News & Events
Governor Brown released his proposed budget for fiscal year 2017-18. It includes an increase for regional centers Purchase of Services and Operations to accomodate projected growth of 13,836 new clients statewide over the 2016-17 year, for a projected total of 317,283 clients statewide. The proposed total funding of $6.4 Billion statewide therefore reflects a net increase of $359 million from the updated 2016-17 budget. This proposed budget will now be reviewed by legislators who may propose modifications, and may also be amended by the Governor in his annual May Revise, before going for vote for approval in June.
The OPS increase is the net of staffing resulting from increased caseload, adjustments for OPS Projects, and a $2.9 million increase ($1.9 million GF) to fund the two-year statewide minimum wage increase from $10 to $11 per hour for positions below $11. The POS increase reflects increase in all POS budget categories based on updated caseload and expenditure projections.
For the Minimum Wage Increase already in place: $7.5 million increase ($4.4 million GF increase) in POS to reflect increased expenditures based on caseload and utilization growth
For continuation of funds appropriated through ABX2-1 Extraordinary Session in 2016, $14.3 million increase ($8.4 million GF increase) to reflect the full amount of funds appropriated through special session.
Proposed Budget Trailer Bill language includes amendments to:
- Allow Regional Centers Consumers aged 18-22 who are still receiving educational services to participate in paid internships for the purpose of gaining experience in competitive,integrated employment (through a new internship program implemented for adult clients in 2016)
- Broadens the use of Community Placement Plan (CPP) funds to include additional community resources to develop services and supports for consumers already living in the community, including those with specialized and complex service needs.
The Legislature passed a budget for the 2016-17 fiscal year which contains a substantial increase in spending for regional centers mostly because it incorporates the provisions of ABX-2 passed by the Legislature during the special legislative session. There have been no unexpected additions or deletions in the budget as enacted. The new fiscal year, and the new budget, were effective on July 1, 2016.
Reason To Celebrate: Bipartisan Legislature Passes Developmental Services Funding Bill
On February 29, 2016, the Legislature passed a two-bill package, signed by the Governor on the following day, that will provide much needed funding relief for services for people with developmental disabilities and the people who serve and care for them. These votes come after a five-year campaign by our community.
The first of the two bills helped to secure continued inflow of federal funding, by restructuring the way that Managed Care Organizations are taxed. The continuation of federal funding made it possible for the second of these two bills to provide nearly $300 Million in state general funds for the developmental services system. And this will be matched by federal funds resulting in an estimated total of more than $400 Million. Support for the developmental services funding bill in the legislature was unanimous.
After over a decade of service cuts, funding reductions and frozen rates, the new funding has been targeted to specific areas, to begin to restore the service system. These include funds to retain service coordinators and service provider direct care staff, and rate increases for targeted service categories such as supported employment, supported and independent living, respite, and transportation services. Special initiatives for promoting integrated employment, and increasing cultural competency in service delivery were also included in the funding package. Finally, the package will fund a rate study plan to support the ongoing sustainability of our service system.
The new infusion of funds is to become effective July 1st of 2016. We expect that some fine tuning will occur during the coming months as the total budget for the 2016-17 fiscal year is finalized, and as implementation details are provided by the Department of Developmental Services.
Many in the developmental services community, including system advocate Senator Jim Beall, have pointed to the severe need for housing resources for people with developmental disabilities. We are also continuing to advocate for resource development for all types of services, to begin to restore services which have been lost as underfunded programs have been forced to close, and to serve emerging needs in our community.
For now, the passage of new funding is an important first step in our ongoing efforts for the fundamental reform we will need, to see another 50 years of developmental services.
Read Daily Breeze: Californians with Developmental Disabilities Get Desperately Needed Help
Read HRC ENews 2/12/16 for background What is the MCO Tax and Why Is It Important to Developmental Services?
The approved MCO tax and developmental services funding package includes:
- A 7.5% increase for salaries and benefits,for both POS&OPS
- A 2.5% increase for administrative and other costs,for both POS&OPS
- A restoration of the supported employment rates to 2006 levels
- A 5% increase for supported and independent living services
- A 5% increase for in-home and out-of-home respite services
- A 5% increase for transportation services
- An effective 5% increase for ICFs,done as a 3.75%increase,and the elimination of prior cuts,
- A comprehensive increase for competitive integrated employment programs, in the form of paid internships and incentive payments for helping individuals obtain and retain employment
- An increase in vendor audit thresholds
- A rate study plan
- 5 million for disparity issues for bilingual staff at regional centers, cultural competency training,and parent education efforts
The Administration has put the total value of this package at $300M General Fund, $418M Total Funds. The majority of that money will be provided via the MCO agreement, with the balance addressed in the Governor’s May Revise.
Thank You HRC Community for Contacting Your Legislators
"The real power behind this was the tireless work of advocates like you. This is an historic step for over 300,000 Californians with developmental disabilities, their families, and their service providers." said Anne Struthers, President of ARCA. "This bipartisan support shows the Legislature and Governor Brown are committed to community-based care and the values expressed in the Lanterman Act, passed also with bipartisan support in 1969. Congratulations to the Legislature for taking this step." \
Association of Regional Center Agencies
Thank you Legislators For Your Support!
"Today, after a decade of waiting, the developmental disability community in California finally got some help from Sacramento! I was proud to support this measure... This is a down payment on restoring years of cuts and cost-of-living adjustments that were never appropriated."
Assembly Member David Hadley, Torrance
"The Legislature approves ABX2-1, injecting $500 million in permanent, on-going funding -- $300 million in state funding that draws a $200 million federal match-- into the beleaguered developmental disabilities services network. It's a good first step to stabilize the system, but we still must come up with a long term solution." Senator Jim Beall
Thank you to HRC area legislators:
Senators Ben Allen, Isadore Hall, Ricardo Lara, and Tony Mendoza
Assembly Members Ian Calderon, Cristina Garcia, Mike Gipson, David Hadley, Patrick O'Donnell, and Anthony Rendon.
The Governor's Budget for 2016-17
Developmental Services (DDS) Budget Highlights
The proposed budget provides additional funding for regional center operations, to. add more service coordinator positions, for example. But the budgeted amounts are not enough to keep up with growth and current costs. Funds are provided for mandated increases in minimum wage, but not for rate increases which have been long frozen.
"The recession-era cuts left a $1.1 billion hole in the state’s Department of Health and Human Services, which won’t be restored by the budget proposal, even as the Golden State has built a surplus. Those cuts continue to be present in Brown’s latest budget proposal because they go unrestored, said Anthony Wright, executive director of Health Access California.
Instead, Brown is counting on lawmakers to continue a special session he convened last year so that they could discuss and come to a consensus on a revised managed care organization tax to restore the $1.1 billion. "
Legislative Analyst's Office Budget Overview 2016-17
We note that the Governor’s proposal does not appear to provide adequate funding to bring RCs into full compliance with these ratios, and to the extent that RCs are out of compliance with federal caseload ratios, some federal funding could be at risk.
The 2016–17 budget provides for several new spending proposals in the DDS. These major budget proposals are primarily to support community services and their development, as described below. The budget also includes a proposal for additional headquarters staff resources to improve DDS’ fiscal oversight of services provided to persons with developmental disabilities.
Budget Assumes a New Rate for Certain Residential Facilities. The Governor’s budget proposes $46 million ($26 million General Fund) to allow for the development and implementation of a new rate for certain residential facilities serving four or fewer individuals. These facilities are currently funded through a rate methodology—known as the Alternative Residential Model (ARM) rate—which has not been updated in many years. This rate methodology was established based on the assumption that each home would support six residents. Therefore, the current individual rate–per–consumer paid to facilities assumes that overhead and staffing costs is spread across six placements, even though Regional Centers (RCs) are increasingly using facilities with fewer placements, which is generally consistent with federal policy direction. The new rate would be based on a four–bed model. Because many individuals residing in DDS–funded residential homes are in ARM–rate facilities, we think the Governor’s proposal merits consideration. However, the Governor’s budget does not include any other proposed rate adjustments or reforms for any other community service provider rates, which continue to be of significant interest to the Legislature and part of ongoing stakeholder and legislative discussions.
Funding to Begin Compliance Efforts With New Federal Regulations. The Governor’s budget provides $17.1 million ($12.2 million General Fund) to support compliance by March 2019 with new federal requirements related to Medicaid–funded community–based services. California receives about $1.7 billion in federal funds annually for these services in the DDS budget. The new federal rules require that services are provided in settings that are integrated with the larger community. The proposed funding would support 21 Program Evaluator positions within the RCs to evaluate and monitor compliance and would provide resources to providers for service modifications and staffing needs to meet compliance. Noncompliance with these regulations could put federal funding at risk. While the Governor’s proposal shows the administration’s commitment to bringing California into compliance, it is unclear how this proposal would be implemented and the extent to which the funding levels provided for service changes move the state toward full compliance with the federal regulations.
Additional Service Development Funds Support Developmental Center Closures. In May 2015, the administration announced plans to initiate closure of the state’s remaining developmental centers, with some exceptions. The 2015–16 spending plan reflects the Legislature’s approval of the Governor’s intent in concept. On October 1, 2015, DDS submitted to the Legislature a plan to close Sonoma Developmental Center and in November 2015 announced intent to submit similar closure plans for Fairview Developmental Center and the general treatment area at Porterville Developmental Center. The Governor’s budget includes $78.8 million ($73.9 million General Fund) in one–time resources for service development targeted for individuals transitioning from these centers. The state is at risk of losing additional federal funding related to these developmental centers due to violations generally related to clients’ health, safety, and rights. The state was able to reach a settlement agreement with the federal government that would continue funding if certain terms are met, which include a commitment to transition individuals out of Sonoma Developmental Center. The state is in similar negotiations related to the other developmental centers proposed for closure.
Budget Includes Funds to Support Improvements in RC Caseload Ratios. Current reports to DDS indicate that all RCs were out of compliance with one or more caseload–ratio requirements for the past two years. The Governor’s budget includes $17 million ($13 million General Fund) to support an estimated 200 additional RC service coordinator positions. Caseload reports show RCs have had a longstanding noncompliance in meeting caseload–ratio requirements. We note that the Governor’s proposal does not appear to provide adequate funding to bring RCs into full compliance with these ratios, and to the extent that RCs are out of compliance with federal caseload ratios, some federal funding could be at risk.
News on Special Session
The Brown Administration is currently developing the Governor's Budget for fiscal year 2016-17 to be released in January. At a meeting of the Developmental Services task force, Secretary of Health and Human Services Diana Dooley warned that because the Managed Care Organization tax proposal to fund MediCal and developmental services did not receive sufficient bipartisan support in the extraordinary legislative session, the Governor's Budget will not contain any increases, and may even contain decreases for health care and developmental services. "Without additional revenue, there will be no alternative to reductions in our health care spending." Statement of California Health and Human Services Secretary Diana S. Dooley on the Managed Care Organization (MCO) tax.
Although clients, families, service providers and advocates across the state worked hard to encourage the passage of SBX2-14 on the final scheduled day of the Special Session, the legislators were not able to reach agreement on this bill. However, they created a conference committee with members from both the Assembly and Senate, from both parties to continue work on this issue.
No help yet for developmental community; special session’s work must continue
Industry, governor fail to reach deal on new health tax
Sacramento Bee Editorial Board: Enough speechifying, boost pay for care of disabled people
LA Daily News: Advocates for those with special needs await cigarette tax vote as session closes.
9/9/15 Senator Hernandez Introduces Comprehensive Bill to Fund MediCal and Developmentally Disabled Programs
7/9/15: Senators Jim Beall, Bill Monning, and Fran Pavley have introduced a bill, SBx2,
to provide a 10% across the board funding increase, require the state to develop a ten-year financial sustainability plan to support this system, and cover service providers' costs for minimum wage increases. Read More
6/17/15 - Legislators respond to developmental disability community outcry: "Our commitment has not changed, only the venue.”
6/16/15 - Budget Deal Announced by Goveror Brown, Senator DeLeon, and Assembly Member Atkins
Although the Budget passed by the Legislature on Monday 6/15/15 included nominal funding increases for developmental services, these were removed from the final agreement with Governor Brown.
That means that although the budget will include just enough funding increase to cover the anticipated growth in new regional center clients. The hoped-for and fought-for rate increases for service providers and regional centers did not make it through to the final budget agreement.
The Governor did address the need to provide additional support for our system, in a press release announcing that he is calling for a special session of the legislature to address funding for a variety of programs. In his press release he stated: “In the special session, the Governor proposes that the Legislature enact permanent and sustainable funding to provide... funding for additional rate increases for providers of Medi-Cal and developmental disability services.
..."Whereas the state's General Fund cannot afford to provide additional rate increases for providers of service for MediCal recipients and consumers with developmental disabilities..." Read Proclamation.
We will of course continue our efforts to advocate for increased support to strengthen our service system and will watch closely for any new developments in the days to come, the legislature's special sessions and continued efforts by the Developmental Services task force for system reform. The Association of Regional Center Agencies (ARCA) and the Lanterman Coalition are continuing their Virtual Candlelight Vigil, “Let Your Light Shine for Lanterman.”
6/10/15 - Budget Conference Committee Reaches Agreement on Health and Human Services funding. (Unfortunately, None of the increases in the Budget Conference Committee's plan survived the final agreement with the Governor).
The Conference Committee is made up of top legislators, who work out the different proposals that have been made between the Senate and Assembly's Budgets. Each Committee member demonstrated that they heard your voices, and know that developmental services needs and deserves support.Watch video of their June 1st session (video begins at approximately 00:10:00; discussion of regional center rates begins at 00:26). Late Tuesday, June 9, 2015, the Budget Conference Committee approved some funding increases and restorations for health and human services programs, The Governor’s representative from the Department of Finance, expressed concern about the long-term ability of the state to afford such funding levels, and opposed almost all the increases in funding that the Budget Conference Committee approved.
What the Conference Committee approved (but was later thrown out during final negotiations with Governor)
· 5% increase for Supported Living, Supported Employment, and Respite.
· 2.5% increase for transportation.
· Funding for 21 dental coordinators and 21 forensic specialists (one per regional center)
· 5% increase for Client’s Rights Advocates (Disability Rights California)
· 2.5% increase across-the-board for services whose funds were not previously increased
· 2.5% increase to the core staffing formula
The Committee also approved Trailer bill language requiring the Department of Developmental Services to annually report on progress related to rate reform, and language expressing legislative intent to calculate savings from the closure of developmental centers and reinvest it in the community.
What Was Proposed in the Governor's Budget for 2015-16?
The Governor’s Budget for 2015-16, released in January, and his recently released “May Revision” proposed no increases or adjustments for regional centers or service provider rates, despite significant evidence and input that after many years of rate reductions and freezes, the developmental services system is experiencing severe strain upon its ability to serve our community. Last year the Governor directed the Health and Human Services Agency to convene a work group to review these issues. In the past year this Developmental Services Work Group has been meeting to analyze issues, but no recommendations have emerged as yet. At legislative hearings in the Senate and Assembly, budget subcommittees discussed at length the lack of significant funding adjustments for regional centers and community-based service providers in the past decade, and have listened closely to extensive public comments. Many have expressed deep concerns about the impact of a prolonged rate freeze, and an outdated, inadequate funding formula upon the quality, stability, and accessibility of services and supports in the community. 67 Legislators (a majority in both the Senate and the Assembly) have signed a letter supporting increased funding to support developmental services. Legislators have also expressed interest in using savings achieved from the closure of developmental centers for new investments in regional center services for people with developmental disabilities in the community.
Budget Recap 2014-15
The 2014-15 Budget included $5.2 billion ($2.9 billion General Fund) for support of all developmental services including the regional centers. "Trailer Bill Language" was also enacted to implement the following:
- The budget will cover an anticipated increase of 9,480 regional center clients, and $125.6 million increase over 2013-2014 fiscal year for caseload growth and service utilization.
- Early Start eligibility restored to pre-2009 levels:
Currently, developmentally delayed infants and toddlers who are determined to have a significant difference between the expected level of development for their age and their current level of functioning are eligible for early intervention services.
Beginning January 1st, 2015, infants and toddlers who are at high risk of having substantial developmental disability, due to a combination of biomedical risk factors, will also be eligible.
Eligibility is determined in either case by a multidisciplinary team of qualified professionals and the parents.A "significant difference will be defined as a 33 % delay in one or more developmental areas.
- Payment for Health Care Service Plan or Health Insurance Policy Deductibles: Similar to the implementation of payments for health insurance copayments and coinsurance (which became effective in 2013), regional centers were authorized in 2014 to pay for applicable insurance deductibles for services that are paid for by a client's health plan, if the client meets specified conditions (eg. income less than 400% of federal poverty leve).
- Rate Adjustments Due to the Minimum Wage Increase and Changes in Federal Regulations Implementing the Fair Labor Standards Act of 1938. The rate adjustments shall be specific to payroll costs associated with any increase necessary to come into compliance with the increased state minimum wage, but not for general wage enhancement for employees already paid above the increased minimum.
Click here for more information on implementation of funding for the minimum wage increase.
- $7.8 million increase to fund the changes in the Fair Labor Standards Act regulations, for payment of overtime for in-home workers by service providers that previously were not required to pay overtime.
- Provisions for development of community resources, including two new models of care for enhanced behavioral supports homes and community crisis homes.
- The Director of Health and Human Services has been directed by the Governor to convene a task force to review issues related to adequate funding of community services (regional centers and service providers), and to continue to work on issues identified in the Plan for the Future of Developmental Centers.
for current and prior years on the DDS website: http://www.dds.ca.gov/Budget/Home.cfm
The 2013-14 budget reflected the state’s gradual economic and budget recovery process, and it maintained the Governor’s proposals for cautiously controlled spending, to avoid a deficit.
Regional Centers’ budget for 2013-14 saw an overall increase to Purchase of Service funding of about $150 million over 2012-13, primarily to provide for projected growth by 8,637 total clients. The best news to come for regional centers and our providers in this budget was the discontinuation of mandated payment reductions for service providers.
For medically necessary treatments that are covered by clients/families’ health care plans (such as behavioral health services) lawmakers added directives for how regional centers may provide services . The new language in the law prescribed the limited conditions under which regional centers’ may cover insurance co-payments (e.g. based on the family’s income of 400% or less of federal poverty level), and prohibited payment of deductibles.
Another provision of the budget trailer bill made the Annual Family Program Fee continue indefinitely, for families of minor children who are served by regional centers, receive certain purchased services, and who have income at or above 400% of federal poverty level. Regional Centers advocated the ‘sunset’ of this fee in June of this year as originally planned, but it has been made permanent.
Some of the funding restoration hoped for by advocates for people with developmental disabilities did not make it into the final budget deal. Our system came together in force, statewide, to advocate for restoration of eligibility for Early Start services to what was in place prior to 2009. However, the changes in eligibility for Early Start services that went into effect in 2009 remained in place for 2013-14, and there was no funding for regional centers to provide prevention services for infants and toddlers at risk of developmental disabilities. (Regional Centers continue to serve infants and toddlers birth to 3 years with more significant developmental delays, or established risk conditions with a high probability of resulting in delay).
In June 2012, both the Senate and Assembly approved the Department of Developmental Services (DDS) plans for reducing developmental services by $200 million in 2012-13. The budget was passed by the legislature, and signed by the Governor.
In November 2012, voters passed Proposition 30. As a result, California Regional Centers will not be required to implement an additional $50 million reduction for the second half of 2012-13. This reduction would have been part of a larger $6 billion total statewide reduction for a variety of services and programs in California, and would have amounted to a total $100 million additional reduction for regional centers in the full fiscal year 2013-14.
Regional Centers continued to implement changes which had already been required, associated with the reduction of $200 million to the state’s annual developmental services budget, under the state Budget Act passed in June of 2012.
"The Budget reflects $200 million in 2012-13 savings. Savings will be achieved by increasing eligibility for federal funding, increasing insurance billing for certain autism-related services, redesigning options for consumers who have been hard to serve in the community, and a 1.25% provider payment reduction."
As reported above by the Department of Finance, one component of the $200 million reduction to developmental services in the 2012-13 fiscal year is the payment reduction of 1.25% for service providers (purchase of service) and for regional center operations. This represents a partial restoration of payments, compared to the reduction of 4.25% which had been in effect since 2010.
These changes include:
- a payment reduction for regional centers and service providers of 1.25% (as noted above, expected to end June 30, 2013)
- assisting families to access private insurance coverage for behavioral health treatment and other medically necessary services instead of paying directly for these service using regional center funds
- a standardized process for reviewing needed supported living services
- strict limitations on admissions to the developmental centers for individuals with exceptionally challenging service needs.
- In addition we continue to implement measures instituted in earlier years, such as continued assessment of annual family program fees, and development of transportation service plans designed to eliminate contract transportation for individual clients.
Despite these measures, regional centers are concerned that their concerted efforts will not be able to achieve the full $200million in savings, and with the possibility of ending the year in deficit. Together the regional centers are continuing to ensure that individual needs identified in individual/family service plans are met, while working closely together with the Department of Developmental Services to get through this year within funds available.
Some of the most significant changes made in 2011-12 include, but are not limited to:
- Continuation of temporary 4.25% payment reduction to regional center operations and service providers (purchase of services), and administrative reductions to regional centers and DDS (changed to 1.25% for 2012-13)
- A new Annual Family Program Fee of $150-$200 for families of minor children who live at home, and have income of at least 400% or more of the federal poverty level. Some families will be exempt, eg. if the child receives Medi-Cal or does not receive services beyond eligibility determination, needs assessment and service coordination. (Continuing)
- Elimination of the regional center Prevention Program. Effective July 1st, 2012, infants ‘at-risk’ of developmental disability will be referred to Family Resource Centers for information and referral, while regional centers will continue to provide services to infants and toddlers with developmental delays who meet Early Start criteria. (Continuing)
- A new requirement for families to provide the regional center with a copy of any health benefit card at the time of assessment or at the individual service planning meeting, to promote access of any available benefits. (Continuing)
- A requirement to access education-funded day services, rather than regional center-funded programs, for 18-22 year old adults.(Continuing)
- Requirements for adult day services to offer flexible or half-day schedules. (Continuing)
- Allowing lower payment levels for individual clients in licensed homes whose needs have decreased, without having to move to another home. (Continuing)
- Providing shared supported living services for adults with shared tasks in the same supported living home, Conducting independent assessment of support needs. (Beginning in 2012-13 a new system is to be implemented for standardized assessment of all clients receiving supported living services, rather than independent assessment of only those clients receiving higher cost SLS services).
- A new requirement for parents receiving behavior services to verify receipt of those services prior to payment. (Continuing)