BILL ANALYSIS Ó
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CONFERENCE REPORT NO. 1
Bill No: ABX2 1
Author: Assemblymember Thurmond (D), Senator Beall (D),
Assemblymember Bonta (D), Assemblymember Maienschein
(R), and Senator Cannella (R), et al.
Proposed: 2/22/16
Vote: 27
CONFERENCE COMMITTEE: 10-0, 2/22/16
AYES: Senator Hernandez, Senator Anderson, Senator Leno,
Senator Mitchell, Senator Nielsen, Assemblymember Bonta,
Assemblymember Bonilla, Assemblymember Gallagher,
Assemblymember Patterson, Assemblymember Santiago
SUBJECT: Developmental services: Medi-Cal: funding
SOURCE: Author
DIGEST: This bill implements targeted rate increases for the
community-based developmental services system, and forgives
retroactive recoupment of Medi-Cal payment reductions and rate
freezes, pursuant to AB 97 (Committee on Budget, Chapter 3,
Statutes of 2011), for distinct part nursing facilities.
Conference Committee Amendments delete the prior version of the
bill and insert the current language.
ANALYSIS:
Existing law:
1)Establishes the Department of Developmental Services (DDS),
which oversees the provision of services and supports to over
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290,000 persons with developmental disabilities and their
families, pursuant to the provisions of the Lanterman
Developmental Disabilities Services Act, also known as the
Lanterman Act, (Division 4.5 of the California Welfare and
Institutions Code). The Lanterman Act establishes an
entitlement to services and supports for Californians with
developmental disabilities.
2)Establishes the state's Medi-Cal program provides health care
coverage for low income children, their families, and certain
disabled residents of the state. Over the last several years,
there have been a variety of attempts by the state to reduce
payment rates to Medi-Cal providers, in an effort to reduce
state spending on the program. As part of the 2011-12 Budget,
AB 97 (Committee on Budget, Chapter 3, Statutes of 2011)
implemented rate reductions and rate freezes for certain
Medi-Cal providers, including distinct part nursing
facilities.
This bill:
1)Makes the following changes, effective July 1, 2016, except as
otherwise noted below, to the community-based developmental
services system:
a) Requires DDS to submit a rate study to the Legislature
by March 1, 2019, addressing the sustainability, quality,
and transparency of community-based services for
individuals with developmental disabilities.
b) Requires an entity to obtain an independent review of
its financial statements relating to payments made by
regional centers if it receives payments more than or
equal to $500,000 but less than $2 million. Current law
requires an independent review if the entity receives
payments more than or equal to $250,000 but less than
$500,000. This bill also requires an entity to obtain an
independent audit if it receives payments that are equal
to or more than $2 million and allows these entities to
apply for a two-year exemption from the audit requirement.
c) Provides for a 7.5% rate increase for salary and/or
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benefit increases for regional center staff. The funds
used to provide this rate increase cannot be used for
unfunded retirement liabilities or executive staff. The
amount of funding for this purpose is capped at $29.7
million General Fund and total fund estimate is $43.6
million.
d) Provides for a 2.5% rate increase for administrative
costs for regional centers and clients' rights advocates
contracts. The amount of funding for this purpose is
capped at $1.4 million General Fund and total fund
estimate is $2 million.
e) Requires regional centers to maintain documentation on
how this funding was allocated and requires regional
centers to report specified information to DDS by March
10, 2017 and October 1, 2017, regarding the allocation of
this funding. Any regional center that fails to report
this information shall forfeit these rate increases.
f) Requires DDS to describe the implementation of these
rate increases in its 2017-18 May Revision.
g) Provides a 7.5% rate increase for the purpose of
enhancing wages and benefits for staff who spend a minimum
of 75% of their time providing direct services to
consumers. The actual percentage rate increase shall be
determined based on a random sample of service providers
in each service category eligible for the rate. DDS shall
use this information to determine a rate increase, to be
the same for eligible providers in each service category,
which shall be based on the proportion of the rate that is
for direct services in each category. The amount of
funding for this purpose is capped at $169.5 million
General Fund and total fund estimate is $294.8 million.
h) Provides a 2.5% rate increase for administrative
expenses for service providers. The amount of funding for
this purpose is capped at $9.9 million General Fund and
total fund estimate is $17.3 million.
i) Provides that these rate increases do not apply to
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services for which rates are determined by other entities,
such as the Department of Health Care Services or the
Department of Social Services, or that are usual and
customary.
j) Requires DDS to conduct a survey of all providers on
how these rate increases were used by providers. This
survey shall include, but not be limited to, the number of
employees and their salary, wage, and benefit costs;
percentage of time each employee spends providing direct
services; administrative expenses; and additional
information determined by the department.
aa) Requires DDS to describe the implementation of
these rate increases in its 2017-18 May Revision.
bb) Provides a 5% rate increase for supportive and
independent living services. The cost for this rate
increase is $34.3 million ($18 million General Fund) in
2016-17.
cc) Provides for a 5% rate increase for in and
out-of-home respite services. The cost for this rate
increase is $16.4 million ($10 million General Fund) in
2016-17.
dd) Implements a 5% rate increase for Intermediate
Care Facilities for the Developmentally Disabled
(ICF-DDs). This rate increase is achieved by eliminating
the AB 97 (Committee on Budget, Chapter 3, Statutes of
2011), Medi-Cal payment reductions and then increasing the
rates to these providers by 3.7%. This rate increase is
effective August 1, 2016, as the rate year for this
provider type is August to July. The cost for this rate
increase is $24 million ($12 million General Fund) in
2016-17. This bill does not appropriate this funding.
ee) Provides a 5% rate increase for transportation
services. The cost of this rate increase is $13.9 million
($9 million General Fund) in 2016-17.
ff) Provides an 11.1% rate increase (from $30.82 to
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$34.24) for the supported employment program at DDS. The
cost of this rate increase is $10.9 million ($8.5 million
General Fund) in 2016-17. This increase will restore rates
to the level in-effect in 2006.
gg) Establishes a program to increase paid
internship opportunities for individuals with
developmental disabilities and to provide additional
payments to supported employment services providers for
initial placements, placements lasting a continuous six
months, and placements lasting 12 consecutive months.
Placements for this program must be into competitive,
integrated work environments. Regional centers will report
information to DDS regarding the outcomes of this program.
DDS will include this information in its May Revision
fiscal estimate. The cost of this program is $20 million
General Fund in 2016-17.
hh) Provides for pay differentials supporting
bilingual service coordinators at regional centers when
fluency in the second language helps to address the
language needs of the regional center's catchment area,
for a cost of $1 million General Fund. This bill also
provides for implementation of recommendations and plans
to help reduce disparities in the purchase-of-service
expenditures and to encourage the development and
expansion of culturally and linguistically appropriate
services. Activities funding may include, but are not
limited to, paying differentials supporting direct care
bilingual staff of community-based service providers,
parent education programs, cultural competency training,
and outreach, for a cost of $10 million General Fund.
2)Appropriates $287 million General Fund to the DDS effective
July 1, 2016, for the purposes specified above. This bill does
not include an appropriation to the Department of Health Care
Services for the rate increase for ICF-DDs.
3)Prohibits the Department of Health Care Services from
implementing or retroactively recouping the rate reductions
and rate freezes for skilled nursing facilities that are
distinct parts of general acute care hospitals, referred to as
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distinct part nursing facilities, pursuant to AB 97 for dates
of service on or after June 1, 2011, and on or before
September 30, 2013. The cost for this is $122.9 million
General Fund in 2016-17. This bill does not appropriate this
funding.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
SUPPORT: (Verified2/26/16)
Association of Regional Center Agencies
Barton Health
Barton Memorial Hospital
Bear Valley Community Healthcare District
California Association of Health Facilities Developmental
Services Conference
California Disability Services Association
California Disability-Senior Community Action Network
California Hospital Association
California Person Centered Advocacy Partnership
California Respite Association
California State Council on Developmental Disabilities
California Supported Living Network
Cal-TASH
Catalina Island Medical Center
Central Valley Regional Center Inc.
Coalinga Regional Medical Center
Colusa Regional Medical Center
Community Regional Medical Center
Developmental Services Network
Disability Rights California
Easter Seals Disability Services
Eastern Los Angeles Regional Center
Eastern Plumas Health Care
Educate.Advocate.
Family Resource Centers Network of California
George L. Mee Memorial Hospital
IDA California
Jewish Home of San Francisco
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Kaweah Delta Health Care District
Kern Valley Healthcare District
Lanterman Coalition
Mayers Memorial Hospital District
Modoc Medical Center
Motion Picture & Television Fund
Mountains Community Hospital
Orchard Hospital
Palomar Health
People First of California
Regional Center of the East Bay
ResCoalition
San Andreas Regional Center
Seneca Healthcare District
Service Employees International Union
Sharp HealthCare
SoCal Association of People Supporting Employment First
Sonora Regional Medical Center
Strategies to Empower People
Tahoe Forest Hospital District
The Alliance
The Arc California
United Cerebral Palsy California Collaboration
OPPOSITION: (Verified2/24/16)
None received
Prepared by: Michelle Baass / P.H. & D.S. /
2/26/16 14:03:18
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