BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 577 (Pavley) - Autism and other developmental disabilities:
employment.
Amended: January 6, 2014 Policy Vote: Human Services 6-0
Urgency: No Mandate: No
Hearing Date: January 23, 2014
Consultant: Brendan McCarthy
SUSPENSE FILE.
Bill Summary: SB 577, as recently amended, would establish a new
category of "community-based prevocational services" for
regional center consumers.
Fiscal Impact:
One-time costs up to $150,000 for program development by
the Department of Developmental Services (General Fund).
Likely ongoing costs in the tens of millions per year to
provide pre-vocational services (General Fund and federal
funds). The new service category the bill would create is
designed to improve the employability of developmentally
disabled consumers. It is likely that most consumers who
desire to use the new services will continue to need their
existing services (such as day programs or work activity
programs). Depending on the share of regional center
consumers who utilize the new service category, the costs
could vary considerably. For example, if 10% of consumers in
work activity programs and look alike programs use the new
services, annual costs would be about $30 million per year.
Potential ongoing annual savings in the millions to tens of
millions per year (General Fund and federal funds). To the
extent that the new service category created in the bill
improves the employment prospects of regional center
consumers, it is likely that consumers will shift from more
expensive day programs and work activity programs to less
expensive 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 supported employment,
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annual savings would be about $4 million per year. Note the
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
supported employment, thus the savings would increase over
time while program costs are likely to remain relatively
flat.
Background: The Department of Developmental Services is
responsible for coordinating services and supports for about
250,000 people with developmental disabilities. The vast
majority of these people are served by 21 regional centers,
which are non-profit entities that contract with the state. The
regional centers, in turn, contract with vendors to provide
direct services to the developmentally disabled.
The Department of Rehabilitation provides services to assist
people with disabilities find employment. Under federal law, the
state is eligible to receive reimbursement for services provided
to assist someone with a disability find employment, provided
that the individual was previously eligible for federal
disability benefits, the individual meets a certain threshold of
employment activity, and the state can show savings due to the
individual's reduced reliance on state benefits. According to
the Department, the average reimbursement from the federal
government is between $2,000 and $3,000.
Advocates for individuals with autism and related developmental
disabilities have raised concerns that the services provided by
the Department of Rehabilitation are not sufficient to
significantly increase the employment prospects of individuals
with autism and related disorders. While these individuals can
find long-term employment, they typically need significant
upfront support in order to prepare for employment and that
level of support is not provided by the Department of
Rehabilitation.
Proposed Law: SB 577 would establish a pilot program to provide
additional support to regional center consumers, with the
intention of increasing employment by participants in the
program.
Specifically, the bill would:
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Define job exploration and discovery services;
Establish a rate of $40 per hour, up to 75 hours per
quarter, to be paid to regional center vendors that provide
those services;
Require the Department of Developmental Services to create
a pilot program to improve employment by regional center
consumers;
Require the Department to collect data on program
participants;
Establish the pilot program in six specific regional center
catchment areas;
Require $200 per month to be transferred from the
Department of Health Care Services for support of the
program for each month a program participant is enrolled in
employer-provided health care coverage;
Require $1,000 to be transferred from the Department of
Rehabilitation for support of the program for each program
participant that reaches the federal standard of employment,
leading to state reimbursement;
Require participating regional centers to provide specified
information to the Department of Developmental Services;
Require the Department of Developmental Services to
determine the savings to the regional centers due to
increased employment by program participants and allocate
50% of those savings to support the program;
Require the Department of Developmental Services to report
on the program;
Sunset the bill on July 1, 2018.
Related Legislation:
AB 287 (Beall, Statutes of 2009) required the State Council
on Disabilities to report on strategies to improve
employment by the disabled.
AB 1041 (Chesbro) would require regional centers to provide
certain information to consumers about employment options.
That bill is in the Assembly Appropriations Committee.
SB 1112 (Ammiano) would require rates provided to regional
center vendors for employment services to be consistent with
rates paid by the Department of Rehabilitation. That bill is
in the Assembly Appropriations Committee.
AB 954 (Mainenshein) would increase the hourly rate paid to
providers of employment services. That bill is in the
Assembly Appropriations Committee.
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Staff Comments: The bill requires the pilot program to be
implemented in six regional centers. Assuming that each regional
center allows an average of 50 consumers to participate in the
program, that it takes on average six months of support services
to prepare consumers for successful employment, the annual
program costs to provide employment services will be about $2
million per year.
To the extent that the program is successful in improving
employment opportunities for consumers, there are likely to be
reductions in the need for services by those consumers (for
example, day programs). The extent to which the program will be
successful in placing consumers into employment is unknown, thus
any potential cost savings are unknown.
The bill requires $200 to be transferred from the Department of
Health Care Services (to the extent allowed by federal law) for
each month a participating Medi-Cal eligible consumer is
employed and has employer-funded health insurance. The intention
of this provision is to capture a portion of the potential
savings to the state from moving regional center consumers from
Medi-Cal coverage to private coverage. Whether the proposed
transfer of funds would accurately reflect the savings to the
Medi-Cal program is unknown, as Medi-Cal typically continues to
pay for medical costs not covered by other insurance programs.
Similarly, the bill requires $1,000 to be transferred from the
Department of Rehabilitation for each successful placement in
long-term employment. While those funds would offset some of the
costs to the regional centers, they would also reduce available
funding for the Department of Rehabilitation, putting an equal
cost pressure on the General Fund.
Recently adopted amendments: delete the proposed pilot program.
Instead community-based prevocational services would be a new
benefit available to all regional center consumers whose
individual program plan included such services.