Existing law, the Lanterman Developmental Disabilities Services Act, authorizes the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities. Existing law governs the habilitation services provided for adult consumers of regional centers, including work activity programs, as described, and establishes an hourly rate for supported employment services provided to consumers receiving individualized services. Existing law requires the department, contingent upon receiving federal financial participation, to conduct a 4-year demonstration project to determine whether community-based vocational development services will increase employment outcomes for consumers and reduce purchase of service costs for working age adults.

This bill would require, on or before July 1, 2017, the department to establish a Work Transition Project with a process for regional centers to allow well coordinated forms of integrated services using allowable services under existing state and federal law and to assist in the states efforts to reach compliance with the federal Home and Community-Based Services Waiver regulations. The bill would authorize the department to waive certain regulations through the use of modifications that maintain the purpose of the regulation while allowing flexibility to expand activities and choices in service program settings. The bill would set a maximum rate of $40 per hour for vendors to provide needed job readiness and support services aimed at individualized transition services for consumers currently placed in work activity programs and other similar day services related to work experience and work opportunities who choose to move towards competitive integrated employment. The bill would require the department to assess the decrease in change in the amount of time that it takes a consumer under these provisions, as compared to previous modes of service delivery, to become job ready and to transition into an integrated work a competitive integrated employment setting and to report that information to the budget committee and appropriate policy committees of each house of the Legislature during the annual budget process.

Existing law, the Lanterman Developmental Disabilities Services Act, authorizes the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities. Existing law governs the habilitation services provided for adult consumers of regional centers, including work activity programs, as described, and establishes an hourly rate for supported employment services provided to consumers receiving individualized services. Existing law requires the department, contingent upon receiving federal financial participation, to conduct a 4-year demonstration project to determine whether community-based vocational development services will increase employment outcomes for consumers and reduce purchase of service costs for working age adults.

This bill would require, on or before July 1, 2017, the department to establish a Work Transition Project with guidelines and an approved a process for regional centers to allow blended or braided well coordinated forms of integrated services using allowable services under existing state and federal law and to assist in the states efforts to reach compliance with the federal Home and Community-Based Services Waiver regulations. The bill would authorize the department to waive, until March 31, 2019, regulatory requirements that inhibit the provision of services in competitive integrated settings. The bill would authorize the department to waive certain regulations through the use of modifications that maintain the purpose of the regulation while allowing flexibility to expand activities and choices in service program settings. The bill would set a maximum rate of $40 per hour for vendors to provide needed job readiness and support services aimed at individualized transition services for consumers currently placed in work activity programs and other similar day services related to work experience and work opportunities who choose to move towards competitive integrated employment. The bill would require the department to assess the decrease in time that it takes a consumer under these provisions to become job ready and to transition into an integrated work setting and to report that information to the budget committee of each house of the Legislature during the annual budget process.

The federal Workforce Innovation and Opportunity Act provides for workforce investment activities, including activities in which states may participate. Existing law also provides for the Medi-Cal program, which is administered by the State Department of Health Care Services, under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid Program provisions. Existing federal law provides for various home- and community-based services waivers.

This bill would express the intent of the Legislature to enact legislation that would ensure that individuals with developmental disabilities who are earning income do not lose their vocational opportunities and earning power due to changes related to the home- and community-based services settings rule, the implementation of the Workforce Innovation and Opportunity Act, or the debate over the use of productivity-based pay.

Date of Hearing: August 3, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

SBPCA Bill Id:SB 1427

Author:(Pavley) – As Amended Ver:June 30, 2016

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

SUMMARY:

This bill requires the Department of Developmental Services (DDS), on or before July 1, 2017, to establish a Work Transition Project (WTP), as specified, to facilitate the delivery of integrated services and assist in state compliance with federal Home and Community-Based Services (HCBS) Waiver regulations.

FISCAL EFFECT:

1. Likely annual costs in the range of $12 million to $27 million (GF/federal funds) to establish a WTP with a process for regional centers to allow well-coordinated forms of integrated services. The exact cost will depend on the number of participants, the number of hours of participation, and whether the hours are in addition to or in lieu of current Day/WAP participation. This estimate assumes 1,000 participants who participate 10-15 hours per week in lieu of equivalent hours of Day/WAP participation, accounts for the enhanced rate of $40 per hour, and includes offsetting savings for less than 52 weeks per year of use.
2. Likely one-time costs up to $150,000 for DDS to develop program requirements, accountability measures, and data collection requirements (GF/federal funds).
3. Likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (GF/federal funds).

COMMENTS:

1. Purpose. The author states, “California’s Employment First Policy and changes to the HCBS setting rule require the state to increase opportunities for individuals with developmental disabilities to achieve competitive, integrated employment. The purpose of the HCBS rule is to ensure that individuals receive services in settings that are integrated in and support full access to the greater community, which includes opportunities to seek employment and work in competitive and integrated settings. In order to ensure continued federal financial participation, services in California must follow the new rules by March 2019.

The bill would allow the blending of services so that providers can engage in job discovery and job readiness with their consumers to ensure that they have choice in their employment goals. By using existing service categories, this focused redesign allows the existing federal waivers to finance these services during the time when the state is working on the HCBS transition plan."

1. Background. Waivers enable states to apply for greater flexibility in their use of federal Medicaid dollars. Section 1915(c) waivers, known as Home and Community-Based Services (HCBS) waivers, permit states to use Medicaid dollars to provide long-term care services in home- and community-based settings as an alternative to the use of institutional settings. A variety of services can be offered under an HCBS waiver, including personal care, case management, adult day health, habilitation, home health aide, and other services.

California’s HCBS waiver provides a significant source of federal funds to California; for 2016-17, the DDS budget anticipates close to $1.7 billion in federal funds under the HCBS waiver, to be used to pay for services for regional center consumers and for regional center operations.

In 2014, the federal Centers for Medicare and Medicaid Services (CMS) issued a new rule regarding HCBS waivers reflecting, among other things, CMS’s intent that individuals receiving services through Medicaid’s HCBS programs are able to fully access the benefits of community living and receive services in the most integrated setting. California must come into full compliance with these regulations by March 2019. Included among the many changes in the new regulations is the requirement that individuals with developmental disabilities be offered greater opportunity to obtain competitive, integrated employment.

In 2011-12, 13% of working age Californians with developmental disabilities were found to be employed, compared to 73% of the state’s general population. For those regional center consumers who are employed, the author contends that many will see their employment threatened by the pending changes per the new HCBS waiver rule, and that specific attention should be given during the interim transition period such that these individuals have reasonable access to more integrated work settings of their choice. The author cites the need for job discovery, soft skills training, and flexible employment service models to help assist consumers in acquiring and maintaining competitive, integrated employment.

1. Budget Appropriation. The Budget Act of 2016 appropriated $15 million for DDS to allocate to community service providers based on demonstrated need to comply with the new federal HCBS regulations. This bill requires that WTP services be eligible to receive allocations from these funds. Staff notes that DSS will establish a process for allocating these funds to providers so that all providers have access on the same basis. This bill establishes a separate process for a subset of providers. The committee may wish to consider whether a separate allocation process is necessary and appropriate.
2. Prior Legislation.
3. SB 577 (Pavley), Chapter 431, Statutes of 2014, required, contingent upon the receipt of federal funding, DDS to conduct a four-year demonstration project regarding the impacts of community-based vocational development services on employment outcomes for regional center consumers and on purchase-of-service costs for working-age adults.
4. AB 1041 (Chesbro), Chapter 677, Statutes of 2013, created a statewide Employment First Policy and set forth requirements related to the inclusion of employment opportunities and services in a regional center consumer's individual program plan.

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

Date of Hearing: June 28, 2016

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Susan Bonilla, Chair

SBPCA Bill Id:SB 1427

Author:(Pavley) – As Amended Ver:June 21, 2016

SENATE VOTE: 39-0

SUBJECT: Workforce development: developmentally disabled individuals

SUMMARY: Requires the Department of Developmental Services (DDS) to establish a Work Transition Project, as specified, to facilitate the delivery of integrated services and assist in state compliance with federal Home and Community-Based Services (HCBS) Waiver regulations.

Specifically, this bill:

1. States Legislative intent to ensure that individuals with developmental disabilities who are earning income do not lose their vocational opportunities and earning power due to changes related to the home- and community-based services settings rule, as specified.
2. Makes a number of findings and declarations related to the employment of individuals with developmental disabilities.
3. Requires DDS to, by July 1, 2017, establish a Work Transition Project to assist in state compliance with federal HCBS Waiver regulations by March 31, 2019, to include a process for regional centers to allow for the provision of integrated services, as specified, using allowable services under existing state and federal law.
4. Authorizes integrated services approved under the Work Transition Project to be eligible to receive available funding appropriated for transitioning programs toward compliance with federal HCBS regulations.
5. Requires DDS to allow regional centers to partner with work activity programs and other similar work-related day services to increase opportunities for consumers and support consumers who choose to move towards competitive integrated employment, as specified.
6. Prohibits the rate for vendors to provide needed job readiness and support services for consumers currently placed in work activity programs and similar work-related day services, as specified, from exceeding $40 per hour.
7. Permits hours of participation in job readiness and support services to be provided in addition to, or in lieu of, the hours of participation in existing work activity programs and similar day services, as specified.
8. Authorizes DDS to waive certain regulations in a manner that maintains the purpose of the regulation while allowing flexibility, as specified, if necessary to provide flexibility from program requirements that have the effect of social isolation and restricting community integration activities.
9. Requires DDS to allow regional centers to partner with group supported employment program and similar day services to support career pathway development, as specified.
10. Permits additional job coaching hours to be authorized to support consumers who choose to move toward competitive integrated employment, as specified.
11. Requires DDS to measure the decrease in time that it takes a consumer under the Work Transition Project to become job ready and to transition into an integrated work setting and further requires DDS to report to the Legislature regarding the project and measurable outcomes, as specified.

EXISTING LAW:

1. Establishes the Lanterman Developmental Disabilities Services Act (Lanterman Act), providing an entitlement to services for individuals with developmental disabilities.

(WIC 4500 et seq.)

1. 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, a number of rights, including the right to treatment and habilitation services and supports in the least restrictive environment. (WIC 4502)
2. Establishes a system of nonprofit regional centers throughout the state to identify needs and coordinate services for eligible individuals with developmental disabilities and requires DDS 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.)
3. 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)
4. Creates a process by which regional centers may “vendorize” service providers, thereby providing a path to contract for services with that provider and ensuring maximum flexibility and availability of appropriate services and support for persons with developmental disabilities. (WIC 4648)
5. Authorizes regional centers to solicit an individual or agency through a request for proposals or other means to provide needed services or supports not presently available, provided it is necessary to expand the availability of needed services of good quality. (WIC 4648(e)(1))
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. Authorizes DDS and regional centers to monitor services and supports purchased for regional center consumers without prior notice, as specified, and authorizes DDS to conduct fiscal reviews and audits of service providers’ records. (WIC 4648.1(a))
8. Establishes the state’s Employment First Policy, whereby opportunities for integrated, competitive employment are required to be given the highest priority for working age individuals with developmental disabilities, regardless of the severity of their disabilities. (WIC 4869)
9. Defines “competitive employment” to mean work in the competitive labor market that is performed on a full- or part-time basis in an integrated setting and for which the employee is compensated at or above the minimum wage, but not less than the customary wage and level of benefits paid for the same or similar work performed by individuals who are not disabled. (WIC 4868 (d)(1))
10. Defines “integrated employment” to mean the engagement of an employee with a disability in work in a setting usually found in the community, where interaction takes place between the employee and individuals without disabilities other than those who are providing services, to the same extent that individuals without disabilities in comparable positions interact with other persons. (WIC 4868 (d)(2))
11. Establishes regulations regarding the Medicaid Home and Community-Based Services state plans. (42 CFR 441.710)

FISCAL EFFECT: According to the Senate Appropriations Committee’s May 2, 2016, analysis, this bill may result in the following costs:

1. Likely one-time costs up to $150,000 for DDS to develop program requirements, accountability measures, and data collection requirements (General Fund and federal funds).
2. Likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (General Fund and federal funds).
3. Likely annual costs of $5 million to $10 million per year to provide additional job readiness and support services to regional center consumers currently participating in work activity programs or group supported employment programs (General Fund and federal funds). There are about currently about 15,000 regional center consumers who participate in one of these two programs. Assuming that 10% of those consumers participate in the program authorized in the bill and that those consumers, on average, receive the newly authorized services for two quarters, total net costs for those new services would be about $8 million per year. (This includes an offsetting reduction in service hours those consumers are currently receiving.)
4. Likely annual savings in the millions per year (General Fund and federal funds). To the extent that the new services authorized in the bill improve the employment prospects of regional center consumers, it is likely that consumers will shift from more expensive work activity programs and group supported employment programs to less expensive individual supported employment programs (wherein consumers are employed in the community, with ongoing assistance from regional center vendors). For example, if 50% of program participants are able to shift to individual supported employment, annual savings would be about $3 million per year.

The May 2, 2016, Senate Appropriations Committee’s analysis also notes that it is important to note that the increased costs for a regional center consumer using the new services would likely only occur for the first year or two, whereas savings would continue as long as the consumer stays in individual supported employment. Thus, the savings would increase over time while program costs are likely to remain relatively flat.

COMMENTS:

Developmental services: Developmental disabilities are disabilities that originate before an individual attains 18 years of age and that are expected to continue indefinitely as a substantial disability for that individual. Developmental disabilities include intellectual disabilities, cerebral palsy, epilepsy, and autism spectrum disorders, as well as those disabling conditions similar to an intellectual disability that require care and management similar to that required by individuals with an intellectual disability.

Guidance for the delivery of services and supports to Californians with developmental disabilities is found in the Lanterman Act (WIC § 4500 et seq.). This Act entitles individuals with developmental disabilities (often referred to as “consumers”) to treatment and habilitation services and supports in the least restrictive environment; services are designed to enable all consumers to live more independent and productive lives in the community.

The developmental services system is administered by DDS and a network of 21 regional centers across the state, 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. These 21 regional centers serve over 300,000 consumers, providing services such as residential placements, supported living services, respite care, transportation, day treatment programs, work support programs, and various social and therapeutic activities. Another approximately 980 consumers live 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.

Individuals with developmental disabilities receive services that are outlined in an individual program plan (IPP) which is based on that individual’s needs and choices and is developed by an IPP team that includes, among other individuals, the consumer, his or her legally authorized representative, and one or more representatives from the regional center. 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 prioritize those services and supports that allow minors to live with their families and adults to live as independently as possible in the community.

Vendorization of community-based services: The 21 regional centers receive an operations budget from DDS to carry out activities related to eligibility determination and development of IPPs. Regional centers also receive funds to purchase over 150 different types of services from vendors; services and supports are aimed at supporting individuals to live in the community and can include in-home care, housing, transportation, activity programs, and employment programs. (Regional centers are the payer of last resort and therefore typically pay for services only in instances where a consumer does not have private health insurance or cannot be referred to “generic” services; the majority of regional center consumers are enrolled in Medi-Cal.)

“Vendorization” is the process by which service providers are identified, selected, and utilized, based on qualifications and requirements, to provide services to consumers. Through this process, regional centers are able to verify that an applicant vendor complies with all necessary requirements and regulations prior to providing services; the regional center with the catchment area in which the service is located vendors that services provider. The vendoring regional center is then responsible for verifying that the applicant vendor meets all necessary licensing, and other, requirements; the regional center will also determine the appropriate vendor category for the service to be provided. If an applicant meets all necessary requirements, a regional center is required to vendor that applicant – however, this does not obligate the regional center to purchase services from that vendor. Other regional centers are also able to utilize the services of a provider vendored by another regional center. There are currently over 44,000 vendors that provide services paid for by regional centers in California.

Employment First Policy: AB 1041 (Chesbro), Chapter 677, Statutes of 2013, adopted the state’s Employment First Policy, making California the 12^th state to adopt such a policy. According to Welfare and Institutions Code Section 4869 (a)(1), California’s Employment First Policy, which is contained within the Lanterman Act, “ is the policy of the state that opportunities for integrated, competitive employment shall be given the highest priority for working age individuals with developmental disabilities, regardless of the severity of their disabilities.”

IPP planning for a transition-age youth or working age adults must consider the Employment First Policy. Per the Employment First Policy, integrated competitive employment – employment in a workplace where an individual with a disability works with people without disabilities, earns at least the minimum wage, and receives the same pay, benefits, and opportunities for promotion as workers without disabilities – is intended to be the first option considered by planning teams for working age individuals, although individuals may choose goals other than integrated competitive employment. DDS coordinates with the state Department of Rehabilitation (DOR) and the California Department of Education to deliver services.

Work services: Within the developmental services system, the Work Services Program addresses the employment needs of regional center consumers; regional center consumers work in a variety of settings. “Supported Employment” services can be provided through the Habilitation Services Program or through DOR’s vocational rehabilitation program. Supported Employment can involve individual or group placements, where a consumer might work in the community with support services and on-the-job training provided by job coaches, and is paid directly by the employer. “Work Activity Program” services are typically offered in a sheltered work setting, and include paid work, work adjustment, and supportive habilitation services; in a sheltered work setting, consumers are paid at a daily per capita rate based on productivity.

Individual Placement Supported Employment constitutes competitive integrated employment; according to State Council on Developmental Disabilities data from 2012-13, only the 4,431 consumers in Individual Placement Supported Employment – (5.5%) of the almost 80,000 regional center clients served in day or employment services – were therefore served in competitive integrated employment. Another 5,589 consumers were served in Group Placement Supported Employment, and 10,242 were in Work Activity Programs (sheltered work settings). (Almost 60,000 other consumers were served in “look alike” day programs, typically in non-work settings.)

Home and Community-Based Services waiver: Waivers enable states to apply for greater flexibility in their use of federal Medicaid dollars. Section 1915(c) waivers, known as Home and Community-Based Services (HCBS) waivers, permit states to use Medicaid dollars to provide long-term care services in home- and community-based settings as an alternative to the use of institutional settings. A variety of services can be offered under an HCBS waiver, including personal care, case management, adult day health, habilitation, home health aide, and other services.

California’s HCBS waiver provides a significant source of federal funds to California; for 2016-17, the DDS budget anticipates close to $1.7 billion in federal funds under the HCBS waiver, to be used to pay for services for regional center consumers and for regional center operations.

In 2014, the federal Centers for Medicare and Medicaid Services (CMS) issued a new rule regarding HCBS waivers reflecting, among other things, CMS’s intent that individuals receiving services through Medicaid’s HCBS programs are able to fully access the benefits of community living and receive services in the most integrated setting. California must come into full compliance with these regulations by March 2019. Included among the many changes in the new regulations is the requirement that individuals with developmental disabilities be offered greater opportunity to obtain competitive, integrated employment. According to the new regulations, the home and community-based setting is “integrated in and supports full access of individuals receiving Medicaid HCBS to the greater community, including opportunities to seek employment and work in competitive integrated settings, engage in community life, control personal resources, and receive services in the community, to the same degree of access as individuals not receiving Medicaid HCBS.” (42 CFR 441.710 (a)(1)(i))

Need for this bill: In 2011-12, 13% of working age Californians with developmental disabilities were found to be employed, compared to 73% of the state’s general population. For those regional center consumers who are employed, the author contends that many will see their employment threatened by the pending changes per the new HCBS waiver rule, and that specific attention should be given during the interim transition period such that these individuals have reasonable access to more integrated work settings of their choice. The author cites the need for job discovery, soft skills training, and flexible employment service models to help assist consumers in acquiring and maintaining competitive, integrated employment.

The author states that:

“California’s Employment First Policy and changes to the federal home and community-based services (HCBS) setting rule require the state to increase opportunities for individuals with developmental disabilities to achieve competitive, integrated employment.

The purpose of the HCBS rule is to ensure that individuals receive services in settings that are integrated in and support full access to the greater community, which includes opportunities to seek employment and work in competitive and integrated settings. In order to ensure continued federal financial participation, services in California must follow the new rules by March 2019.

[This bill] will increase opportunities for individuals with developmental disabilities to engage in job discovery and job readiness training to assist their transition to competitive, integrated employment and to support employment success.

The bill would also allow the blending of services so that providers can engage in job discovery and job readiness with their consumers to ensure that they have choice in their employment goals. By using existing service categories, this focused redesign allows the existing federal waivers to finance these services during the time when the state is working on the HCBS transition plan.

[This bill] will start to build the self-sufficiency of adults with developmental disabilities - including increased earning capacity and reduced dependence on government benefit support – by providing the necessary services to transition into more competitive, integrated employment.”

Recommended amendments: In order to clarify the reporting requirements contained in this bill, and to make technical changes, committee staff recommends the following amendments:

Committee staff recommends the following amendment on line 5 of page 2 of the bill:

1

SECTION 1.   (a) It is the intent of the Legislature to ensure

2

that individuals with developmental disabilities who are earning

3

income do not lose their vocational opportunities and earning

4

power due to changes related to the home- and community-based

5

services settings rule. due to the implementation of the Workforce

6

Innovation and Opportunity Act.

Committee staff recommends the following amendments starting on line 9 of page 5 of the bill:

9

(d) The department shall assess the decrease in change in the amount of time that it takes

10

a consumer under these provisions, as compared to previous modes of service delivery, to become job ready and to

11

transition into an integrated work Competitive Integrated Employment setting. The department shall

12

report to the budget and policy committees of each house of the Legislature

13

during the annual budget process regarding the implementation, use, and oversight of these

14

provisions and the measurable assessed outcomes related to job readiness and transition into Competitive Integrated Employment settings. Any report submitted

15

pursuant to this subdivision shall be submitted in compliance with

16

Section 9795 of the Government Code.

PRIOR LEGISLATION:

SB 577 (Pavley), Chapter 431, Statutes of 2014, required, contingent upon the receipt of federal funding, DDS to conduct a four-year demonstration project regarding the impacts of community-based vocational development services on employment outcomes for regional center consumers and on purchase-of-service costs for working-age adults.

AB 1041 (Chesbro), Chapter 677, Statutes of 2013, created a statewide Employment First Policy and set forth requirements related to the inclusion of employment opportunities and services in a regional center consumer's IPP.

REGISTERED SUPPORT / OPPOSITION:

Support

California Disabilities Services Association (CDSA) - sponsor

Futures Explored, Inc.

National Association of Social Workers, CA Chapter

The Alliance

The ARC

Opposition

None on file.

Analysis Prepared by: Daphne Hunt / HUM. S. / (916) 319-2089

 THIRD READING  

Bill No: SB 1427

Author:

:

Vote:

SENATE HUMAN SERVICES COMMITTEE: 4-0, 4/12/16

AYES: McGuire, Berryhill, Hancock, Liu

NO VOTE RECORDED: Nguyen

SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16

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

SUBJECT:

SOURCE: California Disability Services Association

DIGEST: This bill requires the Department of Developmental Services (DDS) to establish a Work Transition Project, as specified, for regional centers to allow blended or braided forms of integrated services, and to assist in the state’s efforts to reach compliance with the federal Home and Community-Based Services (HCBS) Waiver regulations. This bill authorizes DDS to waive regulatory requirements that inhibit the provision of services in competitive integrated settings. This bill also requires DDS to assess the decrease in time that it takes a consumer under these provisions to become job ready and to transition into an integrated work setting, and to report that information to the Legislature, as specified.

ANALYSIS:

Existing law:

1. Establishes the Lanterman Developmental Disabilities Services Act, which declares California’s responsibility for providing an array of services and supports to meet the needs of each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support their integration into the mainstream life of the community. (WIC 4500, et seq.)
2. Establishes a system of nonprofit regional centers 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. (WIC 4512)
4. Defines habilitation services as activities purchased for regional center consumers, including services provided under the Work Activity and Supported Employment programs to prepare and maintain consumers at their highest level of vocation functioning or to prepare them for referral to vocational rehabilitation services. (WIC 4851)
5. Establishes an individual habilitation services plan and specifies areas in which consumers must meet employment goals. (WIC 4853, WIC 4854)
6. Requires a regional center to authorize appropriate services for a consumer while he or she is on a waiting list for services from the Department of Rehabilitation, as specified. (WIC 4855)
7. Establishes fees and hourly rates for service providers who work with consumers in various job development and support activities. (WIC 4860)
8. Establishes in federal law state reimbursements for achieving work outcomes for individuals with disabilities, as specified. (CFR 411.582)
9. Establishes an Employment First Policy in California to prioritize opportunities for integrated, competitive employment for individuals with developmental disabilities, regardless of the severity of their disabilities, as specified. (WIC 4869)

This bill:

1. Makes various findings and declarations, including legislative intent that individuals do not lose vocational opportunities as the result of changes to the federal HCBS rules, that thousands of consumers in existing employment programs deserve specific attention to ensure an opportunity for more integrated work settings and that it is important that the state implement a program of job discovery and job readiness training to assist these individuals transition successfully to competitive integrated employment.
2. Requires that on or before July 1, 2017, DDS shall establish a Work Transition Project with guidelines and an approved process for regional centers to allow blended or braided forms of integrated services using allowable services under existing state and federal law.
3. Requires that the project assist in the state’s efforts to reach compliance with the federal HCBS waiver regulations by March 31, 2019.
4. Permits a maximum of 75 hours per quarter, at no more than an equivalent of $40 per hour to be authorized for vendors to provide needed job readiness and support services aimed at individualized transition services for consumers currently placed in segregated work settings who choose to move toward competitive integrated employment.
5. Defines “blended or braided forms of integrated services” to mean services for a single consumer that are funded by multiple agencies or entities and that work as a single program.
6. Requires DDS to permit regional centers to customize skill development and job readiness programs for consumers, as appropriate, by partnering with work activity programs and group supported employment vendors to transition those consumers who choose to move towards integrated competitive employment.
7. Permits DDS to waive, until March 31, 2019, regulatory requirements that inhibit the provision of services in competitive integrated settings.
8. Requires DDS to assess the decrease in time that it takes a consumer under these provisions to become job ready and to transition into an integrated work setting.
9. Requires DDS to report to the budget committee of each house of the Legislature during the annual budget process regarding the use of these provisions and the measurable outcomes, as specified.

Background

California’s 21 nonprofit regional centers are part of a system of care for individuals with developmental disabilities overseen by DDS. DDS is responsible for coordinating care and providing services for nearly 290,000 people who live in their communities, and about 1,000 people who lived in developmental centers as of March 2016. Regional centers provide diagnosis and assessment of eligibility and, if consumers qualify for services, case management to help to plan, access, coordinate and monitor the services and supports that are needed. Services for consumers are determined through an IPP.

Employment. AB 287 (Beall, Chapter 231, Statutes of 2009) required that the State Council on Developmental Disabilities establish a standing Employment First Committee to identify strategies, best practices, and incentives, and to develop an Employment First Policy. The Policy’s goal was to increase the number of people with developmental disabilities who are employed in integrated work, self-employment, and microenterprises, and earning wages at or above minimum wage.

A subsequent report, released in 2011, found that 26.5 percent of working-age adults with developmental disabilities live below the federal poverty line compared with 13 percent of adults in the general population. Other findings included a need for additional supports for individuals to prepare for and maintain employment. That report, and a subsequent report in 2012, prompted a number of legislative efforts, including SB 577 (Pavley, Chapter 431, Statutes of 2014) which established a four-year pilot project to create community-based vocational development services to teach “softer” interpersonal skills to consumers, and to evaluate whether those skills are important to succeed in supported employment. The pilot was not enacted.

Individual and group employment. There are a variety of ways for consumers to be supported in a work environment. Typically, regional centers contract with employment services programs and providers to address the employment needs of individuals with developmental disabilities. Consumers are placed in jobs according to their individual skills, needs and choices, and provided support services on an individual basis or in a group.

Work Activity Programs are employment services programs in a sheltered work environment for consumers who have acquired basic vocational and independent living skills. Consumers are paid at a daily per capita rate based on productivity. As of May 2015, there were 108 Work Activity Program vendors and about 9,600 consumers in the program, according to DDS data.

Supported Employment Programs are community-based rehabilitation programs that focus on helping consumers obtain, retain or maintain employment in integrated settings either individually or in groups. Often supported employment includes a job coach that provides on-the-job services and training, and wages paid directly to the consumer by the employer. Supported employment can either be tailored to an individual, or performed with a group. According to data from DDS, as of May 2015, there were 167 group employment vendors and approximately 5,900 consumers. Individual supported employment, which is not the focus of this bill, employed about 188 vendors and nearly, 4,400 individual participants.

Home and Community-Based Services waiver changes. On January 10, 2014, the federal Centers for Medicare and Medicaid Services (CMS) released a new “final rule” summarizing key changes in its requirements for states’ home and community-based services waivers. The rule affects three types of waivers, all of which are applied in California to serve populations including individuals with developmental disabilities. Elements of the new requirements include that an individual has a lease or other legally enforceable agreement providing similar protections, has privacy in their living unit including lockable doors and a choice of roommates, controls his or her own schedule and can access food at any time, among other practices. Experts believe that group work paid at sub-minimum wages will not be supported under the new HCBS rule but that consumers will need to be employed in integrated settings and with a full salary.

On August 14, 2015, the Department of Health Care Services submitted the Statewide Transition Plan for home and community-based settings to CMS for approval. The state is currently negotiating elements of its plan with CMS. The state must be in full compliance with the new HCBS guidelines in order to receive federal funding by March 2019.

Comments

This bill seeks to move a group of consumers who currently are in group employment activities into competitive integrated employment, as is preferred by the new HCBS ruling, by creating a transition program for individuals to learn social and other soft job skills. This bill creates a time-limited opportunity to braid funding from various state departments and regional center vendors to support consumers in obtaining independent employment.

This bill is similar to SB 577 (Pavley, Chapter 431, and Statutes of 2014) which established a four-year pilot project, contingent upon federal funding. Both bills created the same rate structure and similar job skills training. Implementation of SB 577 has been stalled by a lack of federal approval while the state’s HCBS waiver is pending, as has approval of all new services and HCBS-related waivers that seek federal funding. This bill’s sponsors hope that by removing the federal funding requirement and permitting instead braided and blended funding for existing categories of services, that these programs will be established prior to completion of the HCBS waiver process and enactment of SB 577.

Prior Legislation

SB 577 (Pavley, Chapter 431, Statutes of 2014) established a four-year pilot project to create and evaluate whether community-based vocational development services are determined to be a necessary step to achieve a supported employment outcome. The pilot has not been enacted.

AB 1041 (Chesbro, Chapter 677, Statutes of 2013) expanded the definition of competitive integrated employment and required regional centers to ensure that consumers, beginning at 16 years of age, are provided with information about options for integrated competitive employment and other services, including postsecondary education.

AB 287 (Beall, Chapter 231, and Statutes of 2009) established an “Employment First” effort for the State to undertake, which has led to the State Council on Developmental Disabilities to put together an “Employment First” policy and several attempts to get that policy passed into law.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, this bill would result in likely one-time costs up to $150,000 for DDS to develop program requirements, accountability measures, and data collection requirements (General Fund and federal funds). Additionally, this bill would have likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (General Fund and federal funds). There would additionally be likely costs of $5 million to $10 million per year to provide additional job readiness and support services to regional center consumers currently participating in work activity programs or group supported employment programs (General Fund and federal funds).

The Appropriations analysis noted that there are about currently about 15,000 regional center consumers who participate in one of these two programs. Assuming that 10% of those consumers participate in the program authorized in the bill and that those consumers, on average, receive the newly authorized services for two quarters, total net costs for those new services would be about $8 million per year. (This includes an offsetting reduction in service hours those consumers are currently receiving.)

As a result, the analysis concluded there would likely be annual savings in the millions per year (General Fund and federal funds): To the extent that the new services authorized in the bill improve the employment prospects of regional center consumers, it is likely that consumers will shift from more expensive work activity programs and group supported employment programs to less expensive individual supported employment programs (wherein consumers are employed in the community, with ongoing assistance from regional center vendors). For example, if 50% of program participants are able to shift to individual supported employment, annual savings would be about $3 million per year.

The Appropriations analysis also noted that the increased costs for a regional center consumer using the new services would likely only occur for the first year or two, whereas savings would continue as long as the consumer stays in individual supported employment. Thus the savings would increase over time while program costs are likely to remain relatively flat.

SUPPORT: (Verified 5/27/16)

California Disability Services Association (source)

Futures Explored, Inc.

The Arc and United Cerebral Palsy California Collaboration

OPPOSITION: (Verified 5/27/16)

None received

ARGUMENTS IN SUPPORT: According to the bill’s sponsor, this bill provides a pathway to transition consumers into different employment services which are required by the California Employment First Policy and changes to the federal HCBS settings rule. “Often the consumers are technically competent to move into competitive integrated employment, but lack the soft skills to do so. … SB 1427 would allow providers to blend or braid integrated services to provide training on those skills.”

Prepared by:

5/28/16 17:08:39

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SENATE COMMITTEE ON HUMAN SERVICES

Senator McGuire, Chair

2015 - 2016 Regular

Bill No: SB 1427

Subject: Workforce development: developmentally disabled individuals

SUMMARY

This bill requires the Department of Developmental Services (DDS) to establish a Work Transition Project, as specified, for regional centers to allow blended or braided forms of integrated services, as specified, and to assist in the state’s efforts to reach compliance with the federal Home and Community-Based Services Waiver regulations. The bill authorizes the department to waive regulatory requirements that inhibit the provision of services in competitive integrated settings. It also requires DDS to assess the decrease in time that it takes a consumer under these provisions to become job ready and to transition into an integrated work setting, and to report that information to the Legislature, as specified.

ABSTRACT

Existing law:

1. Establishes the Lanterman Developmental Disabilities Services Act, which declares California’s responsibility for providing an array of services and supports to meet the needs of each person with developmental disabilities in the least restrictive environment, regardless of age or degree of disability, and to support their integration into the mainstream life of the community. (WIC 4500, et seq.)
2. Establishes a system of nonprofit regional centers 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. Defines habilitation services as activities purchased for regional center consumers, including services provided under the Work Activity and Supported Employment programs to prepare and maintain consumers at their highest level of vocation functioning or to prepare them for referral to vocational rehabilitation services. (WIC 4851)
5. Establishes an individual habilitation services plan and specifies areas in which consumers must meet individual employment goals. (WIC 4853, WIC 4854)
6. Requires a regional center to authorize appropriate services for a consumer while he or she is on a waiting list for services from the Department of Rehabilitation (DOR), as specified. (WIC 4855)
7. Establishes fees and hourly rates for service providers who work with consumers in various job development and support activities. (WIC 4860)
8. Establishes in federal law state reimbursements for achieving work outcomes for individuals with disabilities, as specified. (CFR 411.582)
9. Establishes an Employment First Policy in California to prioritize opportunities for integrated, competitive employment for individuals with developmental disabilities, regardless of the severity of their disabilities, as specified. (WIC 4869)

This bill:

1. Makes various findings and declarations, including:
   1. It is the intent of the Legislature to ensure that individuals with developmental disabilities who are earning income do not lose their vocational opportunities and earning power as a result of changes related to the home- and community-based services settings (HCBS) rule due to the implementation of the Workforce Innovation and Opportunity Act.
   2. There are thousands of consumers today earning some income in existing employment programs, who are complying with current rules and deserve specific attention during this transition period to ensure they have the opportunity for, and access to, more integrated work settings of their choice.
   3. In order to increase the self-sufficiency of adults with developmental disabilities, as specified, it is important that the state implement a program to provide opportunities for individuals to engage in job discovery and job readiness training to assist their transition to more competitive integrated employment and to ensure employment success.
2. Requires that on or before July 1, 2017, DDS shall establish a Work Transition Project with guidelines and an approved process for regional centers to allow blended or braided forms of integrated services using allowable services under existing state and federal law.
3. Requires that the project assist in the state’s efforts to reach compliance with the federal Home and Community-Based Services waiver regulations by March 31, 2019.
4. Permits a maximum of 75 hours per quarter, at no more than an equivalent of $40 per hour to be authorized for vendors to provide needed job readiness and support services aimed at individualized transition services for consumers currently placed in segregated work settings who choose to move toward competitive integrated employment.
5. Defines “blended or braided forms of integrated services” to mean services for a single consumer that are funded by multiple agencies or entities and that work as a single program.
6. Requires DDS to permit regional centers to customize skill development and job readiness programs for consumers, as appropriate, by partnering with work activity programs and group supported employment vendors to transition those consumers who choose to move towards integrated competitive employment.
7. Permits DDS to waive, until March 31, 2019, regulatory requirements that inhibit the provision of services in competitive integrated settings.
8. Requires DDS to assess the decrease in time that it takes a consumer under these provisions to become job ready and to transition into an integrated work setting.
9. Requires DDS to report to the budget committee of each house of the Legislature during the annual budget process regarding the use of these provisions and the measurable outcomes, as specified.

FISCAL IMPACT

This bill has not been analyzed by a fiscal committee.

BACKGROUND AND DISCUSSION

Purpose of the bill:

The author states that this bill will help individuals with developmental disabilities who are working in group employment or work activity programs to move toward competitive integrated employment, which will be required by new federal regulations in 2019. “Currently, there are thousands of consumers who are earning income in settings that are compliant with current rules, whose employment will be threatened under the forthcoming requirements,” the author states. “These consumers deserve specific attention during this transition period to ensure that they have a reasonable opportunity for, and access to, more integrated work settings of their choice.” The author further states that many of these programs do not provide job discovery or soft skills training needed to transition the consumers into competitive, integrated employment and that existing models are inflexible. “If this population is left without purposefully designed pathways into more competitive, integrated employment, these adults will be at higher risk of losing income and increasing public dependency throughout the course of their lives.”

Regional centers

California’s 21 nonprofit regional centers are part of a system of care for individuals with developmental disabilities overseen by DDS. The department is responsible for coordinating care and providing services for nearly 290,000 people who live in their communities, and about 1,000 people who lived in developmental centers as of March 2016. Regional centers provide diagnosis and assessment of eligibility and, if consumers qualify for services, case management to help to plan, access, coordinate and monitor the services and supports that are needed. Services for consumers are determined through an individual program plan (IPP).

Employment

AB 287 (Beall, Chapter 231, Statutes of 2009) required that the State Council on Developmental Disabilities establish a standing Employment First Committee to identify strategies, best practices, and incentives, and to develop an Employment First Policy. The goal of the policy was to increase the number of people with developmental disabilities who are employed in integrated work, self-employment, and microenterprises, and the number earning wages at or above minimum wage.

A subsequent report, released in 2011, found that 26.5 percent of working-age adults with developmental disabilities live below the federal poverty line compared with 13 percent of adults in the general population. Other findings included a need for additional supports for individuals to prepare for and maintain employment. That report, and a subsequent report in 2012,^[1] prompted a number of legislative efforts, including SB 577 (Pavley, Chapter 431, Statutes of 2014) which established a four-year pilot project to create community-based vocational development services to teach “softer” interpersonal skills to consumers, and to evaluate whether those skills are important to succeed in supported employment. The pilot was not enacted.

Individual and Group Employment

There are a variety of ways for consumers to be supported in a work environment. Typically, regional centers contract with employment services programs and providers to address the employment needs of individuals with developmental disabilities. Consumers are placed in jobs according to their individual skills, needs and choices, and provided support services on an individual basis or in a group.

Work Activity Programs are employment services programs in a sheltered work environment for consumers who have acquired basic vocational and independent living skills. Consumers are paid at a daily per capita rate based on productivity. As of May 2015, there were 108 Work Activity Program vendors and about 9,600 consumers in the program, according to DDS data.

Supported Employment Programs are community-based rehabilitation programs that focus on helping consumers obtain, retain or maintain employment in integrated settings either individually or in groups. Often supported employment includes a job coach that provides on-the-job services and training, and wages paid directly to the consumer by the employer. Supported employment can either be tailored to an individual, or performed with a group. According to data from DDS, as of May 2015, there were 167 group employment vendors and approximately 5,900 consumers. Individual supported employment, which is not the focus of this bill, employed about 188 vendors and nearly, 4,400 individual participants.

Home and Community-Based Services waiver changes

On January 10, 2014, the federal Centers for Medicare and Medicaid Services (CMS) released a new “final rule” summarizing key changes in its requirements for states’ home and community-based services waivers. The rule affects three types of waivers, all of which are applied in California to serve populations including individuals with developmental disabilities. Elements of the new requirements include that an individual has a lease or other legally enforceable agreement providing similar protections, has privacy in their living unit including lockable doors and a choice of roommates, controls his or her own schedule and can access food at any time, among other practices. Experts believe that group work paid at sub-minimum wages will not be supported under the new HCBS rule but that consumers will need to be employed in integrated settings and with a full salary.

According to CMS:

“In this final rule, CMS is moving away from defining home and community-based settings by “what they are not,” and toward defining them by the nature and quality of individuals’ experiences. The home and community-based setting provisions in this final rule establish a more outcome-oriented definition of home and community-based settings, rather than one based solely on a setting’s location, geography, or physical characteristics. The changes related to clarification of home and community-based settings will maximize the opportunities for participants in HCBS programs to have access to the benefits of community living and to receive services in the most integrated setting and will effectuate the law’s intention for Medicaid HCBS to provide alternatives to services provided in institutions.”^[2]

CMS requires states to submit a plan for changes to its service delivery system to comply with the final rule. California’s Department of Health Care Services (DHCS) is coordinating the state’s response, with input from DDS and other affected departments. On August 14, 2015, DHCS, submitted the Statewide Transition Plan for home and community-based settings to CMS for approval. The state is currently negotiating elements of its plan with CMS. The state must be in full compliance with the new HCBS guidelines in order to receive federal funding by March 2019.

Related legislation:

SB 577 (Pavley, Chapter 431, Statutes of 2014) established a four-year pilot project to create and evaluate whether community-based vocational development services are determined to be a necessary step to achieve a supported employment outcome. The pilot has not been enacted.

AB 1041 (Chesbro, Chapter 677, Statutes of 2013) expanded the definition of competitive integrated employment and required regional centers to ensure that consumers, beginning at 16 years of age, are provided with information about options for integrated competitive employment and other services, including postsecondary education.

AB 287 (Beall, Chapter 231, Statutes of 2009) established an “Employment First” effort for the State to undertake, which has led to the State Council on Developmental Disabilities to put together an “Employment First” policy and several attempts to get that policy passed into law.

COMMENTS

This bill seeks to move a group of consumers who currently are in group employment activities into competitive integrated employment, as is preferred by the new HCBS ruling, by creating a transition program for individuals to learn social and other necessary job skills. The bill would create a time-limited opportunity to braid funding from various state departments and regional center vendors to support consumers in obtaining independent employment. Per the author, this is intended to move the state toward solutions that can be incorporated into the new HCBS state plan during the period when the state is formulating then plan.

The bill is similar in concept to SB 577, a four-year pilot project which was contingent upon federal funding and established the same rate structure and similar job skills training. SB 577 was signed and chaptered, however it has been stalled by a lack of federal approval while the state’s HCBS waiver is pending. All new services or waivers must be approved by the federal government to receive matching funding. The sponsors of this bill hope that by removing the federal funding requirement and permitting instead braided and blended funding for existing categories of services, that these programs will be established prior to the HCBS waiver process completion and the enactment of SB 577.

Should this bill be passed from the Senate Human Services Committee, the author may want to provide additional definition of blended and braided funding and how these services would be structured to provide the required training.

POSITIONS

Support:

California Disability Services Association

Arc and United Cerebral Palsy California Collaboration

Oppose:

None received.

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1. http://www.scdd.ca.gov/res/docs/pdf/Employment_First/2012%20EFC%20Annual%20Report%20Jan%2016%202013.pdf ↑

2. https://www.medicaid.gov/medicaid-chip-program-information/by-topics/long-term-services-and-supports/home-and-community-based-services/downloads/hcbs-setting-fact-sheet.pdf ↑

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

SB 1427 (Pavley) - Workforce development: developmentally disabled individuals

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

Bill Summary:

SB 1427 would require the Department of Developmental Services to establish a Work Transition Project to assist regional center consumers currently placed in segregated work settings to transition to competitive integrated employment.

Fiscal Impact:

• Likely one-time costs up to $150,000 for the Department of Developmental Services to develop program requirements, accountability measures, and data collection requirements (General Fund and federal funds).
• Likely ongoing administrative costs in the hundreds of thousands per year for regional centers to administer and monitor participation in the program (General Fund and federal funds).
• Likely annual costs of $5 million to $10 million per year to provide additional job readiness and support services to regional center consumers currently participating in work activity programs or group supported employment programs (General Fund and federal funds).

There are about currently about 15,000 regional center consumers who participate in one of these two programs. Assuming that 10% of those consumers participate in the program authorized in the bill and that those consumers, on average, receive the newly authorized services for two quarters, total net costs for those new services would be about $8 million per year. (This includes an offsetting reduction in service hours those consumers are currently receiving.)

• Likely annual savings in the millions per year (General Fund and federal funds). To the extent that the new services authorized in the bill improve the employment prospects of regional center consumers, it is likely that consumers will shift from more expensive work activity programs and group supported employment programs to less expensive individual supported employment programs (wherein consumers are employed in the community, with ongoing assistance from regional center vendors). For example, if 50% of program participants are able to shift to individual supported employment, annual savings would be about $3 million per year.

It is important to note that the increased costs for a regional center consumer using the new services would likely only occur for the first year or two, whereas savings would continue as long as the consumer stays in individual supported employment. Thus the savings would increase over time while program costs are likely to remain relatively flat.

Background:

The Department of Developmental Services is responsible for coordinating services and supports for about 250,000 people with developmental disabilities. The vast majority of these people are served by 21 regional centers, which are non-profit entities that contract with the state. The regional centers, in turn, contract with vendors to provide direct services to the developmentally disabled.

Regional centers provide a variety of services to consumers whose disabilities do not preclude them from some level of employment. Work activity programs (often referred to as sheltered workshops) allow consumers to work alongside other individuals with disabilities in a managed location, under the supervision of regional center vendor employees. Group supported employment programs allow consumers to work outside of a sheltered location, but still with the support of regional center vendors – for example alongside other consumers on landscaping or janitorial crews. Individual supported employment services are designed to support consumers working in a competitive employment situation. Individual supported employment services assist consumers in seeking out employment opportunities, getting hired, and adjusting to working in a competitive employment situation.

The federal Centers for Medicare and Medicaid Services has adopted revised program regulations that apply to regional center consumers participating in the state’s Home and Community Based Services Waiver. Under the changes, the state will be obligated to ensure that consumers are integrated into the community, including having access to work in competitive employment. The Department of Developmental Services is in the process of developing a plan to bring its waiver programs into compliance with the new federal requirements. It is likely that the state will have to phase out work activity programs as a placement for most consumers under the federal regulations.

AB X2 1 (Thurmon, Statutes of 2016) raised a number of rates for services provided through the regional center system, including implementing an 11.1% rate increase for supported employment services and a 7.5% increase for enhancing wages and benefits for staff who spend most of their time providing direct services to consumers. That bill also requires the Department to submit a rate study to the Legislature by March 1, 2019.

Proposed Law:

SB 1427 would require the Department of Developmental Services to establish a Work Transition Project to assist regional center consumers currently placed in segregated work settings to transition to competitive integrated employment.

Specific provisions of the bill would:

• Require the Department to establish a Work Transition Project by July 1, 2017;
• Require the Project to allow regional centers to allow blended or braided forms of integrated services;
• Authorize up to 75 hours per quarter, at a rate up to $40 per hour, for vendors to provide individual job readiness and support services for consumers currently placed in segregated work settings to move towards competitive integrated employment;
• Require the Department to allow the regional centers to customize programs for consumers, by partnering with work activity program and group supported employment program vendors to transition consumers to integrated competitive employment;
• Authorize the Department to waive regulatory requirements that conflict with the bill’s requirements;
• Require the Department to assess outcomes and report to the Legislature.

Related Legislation:

• SB 1024 (Hancock) would require the Department of Developmental Services to provide an incentive (of at least a 10% rate differential) to encourage the provision of individual supported employment services. That bill will be heard in this committee.
• SB 577 (Pavley, Statutes of 2014) created a pilot project to evaluate whether community based vocational development services are necessary for supported employment. That pilot project has not been implemented.

Staff Comments:

The intent of the bill is to provide services needed to move regional center consumers from less-integrated employment settings (work activity programs and group supported employment programs) to employment opportunities more fully integrated in the community and the competitive job market. This concept is aligned with the general requirements of the new federal guidelines for regional center consumers who participate in the Home and Community Based Services Waiver. However, because the Department has not fully developed its plan to transition the current system to one compliant with those requirements, it is not yet clear how the proposed program in this bill will conform to those plans.

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