CDCAN REPORT #020-2011: Department of Developmental Services outlines process to identify regional center statewide "Purchase of Services" standards cut

• Department of Developmental Services Outlines Process It Will Use To Identify Purchase of Services Standards Reductions
• Governor’s January 10th Budget Proposal Called for $750 Million Cut In General Fund Spending for Developmental Services Largely Impacting Regional Centers – Proposal Called for Imposing Purchase of Service Standards, Various Accountability and Transparency Measures But No Details or Specific Budget Reductions Were Identified

SACRAMENTO, CALIF  (CDCAN) [Updated 01/21/2011  10:35 AM  (Pacific Time)]   -  The Department of Developmental Services, the state agency that contracts with 21 non-profit regional centers to coordinate community-based services and supports to over 240,000 children and adults with developmental disabilities, outlined today the process it will follow to identify details on how a large part of the $750 million reduction in State general fund spending proposed by the Governor, will be cut from developmental services.

The Department of Developmental Services, which also operates and staffs 4 health facilities called developmental centers and one smaller facility, indicated that the process that will lead to crafting, with stakeholder input, a proposed statewide “purchase of services” standards for the Legislature to consider, will be outlined in draft budget related legislative language, called budget “trailer bill” language (because it follows or trails the main State budget bill).  That budget trailer bill langauge could be released early next week for the Legislature to consider.

“Purchase of Services” refers to the regional center budget that pays for the actual community-based service that is provided by a community-based organization (such as Easter Seals or UCP, Respite Inc) or individual.

One specific reduction that was identified in the Governor’s proposal to cut $750 million in state general fund spending in the developmental services budget was continuation for at least another year (to June 30, 2012) of the existing 4.25% cut in payments to most regional center providers and to regional center operations. That cut was supposed to expire June 30, 2011 – though the actual reduction amount is considered permanent.  Many advocates expect the payment reduction to become permanent.

Statewide Purchase of Service Standards Meant to Reduce Spending

• The statewide purchase of services standards was first proposed in 2002 and again in 2003 by Governor Gray Davis, that was tied to large reductions in State general fund spending – though no where near the $750 million reduction  in Governor Brown’s current budget proposal. 
• Davis’ proposal was strongly opposed by advocates who argued it would be reversing the individual rights of people under the Lanterman Developmental Disabilities Services Act – California’s civil rights act for people with developmental disabilities, which no other state in the nation has.  The Legislature rejected the proposal both times – though a reduction was still imposed.

Department Will Involve Stakeholders In Helping To Develop Standards

• The Department of Developmental Services indicated that the draft trailer bill language will outline the process it will use to gather input from stakeholders and to then develop a draft statewide purchase of services standards proposal to be submitted to the Legislature, probably in late May or early June for approval.
• The department indicated that the amount of savings to the State general fund (meaning the amount of money reduced in spending) will likely be “significant” but provided no details. 
• While the Governor and Legislature have fast tracked action on the various budget proposals – including developmental services, the Legislature is likely to approve some dollar amount reduction with budget trailer bill language that would require the Brown Administration (Department of Developmental Services) to submit details by May or June. 
• Statewide purchase of services standards will likely have major impact not only on a reduction in spending overall for services – but could impact availability of services.

The process outlined for developing the statewide purchase of service standards is generally:

• Online Survey – the Department of Developmental Services has been working on and is expected to release a online survey for the public – stakeholders – to provide input on regarding statewide purchase of service standards. The survey – which may use what is referred to as the “survey monkey” online survey tool, should be available as early as Monday – but definitely sometime early next week [CDCAN will issue report with link to the survey for people to participate. In addition the information will be available on the Department’s website at www.dds.ca.gov ]   
• The online survey will be anonymous, open to everyone. The survey will be divided into major categories of programs under the Purchase of Services budget and within those categories there will be a number of questions that people can choose to answer (or not).  It is not known yet how long the survey – when it is up – when be available. 
• Workgroups - From the input from the online survey, the Department of Developmental Services will compile information from about 8 different workgroups – composed of about 30-35 people – to look at and to come up with ideas and recommendations. 
• These would be new workgroups – not yet established – that the Department of Developmental Services will form involving “key players” to designate different people (providers, family members, people who receive services, etc).  The Department is expected to release further details on how it will form these workgroups soon. The previous workgroup known as the “Budget Advisory Group” will not be convened or used  for this process.
• After the workgroups have completed their work in reviewing the online input and making recommendations, the Department of Developmental Services will compile a draft statewide purchase of services proposal.
• Public Forums – before submitting the draft statewide purchase of services proposal to the Legislature, the Department of Developmental Services will hold a series of public forums to receive public comment on the document.  These forums would likely be held sometime in late April or May though no details have been released yet on dates, locations or how many forums will be held.  In addition, several groups – including CDCAN – will hold statewide townhall telemeetings or other events – to help provide for more public comment.
• After the public forums, the Department will finalize the draft statewide purchase of service standards proposal and then submit to the Legislature for approval, including any proposed draft budget trailer bill language needed to make necessary changes to state law to implement the standards.
• Legislative Hearings – The Legislature will likely hold hearings on the draft proposal – and other budget issues, though at this point in time, it is not clear when that would likely happen in late May or June – or whether it will be the subcommittees or the full budget committees.

Expansion of Share of Cost Program Being Looked At

• The Department of Developmental Services, as part of Governor Brown’s over-all reduction proposed for developmental services, is also looking at expanding what it calls “family and consumer responsibility” which refers to the existing family cost participation, which imposes for certain families with higher income levels, what amounts to a share of cost for certain services that their child or children use through the regional center community-based system. 
• No details were provided, and it was not clear if this issue would be included in the draft budget trailer bill to expected to  be released next week. 
• In other health and human service program areas, the Governor proposed – as did Arnold Schwarzenegger unsuccessfully last year and the year before – establishing co-payments in the Medi-Cal program for doctor visits, emergency room visits and hospital stays and imposing hard caps in what could be spent for a recipient in several Medi-Cal services such as durable medical equipment, hearing aids, and incontinence supplies.

Accountability and Transparency Spending Reduction Provisions

The proposed trailer bill language, which the Department of Developmental Services says will be a “starting point” will also contain “extensive language” proposed that deals with the other ways the Governor is proposing to achieve the $750 million cut in State general fund spending beyond the reduction that will be tied to imposing statewide standards.

Those other provisions dealing with accountability and transparency – all of which are meant to reduce spending in developmental services (and correspondingly save State general fund money), include:

• Expand Audit Requirements– draft trailer bill language would include provisions that would expand existing required annual audit requirements of regional centers to include audits of large providers of a “significant size”. 
• Require Change In Auditors of Regional Centers– draft trailer bill language would require regional centers who use the same accounting firm to conduct their required audit for a number of years, would be required to use a different company. 
• Disclosure Requirement of Regional Center Providers– draft trailer bill language would be included to require providers to provide certain information for the Department of Developmental Services to verify to make sure they would meet federal requirements that are required of enrolled Medi-Cal providers.  The proposed language would not mean that regional center vendored providers would have to also be enrolled as Medi-Cal providers, but would require those providers to submit certain information to the Department to make sure they would otherwise be eligible to be a Medi-Cal provider.  It is not certain if this language will refer to all regional center providers or only to those providers whose services are eligible for Medicaid (Medi-Cal) funding, though the draft trailer bill language, when it is released, presumably will make that clear.
• Conflict of Interest Disclosure– would include language regarding disclosure of any conflict of interests (perceived or real) of regional center staff and regional center board members. 
• Third Party Responsibility – language dealing with increasing the ability of the Department of Developmental Services to collect money for services provided to a person with developmental disabilities from other parties (Third party) that under law, should fund the service (example are services covered under a person’s health insurance, etc).  It is not certain yet how measures – such as those contained in AB 171 introduced yesterday by Assemblymember Jim Beall (Democrat – San Jose) will or can be tied to this proposal to increase savings to the State general fund. .
• Regional Center Board Approval of Certain Contracts– would include language in the draft trailer bill that would require a regional center board of directors to approve all special contracts over a certain dollar amount.  This does not refer to vendorization. The draft trailer bill language will likely have details on the exact dollar amount and what specific contracts would be covered by this provision.
• Cap On Administrative Expenses for Regional Centers and Providers– Department of Developmental Services will have language in the draft trailer bill that includes provisions that would impose a cap – the amount not yet determined – on administrative expenses for both regional centers and providers.  The Department of Developmental Services said this was a big issue – including recent press reports that focused on providers with large administrative expenses including executive director salaries.  The Department said the trailer bill language would define administrative expenses.
• Public Records Access – language that includes provision regarding creation of a portal on the Department of Developmental Services existing website to bring together various documents or links to those documents covered under the Public Record Act including links to documents on the 21 regional center websites. Some documents – such as regional center audit reports – are currently available now online, but are posted on a different state government website address.  In addition the draft trailer bill language will contain