CDCAN REPORT #059-2011: Department of Developmental Services releases information on formation of workgroups to provide input

• DEPARTMENT OF DEVELOPMENTAL SERVICES RELEASES INFORMATION ON WORKGROUPS TO PROVIDE INPUT ON STATEWIDE STANDARDS TO PLACE LIMITS ON REGIONAL CENTER COMMUNITY-BASED SERVICES & SPENDING
• Governor’s Proposal – Reduced by Legislature – Seeks to Reduce Regional Center State General Fund Spending for Community-Based Services By At Least $150 Million on Top of Other Separate Reductions - $150 Million Target Is Part of Overall $523.5 Million Reduction In State General Fund Spending for Developmental Services Including Regional Centers

SACRAMENTO, CALIF  (CDCAN) [Updated 02/25/2011 – 10:59 PM  (Pacific Time)] –  The Department of Developmental Services, released a letter to a number of statewide provider and advocacy organizations regarding formation of 8 workgroups to participate in a process the Brown Administration is using to develop a proposal for statewide standards that is meant to reduce spending by at least $150 million in State general funds for regional center community-based services.  The proposal is formally known as “Statewide Standards for the [Regional Centers] Purchase of Services.”  The term “Purchase of Services” or POS refers to the part of the regional centers’ budget that funds community-based services for over 240,000 children and adults with developmental disabilities that includes a wide range of services such as Respite and other Family Supports,  Behavioral Services, Day Programs, Supported Employment and Work Activity Programs, Early Start (early intervention), Healthcare and Therapeutic Services, Independent Living and Supported Living Services, Residential Services, and Transportation.

The workgroup is part of a four step process outlined by the Brown Administration in developing the actual proposal – which the Legislature would still need to approve in June.  The workgroups are expected to begin work by the second week of March sometime and finish its work by April.

The issue is controversial for advocates because of concerns that the standards would have the impact of possibly significantly reducing services, narrowing eligibility, limiting or ignoring individual needs, limiting access to services by imposing co-payments.  Similar proposals were advanced unsuccessfully by Governor Davis in 2002, and 2003 and again by Governor Schwarzenegger in 2004.

Governor Brown’s proposal makes it clear that imposing statewide standards – as was the case in proposals by Davis and Schwarzenegger – is meant to reduce State general fund spending significantly.

The 21 non-profit regional centers under contract and oversight  by the Department of Developmental Services, assess eligibility and authorize and coordinate under state law, funding and services for eligible children and adults with developmental disabilities.  The department and the 21 regional centers are also the lead agencies for the State’s early intervention program (called “Early Start”) that serves close to 30,000 infants with developmental delays.

TEXT OF LETTER SENT TO STATEWIDE GROUPS

The following is the text of the letter released late Friday that was sent to certain specific statewide organizations (including CDCAN), regarding formation of the workgroups:

DEPARTMENT OF DEVELOPMENTAL SERVICES
1600 Ninth Street, Room 240, MS 2-13
Sacramento, CA  95814
TDD 654-2054 (For the Hearing Impaired)
(916) 654-1897

February 25, 2011

[Name of statewide organization]
Address
City and State

Dear XXXXX:

Thank you for your continued efforts in support of California’s Developmental Disabilities System.  During this unprecedented fiscal crisis, your organization’s expertise is invaluable as we are challenged to maximize limited resources while maintaining our commitment to the Lanterman Act.

As you know, the Governor’s January 2011 budget proposes significant reductions for the Department of Developmental Services (DDS) to be achieved through a variety of strategies, including the establishment of statewide standards for regional centers to use when purchasing consumer services.  While this proposal is still under consideration by the Legislature, to maximize the opportunity for stakeholder input, the Department is implementing the following multi-step process to develop the proposed standards.  Unfortunately, due to the State’s budget constraints the entire process will need to be completed in the next few months.

1. Soliciting input and ideas from consumers, family members, service providers, regional centers, advocates, policy advisors, and the general public through a survey on the DDS website (completed February 15, 2011) or any other means available (e.g. letters, e-mail, etc.).
2. Establishing workgroups in eight topic areas to discuss possible standards.     The workgroup topic areas include: Behavioral Services; Day, Supported Employment and Work Activity Programs; Early Start Services; Healthcare and Therapeutic Services; Independent Living and Supported Living Services; Residential Services; Respite and Other Family Supports; and Transportation Services;
3. Conducting three public hearings throughout the State, following development of draft standards by DDS, to obtain public input on the proposed standards; and
4. Submitting the proposed standards to the Legislature with accompanying fiscal information and draft statutory language necessary to implement required changes.

In your role as a statewide organization representing individuals and families who receive various services from the regional center system, the Department is inviting you to participate in all eight workgroups.  These workgroups will range in size and consist of approximately one-third consumers and family members, one-third service providers and one-third advocacy/stakeholder organizations. To ensure full representation, we are requesting that for each workgroup you identify three participants:

1. One representative of your organization;
2. One consumer/family member using the workgroup related services; and
3. One service provider of the workgroup related services.

Please use the enclosed form to provide the names and contact information to the Department by March 4, 2011.

It is anticipated that the workgroup effort will commence in two weeks, conclude in early April, and involve multiple meetings held in Sacramento.  Your organization and representatives will be notified of the meeting dates and times.

Please feel free to contact me at (916) 654-1897 or Patti Samuel at (916) 651-1484 or email at patti.samuel@dds.ca.gov if you would like to discuss this request.  Your input to this process is invaluable and we sincerely hope you will be able to participate.

Thank you for your continued commitment to the people we serve. 

Sincerely,
[signed]
TERRI DELGADILLO
Director

Enclosure

Assembly & Senate Budget Committees and Budget Conference Committee Took Identical Final Action on Governor’s Proposal For Developmental Services Cuts

• While the Legislature has not yet taken final action on the overall budget package that Governor Brown wants sent to him before March 10th, last week the Assembly and Senate budget committees took identical final action that rolled back the Governor’s reduction proposal from $750 million to $523.5 million in overall reductions in State general fund spending for developmental services, that includes regional centers. 
• Earlier on Friday (February 25th)  the Budget Conference Committee gave final approval to legislative language to be part of the budget – called “budget trailer bill language” that gives broad direction to the Department of Developmental Services on developing the statewide standards proposal that would be submitted to the Legislature for review – likely public hearings – and possible approval. 
• Of the $523.5 million in state general funds - $148 million of that amount will be achieved by new federal funds ($83 million of the amount), transfer of $50 million in funds from Proposition 10, the Children and Families First money, and $15 million saved due to rejection of several Medi-Cal cuts that the regional centers would have had to pay for. 
• Actual spending cuts to programs and services total $375.5 million in State general funds out of the overall $523.5 million total.  Out of that $375.5 million, $150 million is not specified – and that is the amount that the Governor’s statewide standards will be designed to achieve at a minimum.  See below for details.

Department of Developmental Process for Stakeholder Involvement in Developing Brown Administration’s Statewide Standards Proposal

• Under Governor Brown’s proposal, the Department of Developmental Services intends to have a stakeholder process to provide input in the development of the Brown Administration’s proposal to the Legislature for the statewide standards for regional center purchase of services.
• The Brown Administration – as represented by the Department of Developmental Services – would then submit the standards to the Legislature by June along with proposed draft legislative language necessary to change existing state law in order to implement required changes, if the Legislature approved the proposal.
• On Friday (February 25th) the Budget Conference Committee approved 10 to 0 legislative language to go with the main budget bill – called budget trailer bill language – that directs the Department of Developmental Services to develop a proposal for statewide standards for the Legislature to review and consider approving.
• Assemblymember Blumenfield said Friday before the vote was taken that the Budget Conference Committee wanted to make sure that three things were done, with the approval of the proposed budget trailer bill language authorizing development  of a proposal for “statewide standards”:   (1)  Protect consumers by providng lcear notification procedures   (2)  Outline transparent process to develop purchase of services best practices and  (3) Any implementation must be vetted and approved by the Legislature, specifically the budget committees.

FOUR STEP STAKEHOLDER PROCESS FOR STATEWIDE STANDARDS PROPOSAL

As mentioned earlier in this report and in the text of the letter from the Department of Developmental Services that outlined a four step process as follows:

ONLINE SURVEY & OTHER PUBLIC INPUT

• The stakeholder process began on January 27th, with the release of an anonymous online survey by the Department of Developmental Services to solicit ideas on the issue of statewide standards.
• The survey was available until February 15th  and the department reported last week to the Budget Conference Committee that about 9,000 people – about equally divided by persons with developmental disabilities, family members,  service providers, regional center staff, advocates and others -  participated in the online survey. 
• Other Ways To Submit Input - The Department of Developmental Services, in releasing the online survey, also indicated on its website that people could instead or in addition to the survey, submit written comments and ideas regarding the statewide standards.

WORKGROUPS

• The Department of Developmental Services is forming eight subject area Workgroups, consisting of 30-35 members each (1/3 family members, 1/3 providers, and 1/3 community and State advocates).  The survey information will be provided to these eight workgroups among other information.. The department informed the Assembly and Senate budget committees on February 3rd and 10th  that the workgroup process will take about two-months to complete and will provide input to the department.   The proposal submitted to the Legislature however would ultimately be what the Brown Administration’s proposal to achieve  – at this point – at least $150 million in reductions in state general fund spending for regional center community-based services by imposing statewide standards.
• The eight workgroups will include these subject areas:  (1) Behavioral Services  (2)  Day Program, Supported Employment, and Work Activity Program Services  (3) Early Start Services  (4) Health Care and Therapeutic Services  (5) Independent Living and Supported Living Services  (6) Residential Services   (7) Respite and Other Family Supports and (8) Transportation

PUBLIC FORUMS

• The Department of Developmental Services said at the February 3rd and 10th budget committee hearings that they will conduct at least 3 Public Forums in May 2011 to present the draft of the statewide s tandards for regional center purchase of services, once the input from the eight Workgroups is obtained.
• Three Public Forums will be convened (Sacramento, Bay Area and Southern California).

LEGISLATURE

• By June 2011, following the three Public Forums, the Brown Administration could make revisions to its proposal, and then would submit it to the Legislature, along with any proposed legislative language to make necessary changes or additions to state law in order to implement the proposed statewide standards.
• The Assembly and Senate Budget Committees – or its budget subcommittees – will hold public hearings (likely in early June)  to take public comment on the proposal it received from the Brown Administration, along with the proposed legislative language. 
• Governor Brown is likely to release revisions in early to mid June to the 2011-2012 State budget he proposed January 10th (and that he hopes the Legislature will approve by March 10th) based on new economic and actual revenue and spending figures and more important, the results of the June special election (that is still not yet scheduled but could happen on June 7th or 14th.
• Legislature will probably move quickly to take action on the Governor’s revisions – that will include the proposed statewide standards.  It should be noted that the reductions to developmental services – and also other health and human services - would be likely if voters end up rejecting the proposed 5 year tax extension ballot initiatives.

CDCAN SUMMARY OF DEVELOPMENTAL SERVICES CUTS

As mentioned earlier in this report, that  reduction of $523.5  million in State general fund spending would be achieved in two basic ways – new federal money or fund shifts and actual spending cuts approved by both the Assembly and Senate Budget Committees. These reductions in state general fund spending for developmental services will be part of any final budget package sent to the Governor:

New Federal Funds & Fund Shifts That Reduce State General Spending for Developmental Services ($148 million out of the $523.5 million total): 

• $13 million reduction in State general fund spending as a result of  increased Federal Funds for Porterville Developmental Center consumers
• $50 million reduction in State general fund spending due to a shift of  Proposition 10 funds to developmental services
• $60 million reduction in State general fund spending due to new federal 1915 (i) Medicaid Waiver funds
• $10 million reduction in State general fund spending due to new “Money Follows the Person” federal Grant,
• $15 million reduction (savings)  from the action by both Assembly and Senate Budget Committees in rejecting Medi-Cal hard caps on physician visits (if it was approved it would have shifted costs to regional centers)
• Actual spending cuts that reduce State general fund spending for developmental services (including those that the Brown Administration would like to achieve through use of Statewide Standards on the Purchase of Services) ($375.5 million out of the $523.5 million total):
• $91.5 million reduction in State general funds by adopting budget trailer bill language to continue  the 4.25%  reduction in payments to most regional center providers and to regional center operations
• $13.2 million reductions in State general fund spending resulting from Developmental Center reductions
• $11.2 million reduction in State general fund spending from regional center operations savings.
• $109.6 million reduction in State general fund spending resulting from the following: 1). Administrative Cost Caps on Regional Centers and Providers 85-15%:   $39.5 million State general fund reduction (total $70 million all funds) – from that total about $1.3 million State general funds from regional center operations and $38.2 million from regional center purchase of services.     2).  Dispute Resolution and 3rd Party Liability:   $10.5 million State general fund reduction (total $11 million including all funds).   3).  Audits or  Review of Financial Statements:   $21.5 million State general fund reduction ($39.8 million all funds).  From that general fund amount, $200,000  in State general funds is from regional center operations and $21.3 million is from regional center purchase of services (providers).     4).Conflict of Interest:  $11 million in State general fund reductions ($20.1 million all funds).  Of the general fund amount, $900,000 from regional center operations and $10.1 million in State general funds from regional center purchase of services.   5).  Accountability and Transparency (includes board composition, compliance with state law, certain review of contracts, posted information on websites; requirement for all regional center vendors to meet the same standard as an enrolled Medi-Cal provider:  $27.1 million in State general fund reductions ($50.3 million all funds). Both houses approved “placeholder” budget trailer bill language.   [CDCAN Note: “placeholder” trailer bill language means legislative language is needed for this issue that at the time of approval, still needed to be finalized or drafted]
• $150 million reduction in State general fund spending resulting from developing and implementing Statewide Standards for Purchase of Services that would place limits on regional center community-based spending.

Both the Senate and Assembly Budget Committees also approved the following budget “trailer bill” language (none of which impacts the overall level of reduction amount) for the following:

• DevelopmentalCenterAutomatic Sprinkler System – (Assembly Budget Committee approved this proposal 2/18 – Senate Budget Committee approved on 2/17)
• SonomaDevelopmental CenterMedical Gasses and Oxygen Piping - (Assembly Budget Committee approved this proposal 2/18 – Senate Budget Committee approved on 2/17)
• Trailer Bill Language: Medi-Cal Managed Health Plans for Lanterman Developmental Center Transition -  (Assembly Budget Committee approved this proposal 2/18 – Senate Budget Committee approved on 2/17)
• Trailer Bill Language – Prevention Program (to allow transfer of funds) -  (Assembly Budget Committee approved this proposal 2/18 – Senate Budget Committee approved on 2/17)

Both the Assembly and Senate REJECTED the following proposed budget trailer bill language (the only one it rejected):

FairviewDevelopmental Center– Upgrade of Fire Alarm System (Assembly Budget Committee rejected Feb 18th and the Senate Budget Committee rejected on February 17th.)

CDCAN SUMMARY OF GOVERNOR’S DEVELOPMENTAL SERVICES PROPOSALS AS OF FEBRUARY 25th

1.  Status of developmental services related budget trailer bills and proposals

• ALL APPROVED , except one dealing with Fairview Developmental Center fire alarm system upgrade  – see above)
• Both Senate and Assembly took final action LAST WEEK on ALL of the proposed trailer bills and proposals under developmental services except ONE – dealing with how statewide standards for regional center purchase of services would be developed.  That was the ONLY issue that went to Budget Conference Committee. 
• As of Friday (February  25th) the Budget Conference Committee approved language that contains some revisions by committee staff – but largely outlines the Governor’s proposal to develop standards proposal for the Legislature to consider for approval in June.
• As of Friday evening (February 25th) there are no other developmental services budget issues remaining in Budget Conference Committee.

2. Developmental Services Budget Trailer Bill Language

• ALL APPROVED (except one dealing with developmental center)
• The developmental services reductions and other proposals which need changes in existing state law, will be in one or two budget trailer bills – no bill numbers yet assigned. 
• None of the final language (or bills) have been officially released yet – but will later next week.

3.  Reduction Amounts for Developmental Services

• As of February 25th, ALL APPROVED by the Senate and Assembly Budget Committees February 17th and 18th in identical actions. 
• As mentioned, the level of reductions – including the $109 million from various accountability and transparency related provisions, the additional $150 million of currently unspecified reductions in State general fund spending (to be identified by June with a proposal for statewide standards
• Effective Dates
• The budget bill and trailer bills normally go into effect immediately after being signed by the Governor. 
• Every one of the developmental services changes and cuts would go into effect July 1, 2011 or the date specified in the budget trailer bill. 

NEXT STEPS – DEVELOPMENTAL SERVICES BUDGET ISSUES

• ALL of  the developmental services budget items are “closed”  now with final actions taken on all of them by the Assembly and Senate Budget Committees February 17th and 18th and for one item, on February 25th by the Budget Conference Committee. 
• The Budget Conference Committee meets Monday and MAYBE Tuesday to finish up its work – none of which includes developmental services budget items.  Critical issues – including proposed elimination of Adult Day Health Care, Multipurpose Senior Services Program, and certain cuts to In-Home Supportive Services and Foster Youth Housing Transitional Program Plus, and realignment of certain state services to the counties – still need final action by the conference committee. 
• The full Assembly and Senate could take final vote on budget (that vote is almost certain not to change budget items related to developmental services and most other health and human services issues approved by the budget committees or the Budget Conference Committees)  as early as the end of next week. 
• Governor Brown wants completed budget package with trailer bills before March 10th. 
• Mid-June, Governor’s revision of his State budget, after the special election.  As mentioned in this report, the level of reduction of state general fund spending for developmental services (and other services and programs) could easily rise back up to where it was (totaling $750 million) or even higher.