program Plan lays out the services and supports that the consumer is entitled to, based on his or her individual needs. The regional centers then work with outside vendors to arrange for the provision of those services and supports. (Vendors who have been approved by a regional center to provide services are referred to as "vendorized".) SB 1038 (Thompson, Statutes of 1998) established a pilot self-determination project within the regional center system. Under this pilot project, about 200 regional center consumers from five regional centers were allocated a personal budget and allowed to personally direct how funds in the budget would be spent (in accordance with the Individual Program Plan). Although that pilot program was not statutorily required to be budget neutral, the Department found that between 1998 and 2002 the pilot was budget-neutral overall. While the pilot project has not been expanded, participants have been allowed to continue to participate and about 140 consumers still do so. In recent years, the state has negotiated a Home and Community-Based Services for the Developmentally Disabled Waiver (the "Waiver") which allows the Department to receive federal matching funds for services provided to regional center consumers. The purpose of this Waiver is to use state and federal funds to allow consumers to remain in the community, rather than being institutionalized. The current Wavier does not allow self-directed services to receive federal matching funds. Thus expenditures by participants in the existing pilot project are not eligible for federal matching funds. Proposed Law: SB 468 would require the Department of Developmental Disabilities to establish a Self-Determination Program, which would allow regional center consumers use an individual budget to purchase services and supports at the consumer's direction. SB 468 (Emmerson) Page 2 Specific provisions of the bill would: Authorize participants to use an individual budget to purchase services; Require the program to be phased in over three years with up to 2,500 participants; After three years, expand the program to any willing consumer; Require the program to be cost-neutral to the state in the aggregate; Require the program to only pay for services and supports eligible for federal cost-sharing; Require participants to use the services of a vendorized financial services provider; Require participants in the prior pilot program be included in the new program; Exempt participants from limitations on services imposed by the state in recent years (costs for those services would still have to be within the consumer's budget); Require the Department to develop a methodology for developing individual budgets; Require the Department to apply to the federal government to authorize federal funding for services provided under the program; Make the program contingent on federal funding; Allow services provided at the consumer's direction to come from non-vendorized providers (except for financial management services); Require reporting on the program by the Department and the State Council on Developmental Disabilities. Related Legislation: AB 1244 (Chesbro, 2011) would have created a program similar to this bill. That bill was held in the Senate Human Services Committee. Staff Comments: As was noted above, since the development of the initial pilot program, the state has received federal approval to draw down federal matching funds for many services provided to regional center consumers. Services provided to participants in the pilot project are not eligible for federal matching funds, because the current Waiver does not allow for self-directed services. The sponsors of the bill and the Department have indicated that the federal government has authorized federal matching funds for self-directed services in SB 468 (Emmerson) Page 3 other states and that the state may be able to receive federal approval to do so under this bill. Because the state is already receiving federal funding for many services provided to regional center consumers, the bill is not likely to result in new federal funding for most consumers who are likely to participate in the program established by this bill. However, because the state is not receiving federal matching funds for services provided to participants in the existing pilot project, the bill may result in additional federal funding, as those consumers would be automatically included in the program authorized under this bill. The Department has indicated that the potential savings to the state from additional federal funding would be about $2.8 million per year.