BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 577 (Pavley) - Autism and other developmental disabilities: pilot program: employment. Amended: April 15, 2013 Policy Vote: Human Services 6-0 Urgency: No Mandate: No Hearing Date: May 23, 2013 Consultant: Brendan McCarthy SUSPENSE FILE. Bill Summary: SB 577 would establish a pilot program to provide additional support to regional center consumers, with the intention of increasing employment of participants in the pilot program. Fiscal Impact: One-time costs in the low hundreds of thousands for program development by the Department of Developmental Services (General Fund). Likely ongoing costs in the low millions to provide additional employment-related supports to consumers who participate in the pilot program (General Fund). See below. Unknown increase in federal funds to the regional centers due to increased employment by regional center consumers (federal funds). Offset by reduced federal funds to the Department of Rehabilitation. See below. Unknown savings due to reduced need for other regional center services by consumers who find long-term employment under the program (General Fund). 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, 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. The Department of Rehabilitation provides services to assist SB 577 (Pavley) Page 1 people with disabilities find employment. Under federal law, the state is eligible to receive reimbursement for services provided to assist someone with a disability find employment, provided that the individual was previously eligible for federal disability benefits, the individual meets a certain threshold of employment activity, and the state can show savings due to the individual's reduced reliance on state benefits. According to the Department, the average reimbursement from the federal government is between $2,000 and $3,000. Advocates for individuals with autism and related developmental disabilities have raised concerns that the services provided by the Department of Rehabilitation are not sufficient to significantly increase the employment prospects of individuals with autism and related disorders. While these individuals can find long-term employment, they typically need significant upfront support in order to prepare for employment and that level of support is not provided by the Department of Rehabilitation. Proposed Law: SB 577 would establish a pilot program to provide additional support to regional center consumers, with the intention of increasing employment by participants in the program. Specifically, the bill would: Define job exploration and discovery services; Establish a rate of $40 per hour, up to 75 hours per quarter, to be paid to regional center vendors that provide those services; Require the Department of Developmental Services to create a pilot program to improve employment by regional center consumers; Require the Department to collect data on program participants; Establish the pilot program in six specific regional center catchment areas; Require $200 per month to be transferred from the Department of Health Care Services for support of the program for each month a program participant is enrolled in employer-provided health care coverage; Require $1,000 to be transferred from the Department of Rehabilitation for support of the program for each program participant that reaches the federal standard of employment, SB 577 (Pavley) Page 2 leading to state reimbursement; Require participating regional centers to provide specified information to the Department of Developmental Services; Require the Department of Developmental Services to determine the savings to the regional centers due to increased employment by program participants and allocate 50% of those savings to support the program; Require the Department of Developmental Services to report on the program; Sunset the bill on July 1, 2018. Related Legislation: AB 287 (Beall, Statutes of 2009) required the State Council on Disabilities to report on strategies to improve employment by the disabled. AB 1041 (Chesbro) would require regional centers to provide certain information to consumers about employment options. That bill is in the Assembly Appropriations Committee. SB 1112 (Ammiano) would require rates provided to regional center vendors for employment services to be consistent with rates paid by the Department of Rehabilitation. That bill is in the Assembly Appropriations Committee. AB 954 (Mainenshein) would increase the hourly rate paid to providers of employment services. That bill is in the Assembly Appropriations Committee. Staff Comments: The bill requires the pilot program to be implemented in six regional centers. Assuming that each regional center allows an average of 50 consumers to participate in the program, that it takes on average six months of support services to prepare consumers for successful employment, the annual program costs to provide employment services will be about $2 million per year. To the extent that the program is successful in improving employment opportunities for consumers, there are likely to be reductions in the need for services by those consumers (for example, day programs). The extent to which the program will be successful in placing consumers into employment is unknown, thus any potential cost savings are unknown. The bill requires $200 to be transferred from the Department of Health Care Services (to the extent allowed by federal law) for each month a participating Medi-Cal eligible consumer is SB 577 (Pavley) Page 3 employed and has employer-funded health insurance. The intention of this provision is to capture a portion of the potential savings to the state from moving regional center consumers from Medi-Cal coverage to private coverage. Whether the proposed transfer of funds would accurately reflect the savings to the Medi-Cal program is unknown, as Medi-Cal typically continues to pay for medical costs not covered by other insurance programs. Similarly, the bill requires $1,000 to be transferred from the Department of Rehabilitation for each successful placement in long-term employment. While those funds would offset some of the costs to the regional centers, they would also reduce available funding for the Department of Rehabilitation, putting an equal cost pressure on the General Fund.