BILL ANALYSIS Ó
SENATE COMMITTEE ON HUMAN SERVICES
Senator McGuire, Chair
2015 - 2016 Regular
Bill No: SB 1024
-----------------------------------------------------------------
|Author: |Hancock |
-----------------------------------------------------------------
|----------+-----------------------+-----------+-----------------|
|Version: |March 29, 2016 |Hearing |April 12, 2016 |
| | |Date: | |
|----------+-----------------------+-----------+-----------------|
|Urgency: |No |Fiscal: |Yes |
----------------------------------------------------------------
-----------------------------------------------------------------
|Consultant|Taryn Smith |
|: | |
-----------------------------------------------------------------
Subject: Developmental services: supported employment
SUMMARY
This bill would require the Department of Developmental Services
(DDS) to provide a clear financial incentive in order to
encourage the development of and support for consumers in
individual supported employment in integrated work settings. The
bill would require the incentive to establish at least a 10%
rate differential for individual supported employment services.
The bill would authorize the department to adjust the rate for
individual supported employment services to administer the
incentive payment, as specified. The bill would also require the
department to review the need for clarifying placement fees and
bonus payments, as specified.
ABSTRACT
Existing law:
1) Establishes the Lanterman Developmental Disabilities
Services Act, which declares California's responsibility
for providing an array of services and supports to meet the
needs of each person with developmental disabilities in
the least restrictive environment, regardless of age or
degree of disability, and to support their integration into
the mainstream life of the community. (WIC 4500, et seq.)
SB 1024 (Hancock) PageB
of?
2) Establishes a system of nonprofit Regional Centers to
provide fixed points of contact in the community for all
persons with developmental disabilities and their families,
to coordinate services and supports best suited to them
throughout their lifetime. (WIC 4620)
3) Establishes an Individual Program Plan (IPP) and defines
that planning process as the vehicle to ensure that
services and supports are customized to meet the needs of
consumers who are served by regional centers. (WIC 4512)
4) Establishes an individual habilitation services plan and
specifies areas in which consumers must meet individual
employment goals. (WIC 4853, WIC 4854)
5) Defines habilitation services as activities purchased
for regional center consumers, including services provided
under the Work Activity and Supported Employment programs
to prepare and maintain consumers at their highest level of
vocation functioning or to prepare them for referral to
vocational rehabilitation services. (WIC 4851)
6) Requires a regional center to authorize appropriate
services for a consumer while he or she is on a waiting
list for services from the Department of Rehabilitation
(DOR), as specified. (WIC 4855)
7) Establishes fees and hourly rates for service providers
who work with consumers in various job development and
support activities. (WIC 4860)
8) Establishes an Employment First Policy in California to
prioritize opportunities for integrated, competitive
employment for individuals with developmental disabilities,
regardless of the severity of their disabilities, as
specified. (WIC 4869)
SB 1024 (Hancock) PageC
of?
9) Establishes in federal law state reimbursements for
achieving work outcomes for individuals with disabilities,
as specified. (CFR 411.582)
10)States that individualized services may be provided on or
off the jobsite; shall consist of job coaching and other
supported employment services for regional center-funded
consumers in a supported employment placement at a job
coach-to-consumer ratio of one-to-one; shall decrease over
time until stabilization in the employment is achieved;
consumers in Supported Employment Programs receiving less
than the minimum wage shall be paid according to
productivity level on the basis of appropriately conducted
productivity studies, as specified. [Title 17 CCR section
58830(e)(3)]
11) Defines stabilization to mean the consumer has reached
the employment outcomes as specified in the Individualized
Plan for Employment and IPP, the consumer has learned and
maintained the job for a minimum of sixty (60) consecutive
work days, and is expected to continue in the employment.
Stabilization rates (the ratio of job coaching hours to the
consumers work hours per month) for consumers receiving
individualized services in supported employment require the
following percentages of intervention be achieved: (A) 20%
intervention or less for 60 days; or (B) 25% intervention
or less for 90 days; or (C) 30% intervention or less for
120 days. (Title 17 CCR section 58801(e)(67)
Special Session Legislation:
Assembly Bill X2-1 makes a number of changes to the
community-based developmental services system. While the rate
changes provided in AB X2-1 take effect on July 1, 2016, the
changes in law will take effect 91 days after special session
ended, which is June 9, 2016. AB X2-1 makes the following
changes that relate to supported employment in integrated work
settings:
1) Requires the DDS to submit a rate study to the
Legislature by March 1, 2019, addressing the
sustainability, quality, and transparency of
SB 1024 (Hancock) PageD
of?
community-based services for individuals with
developmental disabilities.
2) Provides an 11.1% rate increase (from $30.82 to
$34.24) for the supported employment program at DDS.
3) 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.
4) Provides for a 2.5% rate increase for administrative
costs for regional centers and clients' rights advocates
contracts.
5) 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.
6) 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.
This bill:
1) Makes a series of legislative findings and declarations
regarding employment opportunities for individuals with
disabilities.
SB 1024 (Hancock) PageE
of?
2) Declares legislative intent that, in enacting this act,
both of the following occur:
a) Consistent with California's Employment First Policy
and the forthcoming federal Home- and Community-Based
Services rules, incentivize individualized services to
transition individuals with intellectual and
developmental disabilities into competitive, integrated
employment, and protect federal financial participation.
b) Direct DDS to review the rate setting methodology
for individual placement supported employment as a
priority in the state's rate study that is required on or
before March 1, 2019.
1) Requires DDS, to the extent funds are appropriated by
the annual Budget Act or by Chapter 3 of the Second
Extraordinary Session of the Statutes of 2016, to provide
for a clear financial incentive in order to encourage the
development of and support for consumers in individual
supported employment in integrated work settings. The
incentive shall establish at least a 10 percent rate
differential for individual supported employment services.
2) Permits DDS to adjust the rate for individual placement
supported employment services to administer the incentive
payment, as specified.
3) Requires the department to consider a new rate setting
methodology for employment and habilitation services as a
priority to ensure consumers are offered choice and
opportunity in community living under the provisions of the
Lanterman Developmental Disabilities Services Act.
4) Requires the department to review the need for
clarifying placement fees and bonus payments in the state's
employment programs under the jurisdiction of both the
DDS and the Department of Rehabilitation, as specified.
SB 1024 (Hancock) PageF
of?
5) Requires the department to report each year to the
Legislature during the annual budget process regarding the
number of people serviced and information concerning the
priority consumers have about access to employment
opportunities. The report shall also present relevant
information regarding wages paid to these consumers,
educational and skill development activities, and the
relative poverty indicators linked to the service
population served by the Lanterman Developmental
Disabilities Services Act.
FISCAL IMPACT
This bill has not yet been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
Purpose of the bill:
California's Employment First Policy and the federal Workforce
Innovation and Opportunity Act recognize that competitive,
integrated employment is an essential component for individuals
with intellectual and developmental disabilities to lead
productive and meaningful lives, be a part of their communities,
make friends and earn money to help improve their economic
outcome and status. However, in 2012, only 12.4 percent of
working age individuals with developmental disabilities
(approximately 13,410 out of 108,000) reported any income at
all. The majority of these individuals received income through
work activity programs, with only 4,341 consumers receiving
income through individualized services.
According to the author, a key service for helping individuals
with developmental disabilities to obtain and maintain
competitive, integrated employment is individual placement
supported employment, which consists of support by a job coach
to an individual to help him or her adapt to the work
environment and learn to perform the work. The author states
that since 2008, when the supported employment rate was reduced
by 10 percent, at least 500 fewer individuals with developmental
disabilities are competitively employed.
SB 1024 (Hancock) PageG
of?
According to the author, years of frozen rates and the fact
that this is the only rate set in statute has had the unintended
consequence of shutting this critical service out of fiscal
relief in restorations for increased costs like sick leave and
minimum wage increases. Until this year's funding in ABX2-1,
this service has received no cost relief since 2006. ABX2-1
restored the rate for group and individual supported employment
to the 2006 level and permits an additional adjustment pursuant
to the wage and benefit and administrative cost increase
contained in that bill.
The author further states that the hourly rate for providers of
individual placement supported employment for consumers with
intellectual and developmental disabilities is not sufficient to
ensure the availability of this service. As a result, fewer
consumers have access to this critical service. California's
rate for supported employment also lags behind other states
nationally. New York, Oregon, Washington, and Arizona all have
rates that exceed $56 per hour, which is more than 60 percent
higher than California for the same services.
Federal regulatory requirements specify that group supported
employment can only be used for short-term development on an
individual's path to competitive integrated employment.
According to the author, the incentivized rate proposed in SB
1024 would allow providers to offer individual placement
supported employment without enduring significant losses as a
result of offering this service.
The author states that this bill would provide a clear fiscal
incentive to providers of individual supported employment by
establishing at least a 10 percent rate differential for
individual placement supported employment in an effort to
increase the capacity of this service, protect federal financial
participation, and allow the department to adjust the rate to
effectuate this provision. The incentivized rate would be
funded with existing appropriations.
Regional Centers
California's 21 nonprofit regional centers are part of a system
of care for individuals with developmental disabilities overseen
SB 1024 (Hancock) PageH
of?
by DDS. DDS is responsible for coordinating care and providing
services for nearly 290,000 people who receive services and
supports to live in their communities, as well as approximately
1,000 people who lived in developmental centers as of March
2016. Regional centers provide diagnosis and assessment of
eligibility and case managers help to plan, access, coordinate
and monitor the services and supports that are needed because
of an individual's developmental disability. Services for
consumers are determined through an individual program plan
(IPP).
Employment First Efforts
AB 287 (Beall, Chapter 231, Statutes of 2009) required that the
State Council on Developmental Disabilities establish a standing
Employment First Committee to identify strategies, best
practices, and incentives, and to develop an Employment First
Policy. The goal of the policy was to increase the number of
people with developmental disabilities who are employed in
integrated work, self-employment, and microenterprises, and in
the number earning wages at or above minimum wage. A subsequent
report, released in 2011, found that 26.5 percent of working-age
adults with developmental disabilities live below the federal
poverty line compared with 13 percent of same-aged adults in the
general population. Other findings included a need for
additional supports for individuals to prepare for and maintain
employment. That report, and a subsequent report in 2012,
prompted a number of legislative efforts.<1>
There are a variety of ways for consumers to be supported in a
work environment. Typically, regional centers contract with
employment services programs and providers to address the
employment needs of individuals with developmental disabilities.
Consumers are placed in jobs according to their individual
skills, needs and choices, and provided support services on an
individual bases or in a group.
---------------------------
<1>http://www.scdd.ca.gov/res/docs/pdf/Employment_First/2012%20EF
C%20Annual%20Report%20Jan%2016%202013.pdf
SB 1024 (Hancock) PageI
of?
Work Activity Programs are employment services programs in a
sheltered work environment for consumers who have acquired basic
vocational and independent living skills. Consumers are paid at
a daily per capita rate based on productivity.
Supported Employment Programs are community-based rehabilitation
programs that focus on helping consumers obtain, retain or
maintain employment in integrated settings either individually
or in groups, such as landscaping crews. Individual placement
supported employment is a service that requires one job coach to
one consumer. Group supported employment, has a 1:3 job coach
to consumer ratio. Support is usually provided by a job coach
who meets regularly with the individual on the job to help him
or her learn the necessary skills and behaviors to work
independently. As the individual gains mastery of the job, the
support services are gradually phased out.
For individual supported programs, providers are paid only for
certain activities, such as one way transportation and time
actually spent on the job, but not for time spent preparing the
consumer for employment. For example, developing soft skills,
like interview preparation, are not reimbursable. Consumers
participating in individual supported employment often require
more services than those in group programs, which make
individual supports more expensive to operate. Providers say
they are not reimbursed for the actual cost of the services.
According to data from the State Council on Developmental
Disabilities, the number of consumers participating in
individual supported employment programs has fallen from a high
of 5,065 in Fiscal Year 2008/09 to 4,373 in Fiscal Year 2014/15,
a decrease of 692 consumers.
----------------------------------------------------------------
| | Supported Employment Programs |
| | |
| Fiscal Year | |
| | |
----------------------------------------------------------------
SB 1024 (Hancock) PageJ
of?
|-------------+--------------------------+-----------------------|
| | Consumers Participating | Consumers |
| | in Individual Programs |Participating in Group |
| | | Programs |
|-------------+--------------------------+-----------------------|
| 2005/06 | 4,842 | 4,548 |
|-------------+--------------------------+-----------------------|
| 2006/07 | 4,976 | 5,264 |
|-------------+--------------------------+-----------------------|
| 2007/08 | 5,004 | 5,623 |
|-------------+--------------------------+-----------------------|
| 2008/09 | 5,065 | 5,863 |
|-------------+--------------------------+-----------------------|
| 2009/10 | 4,841 | 5,903 |
|-------------+--------------------------+-----------------------|
| 2010/11 | 4,684 | 5,932 |
|-------------+--------------------------+-----------------------|
| 2011/12 | 4,505 | 5,425 |
|-------------+--------------------------+-----------------------|
| 2012/13 | 4,345 | 5,589 |
|-------------+--------------------------+-----------------------|
| 2013/14 | 4,341 | 5,729 |
|-------------+--------------------------+-----------------------|
| 2014/15 | 4,373 |5,912 |
----------------------------------------------------------------
According to DDS, as of May 2015, there were 188 vendors
offering individual employment placements and 167 vendors
offering group placements. It should be noted that most vendors
provide both individual and group placements.
Home and Community-Based Services Waiver Changes
Centers for Medicare and Medicaid Services (CMS) regulations
adopted in 2014 for Home and Community-Based Services (HCBS)
will require programs to meet new criteria in order to qualify
for federal financial participation. The purpose of the rule is
to ensure that individuals receive services in settings that are
integrated in and support full access to the greater community,
including opportunities to seek employment and work in
SB 1024 (Hancock) PageK
of?
competitive and integrated settings.<2>
CMS requires states to submit their plans for changes to its
service delivery system to comply with the final rule.
California's Department of Health Care Services (DHCS) is
coordinating the state's response, with input from DDS and other
affected departments. On August 14, 2015, DHCS, submitted the
Statewide Transition Plan for home and community-based settings
to CMS for approval. The state is currently negotiating
elements of its plan with CMS. The state must be in full
compliance with the federal HCBS guidelines in order to receive
federal funding by March 17, 2019.
Related legislation:
AB 287 (Beall, Chapter 231, Statutes of 2009) established an
"Employment First" effort for the State to undertake, which has
led to the State Council on Developmental Disabilities to put
together an "Employment First" policy and several attempts to
get that policy passed into law.
AB 1041 (Chesbro, Chapter 677, Statutes of 2013) expanded the
definition of competitive integrated employment and required
regional centers to ensure that consumers, beginning at 16 years
of age, are provided with information about options for
integrated competitive employment and other services, including
postsecondary education.
SB 577 (Pavley, Chapter 431, Statutes of 2014) established a
four-year pilot project to create and evaluate whether
community-based vocational development services are determined
to be a necessary step to achieve a supported employment
outcome. The pilot has not been enacted.
ABX2-1 (Thurmond, Chapter 3, Second Extraordinary of Session
---------------------------
<2>https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Long-Term-Services-and-Supports/Home-and-Community-Based-S
ervices/Home-and-Community-Based-Services.html
SB 1024 (Hancock) PageL
of?
2016) implemented targeted rate increases for the community
based developmental services system.
AB 1183 (Committee on Budget, Chapter 758, Statues of 2008)
reduced from $34.24 to $30.82, the hourly rate for supported
employment services, and decrease specified fees paid to
providers upon intake, and retention of a consumer under the
program.
COMMENTS
As previously discussed, ABX2-1 provides an 11.1% rate increase
(from $30.82 to $34.24 per hour) for both individual and group
supported employment programs. This restored the rates to the
level in effect in 2006. ABX2-1 also allows for additional rate
increase, which will be determined and established by the
department by July 1, 2016.
SB 1024 will require that services for individual supported
employment in integrated work settings are paid at a rate that
is at least 10% higher than the yet to be determined rate for
group supported employment, pursuant to ABX2-1. According to
the author, the incentivized rate would be funded with existing
appropriations that have not yet been allocated.
ABX2-1 also requires the department to establish guidelines and
oversee a program that increases 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 placement lasting 12 consecutive months. Placements
for this program must be into competitive, integrated work
environments. Additionally, ABX2-1 requires DDS to submit a
rate study to the Legislature on or before March 1, 2019. The
study shall address the sustainability, quality, and
transparency of community-based services for individuals with
developmental disabilities.
SB 1024 requires DDS to consider a new rate setting methodology
for employment and habitation services as a priority; review the
need to clarify placement fees and bonus payments; and report
annually regarding the number of people served. SB 1024 also
sates legislative intent that DDS review the rate setting
SB 1024 (Hancock) PageM
of?
methodology for individual placement supported employment as a
priority in the state's rate study that is required by ABX1-2 on
or before March 1, 2019.
Federal and state laws and regulations encourage and support
individuals receiving services in settings that are integrated
in and support full access to the greater community, including
opportunities to seek employment and work in competitive and
integrated settings. According to the author, in order to
encourage providers to offer the individualized service, an
incentivized rate is necessary and would increase the capacity
of this service, protect federal financial participation, and
allow the department to adjust the rate to effectuate this
provision.
POSITIONS
Support:
California Disabilities Services Association (Co-sponsor)
State Council on Developmental Disabilities(Co-sponsor)
Alliance Supporting People with Intellectual and
Developmental Disabilities
County of Alameda
Futures Explored
The Alliance Supporting People with Intellectual and
Developemental Disabillities
Oppose:
None received.
-- END -