BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1427  
          (Pavley) - As Amended June 30, 2016


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          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  








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            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.









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            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.  








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            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  








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               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