BILL ANALYSIS Ó SB 1427 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 1427 (Pavley) - As Amended June 30, 2016 ----------------------------------------------------------------- |Policy |Human Services |Vote:|7 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the Department of Developmental Services (DDS), on or before July 1, 2017, to establish a Work Transition Project (WTP), as specified, to facilitate the delivery of integrated services and assist in state compliance with federal Home and Community-Based Services (HCBS) Waiver regulations. FISCAL EFFECT: 1)Likely annual costs in the range of $12 million to $27 million (GF/federal funds) to establish a WTP with a process for SB 1427 Page 2 regional centers to allow well-coordinated forms of integrated services. The exact cost will depend on the number of participants, the number of hours of participation, and whether the hours are in addition to or in lieu of current Day/WAP participation. This estimate assumes 1,000 participants who participate 10-15 hours per week in lieu of equivalent hours of Day/WAP participation, accounts for the enhanced rate of $40 per hour, and includes offsetting savings for less than 52 weeks per year of use. 2)Likely one-time costs up to $150,000 for DDS to develop program requirements, accountability measures, and data collection requirements (GF/federal funds). 3)Likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (GF/federal funds). COMMENTS: 1)Purpose. The author states, "California's Employment First Policy and changes to the 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. SB 1427 Page 3 The bill would 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." 2)Background. 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. SB 1427 Page 4 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. 3)Budget Appropriation. The Budget Act of 2016 appropriated $15 million for DDS to allocate to community service providers based on demonstrated need to comply with the new federal HCBS regulations. This bill requires that WTP services be eligible to receive allocations from these funds. Staff notes that DSS will establish a process for allocating these funds to providers so that all providers have access on the same basis. This bill establishes a separate process for a subset of providers. The committee may wish to consider whether a separate allocation process is necessary and appropriate. 4)Prior Legislation. a) SB 577 (Pavley), Chapter 431, Statutes of 2014, required, contingent upon the receipt of federal funding, DDS to conduct a four-year demonstration project regarding the impacts of community-based vocational development services on employment outcomes for regional center SB 1427 Page 5 consumers and on purchase-of-service costs for working-age adults. b) 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 individual program plan. Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081