BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1427 (Pavley) - Workforce development: developmentally disabled individuals ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: March 28, 2016 |Policy Vote: HUMAN S. 4 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 2, 2016 |Consultant: Brendan McCarthy | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1427 would require the Department of Developmental Services to establish a Work Transition Project to assist regional center consumers currently placed in segregated work settings to transition to competitive integrated employment. Fiscal Impact: Likely one-time costs up to $150,000 for the Department of Developmental Services to develop program requirements, accountability measures, and data collection requirements (General Fund and federal funds). Likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (General Fund and federal funds). Likely annual costs of $5 million to $10 million per year to provide additional job readiness and support services to SB 1427 (Pavley) Page 1 of ? regional center consumers currently participating in work activity programs or group supported employment programs (General Fund and federal funds). There are about currently about 15,000 regional center consumers who participate in one of these two programs. Assuming that 10% of those consumers participate in the program authorized in the bill and that those consumers, on average, receive the newly authorized services for two quarters, total net costs for those new services would be about $8 million per year. (This includes an offsetting reduction in service hours those consumers are currently receiving.) Likely annual savings in the millions per year (General Fund and federal funds). To the extent that the new services authorized in the bill improve the employment prospects of regional center consumers, it is likely that consumers will shift from more expensive work activity programs and group supported employment programs to less expensive individual supported employment programs (wherein consumers are employed in the community, with ongoing assistance from regional center vendors). For example, if 50% of program participants are able to shift to individual supported employment, annual savings would be about $3 million per year. It is important to note that the increased costs for a regional center consumer using the new services would likely only occur for the first year or two, whereas savings would continue as long as the consumer stays in individual supported employment. Thus the savings would increase over time while program costs are likely to remain relatively flat. 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. Regional centers provide a variety of services to consumers whose disabilities do not preclude them from some level of SB 1427 (Pavley) Page 2 of ? employment. Work activity programs (often referred to as sheltered workshops) allow consumers to work alongside other individuals with disabilities in a managed location, under the supervision of regional center vendor employees. Group supported employment programs allow consumers to work outside of a sheltered location, but still with the support of regional center vendors - for example alongside other consumers on landscaping or janitorial crews. Individual supported employment services are designed to support consumers working in a competitive employment situation. Individual supported employment services assist consumers in seeking out employment opportunities, getting hired, and adjusting to working in a competitive employment situation. The federal Centers for Medicare and Medicaid Services has adopted revised program regulations that apply to regional center consumers participating in the state's Home and Community Based Services Waiver. Under the changes, the state will be obligated to ensure that consumers are integrated into the community, including having access to work in competitive employment. The Department of Developmental Services is in the process of developing a plan to bring its waiver programs into compliance with the new federal requirements. It is likely that the state will have to phase out work activity programs as a placement for most consumers under the federal regulations. AB X2 1 (Thurmon, Statutes of 2016) raised a number of rates for services provided through the regional center system, including implementing an 11.1% rate increase for supported employment services and a 7.5% increase for enhancing wages and benefits for staff who spend most of their time providing direct services to consumers. That bill also requires the Department to submit a rate study to the Legislature by March 1, 2019. Proposed Law: SB 1427 would require the Department of Developmental Services to establish a Work Transition Project to assist regional center consumers currently placed in segregated work settings to transition to competitive integrated employment. Specific provisions of the bill would: Require the Department to establish a Work Transition Project by July 1, 2017; Require the Project to allow regional centers to allow blended SB 1427 (Pavley) Page 3 of ? or braided forms of integrated services; Authorize up to 75 hours per quarter, at a rate up to $40 per hour, for vendors to provide individual job readiness and support services for consumers currently placed in segregated work settings to move towards competitive integrated employment; Require the Department to allow the regional centers to customize programs for consumers, by partnering with work activity program and group supported employment program vendors to transition consumers to integrated competitive employment; Authorize the Department to waive regulatory requirements that conflict with the bill's requirements; Require the Department to assess outcomes and report to the Legislature. Related Legislation: SB 1024 (Hancock) would require the Department of Developmental Services to provide an incentive (of at least a 10% rate differential) to encourage the provision of individual supported employment services. That bill will be heard in this committee. SB 577 (Pavley, Statutes of 2014) created a pilot project to evaluate whether community based vocational development services are necessary for supported employment. That pilot project has not been implemented. Staff Comments: The intent of the bill is to provide services needed to move regional center consumers from less-integrated employment settings (work activity programs and group supported employment programs) to employment opportunities more fully integrated in the community and the competitive job market. This concept is aligned with the general requirements of the new federal guidelines for regional center consumers who participate in the Home and Community Based Services Waiver. However, because the Department has not fully developed its plan to transition the current system to one compliant with those requirements, it is not yet clear how the proposed program in this bill will conform to those plans. SB 1427 (Pavley) Page 4 of ? -- END --