Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires regional centers to provide independent living skills services to an adult consumer that provide the consumer with functional skills training that enables the consumer to acquire or maintain skills to live independently or to achieve greater independence while living in the home of another person. Existing law requires the department to promulgate regulations establishing program standards and an equitable process for setting rates of state payment for community-based day programs, which include independent living programs, among other things.

This bill would require that independent living skills services have functional skills training components, including, among others, cooking, money management, use of medical and dental services, and community resource awareness, and would prohibit those services from being conducted in a center-based environment. The bill would require the department, on or before April 1, 2024, to revise and implement an equitable and cost-effective ratesetting procedure for state payment for independent living skills services according to specified requirements, including that independent living skills services shall not be categorized as a community-based day program or adult day program and the ratesetting procedure shall reflect the reasonable cost of independent living skills services, as determined using the most up-to-date United States Bureau of Labor Statisticss State Occupational Employment and Wage Estimates for California, as specified.

Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires regional centers to provide independent living skills services to an adult consumer that provide the consumer with functional skills training that enables the consumer to acquire or maintain skills to live independently or to achieve greater independence while living in the home of another person. Existing law requires the department to promulgate regulations establishing program standards and an equitable process for setting rates of state payment for community-based day programs, which include independent living programs, among other things.

This bill would require that independent living skills services have functional skills training components, including, among others, cooking, money management, use of medical and dental services, and community resource awareness, and would prohibit those services from being conducted in a center-based environment. The bill would require the department, on or before August 1, 2023, April 1, 2024, to revise and implement an equitable and cost-effective ratesetting procedure for state payment for independent living skills services according to specified requirements, including that independent living skills services shall not be categorized as a community-based day program or adult day program and the ratesetting procedure shall reflect the reasonable cost of independent living skills services, as determined using the most up-to-date United States Bureau of Labor Statisticss State Occupational Employment and Wage Estimates for California, as specified.

Existing law, the Lanterman Developmental Disabilities Services Act, requires the State Department of Developmental Services to contract with regional centers to provide services and supports to individuals with developmental disabilities and their families. Existing law requires regional centers to provide independent living skills services to an adult consumer that provide the consumer with functional skills training that enables the consumer to acquire or maintain skills to live independently or to achieve greater independence while living in the home of another person. Existing law requires the department to promulgate regulations establishing program standards and an equitable process for setting rates of state payment for community-based day programs, which include independent living programs, among other things.

This bill would require that independent living skills services have functional skills training components, including, among others, cooking, money management, use of medical and dental services, and community resource awareness, and would prohibit those services from being conducted in a center-based environment. The bill would require the department, on or before August 1, 2023, to revise and implement an equitable and cost-effective ratesetting procedure for state payment for independent living skills services according to specified requirements, including that independent living skills services shall not be categorized as a community-based day program or adult day program and the ratesetting procedure shall reflect the reasonable cost of independent living skills services, as determined using the most up-to-date United States Bureau of Labor Statisticss State Occupational Employment and Wage Estimates for California, as specified.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 1568 (Wood) - Developmental services: independent living skills services: rates

Bill Summary:

AB 1568 would revise and expand the definition of regional center independent living skills (ILS) services and would require the Department of Developmental Services (DDS) to revise and implement a rate-setting procedure for state payment of ILS services, as specified.

Fiscal Impact:

Unknown, potentially significant ongoing General Fund costs for rate payments; and unknown General Fund costs for DDS for state administration.

Background:

The Lanterman Act establishes that individuals with developmental disabilities and their families have a right to receive the necessary supports and services required to live independently in the community. In addition to establishing the rights of individuals, the Lanterman Act also created California’s regional center system, comprised of 21 nonprofit regional centers throughout the state whose primary purpose is to connect individuals with services in the community. Services for individuals with intellectual and developmental disabilities are outlined in an individual program plan, which is developed according to the needs and personal choices of the individual. Services may include, but are not limited to, diagnosis, evaluation, treatment, and care coordination of services such as personal care, day care, special living arrangements, and physical, occupational, and speech therapy.

Current law requires regional centers to provide ILS services to an adult consumer, consistent with the consumer’s individual program plan, to provide the consumer with functional skills training to enable the consumer to acquire or maintain skills to live independently in their own home, or achieve greater independence while living in the home of a parent, family member, or other person.

In 2019, DDS completed a mandated rate study to evaluate the sustainability, quality, and transparency of services and the effectiveness of payment methodologies in supporting an adequate supply of providers and incentivizing outcomes for consumers. Current law specifies the timeline for phased-in implementation of rate increases, and requires, commencing July 1, 2024, that the DDS implement the fully funded rate models.

Proposed Law:

Specific provisions of the bill would:

• Require that independent living skills services include specified functional skills training components and prohibit services from being conducted in a center-based environment.
• Require DDS, on or before April 1, 2024, to revise and implement an equitable and cost-effective rate-setting procedure for state payment for independent living skills services, as specified.

Staff Comments: AB 102 (Ting, Chapter 38, Statutes of 2023) included a budget appropriation of $15 million ($8.5 million General Fund, $6.5 federal funds) for the purpose of adjusting ILS rate model assumptions, by January 2024, to align the types of services provided with more equivalent occupations, such as teachers, social and human services assistants, and rehabilitation counselors.

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8SENATE COMMITTEE ON HUMAN SERVICES

Senator Alvarado-Gil, Chair

2023 - 2024 Regular

Subject: Developmental services: independent living skills services: rates

SUMMARY

This bill expands the definition of independent living skills (ILS) services and specifies that ILS services shall not be conducted in a center-based environment. This bill requires the Department of Developmental Services (DDS) to revise and implement an equitable and cost-effective rate setting procedure for state payment of ILS services, as specified. This bill requires the revised rate setting procedure to be implemented according to the established rate increase schedule.

ABSTRACT

Existing law:

1. Establishes the Lanterman Developmental Disabilities Services Act (Lanterman Act), which states that California is responsible for providing a range 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 contract 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. Makes Regional Centers responsible for expanding opportunities for the full and equal participation of individuals with developmental disabilities in their local communities through activities that include, but shall not be limited to, the following:
   
   1. Outreach to, and training and education of, representatives from community service agencies and programs, businesses, and community activity providers regarding the provision and expansion of opportunities for participation by Regional Center consumers.
      
   2. Developing a community resources list.
      
   3. Providing assistance to case managers and family members on expanding community integration options for consumers in the areas of work, recreation, social, community service, education, and public services.
      
   4. Developing and facilitating the use of innovative methods of contracting with community members to provide support in natural environments to regional center consumers.
      
   5. Development and facilitating the use of natural supports to enhance community participation.
      
   6. Providing technical assistance to, and coordinating with, community support facilitators who will be used to provide supports to individual consumers for community participation, as needed.
      
   7. Providing sources of information relevant to individuals in making informed choices about employment options. This information may include, but need not be limited to, work incentive programs for persons with developmental disabilities, access and retention of needed benefits, interactions of earned income, asset building, or other financial changes on benefits, employment programs and protections, taxpayer requirements and responsibilities, training opportunities, and information and services available through other agencies, organizations, or on the Internet. (WIC 4688(b))
      
4. Establishes an Individual Program Plan (IPP) as the process to ensure that services and supports are customized to meet the needs of consumers who are served by regional centers for the purpose of alleviating a developmental disability or toward the social, personal, physical, or economic habilitation or rehabilitation of an individual with a developmental disability, or toward the achievement and maintenance of independent, productive, and normal lives. (WIC 4512(b))
   
5. Requires Regional Centers to provide ILS services to an adult consumer, consistent with the consumer’s IPP, to provide the consumer with functional skills training to enable the consumer to acquire or maintain skills to live independently in their own home, or achieve greater independence while living in the home of a parent, family member, or other person. (WIC 4688.05)
   
6. Requires DDS to implement rate increases for service providers as specified:
   
   1. Commencing April 1, 2022, DDS shall implement a rate increase for service providers that equals one-quarter of the difference between current rates and the fully funded rate model for each provider.
      
   2. Commencing January 1, 2023, and continuing through the 2023-24 Fiscal Year (FY), DDS shall adjust rates to equal one-half of the difference between rates in effect March 31, 2022, and the fully funded rate model for each provider, and additional funding shall be available for the quality incentive program.
      
   3. Commencing July 1, 2024, DDS shall implement the fully funded rate models using two payment components, a base rate equaling 90 percent of the rate model and a quality incentive payment equaling up to 10 percent of the rate model. (WIC 4519.10(c))

This bill:

1. Specifies that ILS services shall not be conducted in a center-based environment and shall have all of the following components:
   
   1. Cooking,
      
   2. Cleaning,
      
   3. Shopping in natural environments,
      
   4. Menu planning,
      
   5. Meal preparation,
      
   6. Money management, including check cashing and purchasing activities,
      
   7. Use of public transportation in natural environments,
      
   8. Personal health and hygiene,
      
   9. Self-advocacy training,
      
   10. Independent recreation and participation in natural environments,
       
   11. Use of medical and dental services, and other community resources,
       
   12. Community resource awareness, such as police, fire, or emergency help, and
       
   13. Home and community safety.
       
2. Specifies that ILS may also provide supports necessary for a consumer to maintain a self-sustaining, independent living situation in the community.
   
3. Requires DDS to revise and implement, on or before April 1, 2024, an equitable and cost-effective rate setting procedure for state payment for ILS services and requires all of the following parameters:
   
   1. ILS services shall not be categorized as a community-based day program or adult day program.
      
   2. The rate setting procedure shall include each specific allowable service, activity, and provider’s administrative cost in the overall ILS services rate and reflect the reasonable cost of ILS services.
      
   3. Reasonable costs shall be determined biennially by DDS, subject to audit at the discretion of the department.
      
   4. In determining reasonable costs, DDS shall rely on the most up-to-date U.S. Bureau of Labor Statistics’ (BLS) State Occupational Employment and Wage Estimates for California, and shall assume that the job function of an ILS services instructor is comprised of all of the following positions:
      
      1. Thirty percent of the job function as a rehabilitation counselor;
         
      2. Thirty percent of the job function as a social and human service assistant);
         
      3. Twenty percent of the job function as a tutor; and
         
      4. Twenty percent of the job function as a teacher and instructor.
         
4. Requires the revised rate setting procedure to be implemented according to the rate increase schedule established under existing law. Further requires the rate increase scheduled for January 1, 2023, to be immediately applied to the revised ILS services rate.

FISCAL IMPACT

The Assembly Appropriations Committee estimates General Fund costs of approximately $58 million annually, potentially increasing with periodic updates, for DDS to revise and implement a rate setting procedure for state payment of ILS, based on the classifications included in bill.

BACKGROUND AND DISCUSSION

Purpose of the bill:

According to the author, “While most DDS service provider rates are being raised to reflect the Burns Rate Study, and to reflect current provider costs more accurately, the ILS misclassification means higher skilled instructors are being left behind, receiving a fraction of the pay their skill level warrants and that would have been addressed if not for the misclassification. The ability to live independently is of vital importance to people of all ages and abilities. If this situation is not rectified, we are not honoring our responsibility to the IDD [intellectual and developmental disability] community by allowing them to live their lives as independently as possible.”

Lanterman Act

In 1969, the Lanterman Developmental Disabilities Act established that individuals with developmental disabilities and their families have a right to receive the necessary supports and services required to live independently in the community. The Lanterman Act enumerates the rights of individuals with developmental disabilities, as well as the rights of their families, what services and supports are available to these individuals, and how regional centers and service providers work together to provide these supports and services. The term “developmental disability” is defined as a disability that originates before a person reaches 18 years of age, is expected to continue indefinitely, and is a significant disability for the individual; such disabilities include, among others: epilepsy, autism spectrum disorder, intellectual disability, and cerebral palsy.

In addition to establishing the rights of individuals, the Lanterman Act also created California’s regional center system, comprised of 21 nonprofit regional centers throughout the state whose primary purpose is to connect individuals with services in the community. Regional centers coordinate a robust array of services and supports for more than 329,000 individuals with developmental disabilities in California.

Services may include diagnosis, evaluation, treatment, and care coordination of services such as personal care, day care, special living arrangements, and physical, occupational, and speech therapy. Additional services include, but are not limited to mental health services, recreation, counseling for the individual served and their family, assistance locating a home, behavior training and modification programs, emergency and crisis intervention, and many others. The regional center system can also provide respite for family caregivers, short-term out-of-home care, social skills training, specialized medical and dental care, telehealth services and supports, training for parents of children with developmental disabilities, and transportation services necessary to ensure the delivery of services to persons with developmental disabilities.

Independent Living Skills (ILS) Services

ILS services provide training and assistance for adults with intellectual and developmental disabilities to achieve greater independence while living with others or to acquire and maintain independent living. ILS services are funded through the regional center and delivered in a non-licensed home or apartment. ILS services mostly focus on basic self-help activities that may include any of the following: money management, shopping, meal preparation, health/medical care, laundry, advocacy, and psycho-social support.

This bill would require DDS to establish and implement revised rates for ILS. According to the California Community Living Network (CCLN), the 2019 developmental services rate study, discussed below, misclassified ILS Direct Support Professionals, resulting in “essentially reducing their compensation rates to that of lower skilled workers like personal care aides. This mistake directly contradicts with existing law, which clearly outlines the skill level required for ILS workers. As a result of this misclassification, ILS providers will be receiving a rate cut at full implementation of the rate study.”

Developmental Services Rate Reform

AB 1 X2 (Thurmond, Chapter 3, Statutes of 2016) requires DDS to conduct a rate study by March 1, 2019, that considered the sustainability, quality, and transparency of service and the effectiveness of payment methodologies in supporting an adequate supply of providers and incentivizing outcomes for consumers. AB 136 (Committee on Budget, Chapter 76, Statutes of 2021) further specified the timeline for implementation of the rate models proposed in the 2019 rate study^[1], with the first stage effective April 1, 2022.

The 2019 rate study and rate models reflect:

• • • A standardized approach to rate-setting such that providers delivering the same service in the same area receive the same payment;
      
    • Simplification of service codes by consolidating a number of existing codes based on the assumption that a support should be associated with the same service code regardless of where that support is provided;
      
    • The use of market-based cost data to reflect providers’ costs in order to support a stable and high-quality supply of providers;
      
    • A detailed and transparent accounting of these costs so changes could be considered over time;
      
    • Recognition of differences in wage, travel, and real estate costs across the State by developing separate rate models for each Regional Center; and
      
    • The development of enhanced rates for services delivered to individuals who do not speak English when delivered by staff who speak their language, including American Sign Language.

Related legislation:

AB 102 (Committee on Budget, 2023), the Budget Act of 2023, appropriates $6.5 million to adjust ILS rate model assumptions by January 2024. AB 102 has been passed by both houses and is waiting for approval by the Governor.

AB 1957 (Wilson, Chapter 314, Statutes of 2022) required DDS and Regional Centers to report additional data for individuals with developmental disabilities.

AB 136 (Committee on Budget, Chapter 76, Statutes of 2021) specified the timeline for implementation of the rate models proposed in the rate study required by AB 1 X2.

AB 1 X2 (Thurmond, Chapter 3, Statutes of 2016) required DDS to conduct a rate study by March 1, 2019, that considered the sustainability, quality, and transparency of services and the effectiveness of payment methodologies in supporting an adequate supply of providers and incentivizing outcomes for consumers.

COMMENTS

This bill seeks to specify the definition of ILS services, revise ILS rates, clarify that ILS programs are not adult day programs, and align implementation of ILS rates with the new rates as they are implemented pursuant to AB 136.

This bill may be duplicative of ongoing implementation of the 2019 rate study and AB 102, the budget bill. In addition, the specificity of the bill, such as naming specific job classifications, could create inconsistencies with other developmental services programs and rates. Proponents of this bill state this bill addresses issues that were mistakenly overlooked in the 2019 rate study.

PRIOR VOTES

POSITIONS

Support:

Achievement House & NCI Affiliates, INC. (Co-Sponsor)

California Community Living Network (Co-Sponsor)

Tri-county Respite Care Service (Co-Sponsor)

Association of Regional Center Agencies

California Disability Services Association

California State Council on Developmental Disabilities

Disability Rights California

Lanterman Housing Alliance

On My Own Independent Living Services

Pathpoint

Strategies to Empower People

Oppose:

None received

-- END --

1. https://www.burnshealthpolicy.com/DDSVendorRates/ ↑

ASSEMBLY THIRD READING

ATR Bill Id:AB 1568

Author:(Wood)

As Amended Ver:April 12, 2023

Majority vote

SUMMARY

Requires Department of Developmental Services (DDS) to revise and implement a rate setting process for independent living services and specifies services that must be offered.

Major Provisions

1. Requires all regional centers providing independent living skills services to have all of the following functional skills training components and stipulates that the services cannot be conducted in a center-based environment:
2. Cooking;
3. Cleaning;
4. Shopping in natural environments;
5. Menu planning;
6. Meal preparation;
7. Money management, including check cashing and purchasing activities;
8. Use of public transportation in natural environments;
9. Personal health and hygiene;
10. Self-advocacy training;
11. Independent recreation and participation in natural environments;
12. Use of medical and dental services, and other community resources;
13. Community resource awareness, such as police, fire, or emergency help; and,
14. Home and community safety.
15. Permits independent living skills services to also provide the support necessary for a consumer to maintain a self-sustaining, independent living situation in the community.
16. Requires DDS, by April 1, 2024, to revise and implement an equitable and cost-effective ratesetting procedure for state payment for independent living skills services, in accordance with all of the following:
    1. Independent living skills services shall not be categorized as a community-based day program or adult day program.
    2. The ratesetting procedure must include each specific allowable service, activity, and provider's administrative cost in the overall independent living skills services rate, as determined by the department, and reflect the reasonable cost of independent living skills services.
    3. Reasonable costs shall be determined biennially by the department, subject to audit at the discretion of the department.
    4. In determining reasonable costs, the department shall rely on the most up-to-date United States Bureau of Labor Statistics's State Occupational Employment and Wage Estimates for California, and shall assume that the job function of an independent living skills services instructor is comprised of all of the following positions:
       1. Thirty percent of the job function as a rehabilitation counselor (United States Bureau of Labor Statistics, Standard Occupational Classification code 21-1015).
       2. Thirty percent of the job function as a social and human service assistant (United States Bureau of Labor Statistics, Standard Occupational Classification code 21-1093).
       3. Twenty percent of the job function as a tutor (United States Bureau of Labor Statistics, Standard Occupational Classification code 25-3041).
       4. Twenty percent of the job function as a teacher and instructor (United States Bureau of Labor Statistics, Standard Occupational Classification code 25-3099).
17. The revised ratesetting procedure as described in 3) must be implemented according to the rate increase schedule pursuant to Welfare and Institutions Code Section (WIC) 4519. Further, upon implementation of the revised ratesetting procedure as describe in 3), the rate increase scheduled for January 1, 2023, pursuant to WIC 4519.10, must be immediately applied to the revised independent living skills services rate.
18. Exempts the revision and implementation of rating setting as described in 3) from Administrative Regulations and Rulemaking rules described in Government Code Section (GOV) 11340 esq.
19. Removes "independent living programs" from legislative intent language stating the "Legislature intends ratesetting procedures be developed for all community-based day programs…"

COMMENTS

Lanterman Developmental Disabilities Services Act was originally passed in 1969. The Lanterman Act provides entitlement to services and supports for individuals ages three and older who have a qualifying developmental disability. Qualifying disabilities include autism, epilepsy, cerebral palsy, intellectual disabilities, and other conditions closely related to intellectual disabilities that require similar treatment. To qualify, an individual must have a disability that is substantial that began before the age of 18 and is expected to be life-long. There are no income‑related eligibility criteria. As of December 2022, DDS serves about 330,000 Lanterman‑eligible individuals and another 2,900 children ages three and four who are provisionally eligible.

Developmental Services Task Force. In an effort to meet statutory requirements to close developmental centers and move toward deinstitutionalization of persons living with developmental disabilities, a task force was formed and then eventually morphed into the current Developmental Services Task Force that currently still meets regularly. There are 157 task force members, which include self-advocates, family members, advocacy organizations, regional center representatives, community service providers, labor organizations and legislative leaders. 42 of these members serve on the Task Force while the other 115 serve on the five workgroups. The five workgroups are: Community Resources, Oversight, Accountability and Transparency, Safety Net, Serve Access and Equity, System and Fiscal Reform. The Task Force is charged to develop recommendations to strengthen the community services system considering a growing and aging population, resource constraints, and new state and federal laws and regulations.

Developmental Services Rate Reforms. In 2015, the state requested a study to begin rate reform discussions and understand the best way to modernize an outdated rate structure. The study was performed by Burns and Associates and published in March 2019. At the request if the Legislature, the Legislative Analyst's Office (LAO) followed up in May 2019 outlining policy options based on the Burns and Associates report. The LAO noted in their report to the Legislature outlining policy options, "…anything less than full implementation of the proposed rate models has risks." The LAO offered a staged approach which put services in four categories: residential, employment, respite, and independent living services, or combine the staged approach with pilot programs. The LAO also noted that a full implementation was not feasible in one fiscal year. As such, the Legislature adopted a five-year phased in approach in the 2021-22 Budget, and then a four-year accelerated plan was adopted in the 2022-23 Budget. This year, the Governor's budget proposal includes $1.2 billion dollars to have full implementation by July 1, 2024.

The California Community Network and LAO both separately note that the Burns and Associates rate reform model might need adjustments to consider the reality of the differences between Independent Living Services and Supported Living Services. The rate reform model uses the Bureau of Labor Statistics to make job assumptions on wages. The model uses the same occupations of home health aides, psychiatric aides, personal care aides, and recreation workers to set wage assumptions for both independent living services wages and supported living services wages. Public comment was made to DDS expressing this concern and as a result DDS made an adjustment to the rate model. According to DDS in their Responses to Public Comment Report posted in January 2020, "The mix of occupations for Independent Living (Service Code 520) and Independent Living Specialist (Service Code 635) was revised to reduce the use of the personal care aide occupation, producing a base rate model wage assumption of $15.00 per hour; the mix of occupations for Community-Based Day Programs was revised to reduce the use of the personal care aide occupation, producing a base rate model wage assumption of $15.00 per hour; and the wage level for line staff in Community Care Facilities at level 5 and above was increased by 10%."

This bill prohibits independent living skills services from being categorized as a community-based day program or adult day program. The bill also revises wage reimbursement for an independent living instructor to reflect higher paid jobs – teacher, rehabilitation counselor, and a social and human services coordinator from the current model that uses personal care aide, home health aide, psychiatric aide, and recreation worker.

Supported Living Services (SLS) versus Independent Living Services (ILS). SLS allow eligible adults to live in their own home including: assisting with daily living activities, maintaining a clean and safe home, obtaining appropriate medical services, finding appropriate house mates, accessing community resources and participating in community life. SLS can be funded through the regional center and/or In-Home Support Services and can be supervised by the individuals themselves. SLS may include assistance with the following: Selecting a home; Moving into a home; Choosing personal attendants; Choosing housemates; Acquiring household furnishings; Participating in daily living activities; Preparing for emergencies; Participating in community life; and, Managing personal financial affairs.

ILS provide skills training to clients who live independently in the community. Skills that are typically taught include, budgeting, scheduling health appointments, healthy meal planning and cooking, house cleaning, learning public transportation routes, personal health and hygiene, and other independent living skills. ILS services are funded through the regional center and delivered in a non-licensed home or apartment. ILS services mostly focus on basic self-help activities that may include any of the following: Money management; Shopping; Meal preparation; Health/medical care; Laundry; Advocacy; and, Psycho-social support.

Equity Implications: Individuals living with developmental disabilities face challenges in day-to-day life that sometimes requires institutional care, but there are many instances where living independently at home is possible, preferred, and better for the individual. Historically, institutionalization has been prioritized despite opposition to these policy choices. As noted, California is working to bring equity and independence to a group of individuals that have the potential to thrive if given the right tools. This bill prioritizes providers that are able to teach these skills and ultimately help encourage individuals to live and age in the place of their choosing.

According to the Author

"While most DDS service provider rates are being raised to reflect the Burns Rate Study, and to reflect current provider costs more accurately, the ILS misclassification means higher skilled instructors are being left behind, receiving a fraction of the pay their skill level warrants and that would have been addressed if not for the misclassification. The ability to live independently is of vital importance to people of all ages and abilities. If this situation is not rectified, we are not honoring our responsibility to the I/DD community by allowing them to live their lives as independently as possible."

Arguments in Support

Supporters state this bill is correcting an error/misunderstanding that occurred in 2019 when DDS underwent rate reform for DDS services. This bill will rectify the misunderstanding of workers that provide ILS services to more appropriately reflect the work and professionals.

Arguments in Opposition

None on file

FISCAL COMMENTS

According to the Assembly Appropriations Committee on May 17, 2023, estimated General Fund costs of approximately $58 million annually, potentially increasing with periodic updates, for DDS to revise and implement a rate setting procedure for state payment of ILS, based on the classifications included in bill.

VOTES

ASM HUMAN SERVICES: 7-0-1

YES: Jackson, Sanchez, Alanis, Arambula, Bryan, Calderon, Garcia

ABS, ABST OR NV: Bonta

ASM APPROPRIATIONS: 15-0-1

YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega

ABS, ABST OR NV: Robert Rivas

UPDATED

VERSION: April 12, 2023

CONSULTANT: Alexandria Smith / HUM. S. / (916) 319-2089 FN: 0000661

Date of Hearing: May 17, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 1568

Author:(Wood) – As Amended Ver:April 12, 2023

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

SUMMARY:

This bill requires the Department of Developmental Services (DDS) to revise and implement a rate setting process for independent living skills services (ILS) and requires ILS services offered by regional centers to include a functional skills training component.

Specifically, this bill:

1. Requires each regional center, as part of its ILS services, to have specified functional skills training components, such as cooking, cleaning, meal planning, money management, use of medical and dental services, and home and community safety.
2. Prohibits those services from being conducted in a center-based environment.
3. Permits ILS services to also provide support for a consumer to maintain a self-sustaining, independent living situation in the community.
4. Requires DDS, by April 1, 2024, to revise and implement an equitable and cost-effective rate setting procedure for state payment for ILS services, in accordance with specified requirements, including that ILS services not be categorized as a community-based day program or adult day program and the rate setting procedure reflect the reasonable cost of ILS services, as determined using the most up-to-date United States Bureau of Labor Statistics’ State Occupational Employment and Wage Estimates for California, as specified.
5. Requires the revised rate setting procedure as described in 4) to be implemented according to the rate increase schedule in existing law and requires, upon implementation of the revised rate setting procedure, the rate increase scheduled for January 1, 2023, pursuant to existing law, be immediately applied to the revised independent living skills services rate.

FISCAL EFFECT:

Estimated General Fund costs of approximately $58 million annually, potentially increasing with periodic updates, for DDS to revise and implement a rate setting procedure for state payment of ILS, based on the classifications included in bill.

COMMENTS:

1. Purpose. According to the author:

While most DDS service provider rates are being raised to reflect the Burns Rate Study, and to reflect current provider costs more accurately, the ILS misclassification means higher skilled instructors are being left behind, receiving a fraction of the pay their skill level warrants and that would have been addressed if not for the misclassification. The ability to live independently is of vital importance to people of all ages and abilities. If this situation is not rectified, we are not honoring our responsibility to the I/DD community by allowing them to live their lives as independently as possible.

1. Background. The Lanterman Act, enacted in 1969, provides entitlement to services and supports for an individual age three and older who has a qualifying developmental disability, including autism, epilepsy, cerebral palsy, intellectual disabilities, and other conditions closely related to intellectual disabilities that require similar treatment. To qualify, an individual must have a substantial disability that began before the age of 18 and is expected to be life-long. There are no income‑related eligibility criteria. As of December 2022, the Department of Developmental Services (DDS), the entity responsible for carrying out the Lanterman Act, serves about 330,000 Lanterman‑eligible individuals and another 2,900 children ages three and four who are provisionally eligible.

DDS oversees the coordination and delivery of services for individuals with developmental disabilities through a statewide network of 21 community-based, non-profit agencies known as regional centers. Regional centers provide assessments, determine eligibility for services, and offer case management services. Regional centers also develop, purchase, and coordinate the services in each person’s Individual Program Plan.

In 2015, the state requested a study to begin modernizing an outdated rate structure for service providers. The study, performed by Burns and Associates, was published in March 2019. At the request of the Legislature, the Legislative Analyst’s Office (LAO) outlined policy options based on the Burns and Associates report. The LAO suggested a staged approach that put services in four categories: residential, employment, respite, and independent living services. In response, the Legislature adopted a five-year phased in approach in the 2021-22 state budget, and then adopted a four-year accelerated plan in the 2022-23 state budget. The 2023-24 Governor’s budget proposal includes $1.2 billion dollars for full implementation by July 1, 2024.

The California Community Network and Legislative Analyst’s Office (LAO) separately note the Burns and Associates rate reform model may need adjustments to consider the differences between ILS services and supported living services. The rate reform model uses the Bureau of Labor Statistics to make job assumptions on wages. The model uses the same occupations of home health aides, psychiatric aides, personal care aides, and recreation workers to set wage assumptions for both ILS services wages and supported living services wages. Supported living services (SLS) allow eligible adults to live in their own home. ILS services provide skills training to clients who live independently in the community and demand higher skilled instructors.

This bill prohibits ILS services from being categorized as a community-based day program or adult day program and revises wage reimbursement for an independent living instructor to reflect higher paid jobs.

1. Prior Legislation. AB 136 (Committee on Budget), Chapter 76, Statute of 2021, specified the timeline for implementation of the rate models proposed in the rate study required by AB 1 X2 (Thurmond), Chapter 3, Statutes of 2016.

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

Date of Hearing: April 14, 2023

ASSEMBLY COMMITTEE ON HUMAN SERVICES

Corey A. Jackson, Chair

ABPCA Bill Id:AB 1568 (

Author:Wood) – As Amended Ver:April 12, 2023

SUBJECT: Developmental services: independent living skills services: rates

SUMMARY: Requires Department of Developmental Services (DDS) to revise and implement a rate setting process for independent living services and specifies services that must be offered. Specifically, this bill:

1. Requires all regional centers providing independent living skills services to have all of the following functional skills training components and stipulates that the services cannot be conducted in a center-based environment:
2. Cooking;
3. Cleaning;
4. Shopping in natural environments;
5. Menu planning;
6. Meal preparation;
7. Money management, including check cashing and purchasing activities;
8. Use of public transportation in natural environments;
9. Personal health and hygiene;
10. Self-advocacy training;
11. Independent recreation and participation in natural environments;
12. Use of medical and dental services, and other community resources;
13. Community resource awareness, such as police, fire, or emergency help; and,
14. Home and community safety.
15. Permits independent living skills services to also provide the support necessary for a consumer to maintain a self-sustaining, independent living situation in the community.
16. Requires DDS, by April 1, 2024, to revise and implement an equitable and cost-effective ratesetting procedure for state payment for independent living skills services, in accordance with all of the following:
    1. Independent living skills services shall not be categorized as a community-based day program or adult day program.
    2. The ratesetting procedure must include each specific allowable service, activity, and provider’s administrative cost in the overall independent living skills services rate, as determined by the department, and reflect the reasonable cost of independent living skills services.
    3. Reasonable costs shall be determined biennially by the department, subject to audit at the discretion of the department.
    4. In determining reasonable costs, the department shall rely on the most up-to-date United States Bureau of Labor Statistics’s State Occupational Employment and Wage Estimates for California, and shall assume that the job function of an independent living skills services instructor is comprised of all of the following positions:
       1. Thirty percent of the job function as a rehabilitation counselor (United States Bureau of Labor Statistics, Standard Occupational Classification code 21-1015).
       2. Thirty percent of the job function as a social and human service assistant (United States Bureau of Labor Statistics, Standard Occupational Classification code 21-1093).
       3. Twenty percent of the job function as a tutor (United States Bureau of Labor Statistics, Standard Occupational Classification code 25-3041).
       4. Twenty percent of the job function as a teacher and instructor (United States Bureau of Labor Statistics, Standard Occupational Classification code 25-3099).
17. The revised ratesetting procedure as described in 3) must be implemented according to the rate increase schedule pursuant to Welfare and Institutions Code Section (WIC) 4519. Further, upon implementation of the revised ratesetting procedure as describe in 3), the rate increase scheduled for January 1, 2023, pursuant to WIC 4519.10, must be immediately applied to the revised independent living skills services rate.
18. Exempts the revision and implementation of rating setting as described in 3) from Administrative Regulations and Rulemaking rules described in Government Code Section (GOV) 11340 esq.
19. Removes “independent living programs” from legislative intent language stating the “Legislature intends ratesetting procedures be developed for all community-based day programs…”.

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. Makes regional centers responsible for expanding opportunities for the full and equal participation of persons with developmental disabilities in their local communities through, activities including:
   1. Outreach to, and training and education of, representatives of community service agencies and programs, businesses, and community activity providers regarding the provision and expansion of opportunities for participation by regional center consumers.
   2. Developing a community resources list.
   3. Providing assistance to case managers and family members on expanding community integration options for consumers in the areas of work, recreation, social, community service, education, and public services.
   4. Developing and facilitating the use of innovative methods of contracting with community members to provide support in natural environments to regional center consumers.
   5. Development and facilitating the use of natural supports to enhance community participation.
   6. Providing technical assistance to, and coordinating with, community support facilitators who will be used to provide supports to individual consumers for community participation, as needed.
   7. Providing sources of information relevant to individuals in making informed choices about employment options. This information may include, but need not be limited to, work incentive programs for persons with developmental disabilities, access and retention of needed benefits, interactions of earned income, asset building, or other financial changes on benefits, employment programs and protections, taxpayer requirements and responsibilities, training opportunities, and information and services available through other agencies, organizations, or on the Internet. (WIC 4688(b))
3. Requires regional centers to provide independent living skills services to an adult consumer, consistent with their individual program plan, that provide the consumer with functional skills training that enables themselves to acquire or maintain skills to live independently in their own home, or to achieve greater independence while living in the home of a parent, family member, or other person. (WIC 4688.05)
4. Directs the Department of Health Care Services (DHCS) and DDS to jointly seek a federal Centers for Medicare and Medicaid Services’ (CMS) approved 1915(i) state plan amendment to expand federal financial participation for services to persons with developmental disabilities provided by regional centers pursuant to the Lanterman Act. (WIC 4688.5)
5. Requires DDS to implement a rate increase for service providers that equals one-quarter of the difference between current rates and the fully-funded rate model for each provider. (WIC 4519.10)
6. Suspends existing and new assessments and reassessments, and collections of the annual family program fee from July 1, 2022, until June 30, 2023. (WIC 4785)
7. Establishes the Administrative Regulations and Rulemaking Act. (GOV 11340 esq.)
8. States legislative intent that community-based day programs be planned and provided as part of a continuum of services to enable persons with developmental disabilities to approximate the pattern of everyday living available to people of the same age without disabilities. The Legislature further intends that standards be developed to ensure high-quality services, and that equitable ratesetting procedures based upon those standards be established, maintained, and revised, as necessary. The Legislature intends that ratesetting procedures be developed for all community-based day programs, which include adult development centers, activity centers, infant day programs, behavior management programs, social recreational programs, and independent living programs. (WIC 4691(a))

FISCAL EFFECT: Unknown, this bill has not been analyzed by a fiscal committee.

COMMENTS:

Background: Lanterman Developmental Disabilities Services Act. California’s Lanterman Act was originally passed in 1969. The Lanterman Act provides entitlement to services and supports for individuals ages three and older who have a qualifying developmental disability. Qualifying disabilities include autism, epilepsy, cerebral palsy, intellectual disabilities, and other conditions closely related to intellectual disabilities that require similar treatment. To qualify, an individual must have a disability that is substantial that began before the age of 18 and is expected to be life-long. There are no income‑related eligibility criteria. As of December 2022, DDS serves about 330,000 Lanterman‑eligible individuals and another 2,900 children ages three and four who are provisionally eligible.

Developmental Services Task Force. In an effort to meet statutory requirements to close developmental centers and move toward deinstitutionalization of persons living with developmental disabilities, a task force was formed and then eventually morphed into the current Developmental Services Task Force that currently still meets regularly. There are 157 task force members, which include self-advocates, family members, advocacy organizations, regional center representatives, community service providers, labor organizations and legislative leaders. 42 of these members serve on the Task Force while the other 115 serve on the five workgroups. The five workgroups are: Community Resources, Oversight, Accountability and Transparency, Safety Net, Serve Access and Equity, System and Fiscal Reform. The Task Force is charged to develop recommendations to strengthen the community services system considering a growing and aging population, resource constraints, and new state and federal laws and regulations.

Developmental Services Rate Reforms. In 2015, the state requested a study to begin rate reform discussions and understand the best way to modernize an outdated rate structure. The study was performed by Burns and Associates and published in March 2019. At the request if the Legislature, the Legislative Analyst’s Office (LAO) followed up in May 2019 outlining policy options based on the Burns and Associates report. The LAO noted in their report to the Legislature outlining policy options, “…anything less than full implementation of the proposed rate models has risks.” The LAO offered a staged approach which put services in four categories: residential, employment, respite, and independent living services, or combine the staged approach with pilot programs. The LAO also noted that a full implementation was not feasible in one fiscal year. As such, the Legislature adopted a five-year phased in approach in the 2021-22 Budget, and then a four-year accelerated plan was adopted in the 2022-23 Budget. This year, the Governor’s budget proposal includes $1.2 billion dollars to have full implementation by July 1, 2024.

The California Community Network and LAO both separately note that the Burns and Associates rate reform model might need adjustments to consider the reality of the differences between Independent Living Services and Supported Living Services. The rate reform model uses the Bureau of Labor Statistics to make job assumptions on wages. The model uses the same occupations of home health aides, psychiatric aides, personal care aides, and recreation workers to set wage assumptions for both independent living services wages and supported living services wages. Public comment was made to DDS expressing this concern and as a result DDS made an adjustment to the rate model. According to DDS in their Responses to Public Comment Report posted in January 2020, “The mix of occupations for Independent Living (Service Code 520) and Independent Living Specialist (Service Code 635) was revised to reduce the use of the personal care aide occupation, producing a base rate model wage assumption of $15.00 per hour; the mix of occupations for Community-Based Day Programs was revised to reduce the use of the personal care aide occupation, producing a base rate model wage assumption of $15.00 per hour; and the wage level for line staff in Community Care Facilities at level 5 and above was increased by 10 percent.”

This bill prohibits independent living skills services from being categorized as a community-based day program or adult day program. The bill also revises wage reimbursement for an independent living instructor to reflect higher paid jobs – teacher, rehabilitation counselor, and a social and human services coordinator from the current model that uses personal care aide, home health aide, psychiatric aide, and recreation worker.

Supported Living Services (SLS) versus Independent Living Services (ILS). SLS allow eligible adults to live in their own home including: assisting with daily living activities, maintaining a clean and safe home, obtaining appropriate medical services, finding appropriate house mates, accessing community resources and participating in community life. SLS can be funded through the regional center and/or In-Home Support Services and can be supervised by the individuals themselves. SLS may include assistance with the following:

• Selecting a home;
  
• Moving into a home;
  
• Choosing personal attendants;
  
• Choosing housemates;
  
• Acquiring household furnishings;
  
• Participating in daily living activities;
  
• Preparing for emergencies;
  
• Participating in community life; and,
  
• Managing personal financial affairs.

ILS provide skills training to clients who live independently in the community. Skills that are typically taught include, budgeting, scheduling health appointments, healthy meal planning and cooking, house cleaning, learning public transportation routes, personal health and hygiene, and other independent living skills. ILS services are funded through the regional center and delivered in a non-licensed home or apartment. ILS services mostly focus on basic self-help activities that may include any of the following:

• Money management;
  
• Shopping;
  
• Meal preparation;
  
• Health/medical care;
  
• Laundry;
  
• Advocacy; and,
  
• Psycho-social support.

The 2021 United States Bureau of Labor Statistics’ State Occupational Employment and Wage Estimates for California are as follows:

Author’s Statement: According to the Author, “While most DDS service provider rates are being raised to reflect the Burns Rate Study, and to reflect current provider costs more accurately, the ILS misclassification means higher skilled instructors are being left behind, receiving a fraction of the pay their skill level warrants and that would have been addressed if not for the misclassification. The ability to live independently is of vital importance to people of all ages and abilities. If this situation is not rectified, we are not honoring our responsibility to the I/DD community by allowing them to live their lives as independently as possible.”

Need for this bill: Rate reform for developmental services has been an important topic the last few years. By July 2024, California is set to implement the rate reform that was signed into law originally in 2021-22 budget. Within this rate reform, rates were set for ILS that may not match up with how ILS work in practice.

This bill tries to address rate reform through increasing rates for ILS by changing the wage rate calculated based on higher-paying jobs that might reflect the duties of an ILS provider more accurately. This bill also attempts to differentiate between ILS community-based services from ILS.

Equity Implications: Individuals living with developmental disabilities face challenges in day-to-day life that sometimes requires institutional care, but there are many instances where living independently at home is possible, preferred, and better for the individual. Historically, institutionalization has been prioritized despite opposition to these policy choices. As noted, California is working to bring equity and independence to a group of individuals that have the potential to thrive if given the right tools. This bill prioritizes providers that are able to teach these skills and ultimately help encourage individuals to live and age in the place of their choosing.

RELATED AND PRIOR LEGISLATION:

AB 1 X2 (Thurmond), Chapter 3, Statutes of 2016, required DDS to conduct a rate study that considered the sustainability, quality, and transparency of services and the effectiveness of payment methodologies in supporting an adequate supply of providers and incentivizing outcomes for consumers.

AB 136 (Committee on Budget), Chapter 76, Statute of 2021, specified the timeline for implementation of the rate models proposed in the rate study.

AB 1957 (Wilson), Chapter 314, Statutes of 2022, required DDS and regional centers to report additional data for individuals with developmental disabilities.

REGISTERED SUPPORT / OPPOSITION:

Support

California Community Living Network (Sponsor)

Association of Regional Center Agencies

California State Council on Developmental Disabilities

Community Interface Services

Disability Rights California

Disability Voices United

PathPoint

Opposition

None on file

Analysis Prepared by: Alexandria Smith / HUM. S. / (916) 319-2089