Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees to be paid by parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital or on leave from the state hospital.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would, effective July 1, 2016, revise and recast those provisions by, among other things, calculating monthly parental fees based on a percentage of the parents annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less. The bill would require, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be calculated at the time of the parents annual fee recalculation, or within 60 days of a parental request for review by the department and receipt of the familys completed family financial statement. The bill would provide that the Program Development Fund is available upon appropriation by the Legislature and make other related and conforming changes.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees to be paid by parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital or on leave from the state hospital.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would, effective July 1, 2016, revise and recast those provisions by, among other things, calculating monthly parental fees based on a percentage of the parents annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less. The bill would require, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be calculated at the time of the parents annual fee recalculation, or within 60 days of a parental request for review by the department and receipt of the familys completed family financial statement. The bill would provide that the Program Development Fund is available upon appropriation by the Legislature and make other related and conforming changes.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees to be paid by parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital or on leave from the state hospital.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would, effective July 1, 2016, revise and recast those provisions by, among other things, calculating monthly parental fees based on a percentage of the parents annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less. The bill would require, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be recalculated calculated at the time of the parents annual fee recalculation, or within 30 60 days of a parental request for review by the department. department and receipt of the familys completed family financial statement. The bill would provide that the Program Development Fund is available upon appropriation by the Legislature and make other related and conforming changes. To the extent monthly parental fees are increased by these provisions, this bill would make an appropriation.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees to be paid by parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital or on leave from the state hospital.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would, effective July 1, 2016, revise and recast those provisions by, among other things, calculating monthly parental fees based on a percentage of the parents annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less. The bill would require, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be recalculated at the time of the parents annual fee recalculation. recalculation, or within 30 days of a parental request for review by the department. The bill would make other related and conforming changes. To the extent monthly parental fees are increased by these provisions, this bill would make an appropriation.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers. to be paid by parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or who are residents of a state hospital or on leave from the state hospital.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would require the Director of Developmental Services to account for major unusual expenses in establishing the amount of the parental fee, and to adjust the parental fee schedule for the level of annual gross income and the number of persons living in the family home. To the extent fees are increased by this adjustment, this bill would make an appropriation. This bill would also authorize a parent to appeal the parental fee determination and would require the department to consider specified information when evaluating the appeal. would, effective July 1, 2016, revise and recast those provisions by, among other things, calculating monthly parental fees based on a percentage of the parents annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less. The bill would require, for parents of children placed in 24-hour out-of-home care prior to July 1, 2016, the monthly parental fee to be recalculated at the time of the parents annual fee recalculation. The bill would make other related and conforming changes. To the extent monthly parental fees are increased by these provisions, this bill would make an appropriation.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would require the Director of Developmental Services to account for major unusual expenses in establishing the amount of the parental fee, and to adjust the parental fee schedule for the level of annual gross income and the number of persons living in the family home. To the extent fees are increased by this adjustment, this bill would make an appropriation. This bill would also authorize a parent to appeal the parental fee determination and would require the department to consider specified information regarding the parents ability to pay when evaluating the appeal.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers.

Existing law provides that all parental fees collected by or for regional centers are remitted to the State Treasury to be deposited in the Program Development Fund, a continuously appropriated fund.

This bill would require the Director of Developmental Services to account for major unusual expenses in establishing the amount of the parental fee, and to adjust the parental fee schedule for the level of annual net gross income and the number of persons living in the family home. To the extent fees are increased by this adjustment, this bill would make an appropriation. This bill would also authorize a parent to appeal the parental fee determination and would require the department to consider information regarding the parents ability to pay when evaluating the appeal.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers.

Under existing law, the Lanterman Developmental Disabilities Services Act, the State Department of Developmental Services is required to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires the Director of Developmental Services to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers.

This bill would make technical, nonsubstantive changes to these provisions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 564

Author:(Eggman)

As Amended Ver:September 1, 2015

Majority vote

Original Committee Reference: HUM. S.

SUMMARY: Raises the income threshold for required participation in the Parental Fee Program for families with children receiving 24-hour out-of-home care through a regional center and codifies regulatory requirements related to the fee. Specifically, this bill:

1. Makes the following changes to the Parental Fee Program as of July 1, 2016:

1. Revises the requirement that the Department of Developmental Services (DDS) assess a monthly fee to parents with children receiving 24-hour out-of-home care services through a regional center or as a resident of a state hospital to only include those families with gross incomes above 200% of the federal poverty level (FPL). Requires the fee to be assessed beginning 60 days from the date of the child’s placement in 24-hour out-of-home care.

2. Codifies the requirement that the monthly parental fee for a parent who fails to provide income documentation to DDS within the required 30 days be equivalent to the maximum monthly cost of caring for a child according to national data, as specified. Further stipulates that the monthly fee for a parent who later furnishes the appropriate documentation shall be recalculated, as specified, and retroactively adjusted based on the income information provided.

3. Requires the monthly parental fee to be recalculated every 12 months and within 60 days of the date a parent notifies DDS of a change in family income or size, as specified.

4. Authorizes DDS to grant a temporary waiver from paying the monthly parental fee in cases where a family experiences an unavoidable and uninsured catastrophic loss with direct economic impact on the family or significant unreimbursed medical costs associated with care for a child who is a regional center client.

5. Grants a credit equal to one day of the monthly parental fee to a parent who removes his or her child from a 24-hour out-of-home care placement for a home visit for six or more consecutive hours, as specified.

6. Codifies and expands the ability for a parent to appeal DDS' determination of the amount of the parental fee, which is currently allowed through state regulations. Provides that an appeal can only consider disputes related to the family income used to set the monthly parental fee and the denial or amount of credit.

The Senate amendments:

1. Increase the threshold for a Parental Fee Program assessment from 100% FPL to 200% FPL.

2. Recast and codify regulatory timelines for the furnishing of a family's income information to DDS.

3. Codify the Parental Fee Program payment schedule.

4. Recast and codify regulatory provisions related to a family's unavoidable, catastrophic loss by allowing DDS to temporarily waive the monthly parental fee for a family rather than authorizing DDS or the family's regional center to factor the loss into the family's gross income calculation for purposes of determining or adjusting the monthly parental fee amount.

5. Eliminate the requirement that DDS take into account certain factors, such as medical, transportation, incidental, clothing and other expenses, when establishing a monthly parental fee amount.

6. Allow recalculation of a parental fee amount prior to annual redetermination based on updated income information a family provides to DDS.

7. Make other technical changes to conform to the revised parental fee schedule and related requirements and push back the effective date of this bill’s provisions to July 1, 2016.

FISCAL EFFECT: According to the Senate Appropriations Committee, this bill may have the following fiscal impact:

1. Likely one-time costs of about $150,000 to revise existing formulas and procedures and to revise existing regulations by the DDS (General Fund).

2. Projected annual revenue loss of about $190,000 due to changes to the Parental Fee Structure (Program Development Fund), as the bill exempts families with incomes between 100% and 200% of the federal poverty level from paying fees, leading to a reduction in annual fee revenues. In addition, the bill authorizes families to request a recalculation of their fee before the annual fee redetermination.

3. Unknown potential increase if fee revenues due to simplified program requirements (Program Development Fund). According to the DDS, the current structure of the program has led to inconsistent application of fees across the state. By simplifying the program rules, the DDS indicates that compliance with the program's requirements may actually increase, increasing overall fee revenues. For example, a simpler, more consistent fee structure is likely to reduce appeals and eliminate the subjectivity from calculating fee levels. Also, a recent audit of the program found that there are significant amounts of uncollected fees. In part, this may be due to resistance to paying fees by families who feel that their fee calculations were unfair.

COMMENTS:

Developmental services: The Lanterman Act guides the provision of services and supports for Californians with developmental disabilities. Each individual under the Act, typically referred to as a "consumer," is legally entitled to treatment and habilitation services and supports in the least restrictive environment. Lanterman Act services are designed to enable all individuals served to live more independent and productive lives in the community. The term "developmental disability" means a disability that originates before an individual attains 18 years of age, is expected to continue indefinitely, and constitutes a substantial disability for that individual. It includes intellectual disabilities, cerebral palsy, epilepsy, and autism spectrum disorders (ASD). Other developmental disabilities are those disabling conditions similar to an intellectual disability that require treatment (i.e., care and management) similar to that required by individuals with an intellectual disability.

Direct responsibility for implementation of the Lanterman Act service system is shared by DDS and 21 regional centers, which are private nonprofit entities, established pursuant to the Lanterman Act, that contract with DDS to carry out many of the state’s responsibilities under the Act. The 21 regional centers serve 280,000 consumers and contract with providers, on their behalf, to deliver services such as residential placements, supported living services, respite care, transportation, day treatment programs, work support programs, and various social and therapeutic activities. Less than 1,100 consumers reside at one of California's three Developmental Centers – and one state-operated, specialized community facility – which provide 24-hour habilitation and medical and social treatment services.

Out-of-home care: Residence types available to regional center consumers who are not able to remain safely at home vary based on the level of services needed, which dictate criteria such as staffing levels, the physical aspects of a facility, and programming. These residence types include community care homes, such as adult residential facilities, foster family homes, independent living and supported living settings, skilled nursing facilities (SNF) and intermediate care facilities (ICF), developmental centers, and community treatment facilities, among others.

According to April 2015 data, nearly 77% of individuals served by regional centers live with their parents or in their own homes, while 96.76% of children (ages zero to 17) live with their parents. The other 3.24% (or 4,295 children) live in out-of-home, primarily community care settings. There aren't any children living in independent living or supported living settings, nor are there any children living in the state’s developmental centers.

Parental Fee Program: Established in the early years of the Lanterman Act, the Parental Fee Program was put into statute to require parents of children who are under 18 years of age and receive 24-hour out-of-home care, paid for by a regional center, to pay a share of cost based on their ability to pay. The money DDS receives from the Parental Fee Program is required by law to be remitted to the State Treasury for deposit into the Program Development Fund, which is used to initiate new programs consistent with the California Developmental Disabilities State Plan.

Parental fees are established for families with income at or above 100% of the Federal Poverty Level, and they range from $59 to $1,877 per month, based on family size and income. As of April 2015, there were 559 children in the Parental Fee Program.

If parents are unhappy with the determination that they are required to pay a parental fee, or if they wish to dispute the actual monthly amount, they must submit a written request to appeal the determination or the amount within 30 days of receiving notification from DDS stating that they are to pay a parental fee. Within 30 days of receiving the appeal and all pertinent financial information from a family, DDS is required to review the appeal and provide written notice of the decision to the appellant and the appropriate regional center.

A January 2015 California State Auditor report called into question whether implementation of the Parental Fee Program was effective and equitable. The Auditor found that DDS was using gross income and annual expenses when first determining a parent’s ability to pay, and then using net income and monthly household expenses in the appeal process. This resulted in a recommendation that DDS eliminate inconsistencies between the information used for initial fee determinations and the information used when an appeal is filed.

Current law requires the parental fee schedule to exempt families with income below 100% of poverty from assessment and payment of a parental fee and establishes a number of factors that DDS must consider when determining the parental fee amount parents are required to pay. These factors include:

1. The current cost of caring for a child at home, as determined by the most recent data available from the United States Department of Agriculture’s survey on the cost of raising a child in California, adjusted for the Consumer Price Index (CPI) from the survey date to the date of payment adjustment;

2. Medical expenses incurred prior to regional center care;

3. Whether the child is living at home;

4. Parental payments for medical expenses, clothing, incidentals, and other items considered necessary for the normal rearing of a child; and

5. Transportation expenses incurred in visiting a child.

Additionally, Parental Fee Program regulations permit DDS to allow claims for major unusual expenses that limit a family's available resources, which can be used to adjust the family's gross income used to determine a parent's ability to pay and the amount of the fee. These expense allowances include expenditures that consume a substantial portion of the family's gross income, as well as expenditures over which parents have no control (e.g., natural disaster, catastrophic uninsured casualty loss, death of an immediate family member, extreme medical expense).

Need for this bill: By increasing the income threshold for application of the monthly parental fee, as well as codifying and clarifying requirements related to the furnishing of information to DDS, potential temporary waivers of the fee due to unforeseen circumstances, and potential fee adjustment prior to annual redetermination without a formal appeal, the author seeks to provide more fairness, consistency and transparency in the implementation of the Parental Fee Program for families with children in 24-hour out-of-home care.

Analysis Prepared by: Myesha Jackson / HUM. S. / (916) 319-2089 FN: 0001974

 THIRD READING  

Bill No: AB 564

Author: Eggman (D)

Amended: 9/1/15 in Senate

Vote: 21

SENATE HUMAN SERVICES COMMITTEE: 5- 0, 7/14/15

AYES: McGuire, Berryhill, Hancock, Liu, Nguyen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15

AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

ASSEMBLY FLOOR: 78-0, 6/2/15 - See last page for vote

SUBJECT: Regional centers: parental fees

SOURCE: Author

DIGEST: This bill recasts the existing Parental Fee Program within the Department of Developmental Services (DDS) by, among other things, calculating monthly parental fees based on a percentage of the parents’ annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. This bill prohibits a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less, and make other related changes.

ANALYSIS:

Existing law:

1. Establishes the Lanterman Developmental Disabilities Services Act, which states that California is responsible for providing an array of services and supports sufficiently complete to meet the needs and choices of each person with developmental disabilities, regardless of age or degree of disability, and at each stage of life and to support their integration into the mainstream life of the community. (WIC 4500, et seq)

2. Establishes a system of nonprofit Regional Centers, overseen by DDS, to provide fixed points of contact in the community for all persons with developmental disabilities and their families, to coordinate services and supports best suited to them throughout their lifetime. (WIC 4620)

3. Requires a regional center to secure services and supports that meet the needs of the consumer, as determined in the IPP, and to give highest preference to those which 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. (WIC 4648)

4. Requires parents of children under the age of 18 years who are receiving 24-hour out-of-home care services through a regional center, or who are residents of a state hospital pay a fee, depending upon their ability to pay. Requires that this fee not exceed the cost of caring for a normal child at home, as determined by the director of DDS, or the cost of services provided, whichever is less. Requires that DDS determine, assess, and collect all parental fees, as specified, regardless of whether the child is placed in the state hospital or in a public or private community facility. Prohibits parents from being charged for diagnosis or counseling services received through the regional centers. (WIC 4782)

5. Requires DDS to establish, annually review, and adjust as needed, a schedule of parental fees and to revise it, as specified, to reflect changes in economic conditions that affect parents’ ability to pay. (WIC 4784 (a) and (b))

6. Requires DDS, in establishing the amount a parent shall pay, to take into account all of the following factors: (WIC 4784 (c))

1. The current cost of caring for a child at home, as determined by the most recent data available from the United States Department of Agriculture’s survey on the cost of raising a child in California, adjusted for the Consumer Price Index (CPI) from the survey date to the date of payment adjustment.

2. Medical expenses incurred prior to regional center care.

3. Whether the child is living at home.

4. Parental payments for medical expenses, clothing, incidentals, and other items considered necessary for the normal rearing of a child.

5. Transportation expenses incurred in visiting a child.

7. Exempts from the parental fee families with an income below the federal poverty level. (WIC 4784 (d))

8. Requires that fees be remitted to the Program Development Fund of the state Treasury, as specified, to provide resources needed to initiate new programs, consistent with approved priorities for program development in the state plan. Requires that excess fees, as defined, that are collected must be available for expenditure by DDS to offset General Fund costs. (WIC 4784 (f)(1)and (2))

This bill:

1. Strikes existing WIC 4784, which requires DDS to review annually and adjust the formula for calculating parental fees for children placed in out-of-home care as well as the requirement to include in that calculation changes in economic conditions that affect a parent’s ability to pay and other factors that the department must include in their calculation of a parental fee.

2. Replaces it with a new WIC 4784, effective July 1, 2016, that requires DDS to assess a monthly fee to parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or as a resident of a state hospital when the family’s gross income is above 200 percent of the federal poverty level.

3. Requires the parental fee to be effective 60 days from the date of the child’s admission to the 24-hour out-of-home placement, and requires, for the purpose of assessing the fee, that parents provide DDS with income documentation within 30 days from the date of the request for such documentation and requires that documentation to include a copy of a parent’s most recent federal tax return or a copy of each parent’s most recent paystub or employer-provided earnings statement, or alternative verification, as defined.

4. Eliminates the requirement that parents between 100 and 200 percent of poverty pay a fee and otherwise sets the fee as follows:

1. Parents who have a family income of 201 percent through 300 percent of the current federal poverty level shall be assessed a fee of 3 percent of their annual gross income to be billed in monthly increments.

2. Parents who have a family income of 301 percent through 400 percent of the current federal poverty level shall be assessed a fee of 4 percent of their annual gross income to be billed in monthly increments.

3. Parents who have a family income of 401 percent through 500 percent of the current federal poverty level shall be assessed a fee of 5 percent of their annual gross income to be billed in monthly increments.

4. Parents who have a family income of 501 percent or more of the current federal poverty level shall be assessed a fee of 6 percent of their annual gross income to be billed in monthly increments.

5. Requires that parents who fail to provide income documentation to the department within 30 days of the date of the department’s request shall be assessed a maximum monthly fee, as defined, but requires that fee be retroactively adjusted based on income information provided, once the parent provides appropriate documentation.

6. Prohibits any fee being charged that exceeds the maximum cost of caring for a child, as defined, or the cost of the services provided, whichever is less.

7. Requires that the parental fee be recalculated every 12 months, and within 60 days of the date a parent notifies the department of a change in family income or family size, as specified.

8. Requires that parents of children placed in 24-hour out-of-home care prior to July 1, 2016, shall have their monthly parental fee recalculated pursuant to the provisions of this section at the time of their annual fee recalculation, or within 60 days of a parental request for review by the department and receipt of the family’s completed family financial statement.

9. Permits DDS to grant a temporary waiver from paying the monthly parental fee for parents who substantiate, with receipts, an unavoidable and uninsured catastrophic loss with direct economic impact on the family or significant unreimbursed medical costs associated with care for a child who is a regional center consumer.

10. Establishes that a parent is entitled to a credit of one day’s fee, as defined, if the parent removes their child from the care facility for a home visit for any six consecutive hours during a 24-hour period and requires that requests for credits be post marked no later than 60 days from the child’s removal from the facility

11. Requires that failure to provide documentation and postmark the request as specified shall result in a denial of credit by the Department.

12. Requires that all fees collected by the program be deposited into the Program Development Fund, as defined, to provide resources needed to initiate new programs, consistent with approved priorities in the state’s plan, and expands the option for the department to use fees to offset General Fund costs.

13. Permits parents to appeal their monthly fee or the denial of credit by submitting a written appeal request to the director within 30 days, but limits the parent’s appeal to disputes concerning the family income used to set the monthly parental fee and the denial or amount of credit.

14. Requires DDS to provide written notice of the decision to the appellant within 30 days of receipt of the appeal, and requires all decisions regarding monthly parental fee appeals be retroactive to the date the appealed monthly parental fee was assessed.

15. Limits the Department’s scope in considering the appeal to the income documentation and the calculation of the monthly parental fee that was used in making the original determination.

Background

The Lanterman Developmental Disabilities Services Act establishes an entitlement to services and supports for Californians with developmental disabilities who are living in their communities. A developmental disability is one that originates before the age of 18, continues, or can be expected to continue, indefinitely, and constitutes a substantial disability. Approximately 290,000 children and adults with developmental disabilities are served in community-based programs and supported by state- and federally-funded services that are coordinated by 21 nonprofit regional centers. Another 1,077 individuals live in four state-run institutions, including three Developmental Centers, as of July 1. About 77 percent of all consumers and 97 percent of child consumers live in the home of a parent or guardian or in their own home.

Parental fee program. Established in the early years of the Lanterman Act, the Parental Fee Program requires parents to pay a share of cost if their children are under 18 years of age and receive 24-hour out-of-home care, paid for by a regional center. The current calculation requires the Director of DDS consider a family’s gross income, age of the child, travel expenses to visit the child, medical expenses incurred prior to the out-of-home placement, parental payments for specified items “considered necessary in the normal rearing of a child,” and others. The parental fee is intended to be based on a parent’s ability to pay.

For families with income at or above 100 percent of the Federal Poverty Level, fees range from $59 to $1,877 per month, based on family size and income. Currently, 559 are children in the Parental Fee Program and approximately 4,300 children statewide are in out-of-home residential care. Money from the Parental Fee Program is required by statute to be deposited into the Program Development Fund, which is used to initiate new programs consistent with the California Developmental Disabilities State Plan. Excess funds must be used to offset the Department’s General Fund expenses. This bill relaxes that requirement.

State auditor review. A January 2015 report by the California State Auditor found that the program was riddled with errors and inconsistencies that placed some parents at a significant disadvantage. The report noted that as a result of staff error and inconsistent interpretations and processes, parents with similar financial circumstances may be assessed substantially different levels of fees. Auditors reviewed approximately 10 percent of the cases in the program and found that the process DDS uses to assess parental fees is “riddled with unnecessary delays, lack of documentation, incorrect calculations, and inconsistent staff interpretations. For instance, because Developmental Services does not hold regional centers accountable for providing required reports of children newly placed in out-of-home care, months or even years pass before Developmental Services becomes aware of the need to assess fees on certain families.”

The audit found incorrectly assessed fees by hundreds of dollars per month due to staff errors, and inconsistent documentation– verification was required of some families but not others. The auditor concluded that because the appeals process considers expenses and deductions that are not taken into account in the initial fee assessment, 95 percent of all appeals result in a fee reduction, underscoring the inconsistency in both the original calculation, and the appeal. The annual amount of unbilled fees ranges from $740,000 to $1.1 million, according to the auditor.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to a Senate Appropriations Committee analysis, this bill would result in one-time costs of about $150,000 (General Fund) to revise existing formulas and procedures and to revise existing DDS regulations. It projected an annual revenue loss of about $190,000 due to changes to the Parental Fee Structure (Program Development Fund). The analysis also identified a potential increase in fee revenues resulting from simplified program requirements. By simplifying the program rules, DDS indicates that compliance with the program’s requirements may actually increase, increasing overall fee revenues. For example, a simpler, more consistent fee structure is likely to reduce appeals and eliminate the subjectivity in calculating fees. A recent audit of the program found that there are significant amounts of uncollected fees. In part, this may be due to resistance to paying fees by families who feel that their fee calculations were unfair.

SUPPORT: (Verified 8/28/15)

State Council on Developmental Disabilities

OPPOSITION: (Verified 8/28/15)

None received

ARGUMENTS IN SUPPORT: According to the author, this bill will fix problems in the parental fee program which a state audit found to be “riddled with unnecessary delays, lack of documentation, incorrect calculations and inconsistent staff interpretations.” The author requested a California State Auditor review of the program after being contacted by a constituent whose 15-year old child was placed out-of-home in a 24-hour care facility in Los Angeles. The constituent reported dramatic fee increases, and when consulting with other families, found significant differences in fees from family to family. When he filed an appeal, the constituent was subject to a lengthy and convoluted process, which ultimately resulted in a reduction in fees. The Auditor found similar issues statewide.

ASSEMBLY FLOOR: 78-0, 6/2/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Chávez, Grove

Prepared by: Mareva Brown / HUMAN S. / (916) 651-1524

9/1/15 20:22:41

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 564 (Eggman) - Regional centers: parental fees

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 27, 2015

Bill Summary:

AB 564 would revise the requirements of the existing Parental Fee Program for children placed in 24-hour out-of-home care, primarily by establishing a fee structure based on family income.

Fiscal Impact:

• Likely one-time costs of about $150,000 to revise existing formulas and procedures and to revise existing regulations by the Department of Developmental Services (General Fund).

• Projected annual revenue loss of about $190,000 due to changes to the Parental Fee Structure (Program Development Fund). The bill would exempt families with incomes between 100% and 200% of the federal poverty level from paying fees, leading to a reduction in annual fee revenues. In addition, the bill would authorize families to request a recalculation of their fee before the annual fee redetermination. In combination, the Department indicates that these changes will reduce annual fee revenues by $190,000 per year.

• Unknown potential increase if fee revenues due to simplified program requirements (Program Development Fund). According to the Department, the current structure of the program has led to inconsistent application of fees across the state. By simplifying the program rules, the Department indicates that compliance with the program’s requirements may actually increase, increasing overall fee revenues. For example, a simpler, more consistent fee structure is likely to reduce appeals and eliminate the subjectivity from calculating fee levels. Also, a recent audit of the program found that there are significant amounts of uncollected fees. In part, this may be due to resistance to paying fees by families who feel that their fee calculations were unfair.

Committee Amendments:

Delete the continuous appropriation and make technical corrections.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 564 (Eggman) - Regional centers: parental fees

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 564 would revise the requirements of the existing Parental Fee Program for children placed in 24-hour out-of-home care, primarily by establishing a fee structure based on family income.

Fiscal Impact:

• Likely one-time costs of about $150,000 to revise existing formulas and procedures and to revise existing regulations by the Department of Developmental Services (General Fund).

• Projected annual revenue loss of about $190,000 due to changes to the Parental Fee Structure (Program Development Fund). The bill would exempt families with incomes between 100% and 200% of the federal poverty level from paying fees, leading to a reduction in annual fee revenues. In addition, the bill would authorize families to request a recalculation of their fee before the annual fee redetermination. In combination, the Department indicates that these changes will reduce annual fee revenues by $190,000 per year.

• Unknown potential increase if fee revenues due to simplified program requirements (Program Development Fund). According to the Department, the current structure of the program has led to inconsistent application of fees across the state. By simplifying the program rules, the Department indicates that compliance with the program’s requirements may actually increase, increasing overall fee revenues. For example, a simpler, more consistent fee structure is likely to reduce appeals and eliminate the subjectivity from calculating fee levels. Also, a recent audit of the program found that there are significant amounts of uncollected fees. In part, this may be due to resistance to paying fees by families who feel that their fee calculations were unfair.

Background:

California provides community-based services to approximately 250,000 persons with developmental disabilities and their families through a statewide system of 21 regional centers. Regional centers are private, nonprofit agencies under contract with the Department of Developmental Services for the provision of various services and supports to people with developmental disabilities. As a single point of entry, regional centers provide diagnostic and assessment services to determine eligibility; convene planning teams to develop an Individual Program Plan for each eligible consumer; and either provide or obtain from generic agencies appropriate services for each consumer in accordance with the Individual Program Plan.

Under current law, families of children who are placed in 24-hour out-of-home care are required to pay Parental Fees. The purpose of this program is to offset General Fund costs for providing out-of-home care. Under current law, the Department of Developmental Services is required to establish a fee schedule for the Parental Fee Program using factors such as the costs for caring for a child at home, medical expenses previously incurred by the child, parental payments for medical expenses, and other factors. Families with gross income below 100% of the federal poverty level are exempt from the Parental Fee Program.

For example, a family of four with a gross income of $60,000 per year would pay a fee roughly between $470 and $536 per month (the actual fee could vary somewhat depending on family specific factors). For a family of four with a gross income of $90,000, the fee would be roughly between $882 and $1,005.

A January 2015 report by the Bureau of State Audits found that implementation of the Parental Fee Program was inconsistent. The fee levels paid by families varied considerably. In large part this is because the current process for assessing fees is complicated and subject to differing interpretations by Department staff and because staff often make fee level determinations without adequate documentation. In addition, the audit found that fee levels are almost always reduced on appeal. Families that know how to request an appeal are therefore able to pay lower fees than those who do not.

Proposed Law:

AB 564 would revise the requirements of the existing Parental Fee Program for children placed in 24-hour out-of-home care, primarily by establishing a fee structure based on family income.

Specific provisions of the bill would:

• Delete the existing requirements for establishing the Parental Fee Program fee amounts, as of July 1, 2016;

• Delete the requirement that families with income below 200% of the federal poverty level pay the Parental Fee;

• Set the new Parental Fee level at 3% percent of income for families with incomes between 201% and 300% of the federal poverty level;

• Set the new Parental Fee level at 4% percent of income for families with incomes between 301% and 400% of the federal poverty level;

• Set the new Parental Fee level at 5% percent of income for families with incomes between 401% and 500% of the federal poverty level;

• Set the new Parental Fee level at 6% percent of income for families with incomes over 501% of the federal poverty level;

• Specify the information families must provide to the Department to verify their income;

• Prohibit any fee applied under the program from exceeding the maximum monthly cost of caring for a child at home;

• Require the Parental Fee to be recalculated every 12 months and within 60 days of a request for a recalculation by a family (including families whose child was placed in 24-hour care prior to July 1, 2016);

• Authorize the Department to grant a temporary waiver of fees when a family incurs significant medical costs;

• Specify the process for appealing the fee determination amount;

• Specify that fee revenues be deposited in the Program Development Fund to pay for new programs or offset General Fund costs.

Staff Comments:

Currently, the families of 695 children are eligible for the Parental Fee Program. However, almost half of those families have incomes below 100% of the federal poverty level and are therefore exempt from paying fees. About 20% of families have incomes between 100% and 200% of the federal poverty level and would be exempted from paying fees under this bill. While this is a significant share of the number of eligible families, the actual revenue loss from exempting these families is less than $200,000 per year.

-- END --

SENATE COMMITTEE ON HUMAN SERVICES

Senator McGuire, Chair

2015 - 2016 Regular

Bill No: AB 564

Subject: Regional centers: parental fees

SUMMARY

This bill recasts the existing Parental Fee Program within the Department of Developmental Services (DDS) by, among other things, calculating monthly parental fees based on a percentage of the parents’ annual income and authorizing a credit of the equivalent of one day of the monthly parental fee for each day a child spends 6 or more consecutive hours in a 24-hour period on a home visit. The bill would prohibit a monthly parental fee from exceeding the maximum monthly cost of caring for a child or the cost of services provided, whichever is less, and make other related changes.

ABSTRACT

Existing law:

1. Establishes the Lanterman Developmental Disabilities Services Act, which states that California is responsible for providing an array of services and supports sufficiently complete to meet the needs and choices of each person with developmental disabilities, regardless of age or degree of disability, and at each stage of life and to support their integration into the mainstream life of the community. (WIC 4500, et seq)

2. Establishes a system of nonprofit Regional Centers, overseen by DDS, to provide fixed points of contact in the community for all persons with developmental disabilities and their families, to coordinate services and supports best suited to them throughout their lifetime. (WIC 4620)

3. Establishes an Individual Program Plan (IPP) and defines that planning process as the vehicle to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers. (WIC 4512)

4. Requires a regional center to secure services and supports that meet the needs of the consumer, as determined in the IPP, and to give highest preference to those which 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. (WIC 4648)

5. Requires parents of children under the age of 18 years who are receiving 24-hour out-of-home care services through a regional center, or who are residents of a state hospital or on leave from the state hospital shall be required to pay a fee depending upon their ability to pay. Requires that this fee not exceed the cost of caring for a normal child at home, as determined by the Director of DDS, or the cost of services provided, whichever is less. Requires that DDS determine, assess, and collect all parental fees, as specified, regardless of whether the child is placed in the state hospital or in a public or private community facility. Prohibits parents from being charged for diagnosis or counseling services received through the regional centers. (WIC 4782)

6. Requires the Director of DDS to establish, annually review, and adjust as needed, a schedule of parental fees for services received through the regional centers, and to revise it, as specified, to reflect changes in economic conditions that affect parents’ ability to pay the fee. (WIC 4784 (a) and (b))

7. In establishing the amount a parent shall pay, requires DDS to take into account all of the following factors: (WIC 4784 (c))

1. The current cost of caring for a child at home, as determined by the most recent data available from the United States Department of Agriculture’s survey on the cost of raising a child in California, adjusted for the Consumer Price Index (CPI) from the survey date to the date of payment adjustment.

2. Medical expenses incurred prior to regional center care.

3. Whether the child is living at home.

4. Parental payments for medical expenses, clothing, incidentals, and other items considered necessary for the normal rearing of a child.

5. Transportation expenses incurred in visiting a child.

8. Exempts from the parental fee families with an income below the federal poverty level. (WIC 4784 (d))

9. Requires that fees be remitted to the Program Development Fund of the state Treasury, as specified, to provide resources needed to initiate new programs, consistent with approved priorities for program development in the state plan. (WIC 4784 (f)(1))

10. Requires that excess fees, as defined, that are collected must be available for expenditure by DDS to offset General Fund costs. (WIC 4784 (f)(2))

This bill:

1. Strikes existing WIC 4784, which requires DDS to review annually and adjust the formula for calculating parental fees for children placed in out-of-home care as well as the requirement to include in that calculation changes in economic conditions that affect a parent’s ability to pay and other factors that the department must include in their calculation of a parental fee, as defined in WIC 4784 (c).

2. Replaces it with a new WIC 4784, effective July 1, 2016, that requires DDS to assess a monthly fee to parents of children under 18 years of age who are receiving 24-hour out-of-home care services through a regional center or as a resident of a state hospital when the family’s gross income is above 200 percent of the federal poverty level.

3. Requires the parental fee to be effective 60 days from the date of the child’s admission to the 24-hour out-of-home placement.

4. Requires, for the purpose of assessing the fee, that parents provide DDS with income documentation within 30 days from the date of the request for such documentation and requires that documentation to include a copy of a parent’s most recent federal tax return or a copy of each parent’s most recent paystub or employer-provided earnings statement, or alternative verification, as defined.

5. Eliminates the requirement that parents between 100 and 200 percent of poverty pay a fee and otherwise sets the fee as follows:

1. Parents who have a family income of 201 percent through 300 percent of the current federal poverty level shall be assessed a fee of 3 percent of their annual gross income to be billed in monthly increments.

2. Parents who have a family income of 301 percent through 400 percent of the current federal poverty level shall be assessed a fee of 4 percent of their annual gross income to be billed in monthly increments.

3. Parents who have a family income of 401 percent through 500 percent of the current federal poverty level shall be assessed a fee of 5 percent of their annual gross income to be billed in monthly increments.

4. Parents who have a family income of 501 percent or more of the current federal poverty level shall be assessed a fee of 6 percent of their annual gross income to be billed in monthly increments.

6. Requires that parents who fail to provide income documentation to the department within 30 days of the date of the department’s request shall be assessed a maximum monthly fee equivalent to the maximum cost of caring for a child, as specified the most recent published version of the US Department of Agriculture’s Cost of Raising a Child, but that fee must be retroactively adjusted based on income information provided, once the parent provides appropriate documentation.

7. Prohibits any fee being charged that exceeds the maximum cost of caring for a child, as defined, or the cost of the services provided, whichever is less.

8. Requires that the parental fee be recalculated every 12 months, and within 60 days of the date a parent notifies the department of a change in family income or family size, as specified.

9. Requires that parents of children placed in 24-hour out-of-home care prior to July 1, 2016, shall have their monthly parental fee recalculated pursuant to the provisions of this section at the time of their annual fee recalculation.

10. Permits DDS to grant a temporary waiver from paying the monthly parental fee for parents who substantiate, with receipts, an unavoidable and uninsured catastrophic loss with direct economic impact on the family or significant unreimbursed medical costs associated with care for a child who is a regional center consumer.

11. Establishes that a parent is entitled to a credit of one day’s fee, as defined, if the parent removes their child from the care facility for a home visit for any six consecutive hours during a 24-hour period and requires that requests for credits be post marked no later than 60 days from the child’s removal from the facility. Requires that failure to provide documentation and postmark the request as specified shall result in a denial of credit by the Department.

12. Requires that all fees collected by the program be deposited into the Program Development Fund, as defined, to provide resources needed to initiate new programs, consistent with approved priorities in the state’s plan, and expands the option for the department to use fees to offset General Fund costs.

13. Permits parents to appeal their monthly fee or the denial of credit by submitting a written appeal request to the director within 30 days, but limits the parent’s appeal to disputes concerning the family income used to set the monthly parental fee and the denial or amount of credit.

14. Requires DDS to provide written notice of the decision to the appellant within 30 days of receipt of the appeal, and requires all decisions regarding monthly parental fee appeals be retroactive to the date the appealed monthly parental fee was assessed.

15. Limits the Department’s scope in considering the appeal to the income documentation and the calculation of the monthly parental fee that was used in making the original determination.

16. Makes additional statutory cleanup changes.

FISCAL IMPACT

No analysis of the current version of the bill has been done.

BACKGROUND AND DISCUSSION

Purpose of the bill:

According to the author, this bill will fix problems in the parental fee program which a state audit found to be “riddled with unnecessary delays, lack of documentation, incorrect calculations and inconsistent staff interpretations.” The author requested a California State Auditor review of the program after being contacted by a constituent whose 15-year old child was placed out-of-home in a 24-hour care facility in Los Angeles. The constituent reported dramatic fee increases, and when consulting with other families, found significant differences in fees from family to family. When he filed an appeal, the constituent was subject to a lengthy and convoluted process, which ultimately resulted in a reduction in fees. The Auditor found similar issues statewide.

The Lanterman Act

The Lanterman Developmental Disabilities Services Act establishes an entitlement to services and supports for Californians with developmental disabilities who are living in their communities. A developmental disability is one that originates before the age of 18, continues, or can be expected to continue, indefinitely, and constitutes a substantial disability. Approximately 290,000 children and adults with developmental disabilities are served in community-based programs and supported by state- and federally-funded services that are coordinated by 21 nonprofit regional centers. Another 1,077 individuals live in four state-run institutions, including three Developmental Centers, as of July 1. About 77 percent of all consumers and 97 percent of child consumers live in the home of a parent or guardian or in their own home.

Services are developed locally and regional centers provide diagnosis and assessment of eligibility and help plan, access, coordinate and monitor the services and supports that are needed. Services for consumers are determined through an individual program plan (IPP).

Parental fee program

Established in the early years of the Lanterman Act, the Parental Fee Program requires parents to pay a share of cost if their children are under 18 years of age and receive 24-hour out-of-home care, paid for by a regional center. The calculation includes having the Director of DDS consider a family’s gross income, age of the child, travel expenses to visit the child, medical expenses incurred prior to the out-of-home placement, parental payments for specified items “considered necessary in the normal rearing of a child,” and others. The parental fee is intended to be based on a parent’s ability to pay.

For families with income at or above 100 percent of the Federal Poverty Level, fees range from $59 to $1,877 per month, based on family size and income. Currently, 559 are children in the Parental Fee Program and approximately 4,300 children statewide in out-of-home residential care. Money from the Parental Fee Program is required by statute to be deposited into the Program Development Fund, which is used to initiate new programs consistent with the California Developmental Disabilities State Plan. Excess funds must be used to offset the Department’s General Fund expenses. This bill relaxes that distinction.

State auditor review

A January 2015 report by the California State Auditor¹ found that the program was riddled with errors and inconsistencies that placed some parents at a significant disadvantage. The report noted that as a result of staff error and inconsistent interpretations and processes, parents with similar financial circumstances may be assessed substantially different levels of fees. Auditors reviewed approximately 10 percent of the cases in the program and found that the process DDS uses to assess parental fees is “riddled with unnecessary delays, lack of documentation, incorrect calculations, and inconsistent staff interpretations. For instance, because Developmental Services does not hold regional centers accountable for providing required reports of children newly placed in out‑of‑home care, months or even years pass before Developmental Services becomes aware of the need to assess fees on certain families.”

The audit also found incorrectly assessed fees by hundreds of dollars per month due to various staff errors, and inconsistent documentation– verification was required of some families but not others. “We observed similar errors, lack of documentation, and inconsistent staff interpretations with the process DDS uses to review parents’ appeals of fees.” The auditor concluded that because the appeals process considers expenses and deductions that are not taken into account in the initial fee assessment process, 95 percent of all appeals result in a fee reduction, underscoring the inconsistency in both the original calculation, and the appeals process. The Auditor concluded that the annual amount of unbilled fees ranges from $740,000 to $1.1 million.

Related legislation:

AB 9 (Evans, Chapter 9, 4^th Extraordinary Session, 2009) revised the parental fee provisions by providing for additional factors to be used in determining the fee adjustment, and other changes.

COMMENTS

This bill attempts to provide structure within a program that had been inconsistently statewide. By replacing the somewhat subjective calculations required in statute with a strict methodology based solely on family income, the author hopes to remove the inconsistencies that left some families with significantly higher fees than others who were similarly situated. The current language would do the following:

1. Clarify the amount a parent must pay is based solely on a percentage of gross income.

2. In some cases, reduce a family’s obligation.

3. Eliminate the obligation of a family between 100 and 200 percent of poverty to pay a parental fee.

4. Set time lines for the receipt of documentation or require a maximum payment be assessed until required documents are received

5. Permit DDS to waive the fee under certain circumstances.

6. Relax the requirement that DDS use the money first to provide resources needed to initiate new programs, and secondarily to fund General Fund obligations if excess funding is collected. This bill permits any funds to be used on General Fund obligations.

The following chart demonstrates the new structure and change in fees for some families:

While the author has clarified the provisions of the program with substantial technical assistance from DDS, the committee additionally suggests permitting families to request a reconsideration of the initial recalculation rather than having to wait up to a year to see potential fee reductions resulting from this bill.

Staff recommends the following amendment:

4784 (e) (5) Parents of children placed in 24-hour out-of-home care prior to July 1, 2016, shall have their monthly parental fee recalculated pursuant to the provisions of this section at the time of their annual fee recalculation, or within 30 days of a request for review by the Department.

PRIOR VOTES

POSITIONS

Support:

State Council on Developmental Disabilities

Oppose:

None received.

-- END --

Date of Hearing: May 27, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 564

Author:(Eggman) – As Amended Ver:May 6, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill eliminates inconsistency in Parental Fee Program determinations and appeals processes for families with children receiving 24-hour out-of-home care through a regional center. Specifically, this bill:

1. Adds major unusual expenses to the factors that must be taken into account in establishing the parental fee amount.

2. Requires the parental fee schedule to be adjusted for the level of annual gross income and the number of persons living in the family home.

3. Codifies the ability for a parent to appeal the Department of Developmental Services’ (DDS) determination of the amount of the parental fee pursuant to department regulations.

4. Requires DDS to consider the same information regarding a parent’s gross income and the factors required to be taken into account when determining a parental fee, and when considering an appeal of a parental fee determination.

5. Requires a parental fee amount that is adjusted as the result of an appeal to be determined in accordance with the parental fee schedule.

FISCAL EFFECT:

No significant fiscal impact to DDS.

COMMENTS:

1. Purpose. This bill seeks to provide greater consistency in the implementation of the Parental Fee Program for families with children in out-of-home care. Based on the recommendations in a January 2015 State Auditor’s Report, this bill clarifies the factors to be considered when determining the amount of a parental fee, codifies a parent’s right to an appeal of a parental fee determination, and requires the same type of information to be used when making parental fee determinations and when considering appeals.

2. Parental Fee Program. Established in the early years of the Lanterman Act, the Parental Fee Program requires parents of children who are under 18 years of age and receive 24-hour out-of-home care, paid for by a regional center, to pay a share of cost based on their ability to pay. The money the Department of Developmental Services (DDS) receives from the Parental Fee Program is required by law to be deposited into the Program Development Fund, which is used to initiate new programs consistent with the California Developmental Disabilities State Plan.

Parental fees are established for families with income at or above 100% of the Federal Poverty Level, and they range from $59 to $1,877 per month, based on family size and income. Currently, there are 559 children in the Parental Fee Program.

If parents disagree with the determination that they are required to pay a parental fee, or if they wish to dispute the actual monthly amount, they must submit a written request to appeal the determination or the amount within 30 days of receiving notification from DDS stating that they are to pay a parental fee. Within 30 days of receiving the appeal and all pertinent financial information, DDS is required to review the appeal and provide written notice of the decision to the appellant and the appropriate regional center.

3. State Auditor’s Report. A January 2015, California State Auditor’s report called into question whether implementation of the Parental Fee Program was effective and equitable. Among the Auditor’s findings was that DDS was using different sets of income data for first determining a parent’s ability to pay than in the appeals process. The Auditor recommended that DDS eliminate inconsistencies between the information used for initial fee determinations and the information used when an appeal is filed.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 28, 2015

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Kansen Chu, Chair

ABPCA Bill Id:AB 564

Author:(Eggman) – As Amended Ver:April 22, 2015

SUBJECT: Regional centers: parental fees

SUMMARY: Eliminates inconsistency in Parental Fee Program determinations and appeals processes for families with children receiving 24-hour out-of-home care through a regional center.

Specifically, this bill:

1. Adds major unusual expenses, including, but not limited to, expenses caused by a natural disaster, catastrophic uninsured loss, or significant recent medical expenses to the factors that must be taken into account in establishing the parental fee amount.

2. Requires the parental fee schedule to be adjusted for the level of annual gross income and the number of persons living in the family home.

3. Codifies the ability for a parent to appeal the department’s determination of the amount of the parental fee, which is currently allowed through state regulations.

4. Requires the Department of Developmental Services to consider the same information regarding a parent’s gross income and the factors required to be taken into account when determining a parental fee and when considering an appeal of a parental fee determination.

5. Requires a parental fee amount that is adjusted as the result of an appeal to be determined in accordance with the parental fee schedule.

EXISTING LAW:

1. Establishes an entitlement to services for individuals with developmental disabilities under the Lanterman Developmental Disabilities Services Act (Lanterman Act). (WIC 4500 et seq.)

2. Grants all individuals with developmental disabilities, among all other rights and responsibilities established for any individual by the United States Constitution and laws and the California Constitution and laws, the right to treatment and habilitation services and supports in the least restrictive environment. (WIC 4502)

3. Establishes a system of 21 nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires the Department of Developmental Services to contract with regional centers to provide case management services and arrange for or purchase services that meet the needs of individuals with developmental disabilities, as defined. (WIC 4620 et seq.)

4. Requires the development of an individual program plan (IPP) for each regional center consumer, which specifies services to be provided to the consumer, based on his or her individualized needs determination and preferences, and defines that planning process as the vehicle to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers. (WIC 4512)

5. Establishes that an infant or toddler under age 3 who is eligible for regional center services shall have an individualized family service plan (IFSP) to direct services, as specified, and defines the types of services, supports and staffing that should be considered when creating the plan. (GOV 95020)

6. Requires regional centers to provide the consumer, his or her parent, legal guardian, or other appropriate authorized representative, as specified, at least annually, a statement of services and supports the regional center purchased, for the purpose of ensuring that the services are delivered. (WIC 4648(h))

7. Requires regional centers to identify and pursue all possible sources of funding for consumers receiving regional center services, as specified. (WIC 4659 (a) and (b))

8. Requires parents of children who are under age 18 and receiving 24-hour out-of-home-care services through a regional center to pay a parental fee, as specified. (WIC 4782)

9. Requires DDS to annually review and adjust, as needed, a schedule of parental fees for services provided through regional centers, as specified, and exempts families with income below the federal poverty level from assessment and payment of a parental fee. (WIC 4784)

10. Authorizes parents to appeal the determination of their ability to pay a parental fee or the amount of the parental fee within 30 days of receiving a parental fee confirmation letter, as specified. Requires DDS to review the appeal and provide written notice of the decision to the appellant and the appropriate regional center within 30 days after receipt of the appeal and related pertinent information, as specified. (CCR Title 17, Section 50241)

FISCAL EFFECT: Unknown

COMMENTS:

Developmental services: The Lanterman Act guides the provision of services and supports for Californians with developmental disabilities. Each individual under the Act, typically referred to as a “consumer,” is legally entitled to treatment and habilitation services and supports in the least restrictive environment. Lanterman Act services are designed to enable all individuals served to live more independent and productive lives in the community.

The term “developmental disability” means a disability that originates before an individual attains 18 years of age, is expected to continue indefinitely, and constitutes a substantial disability for that individual. It includes intellectual disabilities, cerebral palsy, epilepsy, and autism spectrum disorders (ASD). Other developmental disabilities are those disabling conditions similar to an intellectual disability that require treatment (i.e., care and management) similar to that required by individuals with an intellectual disability.

Direct responsibility for implementation of the Lanterman Act service system is shared by DDS and 21 regional centers, which are private nonprofit entities, established pursuant to the Lanterman Act, that contract with DDS to carry out many of the state’s responsibilities under the Act. The 21 regional centers serve 280,000 consumers and contract with providers, on their behalf, to deliver services such as residential placements, supported living services, respite care, transportation, day treatment programs, work support programs, and various social and therapeutic activities. Around 1,100 consumers reside at one of California’s three Developmental Centers—and one state-operated, specialized community facility—which provide 24-hour habilitation and medical and social treatment services.

Services provided to people with developmental disabilities are outlined in an IPP, which is developed by the IPP team—including, among others, the consumer, his or her legally authorized representative, and one or more regional center representatives—and is based on the consumer’s needs and choices. The Lanterman Act requires that the IPP promote community integration and maximize opportunities for each consumer to develop relationships, be part of community life, increase control over his or her life, and acquire increasingly positive roles in the community. 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.

Out-of-home care: Residence types available to regional center consumers who are not able to remain safely at home vary based on the level of services needed, which dictate criteria such as staffing levels, the physical aspects of a facility, and programming. These residence types include community care homes, such as adult residential facilities, foster family homes, independent living and supported living settings, skilled nursing facilities (SNF) and intermediate care facilities (ICF), developmental centers, and community treatment facilities, among others.

According to April 2015 data, nearly 77% of individuals served by regional centers live with their parents or in their own homes, while 96.76% of children (ages 0 to 17) live with their parents. The other 3.24% (or 4,295 children) live in out-of-home, primarily community care settings. There aren’t any children living in independent living or supported living settings, nor are there any children living in the state’s developmental centers.

Parental Fee Program: Established in the early years of the Lanterman Act, the Parental Fee Program was put into statute to require parents of children who are under 18 years of age and receive 24-hour out-of-home care, paid for by a regional center, to pay a share of cost based on their ability to pay. The money DDS receives from the Parental Fee Program is required by law to be remitted to the State Treasury for deposit into the Program Development Fund, which is used to initiate new programs consistent with the California Developmental Disabilities State Plan.

Parental fees are established for families with income at or above 100% of the Federal Poverty Level, and they range from $59 to $1,877 per month, based on family size and income. Today, there are 559 children in the Parental Fee Program.

If parents are unhappy with the determination that they are required to pay a parental fee, or if they wish to dispute the actual monthly amount, they must submit a written request to appeal the determination or the amount within 30 days of receiving notification from DDS stating that they are to pay a parental fee. Within 30 days of receiving the appeal and all pertinent financial information from a family, DDS is required to review the appeal and provide written notice of the decision to the appellant and the appropriate regional center.

A January 2015 California State Auditor report called into question whether implementation of the Parental Fee Program was effective and equitable. The Auditor found that DDS was using gross income and annual expenses when first determining a parent’s ability to pay, and then using net income and monthly household expenses in the appeal process. This resulted in a recommendation that DDS eliminate inconsistencies between the information used for initial fee determinations and the information used when an appeal is filed.

Current law requires the parental fee schedule to exempt families with income below 100% of poverty from assessment and payment of a parental fee and establishes a number of factors that DDS must consider when determining the parental fee amount parents are required to pay. These factors include:

1. The current cost of caring for a child at home, as determined by the most recent data available from the United States Department of Agriculture’s survey on the cost of raising a child in California, adjusted for the Consumer Price Index (CPI) from the survey date to the date of payment adjustment;
   
   

2. Medical expenses incurred prior to regional center care;

3. Whether the child is living at home;

4. Parental payments for medical expenses, clothing, incidentals, and other items considered necessary for the normal rearing of a child; and

5. Transportation expenses incurred in visiting a child.

Additionally, Parental Fee Program regulations permit DDS to allow claims for major unusual expenses that limit a family’s available resources, which can be used to adjust the family’s gross income used to determine a parent’s ability to pay and the amount of the fee. These expense allowances include expenditures that consume a substantial portion of the family’s gross income, as well as expenditures over which parents have no control (e.g., natural disaster, catastrophic uninsured casualty loss, death of an immediate family member, extreme medical expense).

Need for this bill: With this bill, the author hopes to provide more consistency in the implementation of the Parental Fee Program for families with children in out-of-home care. In addition to clarifying the factors to be considered when determining the amount of a parental fee, and codifying a parent’s right to an appeal of a parental fee determination, this bill requires the same type of information to be used when making parental fee determinations and when considering appeals.

Staff comments: The Department of Developmental Services responded to the recommendations provided in the State Auditor’s report, stating that the recommendations were consistent with recent efforts the Department was making to review and update the numerous components of its Parental Fee Program. In response to the recommendation that DDS should eliminate inconsistency between the information analyzed for making parental fee determinations and the information considered for appeals, DDS stated that it will determine whether implementation of the recommendation is possible within current statutory and regulatory authority, and it will consider revisions to the Parental Fee Program regulations to promote a more transparent appeals process, if necessary.

Recommended amendment: Whereas current appeals procedures within the Parental Fee Program are established in regulations, this bill codifies a parent’s ability to appeal DDS’ determination of the amount a parent is required to pay. While the ability to appeal should be clear, the requirement included in this bill does not spell out any of the responsibilities for either party involved in the appeal or the timeline for the appeals process. Considering DDS’ response to the Auditor’s recommendation, which may result in changes to the regulations that outline the appeals process, this bill should be consistent with the developing regulations pertaining to appeals.

In order to clarify the process for an appeal in the Parental Fee Program, committee staff recommends this bill be amended to cross-reference Section 50241 of Title 17 of the California Code of Regulations, which describes the appeals process.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file.

Opposition

None on file.

Analysis Prepared by: Myesha Jackson / HUM. S. / (916) 319-2089