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  








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          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,  








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              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  








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          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.