BILL ANALYSIS Ó
AB 1400
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ASSEMBLY THIRD READING
AB
1400 (Santiago)
As Amended May 6, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Human Services |5-0 |Chu, Calderon, | |
| | |Lopez, | |
| | | | |
| | | | |
| | |Mark Stone, | |
| | |Thurmond | |
| | | | |
| | | | |
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SUMMARY: Establishes an administrative cost cap for specified
in-home respite service providers that receive regional center
funds. Specifically, this bill:
1)Defines administrative costs as all costs other than direct
service expenditures, as specified.
2)Defines direct service expenditures as all amounts actually paid
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and all accounts payable, as specified, as wages and benefits,
including state, federal, and local payroll taxes, workers'
compensation and unemployment insurance premiums, and
recruiting, training, orientation, and background checks for
respite care aides, and other substantially similar benefits
that are directly related to the provision of in-home respite
services.
3)Requires that entities that contract with regional centers to
provide in-home respite services, and have annual revenue
attributable to in-home respite services provided to regional
center consumers of at least $7 million dollars, spend at least
85% of those regional center funds on direct service
expenditures, as defined.
4)Prohibits funds used for direct service expenditures from
including administrative costs.
5)Requires in-home respite service providers and contractors
subject to the provisions of this bill to, upon request, provide
regional centers with access to books, documents, papers,
computerized data, source documents, consumer records, or other
records pertaining to the service providers' and contractors'
negotiated rates.
EXISTING LAW:
1)Establishes an entitlement to services for individuals with
developmental disabilities under the Lanterman Developmental
Disabilities Services (DDS) Act (Lanterman Act). (Welfare and
Institutions Code (WIC) Section 4500 et seq.)
2)Requires all regional center contracts or agreements with
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service providers in which rates are determined through
negotiations between the regional center and the service
provider to expressly require a 15% administrative cost cap for
regional center funds spent by the providers. Stipulates that
direct service expenditures are those costs immediately
associated with the services to consumers being offered by the
provider, and requires that funds spent on direct services do
not include any administrative costs, as defined. (WIC Section
4629.7(a))
3)Requires that all contracts between DDS and regional centers
require a 15% administrative cost cap for all funds appropriated
through a regional center's operations budget. Requires that
funds spent on direct services, as defined, do not include any
administrative costs, as specified. (WIC Section 4629.7(b))
4)Requires the DDS Director to develop program standards and
establish, maintain, and revise, as necessary, an equitable
process for setting state payment rates for in-home respite
services purchased by regional centers from vendored providers.
Defines in-home respite services as intermittent or regularly
scheduled temporary nonmedical care and supervision, provided in
the client's own home, for a regional center client who resides
with a family member. (WIC Section 4690.2(a))
5)Provides that, commencing July 1, 2014, in-home respite services
agency providers with temporary payment rates set by DDS can
seek unanticipated rate adjustments from DDS due to the impacts
of the increased minimum wage, as specified. Requires that rate
adjustment to be specific to increases in payroll costs only to
the extent necessary to bring employee pay into compliance with
the increased state minimum wage, and prohibits such a rate
adjustment from being sought to provide a general wage
enhancement to any employees paid above the increased minimum
wage. (WIC Section 4691.6(g))
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FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
Developmental services: The Lanterman Act (WIC Section 4500 et
seq.) guides the provision of services and supports for
Californians with developmental disabilities. Each individual
under the Lanterman Act, typically referred to as a "consumer," is
legally entitled to treatment and habilitation services and
supports in the least restrictive environment. Lanterman Act
services are designed to enable all individuals served to live
more independent and productive lives in the community.
Direct responsibility for implementation of the Lanterman Act
service system is shared by DDS and 21 regional centers, which are
private nonprofit entities, established pursuant to the Lanterman
Act, that contract with DDS to carry out many of the state's
responsibilities under the Act. The 21 regional centers serve
280,000 consumers, providing services such as residential
placements, supported living services, respite care,
transportation, day treatment programs, work support programs, and
various social and therapeutic activities.
Regional center vendors: Prior to being approved to receive
funding from a regional center for providing services to a
consumer, a service provider must become vendored by the regional
center that oversees the catchment area in which the provider is
located. This "vendorization" process includes verifying that the
provider is qualified to provide the planned services and meets
all other regulatory standards and requirements. There are over
45,000 vendors that provide services paid for by regional centers
in California.
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Regional center rates: Current statute and regulations set forth
rate requirements for regional center rates paid to vendored
providers to facilitate service delivery to regional center
consumers. There are different rates for different types of
services, including the following:
1)Rates set by DDS, which are included in statute or regulation,
or can be set through cost estimates or rate schedules;
2)Rates established by Medi-Cal for the same service, which
require a regional center to pay no more than the Medi-Cal rate;
3)Usual and customary rates, which align with the rates a
particular business charges individuals who do not have
developmental disabilities and are not served by regional
centers;
4)Rates established by the DDS, which apply to out-of-home respite
services provided in facilities with rates established by DDS;
5)Rates set for transportation services to regional center
clients; and
6)Rates set through negotiation between the regional center and
the provider (also known as "negotiated rates"), which are
applied to services that do not fit within any of the other
established rate structures and in which case the maximum rate
is capped at the regional center median rate for that service or
the statewide median rate for that service, whichever is lower.
In-home respite: In-home respite services are intended to provide
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temporary, nonmedical care and supervision to a regional center
client, in his or her own home, for the purpose of assisting
family members in maintaining the client at home, ensuring the
client's safety in the absence of family members, relieving family
members, and providing other socialization and assistance with
activities of daily living that would otherwise be provided by
family members. In California, there are a number of large
agencies that hire or subcontract with in-home respite providers
to provide direct care, or that serve as the employer of record
for in-home respite providers (primarily to help comply with
employment law and payroll tax requirements) for situations in
which a consumer selects and supervises his or her own caregiver.
Rates for in-home respite services are set by DDS either through
state regulations or cost statements and vary based on the
employment model.
Need for this bill: Because in-home respite services are not
included among services with negotiated rate contracts, there is
currently no statutory requirement for in-home respite provider
contracts with regional centers to include an administrative
expenditure cost cap. According to the author, "Respite care is a
vital family support service that keeps individuals with
developmental disabilities living at home. By investing in direct
care and direct caregivers, this bill attempts to improve the
consistency and continuity of respite services to family
caregivers."
Analysis Prepared by:
Myesha Jackson / HUM. S. / (916) 319-2089FN:
0000378
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