BILL ANALYSIS Ó
SB 1427
Page 1
Date of Hearing: June 28, 2016
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Susan Bonilla, Chair
SB
1427 (Pavley) - As Amended June 21, 2016
SENATE VOTE: 39-0
SUBJECT: Workforce development: developmentally disabled
individuals
SUMMARY: Requires the Department of Developmental Services
(DDS) to establish a Work Transition Project, as specified, to
facilitate the delivery of integrated services and assist in
state compliance with federal Home and Community-Based Services
(HCBS) Waiver regulations.
Specifically, this bill:
1)States Legislative intent to ensure that individuals with
developmental disabilities who are earning income do not lose
their vocational opportunities and earning power due to
changes related to the home- and community-based services
settings rule, as specified.
2)Makes a number of findings and declarations related to the
employment of individuals with developmental disabilities.
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3)Requires DDS to, by July 1, 2017, establish a Work Transition
Project to assist in state compliance with federal HCBS Waiver
regulations by March 31, 2019, to include a process for
regional centers to allow for the provision of integrated
services, as specified, using allowable services under
existing state and federal law.
4)Authorizes integrated services approved under the Work
Transition Project to be eligible to receive available funding
appropriated for transitioning programs toward compliance with
federal HCBS regulations.
5)Requires DDS to allow regional centers to partner with work
activity programs and other similar work-related day services
to increase opportunities for consumers and support consumers
who choose to move towards competitive integrated employment,
as specified.
6)Prohibits the rate for vendors to provide needed job readiness
and support services for consumers currently placed in work
activity programs and similar work-related day services, as
specified, from exceeding $40 per hour.
7)Permits hours of participation in job readiness and support
services to be provided in addition to, or in lieu of, the
hours of participation in existing work activity programs and
similar day services, as specified.
8)Authorizes DDS to waive certain regulations in a manner that
maintains the purpose of the regulation while allowing
flexibility, as specified, if necessary to provide flexibility
from program requirements that have the effect of social
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isolation and restricting community integration activities.
9)Requires DDS to allow regional centers to partner with group
supported employment program and similar day services to
support career pathway development, as specified.
10)Permits additional job coaching hours to be authorized to
support consumers who choose to move toward competitive
integrated employment, as specified.
11)Requires DDS to measure the decrease in time that it takes a
consumer under the Work Transition Project to become job ready
and to transition into an integrated work setting and further
requires DDS to report to the Legislature regarding the
project and measurable outcomes, as specified.
EXISTING LAW:
1)Establishes the Lanterman Developmental Disabilities Services
Act (Lanterman Act), providing an entitlement to services for
individuals with developmental disabilities.
(WIC 4500 et seq.)
2)Grants all individuals with developmental disabilities, among
all other rights and responsibilities established for any
individual by the United States Constitution and laws and the
California Constitution and laws, a number of rights,
including the right to treatment and habilitation services and
supports in the least restrictive environment. (WIC 4502)
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3)Establishes a system of nonprofit regional centers throughout
the state to identify needs and coordinate services for
eligible individuals with developmental disabilities and
requires DDS to contract with regional centers to provide case
management services and arrange for or purchase services that
meet the needs of individuals with developmental disabilities,
as defined. (WIC 4620 et seq.)
4)Requires the development of an individual program plan (IPP)
for each regional center consumer, which specifies services to
be provided to the consumer, based on his or her
individualized needs determination and preferences, 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)
5)Creates a process by which regional centers may "vendorize"
service providers, thereby providing a path to contract for
services with that provider and ensuring maximum flexibility
and availability of appropriate services and support for
persons with developmental disabilities. (WIC 4648)
6)Authorizes regional centers to solicit an individual or agency
through a request for proposals or other means to provide
needed services or supports not presently available, provided
it is necessary to expand the availability of needed services
of good quality. (WIC 4648(e)(1))
7)Requires regional centers to provide the consumer, his or her
parent, legal guardian, or other appropriate authorized
representative, as specified, at least annually, a statement
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of services and supports the regional center purchased, for
the purpose of ensuring that the services are delivered. (WIC
4648(h))
8)Authorizes DDS and regional centers to monitor services and
supports purchased for regional center consumers without prior
notice, as specified, and authorizes DDS to conduct fiscal
reviews and audits of service providers' records. (WIC
4648.1(a))
9)Establishes the state's Employment First Policy, whereby
opportunities for integrated, competitive employment are
required to be given the highest priority for working age
individuals with developmental disabilities, regardless of the
severity of their disabilities. (WIC 4869)
10)Defines "competitive employment" to mean work in the
competitive labor market that is performed on a full- or
part-time basis in an integrated setting and for which the
employee is compensated at or above the minimum wage, but not
less than the customary wage and level of benefits paid for
the same or similar work performed by individuals who are not
disabled. (WIC 4868 (d)(1))
11)Defines "integrated employment" to mean the engagement of an
employee with a disability in work in a setting usually found
in the community, where interaction takes place between the
employee and individuals without disabilities other than those
who are providing services, to the same extent that
individuals without disabilities in comparable positions
interact with other persons. (WIC 4868 (d)(2))
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12)Establishes regulations regarding the Medicaid Home and
Community-Based Services state plans. (42 CFR 441.710)
FISCAL EFFECT: According to the Senate Appropriations
Committee's May 2, 2016, analysis, this bill may result in the
following costs:
1)Likely one-time costs up to $150,000 for DDS to develop
program requirements, accountability measures, and data
collection requirements (General Fund and federal funds).
2)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).
3)Likely annual costs of $5 million to $10 million per year to
provide additional job readiness and support services to
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.)
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4)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.
The May 2, 2016, Senate Appropriations Committee's analysis also
notes that 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.
COMMENTS:
Developmental services: Developmental disabilities are
disabilities that originate before an individual attains 18
years of age and that are expected to continue indefinitely as a
substantial disability for that individual. Developmental
disabilities include intellectual disabilities, cerebral palsy,
epilepsy, and autism spectrum disorders, as well as those
disabling conditions similar to an intellectual disability that
require care and management similar to that required by
individuals with an intellectual disability.
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Guidance for the delivery of services and supports to
Californians with developmental disabilities is found in the
Lanterman Act (WIC § 4500 et seq.). This Act entitles
individuals with developmental disabilities (often referred to
as "consumers") to treatment and habilitation services and
supports in the least restrictive environment; services are
designed to enable all consumers to live more independent and
productive lives in the community.
The developmental services system is administered by DDS and a
network of 21 regional centers across the state, 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. These 21 regional centers serve
over 300,000 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. Another
approximately 980 consumers live at one of California's three
Developmental Centers-and one state-operated, specialized
community facility-which provide 24-hour habilitation and
medical and social treatment services.
Individuals with developmental disabilities receive services
that are outlined in an individual program plan (IPP) which is
based on that individual's needs and choices and is developed by
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an IPP team that includes, among other individuals, the
consumer, his or her legally authorized representative, and one
or more representatives from the regional center. The Lanterman
Act requires that the IPP promote community integration and
maximize opportunities for each consumer to develop
relationships, be part of community life, increase control over
his or her life, and acquire increasingly positive roles in the
community. The IPP must prioritize those services and supports
that allow minors to live with their families and adults to live
as independently as possible in the community.
Vendorization of community-based services: The 21 regional
centers receive an operations budget from DDS to carry out
activities related to eligibility determination and development
of IPPs. Regional centers also receive funds to purchase over
150 different types of services from vendors; services and
supports are aimed at supporting individuals to live in the
community and can include in-home care, housing, transportation,
activity programs, and employment programs. (Regional centers
are the payer of last resort and therefore typically pay for
services only in instances where a consumer does not have
private health insurance or cannot be referred to "generic"
services; the majority of regional center consumers are enrolled
in Medi-Cal.)
"Vendorization" is the process by which service providers are
identified, selected, and utilized, based on qualifications and
requirements, to provide services to consumers. Through this
process, regional centers are able to verify that an applicant
vendor complies with all necessary requirements and regulations
prior to providing services; the regional center with the
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catchment area in which the service is located vendors that
services provider. The vendoring regional center is then
responsible for verifying that the applicant vendor meets all
necessary licensing, and other, requirements; the regional
center will also determine the appropriate vendor category for
the service to be provided. If an applicant meets all necessary
requirements, a regional center is required to vendor that
applicant - however, this does not obligate the regional center
to purchase services from that vendor. Other regional centers
are also able to utilize the services of a provider vendored by
another regional center. There are currently over 44,000
vendors that provide services paid for by regional centers in
California.
Employment First Policy: AB 1041 (Chesbro), Chapter 677,
Statutes of 2013, adopted the state's Employment First Policy,
making California the 12th state to adopt such a policy.
According to Welfare and Institutions Code Section 4869 (a)(1),
California's Employment First Policy, which is contained within
the Lanterman Act, " is the policy of the state that
opportunities for integrated, competitive employment shall be
given the highest priority for working age individuals with
developmental disabilities, regardless of the severity of their
disabilities."
IPP planning for a transition-age youth or working age adults
must consider the Employment First Policy. Per the Employment
First Policy, integrated competitive employment - employment in
a workplace where an individual with a disability works with
people without disabilities, earns at least the minimum wage,
and receives the same pay, benefits, and opportunities for
promotion as workers without disabilities - is intended to be
the first option considered by planning teams for working age
individuals, although individuals may choose goals other than
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integrated competitive employment. DDS coordinates with the
state Department of Rehabilitation (DOR) and the California
Department of Education to deliver services.
Work services: Within the developmental services system, the
Work Services Program addresses the employment needs of regional
center consumers; regional center consumers work in a variety of
settings. "Supported Employment" services can be provided
through the Habilitation Services Program or through DOR's
vocational rehabilitation program. Supported Employment can
involve individual or group placements, where a consumer might
work in the community with support services and on-the-job
training provided by job coaches, and is paid directly by the
employer. "Work Activity Program" services are typically
offered in a sheltered work setting, and include paid work, work
adjustment, and supportive habilitation services; in a sheltered
work setting, consumers are paid at a daily per capita rate
based on productivity.
Individual Placement Supported Employment constitutes
competitive integrated employment; according to State Council on
Developmental Disabilities data from 2012-13, only the 4,431
consumers in Individual Placement Supported Employment - (5.5%)
of the almost 80,000 regional center clients served in day or
employment services - were therefore served in competitive
integrated employment. Another 5,589 consumers were served in
Group Placement Supported Employment, and 10,242 were in Work
Activity Programs (sheltered work settings). (Almost 60,000
other consumers were served in "look alike" day programs,
typically in non-work settings.)
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Home and Community-Based Services waiver: Waivers enable states
to apply for greater flexibility in their use of federal
Medicaid dollars. Section 1915(c) waivers, known as Home and
Community-Based Services (HCBS) waivers, permit states to use
Medicaid dollars to provide long-term care services in home- and
community-based settings as an alternative to the use of
institutional settings. A variety of services can be offered
under an HCBS waiver, including personal care, case management,
adult day health, habilitation, home health aide, and other
services.
California's HCBS waiver provides a significant source of
federal funds to California; for 2016-17, the DDS budget
anticipates close to $1.7 billion in federal funds under the
HCBS waiver, to be used to pay for services for regional center
consumers and for regional center operations.
In 2014, the federal Centers for Medicare and Medicaid Services
(CMS) issued a new rule regarding HCBS waivers reflecting, among
other things, CMS's intent that individuals receiving services
through Medicaid's HCBS programs are able to fully access the
benefits of community living and receive services in the most
integrated setting. California must come into full compliance
with these regulations by March 2019. Included among the many
changes in the new regulations is the requirement that
individuals with developmental disabilities be offered greater
opportunity to obtain competitive, integrated employment.
According to the new regulations, the home and community-based
setting is "integrated in and supports full access of
individuals receiving Medicaid HCBS to the greater community,
including opportunities to seek employment and work in
competitive integrated settings, engage in community life,
control personal resources, and receive services in the
community, to the same degree of access as individuals not
receiving Medicaid HCBS." (42 CFR 441.710 (a)(1)(i))
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Need for this bill: In 2011-12, 13% of working age Californians
with developmental disabilities were found to be employed,
compared to 73% of the state's general population. For those
regional center consumers who are employed, the author contends
that many will see their employment threatened by the pending
changes per the new HCBS waiver rule, and that specific
attention should be given during the interim transition period
such that these individuals have reasonable access to more
integrated work settings of their choice. The author cites the
need for job discovery, soft skills training, and flexible
employment service models to help assist consumers in acquiring
and maintaining competitive, integrated employment.
The author states that:
"California's Employment First Policy and changes to the
federal home and community-based services (HCBS) setting rule
require the state to increase opportunities for individuals
with developmental disabilities to achieve competitive,
integrated employment.
The purpose of the HCBS rule is to ensure that individuals
receive services in settings that are integrated in and
support full access to the greater community, which includes
opportunities to seek employment and work in competitive and
integrated settings. In order to ensure continued federal
financial participation, services in California must follow
the new rules by March 2019.
[This bill] will increase opportunities for individuals with
developmental disabilities to engage in job discovery and job
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readiness training to assist their transition to competitive,
integrated employment and to support employment success.
The bill would also allow the blending of services so that
providers can engage in job discovery and job readiness with
their consumers to ensure that they have choice in their
employment goals. By using existing service categories, this
focused redesign allows the existing federal waivers to
finance these services during the time when the state is
working on the HCBS transition plan.
[This bill] will start to build the self-sufficiency of adults
with developmental disabilities - including increased earning
capacity and reduced dependence on government benefit support
- by providing the necessary services to transition into more
competitive, integrated employment."
Recommended amendments: In order to clarify the reporting
requirements contained in this bill, and to make technical
changes, committee staff recommends the following amendments:
Committee staff recommends the following amendment on line 5 of
page 2 of the bill:
1
SECTION 1. (a)It is the intent of the Legislature to ensure
2
that individuals with developmental disabilities who are earning
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3
income do not lose their vocational opportunities and earning
4
power due to changes related to the home- and community-based
5
services settings rule . due to the implementation of the
Workforce
6
Innovation and Opportunity Act.
Committee staff recommends the following amendments starting on
line 9 of page 5 of the bill:
9
(d)The department shall assess the decrease in change in the
amount of time that it takes
10
a consumer under these provisions , as compared to previous
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modes of service delivery, to become job ready and to
11
transition into a n integrated work Competitive Integrated
Employment setting. The department shall
12
report to the budget and policy committee s of each house of
the Legislature
13
during the annual budget process regarding the implementation,
use , and oversight of these
14
provisions and the measurable assessed outcomes related to job
readiness and transition into Competitive Integrated Employment
settings . Any report submitted
15
pursuant to this subdivision shall be submitted in compliance
with
16
Section 9795 of the Government Code.
PRIOR LEGISLATION:
SB 577 (Pavley), Chapter 431, Statutes of 2014, required,
contingent upon the receipt of federal funding, DDS to conduct a
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four-year demonstration project regarding the impacts of
community-based vocational development services on employment
outcomes for regional center consumers and on
purchase-of-service costs for working-age adults.
AB 1041 (Chesbro), Chapter 677, Statutes of 2013, created a
statewide Employment First Policy and set forth requirements
related to the inclusion of employment opportunities and
services in a regional center consumer's IPP.
REGISTERED SUPPORT / OPPOSITION:
Support
California Disabilities Services Association (CDSA) - sponsor
Futures Explored, Inc.
National Association of Social Workers, CA Chapter
The Alliance
The ARC
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Opposition
None on file.
Analysis Prepared by:Daphne Hunt / HUM. S. / (916)
319-2089