BILL ANALYSIS
AB 421
Page 1
Date of Hearing: April 14, 2009
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Jim Beall, Jr., Chair
AB 421 (Beall) - As Amended: April 13, 2009
SUBJECT : Seriously emotionally disturbed children: out-of-home
placement
SUMMARY : Authorizes payments for 24-hour care of a child
classified as seriously emotionally disturbed and placed
out-of-home in an out-of-state, for-profit residential facility
pursuant to special education provisions. Specifically, this
bill :
1)From January 1, 2009, until January 1, 2011, authorizes
payments on behalf of children placed in out-of-state
privately owned residential facilities that meet applicable
licensing requirements of that state, as required under the
Interstate Compact on the Placement of Children, set forth in
Section 7901 of the California Family Code.
2)Effective January 1, 2010, and until January 1, 2013,
authorizes payments to out-of-state, for-profit residential
facilities that meet applicable licensing requirements in the
state in which they are located for 24-hour, out-of-home care
of a seriously emotionally disturbed (SED) child placed there
pursuant to an Individualized Education Program (IEP) if
either:
a) The county or the local educational agency (LEA) placed
the child in the facility after due process proceedings
were initiated under state special education provisions and
either of the following occurred:
i) Following a due process hearing, the hearing officer
finds that, after a thorough search, no other comparable
private nonprofit or publicly licensed residential
facility was identified that is both willing to accept
placement and capable of providing an appropriate
education in compliance with law; or,
ii) A written mediation or settlement agreement was
reached, which includes documentation that a thorough
search was conducted and no other comparable private
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nonprofit or publicly licensed residential facility was
identified that is both willing to accept placement and
capable of providing an appropriate education in
compliance with law; or,
b) The IEP team agreed, and the placement was made, after a
thorough search in which no other comparable private
nonprofit or publicly licensed residential facility was
identified that is both willing to accept placement and
capable of providing an appropriate education in compliance
with law. The IEP team must document its efforts and the
reasons no other placement option can be identified.
3)Specifies that the provisions described above are not intended
to change existing procedures, protections or requirements
regarding the placement of children in out-of-state
facilities, including out-of-state community care licensing
requirements.
4)Requires the Department of Mental Health (DMH), in
collaboration wit the California Mental Health Directors
Association, to annually provide information to Senate and
Assembly budget committees on:
a) The number of in-state and out-of-state placements of
children with serious emotional disturbances in nonprofit
and for-profit residential facilities;
b) The average lengths of stay of those children in each
type of facility; and
c) The number of those children who were dependents, wards
or voluntarily placed in foster care at the time of their
placement pursuant to an IEP.
5)To the extent that any county fails to voluntarily provide the
required information to DMH, requires DMH to note that as the
reason for the omission of information relevant to that
county.
6)Deems to be reimbursable, county claims submitted to the
Controller for mental health services required by, and 24-hour
care provided to an SED child placed in an out-of-state
for-profit residential facility pursuant to an IEP on or
before the date this bill is enacted. Specifies that the
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state Controller may still dispute whether claims for costs
exceed what is allowable.
7)Prohibits reimbursement for new past claims based on the
provisions of this bill.
8)Declares that this bill is to take effect immediately as an
urgency statute.
EXISTING LAW
Regarding special education and mental health services
1)Entitles every child to a free, appropriate public education
(FAPE) in the least restrictive environment (LRE) that can
meet his or her needs. Requires school districts to provide,
as necessary, related services and a continuum of alternative
placements and to conduct IEP meetings for individuals with
exceptional needs.
2)Authorizes out-of-home residential placements, pursuant to an
IEP, when necessary for a child classified as SED to benefit
from educational services. Requires designation of the county
mental health department as the lead case manager and requires
regular review of such placements.
3)Requires that payments for 24-hour out-of-home care pursuant
to an IEP for a child classified as SED be made to privately
operated residential facilities licensed in accordance with
the Community Care Facilities Act and based on rates
established by Aid to Families with Dependent Children-Foster
Care (AFDC-FC) provisions. Funds that care and costs of local
administration in a separate appropriation in the Department
of Social Services' (DSS) budget.
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Regarding out-of-state placements pursuant to an IEP
4)Requires that out-of-state placements pursuant to an IEP be
made only in a privately operated school certified by the
Department of Education (CDE), and that a plan be developed
for using a less restrictive, in-state alternative (unless it
is in child's best interest to stay out-of-state).
5)Requires LEAs to document efforts to locate a nonpublic school
(NPS) in California before contracting with an out-of-state
NPS. Requires out-of-state NPSs to be certified or licensed
to provide special education in their own state and that IEP
teams report to the Superintendent within 15 days of placement
in any out-of-state NPS and LEAs indicate the anticipated date
for the child to return to the state.
6)Requires local mental health departments to report information
to the DMH regarding each out-of-state residential placement
of an SED child pursuant to an IEP, including provisions for
case management, supervision and family visitation.
7)For a dependent child, requires the court to state on the
record that in-state placements could not meet the child's
needs before approving an out-of-state placement pursuant to
an IEP.
Regarding Aid to Families with Dependent Children-Foster Care
8)Authorizes state AFDC-FC payments to group homes organized and
operated as nonprofits. Specifies limited circumstances when
counties, after exhausting options, can match federal funds
and place children also eligible for regional center services
in for-profit facilities.
FISCAL EFFECT : Unknown
COMMENTS :
AB 3632 and history of prohibition on state funding of
for-profit facilities : AB 3632 (W. Brown), Chapter 1747,
Statutes of 1984, established a program to reimburse group homes
that provide care for children classified as SED who are placed
out-of-home pursuant to an IEP. As a result, since 1985
California law (Welfare & Institutions Code Section 18350) has
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tied the requirements for these placements to state foster care
licensing and rate provisions. The funds for placements of
children classified as SED are not actually foster care
(AFDC-FC) funds. They are instead in a separate appropriation
in the DSS budget.
California does not allow AFDC-FC funding of group home
placements in for-profit facilities. As a result of the
connection between foster care and SED placement requirements,
this prohibition has also applied to placements of children
classified as SED. California first defined the private group
homes eligible to receive AFDC-FC funding as exclusively
nonprofits in 1992, to parallel a federal funding requirement
from the 1980 Adoption Assistance and Child Welfare Act, P.L.
96-272. Although the federal government eliminated this
requirement for federal funding in 1996, California did not make
parallel changes to its law then or since.
In 2006, AB 1462 (Adams), Chapter 65, Statutes of 2007, carved
out a narrow exception to allow California counties to match
federal funding of for-profit placements for a small number of
foster youth who are also eligible for disability-related
services and have extraordinary needs such that there are no
other placement options. Among other requirements, AB 1462
limited these placements to 12 months each and no more than 5
children per county at a time.
Purpose of this bill : The author notes, as above, that
California law was never changed to reflect the changes in
federal law that allowed federal funding of for-profit group
home placements. The author also states that "some out-of-state
providers are owned by 'for-profit' entities, usually
hospital/behavioral health corporations. Some 'non-profit'
residential providers are operated by the parent company through
a subsidiary contract. In a good faith effort to comply with
the state law, counties contract for services for some SED
students with the 'non-profit' entities." According to the
author, "[c]ounties placed students in these facilities
believing that, so long as the contracted company was
'not-for-profit' this was in compliance with the letter and the
intent of federal and state law. Counties have historically
been reimbursed by the state for the costs of these placements,
and therefore had no reason to believe they did not comply with
state law."
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However, the author notes, in 2005, an unpublished
administrative law judge decision in a special education due
process hearing found that these facilities do not meet the
definition of non-profit, because they are a subsidiary of a
for-profit company. "This decision prompted the State
Controller's Office to dispute counties' eligibility for mandate
reimbursement for these out-of-state placements ..."
The author notes that "[t]hese facilities are an important
safety valve and resource for California. ... The supply of
in-state facilities is insufficient for current or anticipated
demand ..." The author points out that "[p]lacements will not
increase as a result of this bill; in fact, the bill ensures a
child who must be 'placed' will be in the most appropriate
setting and not just a setting that is 'available'." The author
also notes that the authorization of payments to out-of-state
for-profit facilities under this bill will expire on January 1,
2013. Prior to that, the author intends to meet with
stakeholders and explore means for expanding the availability of
in-state non-profit placement options to meet the needs of
children currently being placed in out-of-state residential
programs.
Estimates of relevant placement numbers : December, 2007 data
from CDE reflects 45 California-certified non-public schools
outside of California that served 862 students. Of these 45
schools, 13 were affiliated with a licensed children's
residential institution and classified by CDE as for-profit. A
total of 243 California children were attending out-of-state
non-public schools with affiliated licensed children's
residential institutions that CDE classified as for-profit.
Additional data from the Departments of Mental Health or Social
Services might confirm or clarify how many children classified
as SED are residentially placed pursuant to IEPs.
The use of for-profit facilities : Some historical news articles
state that the federal government's original exclusion of
for-profit companies from receiving foster care funds was in
part because Congress feared repetition of nursing home scandals
in the 1970s, when public funding triggered growth of a badly
monitored institutional care industry. California's current
policy of limiting payments to nonprofit group homes continues
to ensure that the goal of serving children's interests is not
mixed with the goal of private profit.
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Prior bill : In the 2007-08 legislative session, the issue of
payment for out-of-state special education placements in
for-profit facilities was addressed in SB 292 (Wiggins).
Concerns with the bill focused on the restrictiveness of
out-of-state residential education placements. When placed out
of state, whether in a nonprofit or for-profit facility,
children are far from home and are isolated from regular
interactions with family, friends, and other children without
disabilities. SB 292 was then amended to require that specified
safeguards and conditions be met before the county or the LEA
may place an SED student in an out-of-state for-profit
residential facility pursuant to the student's IEP.
SB 292 failed passage in the Assembly; however, substantially
similar provisions were subsequently included as budget trailer
bill language, in AB 1805. AB 1805 was vetoed by the Governor.
In his veto message, the Governor said: "I strongly support
providing care to children with serious emotional disturbances,
including the provision of care in whichever facility can best
address their needs. While I support the intent and policy
behind this bill, I cannot sign it in its current form because
it will allow the open-ended reimbursement of claims, including
claims submitted and denied prior to 2006-07. Given our state's
ongoing fiscal challenges, I cannot support any bill that
exposes the state General Fund to such a liability. I would
support legislation that clarifies and narrows state
reimbursement for these important services to a specified time
period and would ask the Legislature to work with my
Administration in January to address this important issue."
The restrictiveness, licensing and oversight of out-of-state
facilities : All children have the right to receive FAPE in the
least restrictive environment that can meet their needs. CDE
monitors some education-related services at out-of-state
nonpublic schools that serve California students. Existing
regulations implementing case management-related statutes
require quarterly onsite contacts between local mental health
case managers and students residentially placed by IEP.
However, neither CDE nor DSS conduct certification, monitoring
or complaint investigation of the residential component of
placements at issue. Some county mental health agencies report
taking on additional oversight responsibility not required by
statute.
By contrast, California law implementing the Interstate Compact
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on the Placement of Children requires that contracts with
out-of-state group homes for placement of foster children
include provisions for DSS to investigate any threat to health
and safety for facilities to report incidents to DSS. DSS or
its designee performs inspections to certify that facilities
meet all licensure requirements of group homes within California
or have been granted a waiver of a specific standard.
California law also requires a county social worker or a social
worker in the other state to visit a foster child in an
out-of-state group home at least once a month. This more
stringent oversight of foster care placements might be
attributable at least in part to the state's heightened
responsibility for dependent children in its custody (unlike
most children placed pursuant to an IEP whose parents retain
parental rights). Still, the lack of equivalent standards
applicable to facilities with children placed pursuant to IEPs
may be problematic.
It is because of these concerns with the restrictiveness of
out-of-state placements, generally, and the ability to provide
state oversight that this bill authorizes payments to
out-of-state for-profit residential programs only until January
1, 2013.
This bill, as amended, is almost identical to the enrolled
version of AB 1805, including the safeguards and conditions that
were amended into SB 292/AB 1805 for the placement of SED
children in out-of-state for-profit facilities. The author
intends to work with the Appropriations Committee and the
administration to clarify and, as appropriate, address any
fiscal concerns with this bill.
In supporting this bill, the California State Association of
Counties (CSAC) points out that "there is no restriction under
federal law regarding reimbursement for these placements." CSAC
argues that "[w]ithout this legislation, counties will be forced
to find alternative arrangements for hundreds of children with
serious emotional issues. Counties are additionally concerned
whether there will be sufficient placements available to meet
the needs of this fragile population. Upsetting existing
placements will dramatically affect the lives of these children,
as well as their families and providers."
In opposing this bill unless amended, Disability Rights
California (DRC), the state's designated protection and advocacy
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agency (Welfare & Institutions Code Section 4900(i)), cites
concerns with "the safety and quality of out-of-state for-profit
residential facilities." DRC proposes that the types of data
required by this bill be expanded to include data on injuries,
death and other abuse and neglect. According to DRC, "[i]t is
important to have this data to properly assess outcomes and
compare the quality and safety of placements in both non-profit
and for-profit facilities." DRC proposes several amendments,
including amendments to expand the types of data that would be
obtained concerning students placed in in-state non-profit
residential facilities and out-of-state non-profit and
for-profit residential facilities. DRC proposes that
out-of-state residential facilities receiving payments under
provisions related to seriously emotionally disturbed children
placed pursuant to an IEP be required to report to California's
protection and advocacy agency data on deaths, injuries,
seclusion and restraint, and involuntary medication.
PROPOSED AMENDMENTS :
The author is reportedly agreeable to make the following,
primarily technical, amendments to Section 1 of the bill
(findings and declarations):
The Legislature finds and declares as follows:
(a) As required by federal law, all schoolaged
school-aged children are legally required to receive a Free
and Appropriate Public Education (FAPE) for kindergarten and
grades 1 to 12, inclusive (20 U.S.C. Sec. 1412(a)(1)).
(b) In accordance with federal law, California has
delegated the FAPE requirements to the local education
agencies and counties (Chapter 2.5 (commencing with Section
56195 of Part 30 of Division 4 of Title 2 of the Education
Code.
(c) Counties are sometimes required to place specified
severely emotionally disturbed children in the most
appropriate placement to accomplish the goal of FAPE.
(d) (c) Counties Local education agencies and counties
recognize, in rare instances, that the most only available
appropriate placement may not be a nonprofit facility, but
meets the needs of the child, as required by federal law.
(e) It is the intent of the Legislature in enacting this
act to ensure that counties receive reimbursement for
adherence to state and federal law as they act in the best
interest of the child in ensuring that every child receives a
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FAPE .
DOUBLE REFERRAL . This bill has been double-referred. Should
this bill pass out of this committee, it will be referred to the
Assembly Education Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Alliance of Child and Family Services
California Council of Community Mental Health Agencies
California Mental Health Directors Association (sponsor)
California State Association of Counties (CSAC)
County Welfare Directors Association of CA (CWDA)
Los Angeles County Board of Supervisors
Mental Health Association in California
San Bernardino County Board of Supervisors
Special Education Local Plan Area Administrators
Urban Counties Caucus
Opposition
Disability Rights California (unless amended)
Analysis Prepared by : Eric Gelber / HUM. S. / (916) 319-2089