BILL ANALYSIS �
SENATE HUMAN
SERVICES COMMITTEE
Senator Carol Liu, Chair
BILL NO: SB 382
S
AUTHOR: Liu
B
VERSION: April 14, 2011
HEARING DATE: April 26, 2011
3
REFERRAL: Judiciary and Appropriations
8
2
CONSULTANT:
Park
SUBJECT
Developmental services: regional centers: complaints
SUMMARY
Requires each performance contract with a regional center
to include specified criteria based on regional center
track record on complaints, state hearings, and compliance
with the individual program plan. Requires the Department
of Developmental Services and the Association of Regional
Center Agencies to develop processes and procedures to
address issues of retaliation, as specified. Requires
regional centers to post specified information on vendors
and negotiated rates for services on its Web site. Makes
clarifying changes with regard to the selection of least
costly providers.
ABSTRACT
Existing law:
1.Establishes the Lanterman Developmental Disabilities
Services Act (Lanterman Act), under which the Department
of Developmental Services (DDS) contracts with 21 private
non-profit regional centers to provide case management
services and arrange for, or purchase, services that meet
Continued---
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the needs of individuals with developmental disabilities,
as defined.
DDS/regional center contract provisions and oversight of
contract compliance
2.Requires the state to enter into five-year contracts with
regional centers, subject to the annual appropriation of
funds by the Legislature. Requires contracts to include
a provision requiring each regional center to render
services in accordance with applicable provision of state
laws and regulations.
3.Requires contracts to include annual performance
objectives that are specific, measurable, and designed to
assist consumers in achieving life quality outcomes,
achieve meaningful progress above the current baselines,
and develop services and supports identified as necessary
to meet identified needs. Requires annual performance
objectives to be developed through a public process, as
specified, that includes but is not limited to providing
information in an understandable format to the community
about regional center services and supports; conducting a
public meeting where participants can provide input on
performance objectives and using focus groups or surveys
to collect information; and circulating a draft of
performance objectives to the community for input prior
to presentation at a regional center board meeting where
additional public input will be taken and considered
before adoption of the objectives.
4.Allows DDS to specify in the performance contract
additional areas of service and support that require
development or enhancement by the regional center, and
requires DDS, in determining those areas, to consider
public comments, the distribution of services and
supports with the regional center catchment area, and
review how availability of services and supports in one
regional catchment area compares with other catchment
areas.
5.Requires each contract with a regional center to specify
steps to be taken to ensure contract compliance,
including, but not limited to: incentives that encourage
regional centers to meet or exceed performance standards;
and levels of probationary status and corrective action,
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as specified. Requires DDS to evaluate a regional
center's compliance with its contract performance
objectives and legal obligations related to those
objectives, as specified.
6.Requires DDS to make reasonable efforts to resolve
problems with a regional center that is not fulfilling
its contractual obligations, and requires letters of
noncompliance to be issued and corrective action plans to
be developed and implemented if there is no successful
resolution. Requires DDS to terminate the contract of
any regional center that continues to fail in fulfilling
its contractual obligations, if specified findings are
made, and authorizes such findings to be the basis of
non-renewal.
The Individual Program Plan
7.Requires determination of services and supports that are
necessary for each consumer to be made through the
individual program plan process, and provides that the
determination shall be made on the basis of the needs and
preferences of the consumer or, when appropriate, the
consumer's family, and include consideration of a range
of service options proposed by individual program plan
participants, the effectiveness of each option in meeting
the goals stated in the individual program plan, and the
cost-effectiveness of each option.
8.Requires the IPP to be developed though a planning team,
as specified, following certain timelines, and requires
regional centers to comply with certain requests for
written notice. Provides a process and timeline to
resolve disagreement within the IPP and provides for fair
hearing notice and opportunity if resolution cannot be
reached. Requires the IPP planning process to include:
gathering information and conducting assessments, as
specified; a statement of goals and time-limited
objectives; a schedule of the type and amount of services
and supports to be purchased by regional center or
obtained from generic agencies; identification of
providers responsible for attaining each objective, with
accompanying timelines; among other requirements.
Requires that an IPP shall be reviewed and modified by
the planning team as necessary, but no less than once
every three years. Requires regional centers to use
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training materials and format prepared by DDS, and
requires DDS to biennially review a random sample of IPPs
to assure that IPPs are being developed and modified in
compliance with specified provisions of law paraphrased
in this paragraph.
9.Requires a regional center to secure services and
supports that meet the needs of the consumer, as
determined in the IPP, and within the context of the IPP,
requires the planning team to give highest preference to
those services and supports that would allow minors with
developmental disabilities to live with their families,
adult persons with developmental disabilities to live as
independently as possible in the community, and that
allow all consumers to interact with persons without
disabilities in positive, meaningful ways. Requires
regional centers, in implementing IPPs to first consider
services and supports in natural community, home, work,
and recreational settings.
10.Requires the regional center and the consumer, or where
appropriate, his or her parents, legal guardian,
conservator, or authorized representative, to consider
all of the following when selecting a provider of
consumer services and supports, pursuant to the IPP:
provider's ability to deliver quality of services or
supports which can accomplish all or part of the
consumer's IPP; provider's success in achieving
objectives of the IPP; where appropriate, provider's
licensing, accreditation, or professional certification;
the cost of providing services or supports of comparable
quality by different providers, if available. Requires
the least costly available provider of comparable
service, including transportations costs, who is able to
accomplish all or part of the consumer's IPP, consistent
with the needs of the consumer and family as identified
in the IPP, to be selected. Requires consideration of
federal financial participation, and provides that the
consumer shall not be required to use the least costly
provider if it will result in the consumer moving to more
restrictive or less integrative services and supports.
Transparency
11.Requires, through the contract, regional centers to
adopt, maintain, and post on its Internet Web site a
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board-approved policy regarding transparency and access
to public information, including timely public access to
information, including, but not limited to, information
regarding requests for proposals and contract awards,
service provider rates, documentation related to
establishment of negotiated rates, audits, and IRS Form
990.
12.Requires each regional center to include on its Internet
Web site, at a minimum: regional center annual
independent audits; biannual fiscal audits conducted by
the DDS; regional center annual reports; contract awards,
including the organization or entity awarded the
contract, and the amount and purpose of the award;
purchase of service policies; the names, types of
service, and contact information of all vendors, except
consumers or family members of consumers; board meeting
agendas and approved minutes of open meetings of the
board and all committees of the board; bylaws of the
regional center governing board; annual performance
contract and year-end performance contract entered into
with the department; biannual Home and Community-based
Services Waiver program review; board-approved
transparency and public information policy;
board-approved conflict-of-interest policy, and other
reports as specified.
13.Requires DDS to establish and maintain a transparency
portal on its Internet Web site, containing specified
links, that allows consumers, families, advocates, and
others to access provider and regional center
information.
Prohibitions against retaliation
14.Under Labor Code, prohibits employers, both public and
private, from preventing employees from disclosing
information, or retaliating against employees for
disclosing information, to a government or law
enforcement agency where the employee has reasonable
cause to believe that the information discloses a
violation of state or federal statute, or a violation of
or noncompliance with a state or federal rule or
regulation. Requires the Attorney General (AG) to
maintain a whistleblower hotline to receive calls
regarding such violations, and requires the AG to refer
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calls to the appropriate government agency for review and
possible investigation. Requires the AG and appropriate
government agency to hold in confidence, during the
initial review of the call, information disclosed through
the whistleblower hotline, including the identity of the
caller and the employer identified by the caller.
Establishes fines and criminal penalties for violations
of these provisions, and burden of proof pertaining to
civil actions and administrative proceedings related to
such violations.
15.Under Government Code, prohibits employers from making,
adopting, or enforcing any rule, regulation, or policy
preventing an employee from disclosing information to a
government or law enforcement agency or from acting in
furtherance of a false claims action, and prohibits an
employer from discharging, demoting, suspending,
threatening, harassing, denying promotion to, or in any
other manner discriminating against, an employee in the
terms and conditions of employment because of lawful acts
done by the employee on behalf of the employee or others
in disclosing information to a government or law
enforcement agency or in furthering a false claims
action. Provides for relief measures, including
reinstatement, back pay, damages, litigation costs, and
attorney's fees, in addition to other remedies.
This bill:
1.Requires DDS, no later than July 1, 2012, to develop
processes and procedures to address issues of retaliation
against regional center employees and vendors, to be
included in the regional center standard agreement
contract. Requires those processes and procedures to
meet minimum requirements, including:
a. For the purposes of the contract, a definition of
"retaliation."
b. A requirement for the regional center to report all
allegations of retaliation to its board members and to
the department, although the department shall not be
required to investigate the allegation unless received
directly from the party making the allegation.
c. A process for corrective action by the regional
center and a process for verification of corrective
action by the department.
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d. A provision of notice to employees and vendors, made
by the regional center, of the processes and procedures
that are developed, detailing to whom they can make a
complaint of retaliation and who will investigate the
complaint; and a requirement that the provision of notice
specify that the department will not investigate a
complaint of retaliation unless the complainant directly
files that complaint with the department, and also
specify the department's policy on responding to
whistleblower complaints and the right to make a
complaint directly to the department. Allows this notice
to be disseminated in the same manner as other notices to
stakeholders concerning their rights when filing a
complaint.
2.Requires DDS to develop the processes and procedures
described above in conjunction with the Association of
Regional Center Agencies (ARCA), and in consultation with
other stakeholder groups representing employees,
consumers and their families, and vendors.
3.Requires a regional center to report annually to DDS the
total number of complaints it has received within a
fiscal year, including the method in which the complaint
was received, the type of complaint, the number of days
pending to resolution, and the disposition of each
complaint.
4.Requires DDS to report annually to the Legislature the
total volume, method, type of complaint, days pending,
and disposition of complaints for each regional center
that the regional center has received in a fiscal year
and for each regional center that DDS has directly
received in a fiscal year. Requires DDS to the best of
its ability to avoid duplicate counting of complaints.
5.Requires DDS to use the complaint data to develop annual
performance objectives for each regional center that will
improve each regional center's resolution of complaints,
where necessary.
6.Requires DDS to conduct a review of each regional
center's compliance with the procedures for developing
individual program plans required by law and regulation,
as specified. Provides that the regional center shall
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have the duty of demonstrating compliance and requires
DDS to issue necessary guidance to aid regional centers
in retaining or producing documentation that constitutes
demonstration of compliance.
7.Requires DDS to include this review in any other audit or
review, but requires DDS to conduct the review no less
than once every 36 months. Requires DDS to monitor a
regional center that has been found to be noncompliant
with state law or regulation, with respect to the
development or ongoing requirements of individual program
plans, and ensure that corrective actions are taken by
the regional center.
8.Requires DDS to utilize the results of this review to
develop annual performance objectives for each regional
center that will improve each regional center's
compliance with state law and regulation with respect to
the development and ongoing requirements of individual
program plans. Requires DDS to include the results of
this review in its published annual review.
9.Requires each regional center, in order to provide
consumers and their families with information about
service providers, and to provide greater transparency in
the rates paid to service providers, to publish a
directory of vendorized service providers on its Internet
Web site, listing them by category of service, beginning
July 1, 2013. Requires the negotiated rate to be
published for vendors who have negotiated rates, and
requires this directory to be updated annually.
10.Requires, rather than authorizes (as in current law) DDS
to specify in the regional center performance contract
additional areas of service and support that require
development or enhancement by the regional center, and
requires DDS to utilize complaint data and IPP review
information in this process. Also requires DDS to
consider the subject and result of fair hearing
decisions, in addition to public comment, and other
required criteria in determining those additional areas
of service and support.
11.Clarifies that the determination of comparability for
selecting the least costly available provider of
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comparable service shall be made by the individual
program plan planning team and shall include, but not be
limited to, the criteria already required to be
considered in the IPP under current law.
FISCAL IMPACT
Unknown.
BACKGROUND AND DISCUSSION
Authors' statement
The author states that SB 382 aims to increase
accountability, transparency, and state oversight of
California's 21 regional centers, in order to better serve
consumers of regional center services, and their families.
The author points out that, in 2010, the Bureau of State
Audits released a report of its audit findings of six
regional centers, which made recommendations to increase
accountability, cost-effectiveness, and transparency of
regional center operations; the Senate and Assembly
committees on human services held a joint hearing in
November 2010 to listen to stakeholder responses to the
audit, as well as other concerns and suggestions for
improving regional centers.
The author states that testimony provided through this
hearing, additional testimony received by the Assembly
Accountability and Administrative Review committee in prior
years, other discussions with stakeholders, and the BSA
audit report all revealed problems related to how IPPs are
being conducted, how complaints have been dealt with at
certain regional centers, the confusion over the
requirement to select the least costly provider of
comparable services, and the general lack of transparency
and complexity of the rate system for providers.
The author states that the bill seeks to increase DDS'
oversight of regional centers, while using the preferred
contract relationship between DDS and regional centers to
make improvements in regional center performance. The
author believes that, in a time of large scale changes
driven by the state's fiscal crisis, it is critical for DDS
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and regional centers to monitor and address how changes are
being implemented in a decentralized system such as the
regional center system. The author believes that by,
requiring DDS to scrutinize complaints, state fair
hearings, and conduct more vigorous IPP reviews, the state
will have a better understanding of how consumers and
families, providers, and employees are faring with such
changes and create a feedback loop for continuous
improvement.
Regional centers
California's regional center system consists of 21 private
nonprofit regional centers, which serve more than 240,000
developmentally disabled individuals and their families.
Regional centers employ more than 6,000 people, who secure
the necessary supports and services outlined in the IPP
from a variety of service providers.
Regional centers were created in statute as private
nonprofit entities to carry out many of the state's
responsibilities under the Act, under contract with DDS.
Regional centers "assist persons with developmental
disabilities and their families in securing those services
and supports which maximize opportunities and choices in
living, working, learning and recreating in the community."
The main roles of regional centers include intake and
assessment, individualized program plan development, case
management, and securing services through generic agencies
(schools, county mental health departments, Medi-Cal,
Social Security Administration, community agencies, etc.)
and/or by purchasing services from providers, whom regional
centers have responsibility for "vendoring." (Vendorization
is the process by which a service provider, upon meeting
minimum qualifications set in regulations, can become
eligible to provide services to consumers and receive
payment from regional centers.) Regional centers purchase
services such as transportation, health care, day programs
and residential care provided by community care facilities,
and generally pay for services if an individual's private
insurance does not cover, or the individual has no private
coverage, or where "generic" services provided through
other programs, entities, or agencies are not available.
The relationship between DDS and regional centers is
primarily contractual, with oversight being conducted
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through a variety of audits. DDS has performance contracts
with regional centers through which DDS monitors progress
and follows up when a regional center fails to maintain an
acceptable level of compliance with performance objectives
or make progress toward meeting them. DDS may impose
corrective actions on a regional center, additional
contract provisions, and levels of probation. DDS also
performs biennial (or annual, if warranted) fiscal audits
of regional centers. Additionally, for the purpose of
ensuring the regional center is meeting federal
requirements pursuant to the HCBS waiver, DDS staff visit
each regional center every other year and review records,
interview consumers and staff, and visit program sites.
DDS must also review regional center purchase of service
policies to prevent a regional center from utilizing a
policy that violates the Lanterman Act.
As private nonprofit entities, regional centers have, to
the extent not prescribed or proscribed by law or
regulation, the ability to control their own affairs and
meet the goals of the Lanterman Act with a high degree of
flexibility and variability, given that the Act is anchored
in individualized supports and services. While the audits
and performance contracts provide some measure of oversight
of regional centers, regional centers have considerable
authority over key elements of the Act, including
development of the IPP, selection of vendors (within the
IPP process), and establishment of certain vendor payment
rates.
In the 1985 ARC decision (citation), the court identified
the critical point for determining those services rests
with the individual program plan (IPP) (or individual
family service plan, in the case of children three years of
age or under), which is conducted by service coordinators
at regional centers. (The Court held, "The rights of
developmentally disabled persons and the corresponding
obligations of the State toward them under the Lanterman
Act are implemented in the Individual Program Plan (IPP).")
The IPP process, prescribed in statute, must be done
through planning teams, including, among others, the person
with a developmental disability, referred to in the Act as
"consumers," his or her legally authorized representative,
and one or more regional center representatives. The Act
requires that the IPP promote community integration.
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Planning teams must develop goals that maximize
opportunities and teach skills needed for each person to
develop relationships, be part of community life, increase
control over his or her life and acquire increasingly
positive roles in the community. Moreover, the IPP must
give the highest preference to those services and supports
that allow minors to live with their families and adults to
live as independently as possible in the community.
BSA audit
In August 2010, BSA issued a report entitled, Department of
Developmental Services: A more uniform and transparent
procurement and rate-setting process would improve the
cost-effectiveness of regional centers, California State
Auditor, Bureau of State Audits, Report: 2009-118 (August
2010) (BSA Report). The report included numerous
recommendations, based on its review of six regional
centers, including that DDS should provide more oversight
and issue more guidance to RCs for preparing and adhering
to written procedures regarding rate-setting, vendor
selection, and procurement processes to ensure consumers
receive high-quality, cost-effective services that meet the
goals of the consumers and the program. It was also
recommended that DDS monitor RCs' adherence to laws,
regulations, and new processes by enhancing the level of
reviews to include examining rate-setting, vendor
selection, and procurement practices at the regional
centers and to adhere to its newly documented process for
receiving, tracking, and investigating complaints from
regional center employees. In a hearing held by this
committee on March 22, 2011, BSA and DDS both stated a high
degree of compliance with BSA's audit recommendations, with
one specified exception where there was disagreement about
an interpretation of current law concerning selection of
the least costly available provider of comparable services.
Assembly Accountability and Administrative Review (AAR)
Committee hearing
In June 2010, the Assembly AAR Committee held a public
hearing on regional center accountability and oversight.
The committee focused on a lack of transparency, noting in
a background paper prepared for the hearing that "�RCs] are
not required to provide information about their operations
or expenditures to the public." The paper also noted that
"�t]here is currently no way to make . . . reports or
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complaints to the �RC], DDS, the Attorney General, or any
other oversight agency in an anonymous manner because
Whistleblower protections are not applicable." The paper
concluded, based on input gathered by Committee staff,
that, while "several �RCs] were cited as well-run
organizations which operate in accordance with high
standards of transparency and accountability," other RCs
"were fraught with allegations of conflict of interest,
overbilling, refusals to provide information, and
retaliation towards those who raised concerns about the way
their local �RC] operates."
Complaints/Whistleblower/Retaliation
DDS indicates that it has a variety of complaint and appeal
processes available to vendors/contractors, agencies,
facilities, parents, and consumers. These include consumer
rights complaints; complaints related to the Early Start
program, due process requests, and mediation conference
requests; Lanterman Act fair hearing requests; Title 17
complaints; citizen complaints and comments. DDS notes
that each of these complaint and appeal processes has
separate and distinct procedures for resolution.
On July 28, 2010, DDS issued a letter to all regional
center executive directors regarding its whistleblower
complaint process. The DDS whistleblower notice defines
both improper regional center activity and improper
vendor/contractor activity and indicates that DDS will need
a clear and concise statement of the improper activity and
any evidence to support the allegation. The notice states
that, "If you do not provide a name or other information
(witnesses or documents) that clearly identifies the person
you are alleging has acted improperly, and the regional
center or vendor/contractor where that person works, we may
not have sufficient information to investigate. ? Although
complaints may be filed anonymously, if insufficient
information is provided and we have no means to contact
you, we may not be able to investigate your allegations."
The notice also states that DDS "?will do everything
possible to maintain the confidentiality of a complainant
making a whistleblower complaint if the complainant
requests confidentiality. However, in the rare
circumstances where DDS is unable to maintain
confidentiality due to its statutory responsibilities
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(including ensuring the health and safety of consumers and
regional center contract compliance), the Department will
attempt to inform the complainant of its need to disclose
certain information prior to releasing identifying
information. Additionally, the identity of the complainant
may be revealed to appropriate law enforcement agencies
conducting a criminal investigation."
In its latest contract with regional centers, DDS required
regional centers to institute a board-approved
whistleblower policy addressing the reporting of alleged
improper regional center and/or vendor/contractor
activities, and required the policy to ensure, among other
things, that the policy clearly indicates that the regional
center will not retaliate against any complainant, ensure
that a process is in place to investigate and take
appropriate action on complaints, including complaints of
retaliation, and ensure a process for notification of
employees, board members, consumers/families, and vendor
community of both the regional center and the State's
whistleblower policy within thirty days of the effective
date of the policy and annually thereafter.
State prohibitions against retaliation
Regional centers, like other non-governmental employers,
are subject to the Labor Code and Government Code
prohibitions on retaliation against employees for
disclosures of violations of state or federal statute, or a
violation of or noncompliance with a state or federal rule
or regulation. These provisions include fines and
penalties for violations of the provisions.
Arguments in support
In relation to the bill as introduced, ResCoalition writes
that SB 382 addresses several concerns within the regional
center system including performance contracts,
transparency, retaliation and complaints, IPP reviews, and
the least costly provider. ResCoalition states that the
bill is an important step in ensuring there are checks and
balances as the Regional Center system struggles to get
back to its roots and be accountable to the communities it
serves. ResCoalition suggests one amendment to include a
direct reference to complaints made under Welfare and
Institutions section 4731, in what DDS must consider when
developing further supports and services in performance
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objectives.
Related/prior legislation
SB 74, Chapter 9, Statutes of 2011, the DDS budget trailer
bill, provides for specified information to be posted on
DDS' Web site and regional center Web sites (see page 3-4
under Transparency), in addition to numerous other
requirements across many areas affecting developmental
services.
AB 435 (Assembly Committee on Accountability and
Administrative Review) of 2010 in its final form dealt with
anti-retaliation/whistleblower protections for regional
center employees. Held in Senate Appropriations Committee.
ABx4 9, Chapter 9, Statutes of 2009-10, Fourth
Extraordinary Session among other provisions, required the
least costly available provider of comparable service,
including transportations costs, who is able to accomplish
all or part of the consumer's IPP, consistent with the
needs of the consumer and family as identified in the IPP,
to be selected to deliver services to the consumer.
AB 1589 (Committee on Accountability and Administrative
Review) of 2009 would have required regional centers (RCs)
to disclose information on "related-persons transactions"
and establishes whistleblower protections for RC employees
who report improper RC activities. Held under submission
by the Assembly Appropriations Committee.
QUESTIONS & COMMENTS
1.Double-referred. This bill is double-referred to Senate
Judiciary Committee. Because of the upcoming deadline for
policy committees to hear fiscal bills, any amendments
agreed to in this committee must be put across by Senate
Judiciary Committee.
2.Recent amendments. Recent amendments to the bill include
the striking of duplicative transparency language (i.e.,
requiring regional centers to post their contracts on
their Web sites), because an identical requirement was
passed through SB 74, Chapter 9, Statutes of 2011.
Additionally, the bill's anti-retaliation provisions were
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substantially amended to accommodate the Association of
Regional Center Agencies (ARCA) requested changes. ARCA
indicated that the previous anti-retaliation language
could cause regional centers to fear being accused of
retaliatory activity, which could interfere with their
role in protecting of consumers. The bill now requires
ARCA and DDS to develop processes and procedures with
stakeholders to address retaliation, provided that
specific requirements become part of those processes and
procedures. Finally, at ARCA's request, the timeframe to
update provider directories and negotiated rates on
regional center Web sites changed from every 6 months to
annually.
3.Changes in the regional center system. With the passage
of SB 74, Chapter 9, Statutes of 2011, the regional
center system is expected to undergo major changes
affecting all stakeholders in the system. (This comes on
top of several changes and cuts that have been enacted in
the past few years.) The Legislature enacted $576
million in General Fund reductions for the budget year,
much of which is expected to affect community services.
DDS is currently expected to come up with purchase of
service best practices to reduce general fund
expenditures by $174 million (as part of the $576
million) in May 2011.
POSITIONS
Support: ResCoalition (prior version of the bill)
Oppose:None received
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