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pdf February 2, 2010 Senate Budget & Fiscal Review Committee Hearing Agenda

Published on 17 August 2014 By Anonymous In Budget Hearings Agendas & Outcomes

February_2,_2010_Senate_Bud(…)ommittee_Hearing_Agenda.pdf

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pdf Feb 10, 2010 DSS Assembly Budget Hearing Agenda

Published on 17 August 2014 By Anonymous In Budget Hearings Agendas & Outcomes 1164 downloads

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Feb_10,_2010_DSS_Assembly_Budget_Hearing_Agenda_.doc

“Subcommittee No. 1 on Health and Human Services February 10, 2010 Agenda Subcommittee No. 1 On Health and Human Services Assemblymember Jerry Hill, Chair Wednesday, February 10, 2010 State Capitol, Room 4202 (Please Note the Room Change) 1:30 p.m. Overview of the Governor’s Special Session Budget Proposals for Human Services Item Description Page Items to be Heard 5180 Department of Social Services Issue 1 CalWORKs Grant Reduction and Child Care Reimbursement Rates 2 Issue 2 CalWORKs Recent Noncitizen Entrants Program, CFAP, and CAPI 5 Issue 3 IHSS Service and Wage Reductions 7 Issue 4 SSI\/SSP Grant Reduction 10 Issue 5 Federal Funding for Foster Care 12 Issue 6 Redirection of County Savings 13 4250 California Children and Families Commission (Prop. 10) 5180 Department of Social Services Issue 1 Redirection of Proposition 10 Funds via June 2010 Ballot 14 5180 Department of Social Services Issue 1: Calworks Grant Reduction and Child care reimbursement rates grant reduction The Governor’s budget proposes to reduce maximum CalWORKs grants by 15.7 percent, effective June 1, 2010. Grants are funded with a combination of TANF (federal block grant)\/State Maintenance of Effort (MOE) and County Funds (2.5 percent). $61.1 million of proposed savings are from transferring TANF to offset GF in the Student Aid Commission and Department of Developmental Services (DDS). ARRA. GF savings in 2010-11 vary by whether the federal government extends the ARRA Emergency Contingency Fund (ECF) past September 30, 2010. Under ECF, the state receives a 4:1 match. If ECF is extended, this proposal results in $129.9 million GF savings and the foregoing of $506.5 million federal funds in 2010-11. Under current federal law (no ECF extension), GF savings from this proposal increase to $481.7 million in 2010-11, and the state would forego $154.8 million in federal funds. Impact. CalWORKs provides temporary cash assistance, education, training, and employment programs to families who are unable to meet basic needs (shelter, food, clothing) on their own. This proposal would impact all 558,664 families (1.4 million individuals). In 8,400 cases, families would lose all CalWORKs assistance. The average monthly grant for a family of three in high-cost counties would be reduced from $694 to $585. As a result, maximum CalWORKs and food stamp grants would equal 73 percent of the Federal Poverty Level (FPL) in high-cost and 71 percent in low-cost counties (compared to 78 percent and 77 percent currently). Recent Grant Cuts. The 2009-10 Budget package deleted the July 2009 COLA and reduced grants by 4 percent, bringing the monthly grant down from a maximum in a high-cost county of $723 to $694. The monthly grant was $694 twenty years ago in 1989. Overall CalWORKs Budget. The 2009-10 Budget appropriated $2.0 billion GF for CalWORKs. The TANF block grant was $3.8 billion (not including ECF funds). Around $1 billion TANF\/MOE funds were used for non-welfare spending. Work Participation Rate (WPR). DSS estimates that this proposal will result in a .9 percent loss of our 2010 WPR (growing to a 2.7 percent annual loss). Our 2007 WPR was 22.3 percent (compared with the required 32.3 percent). CalWORKs Maximum Monthly Grant and Food Stamps Family of Three Under Current Law and the Governor’s Proposal Current Law As Reduced in 2009-10 Budget Governor’s Proposal for June 2010 High-Cost Counties Grant $694 $585 Food Stamps $498 $526 Totals $1,192 $1,111 = Percent of Poverty = 78% fpl = 73% fpl Low-Cost Counties Grant $661 $557 Food Stamps $508 $526 Totals $1,169 $1,083 = Percent of Poverty = 77% fpl = 71% fpl Federal Poverty Level. Congress has taken action to keep the 2009 poverty guidelines in effect until March 1, 2010. The 2009 Poverty Guidelines for the 48 Contiguous States and the District of Columbia Persons in family Poverty guideline 1 $10,830 2 14,570 3 18,310 4 22,050 5 25,790 6 29,530 7 33,270 8 37,010 For families with more than 8 persons, add $3,740 for each additional person. Child care reimbursement rates California offers subsidized child care to parents participating in CalWORKs (Stage 1); families transitioning off of aid (Stages 2 and 3); and others with exceptional need. DSS administers Stage 1; CDE administers Stages 2 and 3. The Governor’s budget proposes to reduce, effective July 1, 2010, the level at which the state reimburses child care providers. As a result, licensed providers would be reimbursed at no more than the 75th percentile of the 2005 Regional Market Rate (RMR), instead of the current ceiling of the 85th percentile. License-exempt providers would be reimbursed at up to 70 percent of the newly established RMR ceiling, instead of the current of 90 percent. Savings in 2010-11 would be $3 million for licensed providers of Stage 1 care (45 percent of caregivers) and $52 million for license-exempt providers (55 percent of caregivers). Context. The 2009-10 Budget appropriated $539.4 million for Stage 1 child care. This includes the impact of a temporary $215.3 million reduction (the majority of a $376.8 million cut to the counties’ single allocation for CalWORKs child care and employment services). Prior to the reduction, Stage 1 would have served an estimated 78,488 children this year. With the reduction, the anticipated number is 51,236. Impact. Specific rate reductions would vary by provider and region. For example, maximum rates for a preschool-age child in Los Angeles County would drop from $744 to $660 (or 11 percent) monthly for a child care center and $615 to $445 for a license-exempt provider. Stakeholders have historically testified that rate reductions would make it very difficult for providers to stay in business or continue to accept clients receiving subsidies, and thus for parents to access child care. Staff Comment The Special Session proposals to reduce CalWORKs grants by 15.7 percent and reduce the level of reimbursement for child care providers raise serious questions about potential adverse impact for families and communities. The reduced grant levels require scrutiny on how the reduction will impact living conditions for children, particularly for the segment of the caseload that will lose benefits as a result of their limited, but too-high earnings. Equally threatening to the ability for families to successfully make the transition from welfare to work is the child care reduction, with unknown consequences given the shifts that will need to be made to lower-cost providers of care. Issue 2: CalWORKs Recent Noncitizen Entrants Program, CFAP, and CAPI Recent nonCitizen entrants program The Governor’s budget proposes to eliminate the CalWORKs Recent Noncitizen Entrants (RNE) Program, effective June 1, 2010. Funding for the RNE Program is countable toward the state’s TANF MOE requirement. ARRA. GF savings in 2010-11 again vary by whether the federal government extends the ARRA ECF. If ECF is extended, this proposal would result in $22.5 million GF savings, and a loss of $36.3 million of those federal funds. If ECF is not extended, the proposal instead results in $47.6 million GF savings in 2010-11; and the state would forego $11.1 million in federal funds. The savings estimate also assumes the impact of the proposed 15.7 percent grant cut. Eligibility. Since 1996, the federal government has excluded most legal immigrants entering the United States from receiving TANF benefits for their first five years in the country. Exemptions exist for certain immigrants, including refugees, veterans, and asylees. California has continued to aid certain noncitizens who became federally ineligible, including legal permanent residents, battered noncitizens, individuals permanently residing under color of law, conditional entrants, and parolees (defined differently than in criminal justice contexts, this can mean a humanitarian visa, re-entering the US with permission, or the release of an inmate). An informal survey of a few large counties indicated that legal permanent residents comprise the vast majority of their caseloads. Impact. Approximately 24,000 individuals would lose temporary cash assistance and education, training, and employment services. Some may apply for and receive a lower amount of assistance from county-funded General Assistance (GA). Counties also project that increased child welfare and foster care costs could result. CFAP and CAPI The Governor’s budget proposes to eliminate the California Food Assistance Program (CFAP) and Cash Assistance Program for Immigrants (CAPI), effective June 1, 2010. CFAP and CAPI are state-funded programs that provide benefits to legal immigrants who do not qualify for federal food stamps and SSI\/SSP funding, respectively. California created CFAP and CAPI in 1997 and 1998 after federal law began excluding these individuals. Since that time, federal law has changed to re-include some, but not all, individuals originally covered under the state programs (e.g., non-citizens with disabilities for CFAP). CFAP Impact. CFAP provides food benefits to legal non-citizens over 18 and under 65 years of age. DSS estimates the average monthly number of 2009-10 recipients as 32,278 (12,617 households). The average monthly benefit is $112 per person. CAPI Impact. CAPI benefits are the equivalent of SSI\/SSP program benefits, less $10 per individual and $20 per couple. The average monthly number of CAPI recipients in 2009-10 is 9,029. Some CAPI recipients may become eligible for GA. Staff Comment These elimination proposals for programs that serve the legal immigrant population require serious attention to human and community impact. The purpose of and need for these safety net programs, and the consequences of their proposed elimination, should be considered during the regular subcommittee process to allow for additional review and discussion. Issue 3: IHSS Service and wage reductions IHSS service reductions The Governor’s budget proposes to eliminate, effective June 1, 2010, all services for recipients with a functional index (FI) score of less than 4. Estimated savings do not include the effect of 2009-10 restrictions in program eligibility that would have taken effect September 1, 2009, but were enjoined by a federal court. ARRA. GF savings vary by whether the federal government extends enhanced ARRA Federal Medical Assistance Percentage (FMAP) rates (61.6 versus 50 percent) past December 31, 2010. During ARRA, program costs are shared 62\/25\/13 at Federal\/State\/County levels. If ARRA is extended, proposed 2010-11 GF savings are $651 million. The state would forego about $2.4 billion federal funds. If ARRA is not extended, GF savings would increase to $1.1 billion, while federal funds foregone would be approximately $1.7 billion. Impact. The Administration is relying on a favorable court decision or increased federal flexibility to allow implementation of this proposal to eliminate eligibility for 426,733 individuals (87 percent of the caseload). According to the LAO, this proposal would likely lead to offsetting costs that more than outweigh potential savings. FI Ranks and Scores. County social workers determine recipients’ levels of dependence upon assistance across a spectrum of daily living activities and assign a ranking to each activity. These rankings vary from 1-5, with 5 being the most acute (the function cannot be performed with or without human assistance). FI scores are a weighted average of rankings. Recipients can appeal their rankings or score or request a reassessment if their condition changes. Prior Changes and Litigation. ABx4 4 (a 2009-10 budget trail bill) eliminated eligibility, effective September 1, 2009, for domestic and related services to individuals with the lowest needs for each service (approximately 85,000), and eliminated all services for individuals with an FI score under 2 (around 39,000). However, a federal district court enjoined these provisions from taking effect. The Administration is appealing in the 9th Circuit. IHSS wage reductions The Governor’s budget proposes, effective June 1, 2010, to reduce the state’s participation in IHSS wages from the current ceiling of $12.10 per hour to a ceiling of the minimum wage of $8.00 per hour, plus $.60 in benefits costs. The non-federal share of costs is split 65\/35 between the state and counties, up to the level of participation under state law. Estimated savings do not include the effect of a July 1, 2009 reduction in state participation to $10.10 ($9.50 + $.60 for wages) that was enacted in February, 2009, but enjoined by the courts. ARRA. GF savings in 2010-11 vary by whether the federal government extends enhanced ARRA Federal Medical Assistance Percentage (FMAP) rates (61.6 percent versus 50 percent) past December 31, 2010. If FMAP is not extended, the state share of IHSS costs would rise and GF savings from this proposal would also increase. The Administration is relying on a favorable court decision or increased federal flexibility to allow implementation of this proposal. Impact. There are approximately 385,000 IHSS service providers providing services to 460,000 program recipients. IHSS providers organize and collectively bargain for wages and benefits on a county-by-county basis. As of October 1, 2009, IHSS wages were above $8.60\/hour in 45 California counties. In 24 counties, the wages were at or above $10.10\/hour. To the extent that counties continue to pay wages above $8.60, they would have to backfill decreased state funds. Prior Changes and Litigation. Under state law in 2008-09, the state participated in wages of up to $12.10 per hour. Budget bill provisions from February 2009 reduced the state’s contribution to participation in wages up to $9.50 per hour plus $.60 for benefits (for a total of $10.10), effective July 1, 2009. However, a federal district court issued a preliminary injunction against this reduction. The Administration is appealing in the 9th Circuit. LAO – IHSS caseload The LAO proposes that the Legislature recognize $35 million GF savings in the 2009-10 budget for IHSS services. DSS estimates that the IHSS caseload will grow from 429,786 recipients in 2008-09 to 460,041 in 2009-10. According to the LAO’s examination of caseload data, the IHSS caseload is significantly below the Governor’s current estimate for the first six months of 2009-10. Taking into account the most recent actual monthly data, the LAO believes the total caseload is overstated by 2.5 percent in 2009-10. They therefore find that the program is over-budgeted by $35 million GF ($137 million all funds). The LAO also estimates that the 2010-11 caseload is overstated and will report at May Revision if additional budget year adjustments may be warranted. Staff Comment The magnitude of these reduction proposals in IHSS requires additional time and legislative deliberation. As the LAO raises in their recent report on IHSS, reducing the program could result in an unknown shift of costs to other state programs. The budget does not include additional funding for long-term care costs that are also likely to increase for former IHSS recipients who then, in its absence, require out-of-home care. Additionally, with litigation still pending for the service level and state participation in wage reductions adopted in the 2009 budget process, decisions on these proposals are premature. Issue 4: SSI\/SSP Grant reduction The Governor’s budget proposes to reduce, effective June 1, 2010, Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) grants to individual recipients. The proposed SSP grant would be set at the federally required MOE level of the 1983 payment standard. Savings include those resulting from grant reductions in the Cash Assistance Program for Immigrants and California Veterans Cash Benefit, as these grant levels tie to those for SSI\/SSP. Approximately 109,000 Non-medical Out-of-Home Care, Restaurant Meal Allowance, and Title XIX Medical Facilities recipients are excluded from this reduction, as is traditional practice. The federal MOE limits reductions states can make to SSP benefit levels without penalty. If a state reduced SSP benefits below the MOE, it would lose federal Medi-Cal funding. Impact. Maximum grants for around one million aged, blind or disabled individual SSI\/SSP recipients would be reduced from $845 to $830 monthly (92 percent of Federal Poverty Level (FPL). 8,776 recipients would become ineligible, some of whom may seek services from DDS. Recent Changes. In the February, 2009 special session, a 2009 federal cost-of-living adjustment was rescinded effective May 1, 2009, and grants were reduced 2.3 percent ($20 for individuals and $35 for couples) effective July 1, 2009. Grants were further reduced, effective October 1, 2009, by $5 for individuals and $82 for couples. Couples’ maximum grants of $1,407 per month are now at the MOE floor (around 116 percent of FPL). The SSI portion of grants will not receive a 2010 federal COLA. An estimated 2 percent of the federal COLA will, however, take effect January, 2011. The state must pass those funds through to recipients. As a result of ABx4 8 (2009-10 trailer bill), no state SSP COLAs will be automatically granted. SSI\/SSP Maximum Monthly Grants: Governor’s Proposal CurrentLevels Governor’s Budget June 2010 January 2011 Individuals SSI $674 $674 $687 SSP 171 156 156 Totals $845 $830 $843 Percent of Poverty 94% 92% 93% Couples SSI $1,011 $1,011 $1,031 SSP 396 396 396 Totals $1,407 $1,407 $1,427 Percent of Poverty 116% 116% 118% Staff Comment In 2009, there were roughly 956,000 SSI\/SSP households in California, representing about 1.25 million recipients. Given the magnitude of this aged, blind, and disabled caseload and the discussions, and uncertainty, around options such as the Food Stamp Cash-Out, this proposal should be deferred to consideration in the regular session. Issue 5: Federal Funding for Foster Care As part of its proposals for $6.9 billion in additional federal funds, the Governor’s budget proposes to recognize, effective June 1, 2010, savings from expanded eligibility for federal financial participation in the costs of foster care. For children who are federally eligible, the ratio of federal\/non-federal foster care costs is determined by the state’s FMAP. Savings from this proposal in 2010-11 thus vary by whether the enhanced ARRA FMAP is extended past December 31, 2010. Non-federal foster care costs are shared at a ratio of 40\/60 by the state\/counties. About 71 percent of the state’s approximately 60,000 children in foster care are currently eligible for federal financial participation (through Title IV-E of the Social Security Act) in the costs of their care. To be eligible for IV-E benefits, children must come from families who meet the income tests that applied to the 1996 Aid to Families with Dependent Children (AFDC) program (which no longer exists). As a result of this outdated and frozen standard, a decreasing number of children are eligible over time. Until recently, AFDC eligibility standards were also applied to the Adoption Assistance Program (AAP). However, the federal Fostering Connections to Success Act of 2008 de-linked federal AAP from the old AFDC requirements. Increased eligibility is phased in over nine years beginning in 2010. Staff Comment This proposal’s dependence on presumed federal funds and action should be weighed as it is considered by the Legislature. Issue 6: Redirection of county savings The Governor’s budget proposes, effective July 1, 2010, to redirect $505.5 million of an estimated $675 million in county savings from the above described IHSS and CalWORKs reductions, as well as the presumed extension of FMAP under ARRA, to a higher county share of costs for child welfare services (CWS), foster care, and AAP. GF savings are from the resulting lowering of the state’s share of costs. Comparison of sharing ratios. Nonfederal costs would become: \u00b7 CWS 30\/70 state\/county (instead of 70\/30) \u00b7 AAP 41\/59 state\/county (instead of 75\/25) \u00b7 Foster Care 25\/75 state\/county (instead of 40\/60) Interaction with Prior Realignment. In 1991, the state realigned control and funding of several social services programs to local governments. Revenue from sales taxes and vehicle license fees was dedicated to the programs. This base funding has not, however, kept pace with costs. The 1991 statutes include a poison pill that makes realignment inoperative if it results in a reimbursable mandate of more than $1 million. Mandate Questions. Mandate laws include an exception for when local costs are fully offset by other savings. However, according to the LAO, it is very infrequently used and not well-established. The LAO also states that it is difficult to determine whether the Governor’s proposal would create a new reimbursable state mandate on counties. The caseload for each affected program varies significantly by county, so individual county’s savings and costs may not balance out. In addition, the amounts would vary each year. Staff Comment This proposal relies on profound action in other major human service programs. Therefore, its consideration is premature until other areas of the budget are resolved. 4250 California Children and Families Commission (Prop. 10) 5180 Department of Social Services Issue 1: Redirection of Proposition 10 Funds via June 2010 Ballot The Governor’s budget proposes to redirect $550 million of California Children and Families Commissions funds in 2010-11. Up to $308 million is from a one-time sweep of state commission reserves. The rest is around 50 percent of the state and local commissions’ ongoing revenues (proposed to be redirected for 5 years). The funds would be used to offset GF spending in other high-priority state programs that serve children under the age of 5. Within DSS, $350 million of the redirected funds would be used for Child Welfare Services, Foster Care and Adoption programs ($183 million), CalWORKs child care ($73 million), SSI\/SSP ($65 million), and the Kinship Guardianship Assistance Program ($29 million). First 5. Established by Proposition 10 in 1998, the state commission (which receives 20 percent of revenues from a $.50\/pack tobacco tax) and county commissions (which receive the remaining 80 percent) operate First 5 programs. Proposition 10 revenues for 2010-11 are estimated to be $484.4 million. Local commission activities vary across the state, but generally include programs focused on family functioning (such as adult education), child development (including preschool), and child health (including health coverage and home visitation). Staff Comment The proposed redirection of Proposition 10 special funds to offset GF costs would require voter approval. A similar ballot measure (Proposition 1D from the May 19, 2009 Special Election) was defeated by a 66 percent no vote. 1 Assembly Budget Committee ”

pdf Assembly Sub.#1 March 24, 2010 Hearing Agenda

Published on 17 August 2014 By Anonymous In Budget Hearings Agendas & Outcomes 1223 downloads

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March_24,_2010_Assembly_Sub_#1_hearing_Agenda.doc

“Subcommittee No. 1 on Health and Human Services March 24, 2010 Agenda Subcommittee No. 1 On Health and Human Services Assemblymember Dave Jones, Chair Wednesday, March 24, 2010 State Capitol, Room 4202 1:30 p.m. Toll on Californians Of Adopted and Proposed Health and Human Services Cuts Item Description Page Items to be Heard Purpose of the Hearing and General Format 3 PART ONE Tables on Adopted Reductions, Proposed Reductions, and Proposed Trigger Eliminations \u00b7 5180 Department of Social Services 4 \u00b7 4260 Department of Health Care Services 7 \u00b7 4200 Department of Alcohol and Drug Programs 9 \u00b7 4280 Managed Risk Medical Insurance Board 10 \u00b7 4300 Department of Developmental Services 11 \u00b7 4170 California Department of Aging 13 \u00b7 4265 Department of Public Health 14 \u00b7 4440 Department of Mental Health 16 Detail, Impact Considerations, and Questions on Adopted Reductions, Proposed Reductions, and Proposed Trigger Eliminations \u00b7 5180 Department of Social Services 17 \u00b7 4260 Department of Health Care Services 38 \u00b7 4200 Department of Alcohol and Drug Programs 49 \u00b7 4280 Managed Risk Medical Insurance Board 52 \u00b7 4300 Department of Developmental Services 58 \u00b7 4170 California Department of Aging 64 \u00b7 4265 Department of Public Health 66 \u00b7 4440 Department of Mental Health 72 PART TWO Scenarios to Illustrate Cumulative Impact 74 Purpose of the Hearing and General Format This hearing will emphasize the magnitude and depth of effects on Californians of the Governor’s proposed reductions for 2010-11 in the health and human services area, as well as a review of the major reductions adopted in the 2009-10 enacted budget. The question for all administration representatives in the hearing for each adopted and proposed reduction is, \”What impact has this cut or will this cut have on Californians and on how many Californians?\” In Part One of the hearing, the Subcommittee requests that each department be prepared to come forward, in the order listed in the agenda, and address the impacts resulting from the adopted changes in 2009-10 and to speak to the anticipated effects of the Governor’s 2010-11 proposals on communities, families, and individuals. The Legislative Analyst’s Office (LAO) will be asked to comment briefly on each of these adopted\/proposed reductions with additional considerations, comments, and questions for the Legislature to consider. In Part Two (captured on the last page of the agenda), the administration is being asked to address the cumulative impact on families and individuals of the reductions and how multiple program changes affect disadvantaged and low-income families and individuals in our State. This will be done using scenarios, with LAO and selected responders providing feedback. Department of Social Services Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments CalWORKs CalWORKs 4% Grant Reduction 1,492,500 All CalWORKs recipients impacted, does not include adults associated with child-only cases. Elimination of CalWORKs COLA 1,492,500 All CalWORKs recipients impacted, does not include adults associated with child-only cases. All individuals duplicated in impact of 4 percent reduction. CalWORKs Single Allocation Reduction and Short-Term Reforms 33,800 According to DSS, the Budget assumes that 33,800 individuals (adults and children) in 12,200 families will lose child care services as a result of the single allocation reduction. Individuals duplicated in impact of 4 percent reduction. CalWORKs Long-Term Reforms 1,212,400 Preliminary estimate assumed that 294,500 individuals would be impacted by the 48 month time limit; 67,000 additional individuals (not impacted by the 48 month time limit) will be impacted by the Graduated Sanction Policy; 1,212,400 individuals would be impacted by the Self Sufficiency Review (includes all those impacted by Time Limits\/Sanctions) all individuals are duplicated in impact of 4 percent reduction. In Home Supportive Services IHSS Service Reductions (Limit IHSS services to recipients with FI score 2.00 and limit D&R to recipients with FI rank of 4 and above) N\/A Reduction was not implemented due to the court injunction. Expected impact includes elimination of domestic services for those with FI ranks below 4.0 (90,000) and elimination of all services for FI score below 2.0 (40,000). IHSS State Participation in Wages N\/A Reduction was not implemented due to the court injunction. If implemented, could impact unknown portion of the 385,000 providers. IHSS Public Authority Reduction Unknown Counties have indicated they may start to reduce staff as a result of the reduction. SSI\/SSP SSI\/SSP Suspension of Jan 09 Federal COLA 1,163,200 Approximately 383,860 received IHSS. SSI\/SSP Couples and Individual Grant Reduction 1,163,200 Approximately 383,860 received IHSS. Recipients duplicated in impact of SSI\/SSP Suspension of Federal COLA. Child Welfare Services Child Welfare Services veto 247 247 social workers may be eliminated. DSS unable to quantify the impact to children because counties have flexibility in applying the reduction. 10% Reduction in Foster Care Rates 18,000 Due to the Alliance lawsuit the reduction applies to FFAs only. Group Homes and SED placements will not be impacted. Total Impacted by Prior Reductions 2,673,947 Department of Social Services, continued Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments CalWORKs CalWORKs 15.7% Grant Reduction 1,451,200 All CalWORKs Recipients Impacted (excluding those discontinued as a result of the 4 percent reduction), does not include adults associated with child-only cases. Elimination of CalWORKs Recent Noncitizen Entrants Program 24,000 Duplicated in persons impacted by 15.7 percent reduction. Reduction in Child Care RMR 202,000 Reflects all children receiving Stage One, Two, Three and AP child care services. All of the Stage One Children (63,678)* and some of the Stage Two Children (number unknown) are duplicated in the impact of the 15.7 percent grant reduction. (Reflects reduced caseload for Stage 3 due to unallocated reduction). The number of child care providers impacted is unknown. In Home Supportive Services 87% Service Elimination in IHSS (Limit IHSS Services to Recipients with FI Score of 4.00 and Above) 426,733 Recipients; 348,424* providers; 1,838 county staff Of the 426,733 recipients who would be eliminated, 366,990 would also have their SSI\/SSP grants reduced to the SSP MOE Floor. Of the 63,239 IHSS recipients who would remain in the program, 54,385 would also have their SSI\/SSP grants reduced to the SSP MOE Floor. Providers duplicated in impact of Reduce State Participation to Min. Wage. State Participation in Wage Reduction 381,071 IHSS providers would have their wages\/benefits reduced, but no recipients or providers would be eliminated from the program. Counties would have the option to backfill the reduced wages with matched federal participation, up to the maximum allowable amount. SSI\/SSP SSI\/SSP Individual Grant Reduction to MOE 923,575 Approximately 304,780 will receive IHSS. These dual clients are duplicated in the Limit IHSS services to Recipients with FI Score of 4.00 and above. Legal Immigrant Programs Elimination of CAPI 10,886 Recipients who are eliminated may seek services from General Assistance or seek assistance from their sponsor. Elimination of CFAP 37,000 Approximately 6,700 are Public Assistance Food Stamp cases and are duplicated in persons impacted by Elimination of CalWORKs Recent Noncitizen Entrants program. Total Impacted by Proposed Reductions 3,059,145 Department of Social Services, continued Trigger Eliminations 2010-11 Trigger Eliminations Lives Impacted Comments Elimination of CalWORKs 1,451,200 CalWORKs recipients; 14,000 county staff and 170 state staff. All CalWORKs Recipients Impacted (excluding those discontinued as a result of the 4 percent reduction), does not include adults associated with child-only cases. Elimination of IHSS 565,074 Providers 489,972 recipients 2,330 county and state staff All IHSS recipients and providers would be eliminated, 2,250 Social Workers and 80 State Staff would be eliminated. Elimination of THP+ 2,054 276 county staff coordinate the THP+ program, these staff also provide ILP services to foster youth. Unknown how the elimination of THP+ would impact their workload. Total Impacted Individuals 2,524,800 Department of Health Care Services Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Medi-Cal Elimination of optional benefits More than 932,114 DHCS can only provide number of users in fee-for-service and not managed care, which would be a much higher number. Benefits and number of users included: dental (932,114), acupuncture (32,906), audiology (28,061), speech therapy (1593), chiropractic (12,439), optometry (731,906), podiatry (85,129), psychology (4970), and incontinence creams and washes (65,591). Restrictions to Adult Day Health Care Never implemented Included: 3-day cap on services, heightened medical acuity eligibility standard, and on-site treatment authorization requests. The 3-day cap and medical acuity have been enjoined by the court. Reduction to public and private hospitals Not quantifiable Cut to counties for eligibility processing Not quantifiable Expanded fees and suspended COLA to LTC facilities Not quantifiable Community Clinics Reductions to clinic programs: Rural Health Services, Expanded Access to Primary Care (EAPC), Seasonal Migratory Worker Clinics 170,000 This number comes from a statewide survey of clinics done by CPCA. Impacts include clinic closures, reduced hours, reduced staff, and elimination of services. Total Count 1,102,114 Department of Health Care Services, continued Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments Medi-Cal Cost containment measures Not quantifiable Eliminate full-scope benefits for legal immigrants 65,600 Eliminate Adult Day Health Care 58,492 Includes: 37,000 consumers, 7,600 jobs, and 13,892 relatives who must quit jobs. Reduces reimbursement rate for family planning services Total Count 124,092 Trigger Eliminations 2010-11 Trigger Eliminations Lives Impacted Comments Eliminate Medi-Cal eligibility categories 304,538 This number reflects calculations done by the Western Center on Law & Poverty Eliminate Medi-Cal family planning (FPACT) program and Breast and Cervical Cancer Treatment Program 1,609,269 Eliminate Medi-Cal Adult Optional Benefits More than 222,993 DHCS can only provide the number of users in fee-for-service and not managed care, which would be a much larger number. Benefits and number of users include: Hearing Aids (17,396), Physical Therapy (6,025), Occupational Therapy (332), Orthotists (1,252), Independent Rehab Facilities (430), Outpatient Heroin Detox (947), Medical Supplies, Prosthetist (11,486), Durable Medical Equipment (222,993). Eliminate All Prop 99 funds from EAPC program $10 million remains for uncompensated care provided by 580 clinics. Total Count 2,136,800 Department of Alcohol and Drug Programs Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Ten Percent Rate Reduction in Drug Medi-Cal 270,598 Reflects current recipient caseload, potentially all of whom were impacted as a result of contraction of services by providers or closures. Elimination of SACPA (Prop. 36) 49,700 Reflects historical number of offenders (48,000) who have been referred to treatment under SACPA annually. Also reflects lost jobs as a result of the cut (in the range of 1,700), including state staff, county staff, treatment counselors, and contracted treatment providers. Total Impacted by Prior Reductions 320,298 Number is additive and does not account for overlap. Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments Elimination of Remaining OTP Funds 10,514 Reflects the number of offenders projected to be served in OTP in 2009-10. Total Impacted by Proposed Reductions 10,514 Managed Risk Medical Insurance Board Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Healthy Families Reduction to Program Backfilled and therefore no impact Cut nearly half of the General Fund dollars without making any statutory policy changes. Elimination of Certified Application Assistors Not quantifiable Managed Risk Medical Insurance Program (MRMIP) Prop 99 shift to backfill GF in Medi-Cal. MRMIB states no impact to caseload. Access for Infants and Mothers (AIM) Prop 99 shift to backfill GF in Medi-Cal. MRMIB states no impact to caseload. Total Count Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments Healthy Families Reduce eligibility from 250 to 200% FPL 216,469 Estimated 200-250% caseload for June 30, 2011. Eliminate vision benefit 1,041,100 Estimated full caseload for June 30, 2011, without an eligibility reduction. Increase monthly premiums 377,580 Total Count 1,041,100 Department of Developmental Services Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments 3% Cut to Regional Center (RC) Purchase of Services (POS) and Operations 246,295 This number is arrived at by considering consumers, RC employees and providers. This includes the 198,295 RC population receiving POS, an estimated 6,800 RC employees and 45,000 providers. Change in RC General Standards including prohibiting the purchase of \”experimental treatments\” 105 This reduction impacted specifically those consumers diagnosed with autism. Roughly anywhere between 46,000 to 50,000 are diagnosed with autism. However, according to the department only 105 lost services due to the change in general standards. Transportation reform 700 The impact of this reduction required switching transportation providers to the least costly, in many cases to a family member. According to the department, this is the number of lives impacted. Early Start Program Changes 654 The elimination of eligibility for Early Start services impacted 32,745 infants and toddlers under age 3, who lost all services. However, the creation of a Prevention Program, with limited services, was able to provide services to 32,091 of these infants and toddlers. Cut in respite hours 696 The department has not quantified the impact of this reduction. However, according to their reports, as of November 30, 2009 there have been 1,741 hearings related to the TBL and 40% of those were related to respite hour cuts. Therefore, this is a premature minimum number of lives impacted by this reduction. Providers have not been accounted for in this estimate. Temporary suspension of services including Day Programs and Non-Medical Therapies 28,000 The department recognizes this number and notes that this reduction impacted those who were not already accessing these services. Total Count ~276,450 These numbers are approximate estimates and overlap has not been accounted for. Department of Developmental Services, continued Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments 3% Cut to Regional Center (RC) Purchase of Services and Operations 251,652 Again, RC consumers, employees and providers are affected. Therefore, this number estimates the same effect as in 2009-10, plus an increase of 5,330 consumers in 2010-11. (Note: the estimated RC population in 2010-11 is 249,975.) Program reforms: $25 million UNKNOWN This general fund savings target will be developed through the Budget Advisory Workgroup and could affect any number of estimated 2010-11 consumers. However, staff is unable to estimate the number of lives without knowing the program changes. Total Count Staff is unable to estimate the number of lives impacted at this point in time. California Department of Aging Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Elimination of Brown Bag Program 35,190 Reflects the number of persons previously served in 2008-09. Elimination of Senior Community Services Employment Program 420 Reflects the difference in the number of persons served in 2008-09 than in 2007-08 with the reduction. The program still exists, albeit at a reduced level, in some of the AAAs. Elimination of Senior Companion Program 2,757 Reflects the number of persons served by program volunteers in 2008-09. Elimination of Alzheimer’s Day Care Resource Center 2,930 Reflects the number of persons served by the program in 2008-09. Elimination of Linkages Program 5,500 Reflects the number of persons served by the program in 2008-09. Elimination of Respite 732 Reflects the number of families served by the program in 2008-09. Total Impacted by Prior Reductions 47,529 Number is additive and does not account for overlap. Department of Public Health Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Maternal, Chid, Adolescent Health (MCAH) Black Infant Health Adolescent Family Life County MCH Grants Office of AIDS Education and Prevention 400,000 HIV Counseling and Testing 125,000 Early Intervention 10,700 Therapeutic Monitoring 20,000 Housing 86,000 Home and Community Based Care 1,300 Domestic Violence Shelters All General Funds Eliminated Backfilled with a one-time special fund loan and program moved to CalEMA. County Emergency Services Prop 99 Funding Eliminated These funds were shifted to backfill General Fund in Medi-Cal Alzheimer’s Research Centers Funding Reduced By Half 42,000 This funding had been used for community training. Dental Disease Prevention Program Elimination of Funding (GF) 285,000 Every Woman Counts (EWC) Prop 99 Reduction Prop 99 shift to backfill GF in Medi-Cal Asthma Public Health Initiative (CAPHI) Prop 99 Reduction 300,000 Prop 99 shift to backfill GF in Medi-Cal Total Count 1,027,000 Department of Public Health, continued Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments Every Woman Counts (EWC) Enrollment Freeze for half of the Current Year and the minimum age eligibility for breast cancer screens has been raised from 40 to 50 100,000 The Administration has not proposed a direct cut to this program, however a reduction would occur reflecting decreasing tobacco tax revenue available for this purpose. Prostate Cancer Treatment Program Enrollment Cap 90 The Administration has not proposed a direct cut to this program, however current funding no longer meets program demand and costs resulting in the program capping enrollment. Total Count 100,090 Trigger Eliminations Trigger Eliminations Lives Impacted Comments Eliminate all Prop 99 funds from Every Woman Counts Program 198,000 DPH states that expected demand for the program for 2010-11 is 260,000 and that the program could serve 62,000 after this reduction. Eliminate all Prop 99 funds from Asthma Public Health Initiative 365,000 DPH states that the remaining three counties reach this number of people. Total Count 563,000 Department of Mental Health Adopted Reductions 2009-10 Adopted Reductions Lives Impacted Comments Mental Health Managed Care Eliminated state support for mental health services other than those that are federally funded. Not quantifiable Shifted costs to counties which have had to shift funding from other program to cover loss of funds here. Impact would be to recipients of other county programs that have lost funding as well as potentially to Mental Health Managed Care clients who experience longer waiting times and other reductions to quality of services. Caregiver Resource Centers Reduction to program Total Count Staff is unable to estimate the number of lives impacted at this point in time. Proposed Reductions 2010-11 Proposed Reductions Lives Impacted Comments EPSDT Shift funds from Prop 63 to backfill General Fund. Not quantifiable EPSDT is a federally required program and is fully funded. No reduction in services. Impact would be on consumers of Prop 63 programs. Mental Health Managed Care Shift funds from Prop 63 to backfill General Fund. Not quantifiable Mental Health Managed Care is a federally required program and is fully funded. No reduction in services. Impact would be on consumers of Prop 63 programs. Mental Health Services Act (Prop 63) Shift $452 million to DMH to backfill General Fund for above two programs. Not quantifiable DMH states no there may be an impact on Prop 63 funded community programs for 2010-11, and there may be an impact in subsequent years depending upon how the reductions are taken after consulting with the counties. Total Count Staff is unable to estimate the number of lives impacted at this point in time. Trigger Eliminations 2010-11 Trigger Eliminations Lives Impacted Comments Shifts an additional $847 million of Prop 63 funds to to fund mental health services in the following priority order: community mental health services, mental health services for Medi-Cal recipients, and State hospital services. DMH states there may be an impact on Prop 63 funded community programs for 2010-11, and will dramatically impact and potentially suspend the program in 2011-12. Total Count Staff is unable to estimate the number of lives impacted at this point in time. PART ONE Department of Social Services Adopted – CalWORKs 4% Grant Reduction and Permanent Elimination of COLA (2009-10) Lives Impacted: 1,492,500 Adopted Reduction The 2009-10 Budget included the following: \u00b7 Grant Reduction to 1989 Levels for CalWORKs Families. Monthly grants were reduced by 4 percent from $723 for a family of three in a high-cost county to $694, yielding General Fund (GF) savings of $146.9 million. This grant, added to food stamps of $495 in value, brings a family’s resources to 77% of the federal poverty guideline. \u00b7 Permanent Elimination of the Annual July 1 COLA. The budget suspended the July 2009 Cost of Living Adjustment (COLA), resulting in savings of $79.1 million GF. Moreover, the budget deal included permanent statutory elimination of the annual, automatic COLA. Though suspended for the past several years, the COLA was an issue for year-to-year discussion, and as a result of this statutory change, it can only be applied if specified by future statute. Expected Impact and Issues for Consideration \u00b7 Some working families lost aid entirely. Whenever grants are reduced, the income eligibility for the program alters and thousands of families lose aid entirely. As a result of the 4 percent reduction effective July 1, 2009, 16,113 families, including 31,259 children, lost access to any minimal grant they were receiving that was augmenting their wages earned as a result of employment. \u00b7 Grants not adjusted for inflation. Grants are currently at 1989-90 levels in real dollars, with seldom use of a COLA and recent grant reductions. The grants were $694 in real dollars in 1989-90. Questions \u00b7 How does the CalWORKs grant at its current level compare to where it would be had it been adjusted for the cost of living in California over the past twenty years? \u00b7 What was the rationale for the administration seeking to eliminate the automatic COLA in statute? Adopted – CalWORKs Single Allocation Reduction and Short-Term Reforms (2009-10) Lives Impacted: 33,800 Adopted Reduction \u00b7 Unprecedented Reduction in County Block Grant Funds. The funding for counties to administer the program and provide services, called the \”single allocation,\” which totals about $1 billion, was cut dramatically by $420 million in 2009-10 and with an agreement to cut $375 million in 2010-11, summing to a two-year overall reduction of $795 million. The 2009-10 cut reduced welfare-to-work services by $162 million and child care services by $215 million. \u00b7 Exemptions for Families with Young Children. To help counties prioritize resources given this reduction in funding, budget legislation exempts families with a child under age two, or with two or more children under the age of six, from work participation requirements. Expected Impact and Issues for Consideration \u00b7 Caseloads Increasing by 10 percent. Caseloads in the CalWORKs program have been increasing since 2007-08, when the economic recession hit and unemployment began to rise to record levels. Unemployment in California holds currently at 12.5% statewide. CalWORKs caseloads are continuing to rise by 10.6 percent in 2009-10 and are expected to continue to increase in 2010-11 by 8.4 percent. Counties are reporting high numbers of increases. \u00b7 Federal Stimulus Funds and Exemptions Mitigating Impact of Service Reductions. General Fund support for CalWORKs in 2009-10 remained essentially flat at about $2 billion. This is due to the budget plan including about $700 million in budget reductions and because of an increase in federal Temporary Assistance to Needy Families (TANF) Emergency Contingency Funds (ECF) provided pursuant to ARRA. \u00b7 Likely impact to be seen in fourth quarter (April-June 2010). Counties report increases in the new exemptions and good cause exemptions, along with substantial decreases in child care caseload. The effects of the cut will likely worsen over time in the current year as resources are further depleted. Questions \u00b7 How has the Subsidized Employment Initiative mitigated the number of job placements lost as a result of the Single Allocation reduction? \u00b7 What is the interaction between the cuts taken and grant payments in the program? Adopted – CalWORKs Long-Term Reforms (Adopted in 2009-10 Budget) Lives Impacted: 1,212,400 Adopted Reduction Major Statutory Changes to CalWORKs Program Adopted in 2009-10. Major punitive policy changes were adopted in the CalWORKs program, to go into effect July 1, 2011. These include: \u00b7 Self-Sufficiency Reviews for families, with the effect of a 50 percent grant reduction if the family does not attend these. \u00b7 A Graduated Sanction Policy that reduces a family’s grant by 25 percent and then 50 percent if they do not comply with state work requirements or otherwise cure their sanction. \u00b7 Additionally, a New Mandatory \”Sit Out\” Period of one year, with the adult portion removed from the grant, is required after 48 months on aid, while maintaining the 60-month lifetime maximum for aid allowed under CalWORKs. Expected Impact and Issues for Consideration \u00b7 County Employment Services Ramp-Up Complicated by Single Allocation Reduction. The new requirements to go into effect July 1, 2011, immediately after the two-year depletion of county funds for CalWORKs services, creating implementation challenges. \u00b7 Caseloads Still Rising, As Unemployment Remains High. The ability for families with barriers to work to reach sustainable employment and meet work participation requirements will be weakened by lack of employment services and continuing unemployment, in some counties the highest its been in recent history. Common barriers to employment include lack of child care, lack of transportation, lack of high school diploma, limited English proficiency, learning disabilities, substance abuse, and mental health conditions. Studies have demonstrated that one of these barriers alone can make sustainable employment difficult. CalWORKs recipients often have two, three, or four of these. \u00b7 Potential Grant Reductions Create Instability for Families with Children. The grant reductions foreseen in the long-term reforms potentially reduce grants to levels of $100 or $200 per month to sustain a family of three. The effects on families and possible homelessness are worthy of consideration. Questions \u00b7 What theoretical changes to a family’s grant could occur under the long-term reforms sought by the administration? Adopted – IHSS Service Reductions (2009-10) Lives Impacted: N\/A Adopted Reduction The Governor proposed in 2009 to eliminate IHSS services for all but the most impaired recipients (resulting in a reduction of nearly 90 percent of the IHSS caseload), for total General Fund savings of roughly $700 million. Instead, the Legislature adopted, effective September 2009, several changes to services and eligibility that were initially estimated to result in General Fund savings of about $73 million in 2009 10. \u00b7 Reduction in Domestic and Related Care Services. The first reduction targets domestic and related care services to the most impaired IHSS recipients, limiting these services to consumers with FI Ranks in this service category above 4.0. An estimated 85,000 would have been affected by this reduction. \u00b7 Elimination of All Services for Consumers with FI Scores Under 2.0. This second reduction eliminates all IHSS services for those who are considered least impaired. An estimated 39,000 elderly and\/or disabled persons would have lost all services. For both of these reductions, the Legislature adopted exceptions for certain recipients who meet specified criteria, but authorized the Governor to waive these exemptions under specified conditions if they put federal IHSS funding at risk. Ultimately, the Governor cited these conditions in vetoing an additional $28.9 million from the final budget package. In total, the savings from these proposals are estimated to be about $102 million in 2009 10. The courts have halted both of these cuts for now. Expected Impact and Issues for Consideration The issues for consideration in impact for these service reductions are similar to those included in this agenda under the Governor’s proposals to significant reduce the IHSS caseload and in his trigger proposal to completely eliminate IHSS services. Please see those ensuing portions of the agenda. Questions \u00b7 What is the current status of litigation in these areas? \u00b7 Has the administration contemplated changes to the FI Rank and Score calculations to assess need? What is the history and origin of this? Has it been revisited? Adopted – IHSS Reduction in State Participation in Wages (2009-10) Lives Impacted: N\/A Adopted Reduction \u00b7 Wage Reduction Adopted in February 2009 Trigger Budget Agreement. In the February, 2009 budget package, the state reduced by $2 the level at which it will participate in paying in-home supportive services worker wages (from $12.10\/hour to $10.10\/hour). The courts have halted this cut for now. \u00b7 Context of Other Changes Pertaining to IHSS Providers. It is worth noting that large-scale program changes were adopted as part of the 2009-10 budget agreement, including a requirement for recipients to be fingerprinted, a new, multi-layered and complicated provider enrollment process, including background checks, to be paid for out of the provider’s pocket, completion of a provider orientation, unannounced home visits for targeted cases, targeted mailings, and fingerprint requirements for both providers and recipients on bi-monthly timesheets. Expected Impact and Issues for Consideration \u00b7 Impact on Provider Livelihood and Consumer Care. The reduction in wages has substantial impact on providers who may not be able to earn a living wage given the current cost of living, particularly in high-cost counties, given housing prices, and the costs of transportation in rural areas. Providers who might be employed by IHSS currently may choose to terminate their employment and choose another job that brings in higher earnings, causing major disruption for individual consumers in the program. \u00b7 Many Families Have No Care-Giving Reserves. The UCLA Center for Health Policy Research states in a recent report that, \”For the two-thirds of paid caregivers who are family members, the income often makes it possible to forego other paid employment so that they can serve as caregivers. Research shows that health benefits are also an important reason that some family members take and keep IHSS jobs over others. \” The larger reduction in state participation in wages, down to minimum wage of $8.60\/hour, has been reintroduced by the administration and is discussed in an ensuing IHSS section in this agenda. Questions \u00b7 What is the current status of litigation in this area? Adopted – IHSS Public Authority Reduction (2009-10) Lives Impacted: Unknown Adopted Reduction \u00b7 Description of Public Authority Role. The IHSS public authorities essentially represent the county in provider wage negotiations. Besides collective bargaining, the primary responsibilities of public authorities include (1) establishing a registry of IHSS providers who have met various qualification requirements, (2) investigating the background of potential providers, (3) establishing a system to refer IHSS providers to recipients, and (4) providing training for providers and recipients. \u00b7 Reductions Sustained in 2009-10. In 2009 10, the Governor proposed $23.3 million General Fund for support of the public authorities. The Legislature reduced General Fund support for public authority administration by $4.7 million. The Governor subsequently vetoed an additional $8.6 million, for a total reduction of about $13.3 million. Expected Impact and Issues for Consideration \u00b7 More Provider Requirements, Fewer Assisting Resources. While the 2009-10 budget agreement included manifold new, substantial requirements for current IHSS providers, numbering 385,000, as well as new providers, this reduction was taken in one of the areas of system supports for the program. Questions \u00b7 What function do Public Authorities play in the reform policies pursued by the administration and adopted as part of the 2009-10 budget? \u00b7 What has been the reaction of the Public Authorities to the reduction? Adopted – SSI\/SSP Suspension of January 2009 COLA, Grant Reduction, and Permanent Elimination of COLA (2009-10) Lives Impacted: 1,163,200 Adopted Reductions \u00b7 Federal COLA Rescinded May 2009. In the February, 2009 special session, a 2009 federal cost-of-living adjustment was rescinded effective May 1, 2009, and grants were reduced 2.3 percent ($20 for individuals and $35 for couples) effective July 1, 2009. \u00b7 October 1, 2010 Additional Reduction. This decrease meant that grants were further reduced, effective October 1, 2009, by $5 (0.6 percent) for individuals and $82 (5.5 percent) for couples. Couples’ maximum grants of $1,407 per month are now at the MOE floor (around 116 percent of FPL). The SSI portion of grants will not receive a 2010 federal COLA. An estimated 2 percent of the federal COLA will, however, take effect January, 2011. The state must pass those funds through to recipients. \u00b7 State SSP COLA Eliminated. As a result of the budget agreement last year, the state SSP COLA was eliminated permanently, and can only be enacted by a future change in statute. Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) grants are provided to aged, blind, and disabled recipients as a means of basic support for living expenses. In 2009, there were roughly 956,000 SSI\/SSP households in California, representing about 1.25 million recipients. General Fund appropriated for SSI\/SSP 2009-10 is $1.26 billion and total program funding is $5.5 billion. Expected Impact and Issues for Consideration \u00b7 Decline in Purchasing Power. Due to the suspension of numerous COLAs throughout the years, the purchasing power of SSI\/SSP has declined compared to what it would have been had it been adjusted per inflation. \u00b7 Reductive Effect for CAPI. Grants for individuals in the Cash Assistance Program for Immigrants (CAPI) declined alongside the SSI\/SSP reductions. CAPI payments are equivalent to SSI\/SSP payments, less $10 per month for individuals and $20 per month for couples. Questions How does the SSI\/SSP grant at its current level compare to where it would be had it been adjusted for the cost of living in California over the past twenty years? Governor’s Veto – $80 Million from Child Welfare Services (2009-10) Lives Impacted: 247 Adopted Reduction California’s state-supervised, county-administered Child Welfare Services (CWS) program provides services to abused and neglected children, children in foster care, and their families. The CWS program provides (1) immediate social worker response to allegations of child abuse and neglect; (2) ongoing services to children and their families who have been identified as victims, or potential victims, of abuse and neglect; and (3) services to children in foster care who have been temporarily or permanently removed from their family because of abuse or neglect. The Governor’s August 2009 veto reduced CWS funding to counties by $80 million (10 percent) from the General Fund. The Legislature had rejected this cut proposal in the budget that it adopted and sent to the Governor. Expected Impact and Issues for Consideration \u00b7 Diminished State Protections for Children. Counties report that the Governor’s veto dramatically reduced services across dozens of child welfare programs. Counties say that funding for nearly 400 child welfare workers has been lost. Accompanying this are increasing social worker caseloads, minimal staffing for child abuse hotlines, less resources to investigate allegations of child abuse, and less assistance to families to safely prevent the removal of children, work with families to safety reunite children, and otherwise find them permanent, safe, and healthy homes. \u00b7 Severe Cuts to Children \”Aging Out\” of Foster Care. As a result of the reduction, stipends were eliminated for youth who have \”aged out\” of the foster care system. The stipends were used to assist youth to attain self-sufficiency by helping to defray some of the costs of college attendance and assisting them with obtaining housing and employment. Questions \u00b7 What is the state doing to track the impact and effects of the reduction? \u00b7 What are the consequences of the reductions on our state’s performance against federal Child and Family Services Review standards? Adopted – Ten Percent Reduction in Foster Care Rates Lives Impacted: 18,000 Adopted Reduction The 2009-10 budget included a 10 percent reduction in the rates paid to group homes, foster family agencies, and other programs for which rates are tied to these, for care and services provided to foster children. This resulted in estimated General Fund savings of $26.6 million. Expected Impact and Issues for Consideration \u00b7 Group Home Reduction Halted by Courts. The reduction to group home rates underwent litigation and was stopped by the courts. This eroded the expected savings in the program. \u00b7 Foster Care Rates Depressed for Many Years. Foster care rates did not receive an increase for many years until the 2008-09 budget agreement. Question \u00b7 What has been the impact of the reduction in real dollars for those care categories for which the rate was in fact reduced in 2009-10? Proposed – CalWORKs Special Session Reductions (2010-11) Lives Impacted: 1,451,200 Governor’s Proposals \u00b7 Additional Grant Reduction of 15.7 Percent. The Governor proposes to further reduce grants by an additional $109 per month, or 15.7 percent, bringing the grant for basic living costs to $585 per month for a family of three. If the federal TANF Emergency Contingency Fund (ECF) under federal stimulus is extended through 2010-11, this proposal will save $129.9 million GF and forego $506.5 million in federal funds. \u00b7 Elimination of CalWORKs Recent Noncitizen Entrants (RNE) Program. The Governor proposed to eliminate the RNE Program, affecting 24,000 individuals who depend on the program for basic assistance. Since the program was created in 1997 in response to federal welfare reform, it has not been threatened by an administration until now. If the aforementioned ECF is extended, this proposal will result in $22.5 million GF savings and a loss of $36.3 million in federal funds. \u00b7 Reduction in Child Care Regional Market Rate. The Governor’s budget proposes to reduce, effective July 1, 2010, the level at which the state reimburses child care providers. As a result, licensed providers would be reimbursed at no more than the 75th percentile of the 2005 Regional Market Rate (RMR), instead of the current ceiling of the 85th percentile. License-exempt providers would be reimbursed at up to 70 percent of the newly established RMR ceiling, instead of the current of 90 percent. Savings in 2010-11 would be $3 million for licensed providers of Stage 1 care (45 percent of caregivers) and $52 million for license-exempt providers (55 percent of caregivers). Expected Impact and Issues for Consideration \u00b7 Seeks Unprecedented Reduction in Grant Amount. CalWORKs provides temporary cash assistance, education, training, and employment programs to families who are unable to meet basic needs (shelter, food, clothing) on their own. This proposal would impact all 558,664 families (1.4 million individuals). \u00b7 Working Families Losing Aid. Due to this level of grant reduction, 8,400 families with 16,296 children would lose all CalWORKs assistance. \u00b7 Impact on Work Participation. DSS estimates that this proposal will result in a .9 percent loss of our 2010 WPR (growing to a 2.7 percent annual loss). Our 2007 WPR was 22.3 percent (compared with the required 32.3 percent). \u00b7 Impact of Elimination of RNE. Approximately 24,000 individuals would lose cash assistance and education, training, and employment services. Some may apply for and receive a lower amount of assistance from county-funded General Assistance (GA), which is only available for three months out of the year for an individual. Questions \u00b7 If grants are reduced by 15.7 percent, please explain how they relate to current costs of living in California? Please explain this for a high-cost county and a low-cost county. \u00b7 What trends in homelessness is the administration seeing? What effect might this grant cut have on that continuing trend? \u00b7 What might be the foreseeable impacts of this grant cut on child welfare demands and foster care? What research is the administration relying upon? What has it heard from advocates? \u00b7 What impact does the grant reduction have on a family’s ability to achieve sustainable work? What modeling has the administration conducted to lead to its findings? Proposed – 87% Service Elimination in IHSS (2010-11) Lives Impacted: 776,995 Governor’s Proposal \u00b7 Proposal. The Governor’s budget proposes to eliminate, effective June 1, 2010, all services for recipients with a functional index (FI) score of less than 4. This cut would eliminate eligibility for 426,733 individuals (87 percent of the caseload). \u00b7 General Fund Savings. GF savings vary by whether the federal government extends enhanced ARRA Federal Medical Assistance Percentage (FMAP) rates (61.6 versus 50 percent) past December 31, 2010. During ARRA, program costs are shared 62\/25\/13 at Federal\/State\/County levels. If ARRA is extended, proposed 2010-11 GF savings are $651 million. The state would forego about $2.4 billion federal funds. If ARRA is not extended, GF savings would increase to $1.1 billion, while federal funds foregone would be approximately $1.7 billion. Expected Impact and Issues for Consideration \u00b7 Legality of Proposal Unclear. The administration is relying on a favorable court decision or increased federal flexibility to allow implementation of this proposal. According to the LAO, this proposal would likely lead to offsetting costs that more than outweigh potential savings. \u00b7 Large Effects on Cognitively Impaired. The UCLA Center for Health Policy Research in a February 2010 report estimated that the vast majority of those with FI scores under 4.0 are severely disabled and suffer from cognitive impairments that make daily survival without assistance extremely difficult. \u00b7 Extremely Limited Nursing Home Capacity. UCLA also estimates that nursing homes and residential care facilities can absorb less than 10 percent of those who face losing their community-based benefits due to these cuts. Questions \u00b7 How many IHSS consumers does the administration project would enter a nursing home if this cut is made in IHSS? What is the basis for that projection? \u00b7 How many in the caseload with an FI score below 4.0 suffer from cognitive impairments that would make them nursing home eligible in their current condition? \u00b7 What options exist for IHSS consumers and how are these affected by the administration’s proposed cuts in other areas and programs? Proposed – IHSS Reduction in State Participation in Wages (2010-11) Lives Impacted: 381,071 Adopted Reduction \u00b7 Repeated Proposal to Reduce State Participation in Wages. The Governor’s budget again proposes, effective June 1, 2010, to reduce the state’s participation in IHSS wages from the current ceiling of $12.10 per hour to a ceiling of the minimum wage of $8.00 per hour, plus $.60 in benefits costs. There are approximately 385,000 IHSS service providers providing services to 460,000 program recipients. IHSS providers organize and collectively bargain for wages and benefits on a county-by-county basis. \u00b7 Status of Wages in Counties. As of October 1, 2009, IHSS wages were above $8.60\/hour in 45 California counties. In 24 counties, the wages were at or above $10.10\/hour. To the extent that counties continue to pay wages above $8.60, they would have to backfill decreased state funds. Expected Impact and Issues for Consideration \u00b7 Legality of Proposal Unclear. Again, the Administration is relying on a favorable court decision or increased federal flexibility to allow implementation of this proposal. Budget bill provisions from February 2009 reduced the state’s contribution to participation in wages up to $9.50 per hour plus $.60 for benefits (for a total of $10.10), effective July 1, 2009. However, a federal district court issued a preliminary injunction against this reduction. The Administration is appealing in the 9th Circuit. \u00b7 Counties Ability to Backfill Questionable. Counties’ ability to make up the difference between a current wage level and that which would be required if the state reduced participation in wages is unknown. County resources being strained as they are across program areas, with furloughs, layoffs, and program downsizing, may not be able to bridge this difference. Questions \u00b7 What is the administrations assessment of county response to the proposed reduction? Proposed – SSI\/SSP Further Reduction in Individual Grants to MOE (2010-11) Lives Impacted: 923,575 Governor’s Proposal The Governor’s budget proposes to reduce, effective June 1, 2010, SSI\/SSP grants to individual recipients. The proposed SSP grant would be set at the federally required MOE level of the 1983 payment standard. Savings include those resulting from grant reductions in the Cash Assistance Program for Immigrants and California Veterans Cash Benefit, as these grant levels tie to those for SSI\/SSP. Expected Impact and Issues for Consideration \u00b7 Below Poverty Level Grants for Aged, Blind, and Disabled Individuals. Maximum grants for around one million aged, blind or disabled individual SSI\/SSP recipients would be reduced from $845 to $830 monthly (92 percent of Federal Poverty Level (FPL). \u00b7 Loss of Benefits for Thousands as a Result. 8,776 recipients would become ineligible, some of whom may seek services from DDS. \u00b7 MOE Considerations. The federal MOE limits reductions states can make to SSP benefit levels without penalty. If a state reduced SSP benefits below the MOE, it would lose federal Medi-Cal funding. Questions \u00b7 How does the SSI\/SSP grant for individuals at its current level compare to where it would be had it been adjusted for the cost of living in California over the past twenty years? How does this look after the proposed reduction? \u00b7 What are the expectations for how SSI\/SSP individuals will grapple with a reduced grant? \u00b7 What is the general health status for SSI\/SSP recipients? Proposed – Elimination of CAPI and CFAP (2010-11) Lives Impacted: 10,886 in CAPI and 37,000 in CFAP Governor’s Proposal The Governor’s budget proposes to eliminate the California Food Assistance Program (CFAP) and Cash Assistance Program for Immigrants (CAPI), effective June 1, 2010. CFAP and CAPI are state-funded programs that provide benefits to legal immigrants who do not qualify for federal food stamps and SSI\/SSP funding, respectively. California created CFAP and CAPI in 1997 and 1998 after federal law began excluding these individuals. Since that time, federal law has changed to re-include some, but not all, individuals originally covered under the state programs (e.g., non-citizens with disabilities for CFAP). Expected Impact and Issues for Consideration \u00b7 CAPI Impact. CAPI benefits are the equivalent of SSI\/SSP program benefits, less $10 per individual and $20 per couple. The average monthly number of CAPI recipients in 2009-10 is 9,029. Some CAPI recipients may become eligible for GA. \u00b7 CFAP Impact. CFAP provides food benefits to legal non-citizens over 18 and under 65 years of age. DSS estimates the average monthly number of 2009-10 recipients as 32,278 (12,617 households). The average monthly benefit is $112 per person. Questions CAPI \u00b7 The majority of CAPI participants live independently and depend totally on their CAPI benefits. How many of these individuals would become homeless and unable to make ends meet if CAPI is eliminated? \u00b7 How many sponsored CAPI participants would be able to meet their basic needs if CAPI is eliminated? \u00b7 If CAPI is eliminated and these individuals transition to GR, how will they survive on the GR\/GA grant which is (approximately) one fourth of the CAPI payment and offered for only three months out of the year? \u00b7 Some of the CAPI participants reside in Non-Medical Out-of-Home Care facilities. If CAPI is eliminated, how will these individuals continue to live without this type of care? CFAP \u00b7 There has been an increase of 30% in the number of CFAP households, statewide, from July 2008 – December 2009 (4,751 CFAP households to 6,168 CFAP households). Are there other programs in place where these households are expected to go so they can eat? \u00b7 There has been an increase of 51% of federal Food Stamp households with a CFAP member from July 2008 – December 2009 (10,392 CFAP\/federal households to 15,682 CFAP\/federal households). Are there other programs in place where these households are expected to go so they can eat? \u00b7 How will cutting nutrition benefits to these needy households struggling to make ends meet assist them to eat and still pay for shelter and their other subsistence needs? Proposed – Elimination of CalWORKs (2010-11 Trigger) Lives Impacted: 1,465,370 Governor’s Proposal The Governor proposes to completely eliminate the CalWORKs program, effective 90 days notice from the Director of Finance that sufficient federal funds were not received. If this proposal took effect in 2010-11, the Administration estimates that the state would save $1.2 billion GF (growing to $2.3 billion GF annually) and forego $3 billion federal funds (growing to $3.8 billion TANF funds annually after the expiration of federal stimulus funds described below). Expected Impact and Issues for Consideration \u00b7 Dramatic Shift in Social Policy for California. California has had a welfare program in some form since the enactment of the Aid to Dependent Children program in 1911. Today, CalWORKs provides not only temporary cash assistance, but also education, training, child care, and employment programs to families who are unable to meet basic needs (i.e. shelter, food, clothing) on their own. \u00b7 Significant Rise in Deep Poverty Expected. This proposal would eliminate benefits to all of the 500,000 to 600,000 families (including more than 1 million children) who receive assistance from the program. Counties and advocates project that the elimination of CalWORKs could result in dramatic increases in unemployment, poverty and homelessness among recipient families, as well as costs in other state and local services (e.g. the child welfare, foster care, and education systems). Again, the Governor’s budget forecasted an unemployment rate of 12 percent during 2010. According to the U.S. Census Bureau, California had an overall poverty rate of 13.3 percent of the state’s population in 2008. The poverty rate was already even higher, at 18.5 percent, for children under 18 years of age. \u00b7 Demands on Small General Assistance Benefit to Balloon. If the trigger proposal takes effect and the CalWORKs program is eliminated, former CalWORKs recipients may become eligible to apply for county-funded General Assistance (GA) programs for indigent families. As an example, the maximum GA grant in Los Angeles County (called General Relief) for a family of 3 is $450 per month. In some counties, GA offers lower-value vouchers and no cash assistance. The County Welfare Directors Association (CWDA) estimates the potential overall costs to counties if all former CalWORKs recipients could become eligible for GA as $1.9 billion. \u00b7 Negative Economic Ripple Effects of Lost Human Services Spending. It is well-established that the lowest-income individuals and families spend a higher percentage of their income locally and immediately than do individuals with more disposable income. In addition to these effects on recipient families and their economic activities, as well as local governments, below are examples of others who would be directly impacted by elimination of CalWORKs: \u00b7 Employers who might otherwise avert layoffs or expand their workforce via up to 15,000 ECF-supported subsidized employment slots. \u00b7 Tens of thousands of local child care providers who provide child care to children whose care is subsidized by the CalWORKs program; and \u00b7 An estimated 14,000 county and 170 state employees who work within the state’s CalWORKs program. \u00b7 TANF Spending Supports Other Non-CalWORKs Parts of the State Budget. Elimination of CalWORKs would also need to account for $590.5 million GF to annually backfill funding for non-welfare programs that otherwise are sustained through TANF funding. Questions \u00b7 How many families does the administration project would become homeless if the CalWORKs program were eliminated? \u00b7 What would be the consequences of a massive increase in family homelessness for children’s health and education performance? \u00b7 How will families terminated from CalWORKs meet their basic needs throughout the year given that in many counties GA benefits are provided for only a few months in any annual period? \u00b7 Have any other states contemplated complete elimination of their safety net for families with children? \u00b7 How many jobs would be directly eliminated if the CalWORKs program were eliminated, including counties and service providers? \u00b7 How much does CalWORKs contribute to economic growth and employment in local communities? \u00b7 How much federal revenue would the State relinquish if the CalWORKs program were eliminated and the State abandoned the TANF block grant? How much of this federal revenue would have to be back-filled with State general fund dollars outside the CalWORKs program? Proposed – Elimination of the IHSS Program (2010-11 Trigger) Lives Impacted: 1,057,376 Governor’s Proposal \u00b7 Trigger Proposal and Foregone Federal Funds. The Governor’s trigger proposals include the complete elimination of the IHSS program, effective 90 days after notice from the Director of Finance that sufficient federal funds were not authorized. According to the Administration, if this trigger proposal took effect for nine months of 2010-11, the state would save $1.2 billion GF and forego $1.8 billion federal funds. The foregone federal funds are predicated on extension through the state’s fiscal year of the enhanced Federal Medical Assistance Percentage (FMAP) rate for federal financial participation available for IHSS under ARRA. After expiration of the enhanced FMAP, the Administration estimates $1.8 billion GF savings and $2 billion foregone federal funds annually. \u00b7 Program History. The IHSS program has its roots in a 50-year-old cash grants program for individuals who are blind, aged, or who have disabilities and a 30-year-old homemaker program that offered domestic help to recipients. Today, the IHSS program provides in-home personal care services to roughly 460,000 qualified individuals who are blind, aged (over 65), or who have disabilities. These individuals usually have income at or below the SSI\/SSP grant level ($845 per month for an individual as of October 2009) and assets, except their homes or cars, worth less than $2,000. County social workers determine eligibility for the program after conducting in-home assessments. Expected Impact and Issues for Consideration \u00b7 Dramatic Departure from Home and Community-Based Services Policy in California. To reduce costs and offer seniors a better quality of life, the state expanded home care and community-based programs like IHSS in the 1980’s. The institutionalization rate subsequently dropped to 2.7 percent. \u00b7 Olmstead Decision Raise Important Legal Questions. The U.S. Supreme Court in Olmstead v. L.C. found that the Americans with Disabilities Act of 1990 requires states to provide community rather than institutional placement when the community placement can be reasonably accommodated. The elimination of the program would leave California with only the most expensive care option of nursing homes offered to a larger population of disabled seniors than existed 30 years ago and at a higher cost to the state and taxpayers. \u00b7 No Budget Accounting for Certain Cost Shifts, Projecting Medi-Cal Deficiencies in Budget Year. The Administration has not accounted for any potential cost shifts from serving IHSS recipients who would no longer receive in-home supports in Skilled Nursing Facilities (SNFs). According to the LAO, however, if at least 32 percent of non-developmentally-disabled IHSS recipients would enter a SNF in the absence of IHSS (which the LAO states is very possible ), the proposed elimination of IHSS would result in GF costs, rather than savings. The LAO also estimates that the GF cost shift for replacing IHSS services with other services for recipients with developmental disabilities is significantly greater than the Administration’s estimate and would likely be higher than $300 million. \u00b7 IHSS Costs and Nursing Home Costs. IHSS services can include tasks like meal preparation, feeding, bathing, paramedical care, and domestic services. On average, the state spends roughly $12,000 per year for IHSS services (although may also spend other funds for some services that a nursing home resident would not utilize). These services frequently assist program recipients to avoid or delay more expensive and less desirable institutionalizations. According to the LAO, the state spends an average of about $55,000 per year for each nursing home resident who uses Medi-Cal (based on 2006-07 figures). \u00b7 Job Loss for IHSS Provider and Rise in Unemployment. Approximately 385,000 IHSS care providers would lose their IHSS employment. Many of these providers already live in low-income households. The Governor’s budget forecasted the state’s 2010 unemployment rate to be 12 percent. According to the LAO, job losses of this magnitude could increase that unemployment rate by more than 1 percent. The LAO also estimates that about 60 percent of affected workers (or 231,000) may qualify for unemployment insurance benefits and 2,000 to 3,000 county and 80 state staff positions could also be eliminated. Questions \u00b7 How many vacant nursing home beds are there in California? How many of these are Medi-Cal beds? What percentage of IHSS consumers is equal to this number of nursing home beds? \u00b7 How many IHSS consumers does the administration project would enter a nursing home if IHSS were eliminated? What is the basis for that projection? \u00b7 What does Medi-Cal pay a nursing home per month for a Medi-Cal patient? How does this amount compare to what it would cost the State to provide care through the IHSS program? \u00b7 What will happen to IHSS consumers who need a nursing home, if there are no beds available? Will they go to an acute care hospital? \u00b7 How do you respond to the LAO’s analysis that state cost shifts for serving individuals with developmental disabilities will be significantly higher ($300 million versus the $55 million the administration estimated)? Proposed Elimination of THP+ (2010-11 Trigger) Lives Impacted: 2,054 Governor’s Proposal The Governor’s trigger proposals also include the elimination in 2010-11 of all $35.9 million for the THP+ housing and supportive services program. The THP+ program is currently funded with 100 percent GF. The proposed elimination of funding would take effect immediately upon notice from the Director of Finance that sufficient federal funds were not authorized. THP+ provides up to two years of transitional housing and supportive services to help former foster youth achieve self-sufficiency. There are approximately 1,400 young adults and 168 of their children living in THP+ placements in 52 California counties. Participants receive support toward their county-approved self-sufficiency (e.g., employment or education-related) goals and may live alone or with roommates. Expected Impact and Issues for Consideration \u00b7 Negative Outcomes for Foster Youth Emancipated Without Support. It is well-documented that foster youth who emancipate from care without continued support at the age of 18 experience higher rates of arrest, incarceration, pregnancy, homelessness, unemployment and a lack of educational achievement (i.e., receipt of a high school diploma) than their peers. In a 2008 survey by the John Burton Foundation, the interviewed THP+ participants experienced a 19 percent gain in employment and a 13 percent increase in hourly wages, in addition to advances in education, health, and housing stability. \u00b7 Immediate Homelessness for Many Anticipated. Advocates state that many of the 1,400 youth and 168 children currently living in THP+ settings would face immediate homelessness with program elimination. In the longer term, this elimination could increase critical challenges faced by former foster youth and result in increased state costs (e.g., public assistance and corrections costs). Questions \u00b7 When and how would you anticipate that THP+ would be ramped down in the event of the trigger being pulled? When and how would THP+ providers and participants receive notice of the program’s elimination? \u00b7 If this trigger proposal took effect, what would you anticipate would be the impacts on the former foster youth currently living in THP+ settings? On foster youth who emancipate from care in the future? On THP+ providers and staff? \u00b7 What would you anticipate to be the effects on other state services and costs (e.g. public assistance, corrections)? Department of Health Care Services Adopted – Elimination of Optional Benefits (2009-10) Lives Impacted: 932,114 Governor’s Proposal The 2009 Budget Act eliminated several adult optional benefits from the Medi-Cal program for projected General Fund savings of $93.9 million and the loss of $150.5 million in federal funds. Expected Impact and Issues for Consideration As with most, if not all, of the reductions to be discussed in this agenda and hearing, only a limited amount of information is available on the impacts of having eliminated these benefits from the Medi-Cal program. The California Dental Association and California Medical Association report that they have anecdotal information from emergency rooms that ER visits for emergency dental procedures has increased, but they have no hard data as of yet. The California Primary Care Association explains that the overall cumulative loss of funding to clinics, as a result of several budget cuts last year, including this one, has resulted in clinic closures and substantial reductions to hours and services, and thereby an overall reduction in access to care for this population. The following are the optional benefits that were eliminated, followed by the number of users in 2006-07. These numbers represent fee-for-service users and do not include the millions of Medi-Cal beneficiaries in managed care, for whom it is not possible for the state to count: Dental (932,114), acupuncture (32,906), audiology (28,061), speech therapy (1,593), chiropractic (12,439), optometry (731,906), podiatry (85,129), psychology (4,970), and incontinence creams and washes (65,591). Questions 1. Have Medi-Cal beneficiaries been able to access these services outside of Medi-Cal since elimination of them as Medi-Cal benefits? 2. If yes, where? 3. Has the Administration done an up-to-date cost-benefit analysis of eliminating dental coverage that incorporates the increased costs of ER visits? 4. Has the Administration assessed whether eliminating these benefits has led to diminished health outcomes and higher costs in general as a result of beneficiaries seeking and needing a higher level of care as a result of losing these benefits? Examples include: A beneficiary might need psychiatric care due to the absence of psychology services or might require ophthalmologic care due to the absence of access to optometry. Adopted – Restrictions to Adult Day Health Care (2009-10) Lives Impacted: 0 Governor’s Proposal In 2009, the Legislature rejected the Governor’s proposal to eliminate Adult Day Health Care (ADHC) and instead the 2009 Budget Act included various cost-saving restrictions to ADHC, including revised medical acuity eligibility criteria, a three day cap on services, and on-site Treatment Authorization Requests, for projected General Fund savings of $14.1 million and the loss of $22.5 million in federal funds. Expected Impact and Issues for Consideration The purpose of ADHC is to give some people with significant medical needs an alternative to institutionalization in long-term care facilities. By remaining with family or in some other type of community setting, a person can have a significantly higher quality of life and the cost of their care is substantially less. Nevertheless, California’s ADHC program has been a source of concern and frustration for both state and federal government agencies; DHCS has produced payment error studies that identify a high degree of fraud and abuse in the program and the federal CMS (the agency that regulates Medicaid nationally) has demanded a higher level of accountability to ensure that Medicaid is paying only for medical services. The major changes to the program that were adopted in last year’s budget have been enjoined by the court which found them to be in violation of either the Olmstead Act or the Americans With Disabilities Act (ADA), or both. Had the state been able to implement the 3-day cap and higher medical acuity eligibility criteria, a significant percentage of current ADHC consumers would have been denied access to ADHC and would have experience one or more of the following: \u00b7 Increased institutionalizations in nursing homes, at significantly higher cost to the state; \u00b7 Increased individuals remaining at home with family, requiring a family member to quit a job to become a full-time care-taker; \u00b7 Worsening health conditions leading to increased ER visits and increased health care costs in general; and \u00b7 Increased homelessness or various other undesirable, harmful outcomes. Questions 1. Please explain and describe the court cases that have enjoined the changes adopted in last year’s budget and the basis for the court finding them to be in violation of current law. 2. Do these court cases suggest that further restrictions to, or elimination of, ADHC also would be violations of current federal law and therefore prohibited by the court, assuming the state were sued again? Adopted – Reductions to Hospitals and Long-Term Care (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act includes several different reductions to health care institutions such as hospitals and nursing homes that care for Medi-Cal beneficiaries, the uninsured, and of course the insured for General Fund savings of approximately $165.3 million and the loss of $207.6 million in federal funds. Expected Impact and Issues for Consideration These reductions are being discussed together here in light of the difficulty in tallying the human impact of reductions to large health care institutions. Some might argue that at least some of these institutions can afford, or absorb, the reductions. Others would assert that these reductions contribute to rising health care costs and generally add strain to an already-strained health care safety net. The state budget cuts to public hospital systems have happened at the same time that their local budgets have been reduced. According to the California Association of Public Hospitals and Health Systems (CAPHHS), this cumulative financial pressure has resulted in hospitals eliminating or reducing programs and services, such as the elimination of a transplant program or the closure of primary care and dental clinics. CAPHHS states that, thus far in FY 2009-10, public hospital systems are facing over $725 million in budget deficits. Questions 1. What have been the impacts on hospitals and nursing homes of last year’s budget reductions? 2. Has there been a direct impact on patients? On providers? On quality of care? 3. Have these reductions in any way reduced access to care? Adopted – Reductions to Community Clinic Programs (2009-10) Lives Impacted: 170,000 Governor’s Proposal The 2009 Budget Act includes reductions to several programs that support community health clinics including: Rural Health Services, Expanded Access to Primary Care (EAPC), American Indian Health Program, and Seasonal Migratory Worker Clinics, for projected General Fund savings of $39 million. Expected Impact and Issues for Consideration Clinics experienced a substantial loss of funds due to the cumulative impact of several budget reductions, including: elimination of optional benefits, reductions to the clinic-support programs listed above, and reductions to the Office of AIDS programs. CPCA conducted a statewide survey of clinics and found the following impacts as a direct result of last year’s budget reductions: \u00b7 Four clinics have closed; \u00b7 170,000 patients have lost some degree of access to care; \u00b7 500,000 encounters will not be provided; \u00b7 Layoffs of hundreds of providers and staff; CPCA also states that clinics have experienced a 50 percent increase in the number of uninsured patients seeking care as a result of the economy. Questions 1. What percentage of Medi-Cal beneficiaries utilize clinics as their primary source of care? 2. How do Medi-Cal beneficiaries access services if they cannot access them through clinics? 3. What is the impact on a beneficiary’s health if services are unavailable or delayed? Proposed – Cost Containment Measures (2010-11) Lives Impacted: ? Governor’s Proposal The Governor’s proposed 2010-11 budget includes a request for authority to make numerous changes to the Medi-Cal program including increased cost-sharing for beneficiaries, utilization controls, and rate flexibility, for projected General Fund savings of $750 million and the loss of $1.6 billion in federal funds. Expected Impact and Issues for Consideration The Governor included this proposal in his proposed 2010-11 budget released in January with very limited detail on what the cost-containment measures would be. The proposed trailer bill language would give the Administration wide authority to develop policy changes to the program and subsequently inform the Legislature after the fact. DHCS has provided a few examples of the kinds of things that might be included, such as a monthly limit on prescription drugs, a limit on the number of covered days in a hospital, and the first-ever mandatory premiums and\/or co-payments for Medi-Cal beneficiaries. Arguably, the impact could be to all Medi-Cal beneficiaries. Questions 1. Please describe this proposal in as much detail as possible. 2. Please explain the existing voluntary co-payments in Medi-Cal. 3. Is there data that indicates what percentage of the Medi-Cal population has the ability to pay co-payments and monthly premiums? 4. How might federal health care reform affect his proposal? Proposed – Elimination of Benefits for Legal Immigrants (2010-11) Lives Impacted: 65,600 Governor’s Proposal The Governor’s 2010-11 budget proposes to eliminate full-scope benefits for legal immigrants who have been here less than five years and for individuals identified as PRUCOL, for projected General Fund savings of $118 million and the increase of $44.6 million in federal funds. Expected Impact and Issues for Consideration This proposal would add another 65,500 people to the ranks of the uninsured. As compared to the insured, uninsured individuals: \u00b7 Are sicker; \u00b7 Lack access to preventive health care, thereby diminishing their own health as well as the public health; \u00b7 Are more likely to seek care through an emergency room, which is costly and less appropriate care; and \u00b7 Have more school and work absences. Questions 1. Does the Administration’s cost\/savings analysis on this proposal account for increased costs to the state in emergency care and increased costs to the local health care safety net in uncompensated care? 2. What does the Administration know about the general health of this population? 3. How might federal health care reform affect his proposal? Proposed – Elimination of Adult Day Health Care (2010-11) Lives Impacted: 58,492 Governor’s Proposal As he did last year, the Governor proposes to eliminate Adult Day Health Care as a Medi-Cal benefit for projected General Fund savings of $134.7 million and the loss of $216 million in federal funds. Expected Impact and Issues for Consideration As stated under the ADHC reduction in 2009, if ADHC services are eliminated, some percentage of current consumers would experience the following: \u00b7 Increased institutionalizations in nursing homes, at significantly higher cost to the state; \u00b7 Increased individuals remaining at home with family, requiring a family member to quit a job to become a full-time care-taker; \u00b7 Worsening health conditions leading to increased ER visits and increased health care costs in general; \u00b7 Increased homelessness or various other undesirable, harmful outcomes; \u00b7 Loss of thousands of jobs; and \u00b7 Thousands of relatives having to either quit jobs or institutionalize their relatives. Questions 1. Please describe what will happen to the 37,000 ADHC consumers if this benefit is eliminated from Medi-Cal. 2. What percentage of ADHC consumers could be institutionalized without completely eroding all of the savings projected as a result of elimination? 3. While ADHC consumers who are Regional Center clients would continue to be eligible for these services, in actuality, how would the Regional Center system ensure continued access to these services? 4. Do this year’s court cases suggest that elimination of ADHC would likely violate federal law and therefore not be possible? Proposed – Reduce Reimbursement for Family Planning (2010-11) Lives Impacted: ? Governor’s Proposal The Governor proposes to rollback reimbursement rates for family planning services in Medi-Cal to 2007 levels for projected General Fund savings of $15 million and the loss of $73.4 million in federal funds. Expected Impact and Issues for Consideration The family planning rates were increased in 2007 after seeing no increase in over 20 years. Substantial data exists to support the long-term cost savings that result from family planning services. These services qualify for a 9 to 1 federal funding match. CPCA states that over the past year, clinics have experienced a 50 percent increase in demand for services. Prior to the rate increase, Planned Parenthood reported turning away 10,000 people per month statewide due to insufficient funding. Questions 1. Where do people seek and receive family planning services when they cannot access them through clinics? 2. How do family planning services affect the lives of teenagers? Proposed – Eliminate Eligibility Categories (2010-11 Trigger) Lives Impacted: 1,913,807 Governor’s Proposal Pending receipt of sufficient federal funds, the Governor proposes to rollback the 1931(b) expansion, reduce the aged, blind and disabled FPL eligibility, and eliminate the following Medi-Cal eligibility categories: Medically Needy Program; CHDP Gateway Pre-enrollment eligibility; Accelerated Enrollment at Single-Point-of-Entry; Expansion for Former Foster Care Children; Medically Indigent Adult Long Term Care Program; FPACT; and the Breast and Cervical Cancer Treatment Program, for projected General Fund savings of $489.3 million and the loss of $523.5 million in federal funds. Expected Impact and Issues for Consideration This proposal would add another 300,000 people to the ranks of the uninsured. An additional 1.6 million would lose access to family planning services and cancer treatments. As stated earlier in this agenda, as compared to the insured, uninsured individuals: \u00b7 Are sicker; \u00b7 Lack access to preventive health care, thereby diminishing their own health as well as the public health; \u00b7 Are more likely to seek care through an emergency room, which is costly and less appropriate care; and \u00b7 Have more school and work absences. Questions 1. Where will these 300,000 people access medical care? 2. What will happen to people currently enrolled in, and people who would be enrolled in the future, in the Breast and Cervical Cancer Treatment Program if this program is eliminated? 3. Please explain what impact federal health care reform will have on Medi-Cal and specifically on this proposal. Proposed – Elimination of Optional Benefits (2010-11 Trigger) Lives Impacted: 222,993 Governor’s Proposal Pending receipt of sufficient federal funds, the Governor’s proposed budget eliminates several adult optional benefits from the Medi-Cal program for projected General Fund savings of $52.2 million and the loss of $65.8 million in federal funds. Expected Impact and Issues for Consideration Optional benefits under Medicaid are benefits that the federal government does not mandate states to offer within their Medicaid programs. Many people would argue that many optional benefits should not be optional and should be mandated benefits under any comprehensive health coverage plan, whether public or private. The following are the optional benefits proposed for elimination, followed by the number of users in 2006-07. These numbers represent fee-for-service users and do not include the millions of Medi-Cal beneficiaries in managed care, for whom it is not possible for the state to count: Hearing Aids (17,396), Physical Therapy (6,025), Occupational Therapy (332), Orthotists (1,252), Independent Rehab Facilities (430), Outpatient Heroin Detox (947), Medical Supplies, Prosthetists (11,486), and Durable Medical Equipment (222,993). Questions 1. Please provide examples of conditions that would qualify Medi-Cal beneficiaries for the optional benefits that the Governor has proposed to eliminate. 2. Please provide some specific examples of durable medical equipment. 3. How will Medi-Cal beneficiaries access these services and products if they are no longer a Medi-Cal covered benefit? 4. Please describe how federal health care reform will impact this proposal. Proposed – Elimination of Prop 99 Funding from EAPC (2010-11 Trigger) Lives Impacted: ? Governor’s Proposal Pending receipt of sufficient federal funds, the Governor proposes to eliminate all remaining $10 million in Proposition 99 funding in the Early Access to Primary Care (EAPC) Program that supports community clinics. This would result in $10 in General Fund savings by backfilling General Fund dollars in Medi-Cal. Expected Impact and Issues for Consideration This funding supports 580 clinics, thereby providing approximately $17,241 to each clinic. Though a relatively small amount of funding, this would be an additional reduction compounding the substantial loss of funding to clinics last year. Questions 1. What will be the impact on clinics, and clinic patients, of additional reductions in this year’s budget? 2. In addition to the clinics that have closed this past year, are there additional clinics that are considering closing or are very close to being forced to close? 3. When a clinic closes, where do the patients access care? Department of Alcohol and Drug Programs Adopted Ten Percent Reduction in Drug Medi-Cal Rates (2009-10) Lives Impacted: 270,598 Adopted Reduction The Department of Alcohol and Drug Programs (ADP) directs and coordinates the state’s efforts to prevent or minimize the effects of alcohol-related problems, narcotic addiction, and drug abuse. Services include prevention, early intervention, detoxification, and recovery. ADP administers funding to local governments and licenses, certifies, and audits alcohol and other drug programs. ADP administers the Drug Medi-Cal Program, which provides substance abuse treatment services for beneficiaries of the Medi-Cal Program. It has also allocated other funds to local governments and contract providers, including funds provided under the Substance Abuse and Crime Prevention Act, the 2000 initiative also known as Proposition 36. The budget also included an across-the-board 10 percent reduction in the rates paid to Drug Medi-Cal providers that is estimated to achieve $8.8 million in GF savings. The spending plan also includes adjustments due to increased FMAP under ARRA. Expected Impact and Issues for Consideration \u00b7 Contraction of Service Network and Provider Closures. Providers have noted closure of sites and service reductions due to the ten percent reduction. They additionally note the diminishing county resources for treatment, which creates greater pressures and demand for private providers and their services. \u00b7 Fewer Treatment Slots to Fend Burgeoning Addiction Trends. Providers note new trends in oxycontin and opiate addictions among youth and in high-income neighborhoods. The availability of these drugs and movement into lower-income communities is creating a greater demand seen in Drug Medi-Cal. Questions \u00b7 What increases in caseload are being seen in Drug Medi-Cal? What effect has the reduction had on the provider pool? Adopted Elimination of All SACPA (Prop. 36) General Fund (2009-10) Lives Impacted: 49,700 Adopted Reduction The 2009-10 eliminated $90 million in GF support from the Substance Abuse and Crime Prevention Act (also known as Proposition 36), while maintaining $18 million in General Fund support for the Offender Treatment Program, which also serves Proposition 36 offenders. These spending reductions were intended to be partially partly offset with $45 million in one-time federal Byrne Memorial Justice Assistance Grant funds for the Offender Treatment Program. Expected Impact and Issues for Consideration \u00b7 Program Defunding Represented Sharp Departure in Addiction Treatment Policy. Eliminating all state funding for Prop. 36 halted a program that had provided treatment to over 30,000 people each year. Almost 300,000 people entered community-based treatment through Prop. 36, half of whom never received treatment services before. About one-third of participants complete treatment and probation and about half stay for at least 90 days, considered to be the minimum threshold for beneficial treatment. \u00b7 Cost Savings Acknowledged for Prop. 36 Services. UCLA found in several annual studies that for every $1 invested in the program, the state saved between $2-4. The diversion of drug offenders out of overcrowded prison systems into treatment has also been widely lauded. Questions \u00b7 What treatment services are available in the absence of Prop. 36? \u00b7 What is the expected increase in state costs, e.g. for incarceration, in the absence of Prop. 36 funding? \u00b7 How are courts reacting to the reductions? Proposed Elimination of All Remaining General Fund in OTP Lives Impacted: 10,514 Proposed Reduction The Governor proposes to reduce the Offender Treatment Program (OTP) by $18 million General Fund in 2010-11, removing all remaining GF for drug treatment programs for nonviolent, low-level drug offenders. The OTP serves the same population as Prop. 36 and its main distinction is the use of more overt law enforcement mediums such as flash incarceration. Expected Impact and Issues for Consideration \u00b7 Program Defunding Represented Sharp Departure in Addiction Treatment Policy. Akin to the elimination of all state funding for Prop. 36, there is significant outcry over removing all state support for these treatment services. Almost 300,000 people entered community-based treatment through Prop. 36, half of whom never received treatment services before. About one-third of participants complete treatment and probation and about half stay for at least 90 days, considered to be the minimum threshold for beneficial treatment. \u00b7 Cost Savings Acknowledged for Prop. 36 Services. UCLA found in several annual studies that for every $1 invested in the program, the state saved between $2-4. The diversion of drug offenders out of overcrowded prison systems into treatment has also been widely lauded. Questions \u00b7 What are the key differences in how Prop. 36 operated in the past and how OTP is operating today? \u00b7 What waiting lists is OTP experiencing that might be indicative of the level of \”need\” in the community for treatment services? \u00b7 What will happen to treatment options without Prop. 36 and without OTP? What is available for a nonviolent, low-level drug offender? Managed Risk Medical Insurance Board Adopted – Reduction to Healthy Families (2009-10) Lives Impacted: 0 Governor’s Proposal The 2009 Budget Act includes a General Fund reduction to the Healthy Families Program of $174 million, nearly half of the prior year’s General Fund appropriation. Subsequent to passage and signing of the Budget Act, First 5 California made an $81 million contribution to the program to cover the costs of children in the 0-5 age range, and the Legislature passed and the Governor signed AB 1422 which extended and expanded a tax on Medi-Cal managed care companies. With these two actions, the Healthy Families Program was fully funded in 2009-10. Expected Impact and Issues for Consideration As a result of the funding solutions described above, there was no direct impact on the Healthy Families program or its beneficiaries from last year’s General Fund reduction. However, AB 1422 includes a sunset of December 31st, 2010, though the Governor has proposed an extension as part of his current budget package. It is anticipated that First 5 California is likely to continue to provide financial support to cover the costs of 0-5 year olds in the program, however this also remains an uncertainty. Adopted – Elimination of Certified Application Assistors (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act eliminated funding for Certified Application Assistors who help parents enroll their children in Healthy Families, for projected General Fund savings of $4.6 million and the loss of $7.3 million in federal funds. Expected Impact and Issues for Consideration As with almost any state program, the Healthy Families Program application and enrollment process can be challenging, confusing, and intimidating. Certified Application Assistors make this process more manageable for families, thereby ultimately increasing enrollment of eligible children. Questions 1. How many CAAs were there before last year’s budget action and are there any remaining? 2. What has been the impact on caseload of eliminating CAAs? 3. Does MRMIB believe that, when sufficient resources are available, CAAs are a worthwhile part of the program? Adopted – Prop 99 Reduction to MRMIP (2009-10) Lives Impacted: 0 Governor’s Proposal The 2009 Budget Act shifted $6.6 million in Proposition 99 funds from the Managed Risk Medical Insurance Program (MRMIP) to backfill an equal amount of General Fund dollars in Medi-Cal. Expected Impact and Issues for Consideration MRMIP is the state’s coverage program for individuals who do not have access to employer-based or other group coverage, and who cannot obtain coverage on the individual market typically because of a pre-existing condition and are often considered high risk. MRMIB states that this fund shift had no impact on caseload in the program. Questions 1. Does the MRMIP program maintain a waiting list and if so, how many people are currently on it? 2. How could this fund shift have not affect caseload, the waiting list, or the program overall? 3. How will federal health care reform affect this population? Adopted – Prop 99 Reduction to AIM (2009-10) Lives Impacted: 0 Governor’s Proposal The 2009 Budget Act shifted $4.9 million in Proposition 99 funds from the Access for Infants and Mothers (AIM) Program to backfill an equal amount of General Fund dollars in Medi-Cal. Expected Impact and Issues for Consideration The AIM program provides prenatal care to pregnant women up to 300 percent FPL who are uninsured. Once their babies are born, the women no longer receive services but their babies are enrolled in Healthy Families until their second birthday, at which time their eligibility is based on the standard Healthy Families eligibility criteria (up to a maximum of 250 percent FPL). MRMIB states that this fund shift had no impact on the AIM caseload. Questions 1. How many women does AIM serve and has the program ever maintained a waiting list? 2. How could this fund shift have had no impact on caseload or the program overall? 3. How will federal health care reform affect this population? Proposed – Healthy Families Eligibility Reduction (2010-11) Lives Impacted: 216,469 Governor’s Proposal As the Governor proposed last year, which the Legislature rejected, the Governor’s 2010-11 budget proposes to reduce eligibility in the Healthy Families Program from 250 percent to 200 percent FPL, for projected General Fund savings of $63.9 million and the loss of $188.5 million in federal funds. Expected Impact and Issues for Consideration Reducing eligibility from 250 to 200 percent FPL would result in the disenrollment of approximately 216,470 children enrolled in the program. This would include approximately 5,000 children who also are enrolled in the California Children’s Services (CCS) program which provides specialty care through coordinated care and access to specialists for children with chronic or otherwise significant health care needs. Questions 1. Please provide some examples of CCS-eligible conditions and the types of care these children need and receive through the CCS program. 2. How will CCS children access the specialty medical care that they need if they are no longer enrolled in Healthy Families and CCS? 3. Where will healthy kids who are disenrolled from Healthy Families access basic, preventive care, such as school-required immunizations, once no longer in Healthy Families? 4. How many families in Healthy Families have access to private insurance but choose to enroll their children in Healthy Families instead? 5. Please explain how federal health care reform will affect the Healthy Families Program and specifically this proposal. Proposed – Elimination of Healthy Families Vision Benefit (2010-11) Lives Impacted: 1,041,100 Governor’s Proposal The Governor’s proposed 2010-11 budget eliminates vision coverage as a Healthy Families benefit. Expected Impact and Issues for Consideration This proposal is to eliminate access to vision screenings and eye glasses. This would not eliminate access to ophthalmology care. Children need to be able to see in order to succeed in school. All children benefit from vision screenings and potentially require glasses, and therefore the impact of this reduction would be to all children enrolled in the program. Questions Where else could these children access affordable optometry services and glasses if this benefit is eliminated? Proposed – Increase Healthy Families Premiums (2010-11) Lives Impacted: 377,580 Governor’s Proposal The Governor’s proposed budget would increase monthly premiums for families between 150 and 200 percent FPL. It would not increase premiums for families below 150 percent FPL, nor for families above 200 percent because it assumes reducing overall program eligibility to 200 percent. As a result of both increasing premiums and eliminating the vision benefit, the Administration projects General Fund savings of $21.7 million and the loss of $44.1 million in federal funds. MRMIB has coupled these two proposals together for purposes of projecting savings in order to protect confidential rate information associated with its vision benefit contracts. Monthly premiums for families from 151 percent to 200 percent of poverty would be increased by $14 per child (to $30 for one child; $60 for two; and a family maximum of $90 for three or more). Expected Impact and Issues for Consideration Premiums and co-payments were increased as of November 1, 2009, except for families under 150 percent. Families at 150 to 200 percent had premiums increased by $4 per child (to $16 for one; $32 for two; and a family maximum of $48 for three or more). Premiums and co-payments were also increased for families from 201 percent to 250 percent as of November 1, 2009. Historically, increases in premiums and co-pays have been proposed and utilized to decrease enrollment in the program. However, presumably due to the economy, the most recent premium increases have not resulted in caseload reductions. Questions Would you anticipate that this premium increase would result in a decrease in caseload or new enrollments? Proposed – Elimination of Healthy Families Program (2010-11 Trigger) Lives Impacted: 1,041,100 Governor’s Proposal Pending receipt of sufficient federal funds, the Governor proposes full elimination of the Healthy Families Program, for projected General Fund savings of $211.5 million and the loss of $824.8 million in federal funds. Expected Impact and Issues for Consideration MRMIB projects enrollment in the Healthy Families program to be 1,041,100 by June 30, 2011. Therefore, this proposal would add over one million children to the ranks of the uninsured. Questions 1. Please provide an overview of caseload trends from the past few years, including the last couple of months. 2. What is known about health outcomes for uninsured as compared to insured children? 3. What is known about academic outcomes for uninsured as compared to insured children? 4. What is known about impacts on parents of having their children insured as compared to uninsured? 5. Please explain how federal health care reform will affect this proposal. Proposed – Elimination of All Prop 99 Funds from MRMIP (2010-11 Trigger) Lives Impacted: 10,200 Governor’s Proposal Pending receipt of sufficient federal funds, the Governor proposes to shift all remaining $32.3 million in Proposition 99 funds in MRMIP to backfill an equal amount of General Fund in Medi-Cal. Expected Impact and Issues for Consideration As described earlier in the agenda, MRMIP provides coverage for people who have established medical conditions and who cannot obtain insurance on their own. This proposal would increase the number of uninsured Californians. Questions 1. Please describe the basics of the MRMIP budget i.e., how much funding overall? Sources of funds? How much Proposition 99 funding and what percentage of the total funding is it? 2. What would happen to this program if all Proposition 99 funding is eliminated? What would be the impact on caseload and on the waiting list? Proposed – Elimination of All Prop 99 Funds from AIM (2010-11 Trigger) Lives Impacted: 11,276 Governor’s Proposal Pending receipt of sufficient federal funds, the Governor proposes to shift all remaining $49.3 million in Proposition 99 funds in AIM to backfill General Fund in Medi-Cal, for $49.3 million in General Fund savings. Expected Impact and Issues for Consideration This program protects the health of low-income pregnant women and their infants, as supported by research that shows that prenatal care improves birth outcomes. Questions 1. Please describe the basics of the AIM budget i.e., how much funding overall? Sources of funds? How much Proposition 99 funding and what percentage of the total funding is it? 2. What would happen to this program if all Proposition 99 funding is eliminated? What would be the impact on caseload? 3. What are the cost savings to the state from providing prenatal care to uninsured women? Department of Developmental Services Adopted – 3% cut to regional centers (RC’s) Purchase of services and operations Lives Impacted: 246, 295 Governor’s Proposal This proposal implemented a 3% cut to Regional Center (RC) operations and purchase of services (POS) budgets, until June 30, 2010. It saved the state $62 million General Fund (GF) and resulted in a reduction of $56.1 million in federal reimbursements. Expected Impact and Issues for Consideration Indirectly and directly, consumers, RC employees and providers are impacted by this proposal. Therefore, for the purpose of accounting for an impact to lives, DDS consumers who received POS, RC employees and providers are included in the rough estimate of 246,295 lives impacted by this proposal. The 3% purchase of services has specifically impacted providers, many who were already feeling the long-standing rate freezes. Alhough there is no uniform way in which the cuts have impacted providers, many providers have had to reduce staff hours, reduce employee benefits, forgo hiring or replacing critical positions, enact mandatory furlough days, increases caseloads (affecting quality of case management), close existing facilities, abstain from expanding services and decrease independent living services (ILS). Advocates argue consumers in RC who receive POS are affected. This reduction decreases POS, which results in the consolidation of programs and therefore limits choices to consumers. Although it is difficult to identify the impact of a reduction in RC operations, when you have 21 independent regional centers, the impact to providers affects consumers. They may receive services, but are they at the same level of care\/quality? Questions How are consumers affected by this proposal? Has the department completed an analysis of the impact to regional centers? Providers? How many providers have closed their doors since the inception of this proposal? Is forgoing $56.1 million in federal reimbursements a good trade-off? Adopted – Change in Regional Center Standards Lives Impacted: 105 Governor’s Proposal Adopted in the Governor’s 2009-10 budget, as agreed on by the DDS Budget Advisory Group, was a change in general standards, saving the state $45.9 million (GF). This proposal established: (1) regional centers shall not purchase experimental treatments, therapeutic services or devices that have not been clinically\/scientifically proven to be effective or safe; (2) RC’s will use generic services when available; (3) Medical and dental will not be purchaseD by RC’s without proof of denial from the insurance provider; (4) RC will purchase services from the least costly provider; and (5) RC’s will provide individual consumers a statement of services summary each year. Expected Impact and Issues for Consideration One in seven developmentally disabled consumers is diagnosed with autism. Prohibiting the purchase of treatments that have not been clinically or scientifically proven to be effective has disproportionably affected this population. Regional centers lack a universal definition of \”experimental treatment\” and this has impacted treatment such as the DIR model (developmental, individual difference, relationship-based). Indirectly, this reduction also impacts school resources and county general assistance programs. Questions Has the department established a clear model for what is considered ‘experimental treatment’? If so, how was it communicated to regional centers and how is it implemented in each of the independent regional centers? Have there been problems (lawsuits) with implementing this model? Adopted – Transportation reform Lives Impacted: 700 Governor’s Proposal This transportation reform proposal mandated RC’s to pursue lower cost transportation services, to reach an intended savings of $16.9 million (GF). Consumers who can use public transportation are required to do so and if feasible, families are required to provide transportation for children. Expected Impact and Issues for Consideration Consumers are impacted by requiring minors to get their transportation needs from family members, thereby impacting family schedules, income and vehicles. In some cases, families drive over 50 miles to get a minor to the provider. Additional considerations include provider unemployment, job loss for family member responsible for providing transportation, use of county hospital resources (exasperated by missed provider visits). Adopted – Early Start Program changes Lives Impacted: 654 Governor’s Proposal This proposal included the elimination of eligibility for \”at risk\” infants and toddlers age 24 months or greater who are ‘developmentally delayed’ or have a risk of a developmental delay. This proposal saved the state $15.5 million (GF) and eliminated services to 32,745 infants and toddlers. However, in the same budget, the creation of a Prevention Program was adopted. The Prevention Program services are restricted to case management, and information and referral to other agencies. These services were made available to 32,091 of the population no longer eligible under the Early Start Program and saved the state $19.5 million (GF). Expected Impact and Issues for Consideration The proposal impacted families who are federally approved to receive child care, diapers, dentistry, access to an interpreter and translator, genetic counseling, music therapy, and respite hours. Without access to services such as child care and respite, jobs, unemployment and poverty are an issue for some families. Others may pursue county general assistance or child welfare programs to receive services such as dentistry or respite. Questions What happens to the 654 infants and toddlers no longer eligible? Why were they not eligible? What agencies do the infants and toddlers get referred to in the Prevention Program? Adopted – Cut in Respite Hours Lives Impacted: 696 Governor’s Proposal A reduction in respite hours was adopted to save the state $4.8 million (GF). The proposal limited out of home respite to a maximum of 21 days per year and in-home respite to a maximum of 90 hours per quarter (30 hours per month). This proposal will be lifted upon certification of the Individual Choice Budget. Expected Impact and Issues for Consideration An estimate of the lives impacted by the proposal is not possible at this point in time. However, it is important to note that 40% of the departments hearings are related to respite hours, not every consumer knows how or has requested a hearing for an exemption. Therefore, 696 is the minimum number of lives affected. Impacts of this proposal include increased reliance on IHSS and general assistance programs. Consumers have lost mobility, self-sufficiency and for some families the ability to care for a consumer at home rather than at a developmental center. The cost to the state of caring for a consumer in the community is less expensive than institutionalizing a consumer in a developmental center. Additionally, due to the speed at which the Legislature passed the Budget Trailer Bills in 2009, the arbitrary cap on respite hours has actually results in an unintended cut of 15%. This has reduced services and the ability for providers to stay open. Providers have not been accounted for in this estimate. Questions Has the department completed an analysis of the impact to consumers? Do consumers have the ability to request an exemption? If so, what is the ratio of those approved to those denied by the department? Was the intended savings reached? Adopted – Temporary Suspension of services Lives Impacted: 28,000 Governor’s Proposal The 2009-10 Governors budget also adopted a temporary suspension of services, pending the adoption of the Individual Choice Model. This proposal saved the state $27.4 million (GF) and suspended access to social\/recreation activities, camping services, educational services to minors and non-medical therapies; such as art, music or dance. Expected Impact and Issues for Consideration The proposal affects new consumers and those who did not receive the services before this reduction. The social and behavioral development of a client is aided by these programs and will be impacted by this proposal. A loss of further development, independence, self-reliance and pride is lost for the consumer. Questions What is the importance of social\/recreation activities to DD consumers? When will the Individual Choice Model be certified by the DDS? Proposed – 3% cut to regional centers (RC’s) Purchase of services and operations Lives Impacted: 251,652 Governor’s Proposal Included in the Governors 2010-11 budget is the proposal to extend the 3% cut to RC’s until June 30, 2011. This proposal was adopted by the Legislature in the 8th extraordinary session. It saved the state $60.9 million (GF) and resulted in a reduction of $54.8 million in federal reimbursements. Expected Impact and Issues for Consideration As in 2009-10, a 3% cut to the RC budget directly and indirectly impacts consumers, RC employees and providers. Therefore, for the purposes of estimating an impact to lives, DDS consumers who received POS, RC employees and providers are included in the rough estimate of 251,652 lives impacted by this proposal. The long-term continuation of last year’s budget solutions has, and will continue to adversely impact this community. Impacting providers and consumers alike by reduced staff hours, reductions in employee benefits, inability to hire or replace critical positions, mandatory furlough days, increases in caseloads (affecting quality of case management), closure of existing facilities, inability to expand services and a decrease in ILS services. The reduction ultimately impacts a consumers access to programs and arguably quality of service. Proposed – Program Reforms to total $25 million Lives Impacted: UNKNOWN Governor’s Proposal The Governor mandated the Department of Developmental Services to reach a $25 million (GF) savings in additional program reforms. This proposal will be developed by the Department and the Budget Advisory Workgroup, and presented to the Legislature in the coming months. Expected Impact and Issues for Consideration The cuts will be made to programs and will inherently affect consumers, whether directly or indirectly. However, without knowing the proposed changes to programs, an estimate is impossible. Question When will the DDS present the Legislature with its plan to implement the $25 million reduction? California Department of Aging Adopted Elimination of All General Fund for Most Community-Based Services Programs Lives Impacted: 47,529 Adopted Reductions As outlined below by program, the 2009-10 budget reduced or eliminated, as of October 1, 2009, GF spending for several CBSPs. Through his veto actions, the Governor then eliminated all of the remaining GF resources for these programs, as well as state and local administration funds, as of that same date (also shown below). Impact of 2009-10 Community Based Services Program Reductions Program Original 09-10 GF Allocation Legislative Action Governor Veto Total 09\/10 GF Reduction* Total 10\/11 Funding Alzheimer’s Day Care Resource Center 3,787,000 -1,200,000 -1,640,000 -2,840,000 0 Brown Bag 541,000 0 -405,000 -405,000 0 Linkages 7,935,000 -2,421,000 -3,958,000 -6,379,000 0 Respite 317,000 -238,000 0 -238,000 0 Senior Companion 317,000 -238,000 0 -238,000 0 Local Admin. for these CBSPs 935,000 -117,000 -157,000 -274,000 0 State Admin. for these CBSPs 211,000 0 -106,000 -106,000 0 * Note that these numbers reflected nine months of funding reductions because of anticipated time for programs to ramp-down. Impact and Issues for Consideration Linkages: Prior to the elimination of its funding, Linkages was expected to serve as a case management program for approximately 5,500 elderly and younger adults who had functional impairments and were at-risk of institutionalization. In May, 2008, the program waiting list included approximately 2,100 people. Alzheimer’s Day Care Resource Centers (ADCRC): Prior to the elimination of this funding, 57 ADCRCs received infrastructure support so that Adult Day Care and Day Health Care Centers could serve 3,200 individuals with dementia. Brown Bag Program: Prior to the elimination of its funding, the Brown Bag program relied on the assistance of 3,900 volunteers and 600 sites to provide free surplus and donated fruits, vegetables, and other foods to 27,000 low-income seniors. The program’s $541,000 local assistance budget was supplemented by $13 million in local matching funds. Respite Purchase of Services (POS): Prior to the elimination of its funding, the Respite POS program provided temporary relief to caregivers of frail elderly or impaired adults who were at risk of institutionalization. Local Actions: Local Area Agencies on Aging (AAAs), which administered these programs in the past, have flexibility to continue these or similar programs if they can use federal Older Americans Act and\/or other funds. For the Linkages program, AAAs may also be eligible to continue receiving a limited amount of funding from local handicap parking fines. AAAs electing to continue programs similar to these CBSPs using non-state funds are not required to meet state standards for the programs. According to a CDA survey conducted in November 2009: \u00b7 25 AAAs planned to continue some form of ADCRC programs and eight discontinued the program. \u00b7 17 AAAs continued Brown Bag programs and seven discontinued them. \u00b7 17 continued Linkages programs and 16 discontinued them. \u00b7 Seven continued Respite programs and 21 discontinued them. \u00b7 Three continued Senior Companion programs and 12 discontinued them. Questions \u00b7 Please describe how the Department has implemented the Governor’s vetoes within these programs and how local agencies have responded to date. \u00b7 What, if any, continuing oversight does the Department have over these programs to the extent that they are still operated locally? \u00b7 What data does the Department have on how the programs’ former beneficiaries are faring today? Do you know how many clients were referred to other state programs that may provide similar services? How many may have entered institutional care in part because of the loss of these services? Department of Public Health Adopted – Reductions to Maternal, Child, Adolescent Health (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act eliminates all General Fund dollars from the Maternal, Child, and Adolescent Health (MCAH) programs, including the Black Infant Health Program, Adolescent Family Life, and County MCH grants, for General Fund savings of $20.3 million. Question Please describe the impact of these reductions. Adopted – Reductions to Office of AIDS (2009-10) Lives Impacted: 400,000 Governor’s Proposal The 2009 Budget Act eliminated all General Fund dollars from all Office of AIDS programs, except the AIDS Drug Assistance Program (ADAP) and Epidemiologic Studies and Surveillance, for projected General Fund savings of $87.1 million. Expected Impact and Issues for Consideration In large urban counties, these reductions have forced a redirection of federal funds from other local programs in order to cover the services that were cut. Question Please describe the impact of these reductions. Adopted – Reduction to Domestic Violence Shelters (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act eliminated all General Fund dollars for domestic violence shelters for General Fund savings of $20.4 million. Subsequent to passage of the Budget Act, SB 13 was passed and signed into law which re-established $16.3 million in shelter funding with a one-time special fund loan and moved the program from DPH to CalEMA. Expected Impact and Issues for Consideration The Governor’s proposed budget for 2010-11 does not restore this funding which historically has served as the shelters’ base funding. Questions 1. What was the impact of this 20 percent reduction? 2. How many shelters will close should this funding not be restored this year? 3. What would be the impact on the shelters of eliminating all of this funding? Adopted – Elimination of Funding for California Health Care for Indigents (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act eliminated all $22.3 million in remaining Proposition 99 funding for county emergency services for indigents to backfill General Fund in Medi-Cal, for General Fund savings of $22.3. Question What has been the impact of this reduction? Adopted – Reduction to Alzheimer’s Research Centers (2009-10) Lives Impacted: 42,000 Governor’s Proposal The 2009 Budget Act reduced funding for the Alzheimer’s Research Centers by 50 percent, for General Fund savings of $3.1 million. Expected Impact and Issues for Consideration According to DPH, this reduction was absorbed by eliminating community training that had been provided to 42,000 people. Questions 1. Please describe what the Alzheimer’s Research Centers do. 2. Please describe the community training that was eliminated? Adopted – Elimination of Dental Disease Prevention Program (2009-10) Lives Impacted: 285,000 Governor’s Proposal The 2009 Budget Act eliminated the Dental Disease Prevention Program (DDPP) for General Fund savings of $2.9 million. Expected Impact and Issues for Consideration The DDPP provided oral health education to thousands of low-income children, as well as very basic on-site dental care. For some children, this was the only time when a dental professional looked in their mouths. For a small number, significant dental problems were identified and an effort was made to obtain and ensure on-going dental care for these children. Questions 1. As a result of this program being eliminated, has there been an increase in demand for dental services through clinics, emergency rooms, or elsewhere? 2. Have low-income schools provided any information on the impact of the elimination of this program? Adopted – Reduction to Breast Cancer Early Detection (Every Woman Counts) Program (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act shifted $4.5 million of Proposition 99 funds from the Every Woman Counts Program (EWC) to backfill General Fund in Medi-Cal for $4.5 million in General Fund savings. Expected Impact and Issues for Consideration The EWC provides funding for breast and cervical cancer screenings and diagnostic services for uninsured and under-insured women, up to 200 percent FPL. The EWC is not an entitlement program, but had been treated as one for as long as there were sufficient resources to do so. The program receives no General Fund and is primarily supported with tobacco tax revenue. Due to declining tobacco tax revenues, combined with increasing demand for the program, the program began running short of funds last year. DPH requested legislative authorization to spend unspent funds from prior years in order to address the deficiency, which was provided through the 2009 health trailer bill. DPH also indicated that either increased funding or increased restrictions on the program would need to be provided in order to not overspend the program’s budget. Question How much did this fund shift contribute to the program’s overall budget deficiency? Adopted – Reduction to California Asthma Public Health Initiative (2009-10) Lives Impacted: 300,000 Governor’s Proposal The 2009 Budget Act shifted $438,000 of Proposition 99 funds from the California Asthma Public Health Initiative (CAPHI) to backfill General Fund in Medi-Cal for General Fund savings of $438,000. Expected Impact and Issues for Consideration The CAPHI used to provide local assistance to ten community health centers serving a combined population of approximately 9,000 children with asthma in underserved communities. All ten of these contracts were cancelled as a result of this fund shift. The program also administers a local assistance program with central valley health departments designed to reach as many people with asthma, of all ages, as possible. Until this past year, the program worked with five counties (Fresno, Stanislaus, Kern, Tulare, and Madera), however this budget cut resulted in Tulare and Madera pulling out of the program. The three remaining counties reach an estimated 365,000 people. The program also conducts four clinical collaboratives to promote improved pediatric asthma care. DPH states that these collaboratives have directly impacted over 25,000 children resulting in significant clinical care improvements, reduced morbidity, decreased emergency visits and hospitalizations. Finally, CAPHI provides statewide asthma clinical expertise to health care providers and individuals affected by asthma. Questions 1. What were all of the impacts on this program of this fund shift? 2. Please describe the basics of the APHI budget i.e., how much funding overall? Sources of funds? How much Proposition 99 funding and what percentage of the total funding is it? Proposed – Breast Cancer Early Detection (Every Woman Counts): Policy Changes & Elimination of Prop 99 Funds (2010-11 Trigger) Lives Impacted: 100,000 Governor’s Proposal While not a traditional proposed reduction, prior to release of the Governor’s proposed 2010-11 budget in January, the Administration implemented significant new restrictions on EWC including a 6-month enrollment freeze and an increase in the minimum age eligibility for breast cancer screens from 40 to 50. Additionally, pending receipt of sufficient federal funds, the Governor has proposed elimination of all $22 million in remaining Proposition 99 funds from EWC in order to backfill General Fund in Medi-Cal, for General Fund savings of $22 million. Expected Impact and Issues for Consideration DPH projects that these two program restrictions will result in 100,000 fewer women being screened through the program in the current year than otherwise would have been. DPH also states that approximately 1 percent of the women screened ultimately are diagnosed with cancer. Therefore, approximately 1,000 women with breast cancer are not being screened, thereby delaying their diagnosis and treatment, and increasing their mortality rate. DPH estimates that if all Prop 99 funds were taken out of EWC, the program would have sufficient resources to serve 62,000 women, as compared to the current demand of 350,000. Proposed – Enrollment Cap in Prostate Cancer Treatment Program (2010-11) Lives Impacted: 90 Governor’s Proposal While not a traditional proposed reduction, the Prostate Cancer Treatment Program has run short of funds in the last month, in light of increasing treatment costs and increasing demand for the program, and therefore has instituted an enrollment cap and waiting list. Expected Impact and Issues for Consideration In order to be eligible for this program, men must be at least 18 years old, under 200 percent FPL, have already been diagnosed with prostate cancer, and have no other means to pay for treatment. The average age for men in the program is 59, as compared to the average age of men with prostate cancer nationally being 70. According to UCLA, the contractor that runs the program, the program has run out of funds as a result of increasing demand combined with increased treatment costs. UCLA projects a total of approximately 80 men to be put on a waiting list in the current year, and approximately 90 in the budget year, assuming the program receives the same amount of funding as this year. Questions 1. What will be the impact on the health of the men who are being put onto the waiting list, thereby delaying their treatment? 2. Has the Administration explored opportunities to increase funding for this program? Proposed – Elimination of Prop 99 Funds from Asthma Public Health Initiative (2010-11 Trigger) Lives Impacted: ? Governor’s Proposal Pending receipt of sufficient federal funds, the Governor has proposed shifting all $1.2 million in remaining Proposition 99 funds in the APHI to backfill General Fund dollars in Medi-Cal, for General Fund savings of $1.2 million. Question What will happen to this program if all Proposition 99 funding is eliminated? Department of Mental Health Adopted – Reduction to Mental Health Managed Care (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act includes a reduction of $64 million to Mental Health Managed Care, for projected General Fund savings of $64 million and the loss of $102.6 million in federal funds. Expected Impact and Issues for Consideration This reduction shifted the cost burden of these services to counties which may have had to shift funds from other local programs in order to meet this new financial obligation. Questions 1. From where have counties obtained the necessary funding in order to provide these services? 2. What local programs have been reduced or eliminated as a result of this reduction? Adopted – Reduction to Caregiver Resource Centers (2009-10) Lives Impacted: ? Governor’s Proposal The 2009 Budget Act included a reduction of $7.6 million to the Caregiver Resource Centers, out of total funding of $10.5 million, for General Fund savings of $7.6 million. Expected Impact and Issues for Consideration The Caregiver Resource Centers provide services and support to individuals who are caring for an adult family member at home who has a cognitive impairment. Questions 1. What has been the impact on Caregiver Resource Centers as a result of this reduction? Proposed – Shift of Prop 63 Funds to Department of Mental Health (2010-11 Trigger) Lives Impacted: ? Governor’s Proposal The Governor’s proposed 2010-11 budget includes two separate proposals, one of which is triggered by the receipt of insufficient federal funds, to shift Proposition 63 funds to two Department of Mental Health programs (DMH): 1) Early and Periodic Screening, Diagnosis, and Treatment (EPSDT); and 2) Mental Health Managed Care. The Proposition 63 funds would backfill General Fund dollars in these two programs, resulting in $452 million in General Fund savings, and potentially an additional $847 million in General Fund savings, pending receipt of sufficient federal funds. Expected Impact and Issues for Consideration The Governor’s budget proposes no reductions to EPSDT or Mental Health Managed Care and fully funds these programs. DMH explains that with either proposal, it would be incumbent upon the counties to then decide how to deal with the loss of Proposition 63 funds. With the first proposal, DMH believes that counties would not necessarily have to reduce community Prop 63-funded programs and services. Mental health advocates and stakeholders strongly disagree. Questions 1. Please describe the types of programs and services that counties now offer as a result of Proposition 63 and how these programs differ from EPSDT and Mental Health Managed Care. 2. Please explain how shifting $452 million in Prop 63 funding to DMH programs could not result in reductions to community Prop 63-funded programs and services. PART TWO Scenarios to Illustrate Cumulative Impact of Adopted Reductions in 2009-10 and Proposed Reductions and Eliminations in Governor’s Budget for 2010-11 1. Low-Income Family Served by CalWORKs and Medi-Cal. Mary has two children and is on CalWORKs. One child is a disabled adolescent receiving SSI benefits and IHSS services and the second child is under two. The family receives Medi-Cal services. Departments and programs to present on possible cumulative impact on the adult and children in these programs: \u00b7 DHCS Medi-Cal \u00b7 DSS CalWORKs, Child Welfare Services, Foster Care, Proposition 10, THP+ \u00b7 DMH EPSDT Responders: \u00b7 Frank Mecca (Executive Director, County Welfare Directors Association) \u00b7 Mike Herald (Legislative Advocate, Western Center on Law and Poverty) 2. Senior, Disabled Recipient. Ed is 70 years old and receives SSI\/SSP and IHSS services. His wife, Linda, is 65 years old and receives ADHC services. Both once received services through their AAA. Departments and programs to present on cumulative impact on this recipient: \u00b7 DHCS Medi-Cal, ADHC \u00b7 DSS SSI\/SSP, IHSS \u00b7 CDA MSSP, Linkages, Brown Bag, Senior Companion, Foster Grandparent Responders: \u00b7 Elizabeth Landsberg (Legislative Advocate, Western Center on Law and Poverty) \u00b7 Diane Kalijian (Director, Area Agency on Aging; Adult and Aging Services Director, Sonoma County Human Services Department) 3. Dually Diagnosed Mental Health and DDS Consumer. Veronica is a dually diagnosed consumer receiving services by both the DDS and DMH. Departments and programs to present on cumulative impact on this consumer: \u00b7 DDS Regional Centers \u00b7 DSS IHSS \u00b7 DMH & MHSOAC Proposition 63 Responders: \u00b7 Pat Ryan (Executive Director, California Mental Health Directors Association) \u00b7 Evelyn Abouhassan (Sr. Legislative Advocate, Disability Rights California) 2 Assembly Budget Committee ”

pdf Assembly Sub. #1& #2- 2-2-11 Child Care Hearing Agenda

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pdf Assembly Sub. #1 1-27-11 Hearing Agenda

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” SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 1 AGENDA SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR THURSDAY, JANUARY 27, 2011 STATE CAPITOL, ROOM 4202 1:00 P.M. EVERY EFFORT WILL BE MADE TO ACCOMMODATE ALL MEMBERS OF THE PUBLIC WHO WISH TO PROVIDE PUBLIC TESTIMONY. HOWEVER, DUE TO THE UNUSUALLY SHORT TIME-FRAME AND THE BREADTH OF HEALTH AND HUMAN SERVICES ISSUES BEING CONSIDERED, THE CHAIR WILL ANNOUNCE AT THE ONSET OF EACH HEARING HOW MUCH TIME, AND WHERE IN THE AGENDA, PUBLIC TESTIMONY WILL BE ALLOWED. WRITTEN TESTIMONY IS STRONGLY ENCOURAGED AS THE SUBCOMMITTEE CANNOT GUARANTEE THERE WILL BE ENOUGH TIME FOR EVERYONE TO SPEAK. ITEM DESCRIPTION PAGE 5180 DEPARTMENT OF SOCIAL SERVICES – Adult Programs – In-Home Supportive Services Issue 1 8.4 Percent Across-the-Board Reduction 3 Issue 2 Domestic and Related Service Reductions 5 Issue 3 Elimination of All Services for Recipients Without a Physician’s Certificate 7 Issue 4 Elimination of State Funding for IHSS Advisory Committees 8 Issue 5 BCP #53 IHSS Enacted Trailer Bill 9 Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) Issue 1 Reduction to SSP MOE Floor for Individuals 12 SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 2 Disability Determinations Issue 1 Los Angeles State Programs Branch Relocation 13 Issue 2 Federal Consolidated Request for Positions 14 Adult Protective Services Issue 1 Realignment Proposal, Phase I 15 – Children’s Programs – Issue 1 Realignment Proposal in Child Welfare 16 Issue 2 Child Welfare Services Reduction 17 Issue 3 Reduction of Funding for the Transitional Housing Plus Program 18 Issue 4 BCP #3 Improving Child Safety 19 Issue 5 BCP #10 Foster Care Audits Accountability and Group Home Litigation 20 Issue 6 BCP #15 Implementing Fostering Connections PL 110- 351 21 Issue 7 BCP #20 Field Monitoring and Oversight of County Operations 22 Issue 8 BCP #50 Implementing AB 12 23 Issue 9 BCP #51 Implementing Recently Enacted Legislation 24 SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 3 DISCUSSION ITEMS 5180 DEPARTMENT OF SOCIAL SERVICES (DSS) IN-HOME SUPPORTIVE SERVICES (IHSS) The IHSS program was established in 1973. Today, IHSS provide services to approximately 456,000 qualified aged, blind, and disabled individuals allowing them to live safely in their homes, and avoid institutionalization. IHSS is administered locally by 58 county social service agencies with administrative direction and oversight by DSS. Eligible IHSS recipients receive such services as housecleaning, meal preparation, laundry, grocery shopping, personal care services (e.g. assisting with the administration of medications, assisting with basic personal hygiene, eating, grooming, and toileting), accompaniment to medical appointments, and protective supervision. ISSUE 1: 8.4 PERCENT ACROSS-THE-BOARD REDUCTION The Governor proposes an 8.4 percent additional reduction to service hours for IHSS recipients, with corresponding administrative, systems change, aid paid pending, and state operations costs, for net General Fund savings of $127.5 million in 2011-12. This proposal, combined with the 3.6 percent reduction enacted in the 2010-11 Budget, brings the total across-the-board reduction in assessed hours for IHSS recipients to 12 percent. This reduction is proposed for implementation on July 1, 2011. The Governor states that qualified recipients at risk of out-of-home care placement due to the reduction could apply for supplemental hours. Of the 456,380 projected caseloads in 2011-12, the Administration estimates 435,590 recipients will be impacted with either a partial or full impact from this reduction. Impacted recipients will lose an average of 6.74 hours per month. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for recipients with a high number of hours and with the most acute needs? o How was the percentage reduction determined? Using what programmatic basis or analysis of the recipient population? o Please explain the assumptions around the restoration of hours. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 4 o Will consumers only be required to file a supplemental care application once at the time the initial cut is implemented or each year during the reassessment process? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 5 ISSUE 2: DOMESTIC AND RELATED SERVICE REDUCTIONS In IHSS, Domestic and Related (D&R) service hours are provided for daily tasks including meal preparation, meal cleanup, laundry, grocery shopping, and housework for recipients. These hours have been assessed by a social worker, who reviews assistance needed for the recipient to functionally perform these activities of daily living. Proposal 1. Elimination of D&R Services for Recipients in Sharing Living Arrangements The Governor proposes to eliminate domestic and related service hours, both pro-rated and non-prorated, for recipients living in a shared living arrangement. The net savings under this proposal are $235 million in 2011-12. The reduction would take effect July 1, 2011. The calculation of the savings includes interaction with the 3.6% and 8.4% reductions. The Administration estimates that 259,970 recipients with pro-rated hours will be impacted. Assuming the interactions, each impacted pro-rated recipient will lose an average of 14.25 D&R hours per month. An estimated 92,420 recipients with non pro-rated hours will be impacted. Assuming the interactions, each impacted non pro- rated recipient will lose an average of 16.53 D&R hours per month. Proposal 2. Elimination of D&R Services for All Recipients Under Age 18 Living with Parent The Governor proposes to eliminate Domestic and Related (D&R) Services for all recipients under 18 years old living with an able an available parent for net savings of $1.57 million in 2011-12. The reduction would take effect July 1, 2011. The calculation of the savings includes interaction with the 3.6% and 8.4% reductions. An estimated 7,187 recipients would be impacted. Assuming the interactions, each impacted recipient will lose an average of 4.91 D&R hours per month. The two proposals allow an IHSS applicant\/recipient to petition for authorized domestic and related services hours if a medically verified condition inhibits the ability for other members of the household or the parent of the applicant\/recipient child to perform these tasks. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 6 PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for recipients? o Why does the proposal include consumers who live with housemates who are not their provider? o Why does the Administration think federal approval might be necessary? o What is the basis for the estimate that 50% of consumers will appeal elimination of D&R? o Why does the Administration believe these cuts would survive the same kind of legal challenges that enjoined implementation of the 2009 IHSS cuts? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 7 ISSUE 3: ELIMINATION OF ALL SERVICES FOR RECIPIENTS WITHOUT A PHYSICIAN’S CERTIFICATE The Governor proposes to eliminate IHSS services for recipients without a physician’s written certification that personal care services are necessary to prevent out-of-home care. The proposal requires a medical review for all IHSS applicants\/recipients to ensure services are needed to avert out-of-home placement. The Governor’s budget assumes General Fund savings of $120.5 million in 2011-12. This reduction would implement July 1, 2011 and assumes an elimination of services for 10 percent of IHSS recipients. It includes interactions with the 3.6% and 8.4% Service Hour Reductions and D&R Reductions. An estimated 41,958 current and new recipients will be impacted. Assuming the interactions, each impacted recipient will lose an average of 65.02 hours per month. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o How often would consumers be required to obtain written certification from a physician? o Are there any hardship circumstances that would allow a consumer to receive IHSS without a physician certificate? o Why does the Administration think federal approval might be necessary? o What is the basis of the assumption that 43,000 (10%) consumers will not obtain a physician certification? o Does the estimate take into consideration the costs in the Medi-Cal program, both status quo Medi-Cal and Medi-Cal as it is proposed to be changed through the Governor’s budget proposals? o Does the estimate take into consideration the shortage of primary care physicians in many counties? o Why does the Administration think doctors should judge the needs for homecare services? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 8 ISSUE 4: ELIMINATION OF STATE FUNDING FOR IHSS ADVISORY COMMITTEES The Governor proposes to eliminate state funding for IHSS advisory committees for General Fund savings of $1.6 million in 2011-12. The Governor states that counties would continue to have the option to continue advisory committees at their own expense and that those counties that choose to do so would be eligible for matching federal funds. This proposal would impact all 58 counties for a savings of $28,000 GF per impacted county. The reduction would take effect July 1, 2011. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for counties? For the quality of the program locally? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 9 ISSUE 5: BCP #53 IHSS ENACTED TRAILER BILL The Department requests resources to implement recently enacted changes in the omnibus Human Services trailer bill. Resources requested include 23.5 positions across four departmental divisions as well as funding for contract costs. DSS states that the resources will enable it to implement the following changes to the In-Home Supportive Services (IHSS) program: Across-the-Board 3.6% Services Reduction, Provider Exclusions, Provider Fees, and Fingerprinting requirements. From information provided by the Department: IHSS Across-the-Board 3.6% Service Reduction. This provision would reduce each IHSS recipient’s total authorized hours by 3.6 percent effective February 1, 2011 through June 30, 2012. Service hours would be restored effective July 1, 2012 to the recipient’s full authorized level based on the most recent assessment. The Adult Programs Division (APD) requests one (1.0) one-year Limited Term (LT) Staff Services Analyst (SSA)\/Associate Governmental Program Analyst (AGPA) position for this purpose. The Legal Division (LD) requests one (1.0) one-year LT Staff Counsel (SC) III (Specialist) position for the Program Litigation Branch that serves APD. Provider Exclusions. These provisions allow prospective applicants, and applicants whose application has been denied on the basis of a conviction and for whom an appeal is pending, to be excluded from providing supportive services to any recipient of the IHSS program if they had been convicted of (1) a violent or serious felony as specified in subdivision (c) of Section 667.5 of the Penal Code and subdivision (c) of Section 1192.7 of the Penal Code; or (2) a felony offense for which a person is required to register under subdivision (c) of Section 290 of the Penal Code. The provisions allow a recipient to submit an individual waiver to entitle him\/her to hire the applicant. The new provisions also allow applicants to request a general exception to the exclusionary crime(s) from the Department. Applicants who have been denied the general exception may request an administrative hearing. The APD requests three (3.0) one-year LT SSA\/AGPA positions. The CCLD requests one (1.0) two-year LT AGPA position to determine whether applicants meet IHSS requirements to receive an exception, and one-half (0.5) two-year LT Office Technician (Typing) [OT (T)] to support the exception analyst, obtain IHSS criminal record information from counties, and manually enter data from those sources. The LD requests one (1.0) two-year LT SC III (Specialist) position for the Program Litigation Branch that will provide direct legal services to APD, CCLD’s Caregiver Background Check Bureau (CBCB) and LD’s Community Care Licensing Enforcement Branch (Legal CCL Enforcement) to implement Welfare and Institutions Code (W&IC) Section 12305.87 signed into law pursuant to AB 1612. In addition, one (1.0) two-year LT Senior Legal Analyst and one (1.0) two-year LT Senior Legal Typist are requested to provide necessary support services to the APD attorney. The LD also requests one (1.0) two-year LT SC III (Specialist) position for Legal CCL Enforcement that will be representing CDSS in administrative evidentiary hearings before an Administrative Law Judge (ALJ) for appeals filed by prospective IHSS providers denied SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 10 enrollment based on a prohibited criminal conviction and a denial of an exception issued by CDSS pursuant to an administrative review. The LD also requests $37,000 for the Department of General Services’ Office of Administrative Hearings (OAH) costs for processing the cases referred to LD for administrative hearing. It is anticipated that 37 of the estimated 61 cases referred to LD per year will go to administrative hearing. The CDSS reimburses OAH for conducting the hearings and pays for hearing-related costs such as court reporters, interpreters, and witness fees. Provider Fee. This provision authorizes the Department to impose a new provider fee\/tax to maximize funding for IHSS retroactive to July 1, 2010. IHSS providers will be required to pay a fee based on applying the state’s sales tax to services provided to IHSS recipients. Revenues from the fee will be used to increase federal matching funds the state receives. Providers will receive an additional payment to offset the fee, which would amount to 7.5 percent of the provider’s adjusted gross income. Implementation of this proposed tax requires approval from the Centers for Medicare and Medicaid Services (CMS). This provision is expected to result in approximately $180-$200 million a year in federal funding to support the program. The APD requests six (6.0) positions to perform fiscal and system modification to implement and administer the provider sales tax mandates. The six (6.0) positions include one (1.0) one-year LT Staff Services Manager I (SSM I), four (4.0) AGPAs (1.0 permanent and 3.0 one-year LT), and one (1.0) permanent Associate Management Auditor (AMA). These positions will be responsible for working with the current vendor, the Financial Consultant Auditor, and stakeholders to design, develop, and implement system modifications to collect, report, pay, and administer the provider sales tax. The Fiscal Systems and Accounting Branch (FSAB) will require one (1.0) permanent, full-time Accounting Administrator (AA) I (Specialist), to conduct the fiscal workload in developing and administering the IHSS provider fee program. Fingerprinting Requirements. This provision requires CDSS to implement rigorous anti- fraud efforts in the IHSS program. These efforts include: (1) requiring all current and new IHSS providers to attend an orientation and be fingerprinted, (2) requiring all IHSS recipients to be fingerprinted, (3) requiring timesheets be signed under a statement acknowledging that false timesheets are subject to civil penalties, and (4) requiring fingerprints of both the recipient and provider on IHSS timesheets. The APD requests six (6.0) permanent full-time positions that were requested in a Fiscal Year (FY) 2010- 11 Budget Change Proposal (BCP) for IHSS Provider and Recipient Fingerprinting and Program Integrity activities. The positions were administratively established; however, the BCP was not approved and the positions expired. These positions are needed to implement and administer the provider and recipient fingerprinting mandates that were included in the FY 2010-11 Budget Act. The requested positions include one (1.0) SSM I and five (5.0) AGPAs. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 11 The funding for resources is requested effective July 1, 2011. The requested one-year LT positions will be effective through June 30, 2012 and the two-year LT positions will be effective through June 30, 2013. PANELISTS \uf0b7 DSS Please briefly describe the requests made in the BCP for new positions and the related General Fund impact of their establishment in 2011-12 and in future years. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 12 SUPPLEMENTAL SECURITY INCOME\/STATE SUPPLEMENTARY PAYMENT (SSI\/SSP) ISSUE 1: REDUCTION TO SSP MOE FLOOR FOR INDIVIDUALS The Governor proposes to reduce monthly SSP grants for individuals to the federally required minimum payment standard. The maximum monthly SSI\/SSP cash grant for individuals would be reduced by $15 per month, from $845 to $830, beginning June 1, 2011, bringing their grant down to 71% of the federal poverty level. This proposal would affect approximately 1 million SSI\/SSP recipients. According to the Department, 8,500 recipients may lose their eligibility and seek services elsewhere. SSP grants for couples were previously reduced to the federal minimum in November 2009. This proposal would result in savings of $14.7 million in 2010-11 and $177.3 million in 2011-12. These savings are net of increased General Fund costs necessitated in the Department of Developmental Services budget as a result of the SSP grant cut. This proposal assumes enactment of legislation by March 1 to effectuate the June 1 implementation. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for recipients? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 13 DISABILITY DETERMINATIONS ISSUE 1: LOS ANGELES STATE PROGRAMS BRANCH RELOCATION The Department is requesting a budget augmentation of $540,000 ($270,000 GF) for annualized increased rent costs related to the relocation of the LASP to a site that meets the state’s seismic criteria. The Department of General Services (DGS), Real Estate Service Division informed the California Department of Social Services (CDSS) that the LASP Branch must be relocated due to seismic noncompliance. Currently, the LASP Branch occupies approximately 20,866 square feet at a rental rate per square feet of $1.78. The lease expired April 30, 2009; however, a soft-term least extension has been negotiated. The relocation project has been started and the relocation is projected early FY 2011-12. The projected rental rate for relocation with the calculated size requirement of approximately 20,500 square feet is $4.00 per square foot, resulting in $45,000 of increased lease costs per month beginning FY 2011-12. This would result in an annualized rent increase of $540,000 ($270,000 GF). One-time costs in the amount of $633,750 have been placed in an Architectural Revolving Fund (ARF) for this relocation project. PANELISTS \uf0b7 DSS Please briefly describe the requests made in the BCP and the related General Fund impact in 2011-12 and in future years. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 14 ISSUE 2: FEDERAL CONSOLIDATED REQUEST FOR POSITIONS This Budget Change Proposal (BCP) requests to permanently establish 245.0 positions to process Social Security (SSA Title II) and Supplemental Security Income (SSI Title XVI) disability claims. No General Fund (GF) dollars are requested as this program is 100% federally funded. In September 2009, the SSA San Francisco Regional Office authorized the state to open a new branch in the San Diego area and hire additional staff during Federal Fiscal Year (FFY) 2010 to process the ongoing workload anticipated in FFY 2010 and beyond. The SSA also provided additional funding to expand the space in the DDSD Roseville Branch. The SSA estimates that the cash benefits paid to California residents who are in the SSA\/SSI disability program annually represent over $900,000,000. Thus, in addition to not representing a GF cost to the state, DDSD’s case processing operation generates a cash flow to the state’s economy while assisting its most vulnerable population. In addition to adjudicating initial claims for benefits, DDSD also conducts continuing disability reviews (CDR) to determine whether current beneficiaries continue to meet the federal disability criteria, or should be removed from the SSA\/SSI disability rolls. The DDSD processes approximately 35,000 such reviews annually. Of these reviews, 77.8 percent are conducted on recipients who also receive the SSP supplement. Fourteen percent result in cessation of eligibility to recipients, and ten percent of the CDR decisions to cease benefits are upheld upon appeal. With a typical annual SSP payment of $2,184 per recipient this represents a GF cost avoidance to the state of approximately six million dollars annually (35,000 X 0.778 X 0.10 X $2,184 = $5,947,032). When staff positions in this program are unfilled, DDSD is not able to process all of its workload. Typically, the workload that is assigned a lower priority is the CDR one. It has a lower priority because it is the least vulnerable population served by the program. These CDR cases are either shelved in DDSD field Branches, or in SSA Field Offices; or not called up for review by SSA Headquarters in Baltimore. The beneficiaries continue to get their cash payments, whether they remain entitled to them or not. Therefore, SSP full potential savings are not achieved when federally authorized staffing levels are not maintained in DDSD. PANELISTS \uf0b7 DSS Please briefly describe the request made in the BCP. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 15 ADULT PROTECTIVE SERVICES ISSUE 1: REALIGNMENT PROPOSAL, PHASE I The Governor proposes to realign the Adult Protective Services (APS) program, which provides services to persons aged 65 and older who are functionally impaired, unable to meet their own needs, and who are victims of abuse, neglect, or exploitation. As part of the Governor’s Phase One Realignment, $55 million would be realigned in 2011-12, with this amount sustained through full implementation of realignment in 2014- 15. Currently, APS is administered by the 58 local APS agencies with oversight provided by DSS. The Governor states that the transfer of this entire program will give counties full flexibility to determine the appropriate level of service and priority for their community. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for recipients? o What are the expected effects on counties? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 16 CHILDREN’S PROGRAMS ISSUE 1: REALIGNMENT PROPOSAL IN CHILD WELFARE The Governor proposes to realign funding and primary program responsibility for California’s Child Welfare Services (CWS) system, which includes Foster Care, Adoptions, and Child Abuse Prevention programs. As part of the Governor’s Phase One Realignment, $1.6 billion would be realigned in 2011-12, with this amount sustained through full implementation of realignment in 2014-15. Currently, the federal government’s role is to establish overall programmatic requirements and goals, provide funding, and ensure compliance with federal standards. The state supervises and monitors these program activities while counties administer services. The Governor states that this shift of funding and responsibility to counties will provide flexibility to operate the program and better serve vulnerable children. The Administration has not yet provided additional detail on this proposal. PANELISTS \uf0b7 DSS Please describe the proposal and respond to the following: o What are the risks of the proposal? What are the expected benefits for children served in the program? o How does the Administration account for the current level of funding and its adequacy under acknowledged social worker staffing standards? o What role would the state retain and how would this work vis-\u00e0-vis federal agencies and rules? o What reaction has been registered by the advocates? What considerations and conditions have they raised? o What is the expected role of the department in the course of this realignment and after? What are the implications for CWS automation? o How does realignment work in the near-term, beginning of 2011-12? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 17 \uf0b7 ISSUE 2: CHILD WELFARE SERVICES REDUCTION California’s state-supervised, county-administered Child Welfare Services (CWS) program provides services to abused and neglected children, children in foster care, and their families. The CWS program provides (1) immediate social worker response to allegations of child abuse and neglect; (2) ongoing services to children and their families who have been identified as victims, or potential victims, of abuse and neglect; and, (3) services to children in foster care who have been temporarily or permanently removed from their family because of abuse or neglect. Governor Schwarzenegger vetoed $80 million GF from the program in August 2009 veto, a reduction of 10 percent. The amount was restored by the Legislature for the 2010-11 Budget, when Governor Schwarzenegger again vetoed the funds. Governor Brown has continued this reduction in his proposed 2011-12 budget proposal. PANELISTS \uf0b7 DSS Please respond to the following questions: o What have been the demonstrated impacts for children and families as a result of the reduction? o How has the allocation of the reduction across programs changed? o How many social workers were lost in child welfare as a result of this reduction? How many other positions in child welfare were lost? o What are the consequences of the reductions on our state’s performance against federal Child and Family Services Review standards? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 18 ISSUE 3: REDUCTION OF FUNDING FOR THE TRANSITIONAL HOUSING PLUS PROGRAM The Governor proposed to eliminate transitional housing services to youth aged 18 and 19. The Administration states that counties will keep the flexibility to serve this population based on demand and counties’ resources. The estimated savings of this reduction proposal is $19 million. The reduction is approximately 57 percent of the current population and represents a loss of 650 beds or over 1200 youth. PANELISTS \uf0b7 DSS Please briefly describe the proposal and respond to the following: o What are the anticipated impacts for the youth served by the program? \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 19 ISSUE 4: BCP #3 IMPROVING CHILD SAFETY The Department requests $295,000 ($203,000 GF) and the establishment of 3.0 permanent full-time positions to perform activities associated with state and federal requirements to review child fatalities and near fatalities resulting from child abuse and\/or neglect. The requested positions consist of 3.0 Social Service Consultant IIIs in the Children and Family Services Division. The Administration states that these positions would perform duties associated with state and federal mandated case-specific reviews of the circumstances surrounding fatalities\/near fatalities of children known to the state’s Child Welfare Services (CWS) system. These staff will conduct electronic file review, prepare high profile incident summaries as needed, participate in county critical incident review team briefings, prepare state and federally mandated reports and analyses pertaining to child fatalities\/near fatalities, maintain a website for public access to child fatality related information, and work with the counties to improve their reporting of child fatalities\/near fatalities resulting from abuse and\/or neglect to ensure the State’s compliance with federal and state mandate for reporting and disclosure of such incidents. PANELISTS \uf0b7 DSS Please briefly describe the request made in the BCP. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 20 ISSUE 5: BCP #10 FOSTER CARE AUDITS ACCOUNTABILITY AND GROUP HOME LITIGATION The Department is requesting $101,000 ($64,000 GF) and 1.0 two-year limited term General Auditor (GA) III position in FCARB necessary to address the impact of the recent court order resulting from the Alliance lawsuit that required the CDSS to increase group home rates by 32 percent. The GA III position is necessary because, as a result of the increased rates, a large number of non-profit corporations’ combined federal revenues will increase to over $500,000 and will require submission of a FAR once a year (annually), instead of once every three years (triennially). DSS states that this proposal is necessary to manage the increased workload in submission of FARs that will be submitted to CDSS as a result of the approximate 32 percent increase in group home rates imposed by a court order in the Alliance lawsuit. DSS estimates that 116 additional FARs will be submitted annually to CDSS, which will require review and issuance of Management Decision Letters within six months of receipt of a FAR, as mandated by the federal Office of Management and Budgets (OMB) Circular A-133. In addition, DSS states that this proposal would bring the State into compliance with existing federal and state statutes and avoid federal audit sanctions by providing oversight responsibility of non-profit corporations to ensure their financial stability. The lack of staff resources to review the additional FARs could jeopardize the approximately $721 million in Title IV-E funds received by California annually for group home and FFA programs. PANELISTS \uf0b7 DSS Please briefly describe the request made in the BCP. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 21 ISSUE 6: BCP #15 IMPLEMENTING FOSTERING CONNECTIONS PL 110-351 The Department requests the following to effectively implement PL 110-351, the Fostering Connections to Success and Increasing Adoptions Act (FCSA) of 2008, for a cost of $467,000 ($233,000 GF). \uf0b7 The Staff Services Manager I (SSMI) position granted July 1, 2009 be made permanent effective July 1, 2011. \uf0b7 One limited-term, full-time Associate Governmental Program Analyst (AGPA) to become effective July 1, 2011. \uf0b7 Continuing the SSMI position and requesting the additional position will assist the state to protect existing Title IV-E funding and to secure additional federal financial participation in foster care and adoption services. PANELISTS \uf0b7 DSS Please briefly describe the request made in the BCP and respond to the following: o What workload portion of this request related to the issues around establishment of Tribal-State agreements? Please describe these issues in brief and how the requested positions relate to this work. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 22 ISSUE 7: BCP #20 FIELD MONITORING AND OVERSIGHT OF COUNTY OPERATIONS The Department requests seven (7.0) permanent positions to perform field monitoring of county programs, for a cost of $837,000 ($279,000 GF). DSS states that this proposal would avoid sanctions from the Administration on Children and Families (ACF) related to monitoring and oversight of county operations. The CDSS has been cited repeatedly by the Bureau of State Audits (BSA), the Office of the Inspector General (OIG) and ACF for not meeting the program performance monitoring and reporting requirements set out in Code of Federal Regulations (CFR), 45 CFR 92.40. According to DSS, the monitoring of sub-recipients (counties) is currently being accomplished through federal Office of Management and Budgets (OMB) A-133 audits, various internal controls, and desk audits performed at the state level. Until recently the Department has disputed recurrent BSA findings that CDSS is not meeting program performance monitoring and reporting requirements set out in 45 CFR 92.40. The ACF has now directed the Department to take corrective action to comply with these requirements and CDSS is facing potential sanctions pursuant to 45 CFR 92.40. These sanctions apply to several programs, the most critical of which are Temporary Assistance to Needy Families (TANF) and Title IV-E. The Department has been negotiating with ACF on a solution with minimal or no budget impact. However, having exhausted no-cost alternatives, enforcement action, including federal sanctions, are a very real possibility. To avoid these sanctions, CDSS is requesting 7.0 positions, including 1.0 Staff Services Manager I and 6.0 Associate Governmental Program Analysts to perform field monitoring of county programs. PANELISTS \uf0b7 DSS Please briefly describe the request made in the BCP and the GF effect. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 23 ISSUE 8: BCP #50 IMPLEMENTING AB 12 The Department is requesting $1,559,000 ($867,000 GF), 7.0 permanent positions, and 4.0 two-year limited-term positions, as well as funding for temporary help. These additional positions and funding will assist the state in implementation of AB 12 which will provide additional access to Federal Financial Participation (FFP) for extending the age of foster care to age 21. PANELISTS \uf0b7 DSS Please briefly describe the requests made in the BCP and the GF effect. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 24 ISSUE 9: BCP #51 IMPLEMENTING RECENTLY ENACTED LEGISLATION The Department is requesting 3.5 positions, most limited-term and .8 on a permanent basis, for a total cost of $270,000 ($217,000 GF) for 2011-12 associated the implementation of the following chaptered bills: AB 2418. In September 2010, Assembly Bill 2418 was chaptered. This legislation revised the definition of Indian child for the purposes of Indian child custody proceedings to include an unmarried person who is 18 years of age over but under 21 years of age, and who is either a member of an Indian tribe or eligible for membership in an Indian tribe, as specified. The Child Protection and Family Support Branch (CPFSB) of the California Department of Social Services (CDSS) requests $96,000 ($61,000 GF) and 1.0 limited-term Social Services Consultant III (SSC III) position to become effective July 1, 2011. The SSC III position will assist the state to implement new processes and requirements resulting from the expansion of the definition of Indian child for the purposes of Indian child custody proceedings, under AB 2418. AB 973. In September 2010, Governor Schwarzenegger signed AB 973 (Strickland) Minors: temporary custody. AB 973 created new mandates to the CDSS’ adoption program. In order to be in compliance with the recently enacted statute, the Child and Youth Permanency Branch is requesting $55,000 ($37,000 GF) and 0.5 limited-term AGPA. AB 1048\/1983. In September 2010, Governor Schwarzenegger signed AB 1983 (Torrico) Personal income taxes: voluntary contributions: Safely Surrendered Baby Fund. The bill specifically designated activities to the CDSS which represent an additional workload, intended to be supported by the funds generated by the contributions. Additionally, AB 1048 (which amends Health and Safety Code [H&SC] Section 1255.7) was signed and requires new annual reports to the Legislature. In order to be in compliance with these recently enacted statutes, CDSS is requesting $50,000 (GF) and 0.5 limited-term Accounting Officer. AB 2084. AB 2084 requires licensed child day care facilities to a) serve only low fat or nonfat milk to children ages two or older; b) limit juice to not more than one serving per day of 100% juice; c) serve no beverages with added sweeteners, either natural or artificial; and d) make clean and safe drinking water readily available and accessible for consumption throughout the day. The provisions of this bill would become operative on January 1, 2012, and the bill specifies that CDSS inspect these facilities for compliance during regularly scheduled inspections. To ensure compliance with this statutory provision, CDSS requests the following augmentation: $69,000 (GF) and 1.5 Licensing Program Analyst (LPA) positions to check during annual on site inspections that the new standards are met. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES JANUARY 27, 2011 ASSEMBLY BUDGET COMMITTEE 25 PANELISTS \uf0b7 DSS Please briefly describe the requests made in the BCP, the effect on GF, and to what extent these resources were foreseen and included in the DOF and Appropriations analyses on the bills prior to them becoming law. \uf0b7 Department of Finance \uf0b7 Legislative Analyst’s Office \uf0b7 Public Comment ”

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” SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 1 AGENDA SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, FEBRUARY 2, 2011 STATE CAPITOL, ROOM 4202 1:00 P.M. EVERY EFFORT WILL BE MADE TO ACCOMMODATE ALL MEMBERS OF THE PUBLIC WHO WISH TO PROVIDE PUBLIC TESTIMONY. HOWEVER, DUE TO THE UNUSUALLY SHORT TIME-FRAME AND THE BREADTH OF HEALTH AND HUMAN SERVICES ISSUES BEING CONSIDERED, THE CHAIR WILL ANNOUNCE AT THE ONSET OF EACH HEARING HOW MUCH TIME, AND WHERE IN THE AGENDA, PUBLIC TESTIMONY WILL BE ALLOWED. WRITTEN TESTIMONY IS STRONGLY ENCOURAGED AS THE SUBCOMMITTEE CANNOT GUARANTEE THERE WILL BE ENOUGH TIME FOR EVERYONE TO SPEAK. ITEM DESCRIPTION PAGE 5180 DEPARTMENT OF SOCIAL SERVICES 3 -CalWORKs- Overview of CalWORKs 3 Issue 1 Governor’s Proposals 5 Proposal to Establish 48-month Time Limit Proposal to Reduce Grants by 13 percent Proposals to Reduce Employment Services and Child Care and Remove Related Exemptions Issue 2 Work Incentive Nutritional Supplement (WINS) and Temporary Assistance Program (TAP) 10 Issue 3 State and County Peer Review Process 12 Issue 4 Informational Item — Proposal to Lower Age at which Children Are Eligible for Child Care (Stage 1 Impacts) 13 SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 2 -CalFresh- Issue 1 Request for CalFresh Nutrition Education Unit Staffing 14 Issue 2 Electronic Benefits Card Usage at Farmers’ Markets 15 0530 OFFICE OF SYSTEMS INTEGRATION (HEALTH AND HUMAN SERVICES AGENCY) 16 5180 DEPARTMENT OF SOCIAL SERVICES 16 -Automation Projects- Issue 1 Case Management, Information, and Payrolling System II (CMIPS II) 16 Issue 2 LEADER Replacement System 17 Issue 3 Child Welfare Services (CWS)\/Web Project 19 Issue 4 CWS\/Case Management System (CMS) Maintenance and Operation 21 Issue 5 Consortium IV Project and ISAWS Consortium Migration Project 22 SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 3 DISCUSSION ITEMS 5180 DEPARTMENT OF SOCIAL SERVICES (DSS) OVERVIEW OF CALWORKS CalWORKs provides cash assistance and welfare-to-work services to families whose income is inadequate to meet their basic needs for shelter, clothing, and other essentials. The 2010-11 budget for CalWORKs includes $5.8 billion ($2.3 billion GF). Based on August, 2010 data, the program serves around 575,000 families with about 1.1 million children. Eligibility. To be financially eligible for CalWORKs, a family’s income must be below a specified income level (for example, $1,203 per month for a family of three) and they must meet set limits on their other assets (e.g., no more than $2,000 in savings). Grants vary by family size and county of residence. If an adult has reached the five- year limit on his or her aid, the family’s grant is reduced by the amount attributable to the adult, and the children continue to receive aid in a program known informally as the CalWORKs safety net (approximately 9 percent of all CalWORKs cases). Children with parents who are ineligible to receive CalWORKs assistance (approximately 35 percent of all CalWORKs cases) receive a child-only grant throughout their time on aid. Assistance. Currently, the maximum monthly grant for a family of three is $694 in higher-cost counties (the equivalent of approximately 76 percent of the Federal Poverty Level when combined with CalFresh benefits). Once on aid, a family may remain eligible despite having some additional earnings because of an earned income disregard, which does not count certain earned income when determining the family’s grant. Generally, able-bodied adults are limited to 60 months of cash aid, while children are not subject to such time limits. Under reforms passed as part of the 2009-10 budget, these time limits for adults are scheduled to change, as of July 1, 2011, to 48 months and then a sit out period of at least one year before eligibility for an additional 12 months begins. Work Requirements. Federal law generally requires that states ensure that at least 50 percent of families with adult recipients be working either 20, 30, or 35 hours per week, depending on the age of the youngest child and whether there are one or two parents in the household. Failure to meet the net federal work participation rate may result in federal financial penalties for the state. Able-bodied adults who are required to participate receive child care and other services to help them work, obtain training, or find work. Governor’s 2011-12 Proposals. The Governor’s budget proposes a total of approximately $1.5 billion GF savings as a result of the major reductions to CalWORKs SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 4 described in the rest of this agenda. This amounts to a 50 percent reduction in net GF costs for CalWORKs compared to the workload budget. To achieve a majority of these savings, $946.8 million of federal TANF block grant funding would be transferred from DSS to the Student Aid Commission to offset a like amount of GF costs for CalGrants. While some TANF funds have been used for programs other than CalWORKs itself in prior years, the scale of this proposed transfer is unprecedented. The Governor also proposes trailer bill language to repeal a number of reforms to the CalWORKs program that were enacted as part of the 2009-10 budget and which are scheduled to take effect July 1, 2011. These reforms include the change to the time limits on adults’ eligibility for CalWORKs benefits described above, additional reviews of clients’ circumstances ( self-sufficiency reviews) by case workers, and increases in sanctions for non-compliance with welfare-to-work requirements. The Department estimates that taken together, these reforms would have saved $104.9 million GF in 2011-12 [$134.9 million GF savings in the CDSS budget offset by $34 million GF costs in the Department of Education (CDE) budget for increased child care costs]. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 5 ISSUE 1: GOVERNOR’S PROPOSALS PANELISTS For this issue, the Legislative Analyst Office (LAO) is being asked to provide an overview of the Governor’s proposals. The Department of Social Services will then be asked to respond to questions raised in the agenda, provide additional information, and answer questions from the Subcommittee. An informal panel of stakeholders will then be called forward to testify to the proposals. After this, public comment will be taken according to the guidance of the Chair. PROPOSAL TO ESTABLISH 48-MONTH TIME LIMIT The Governor’s budget proposes savings of $832.9 million GF\/Temporary Assistance to Needy Families (TANF) to establish, effective July 1, 2011, a 48-month time-limit on the receipt of CalWORKs cash assistance and supportive services. This new time limit would apply retroactively and would apply to both adults and children, with some narrow exceptions for children whose parents continue to meet federal work participation requirements. Previous months of cash aid would count toward the time limit, even if the adult participant had been exempted from welfare-to-work requirements or was temporarily disabled at the time. Current Time Limits. Currently, able-bodied adults who are eligible to receive CalWORKs assistance are limited to 60 months of cash aid. Under reforms passed as part of the 2009-10 budget, these time limits for adults are scheduled to change, as of July 1, 2011, to 48 months, and then a sit out period of one year before eligibility for an additional 12 months begins. If an adult recipient reaches the existing 60-month time-limit, the family’s aid is reduced by the portion of the grant that was attributed to the adult and the family’s child or children may continue to receive cash assistance until the age of eighteen in what is known as the CalWORKs safety net . Children of adults who are not eligible to receive CalWORKs assistance receive cash aid in what are known as child-only cases, and there is no time limit on their aid during childhood. Caseload Characteristics and Impacts. The Governor’s budget assumes that 115,000 low-income families with 234,000 children would lose all CalWORKs assistance as of July 1, 2011 as a result of this proposal. A more detailed breakdown based on 2011-12 caseload projections is below: SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 6 There are 313,200 CalWORKs assistance families with an eligible adult (including cases in which the adult has been sanctioned or is exempt for other reasons). In 42,900 of these cases (with 77,000 children), the family has been receiving aid for 48 months, but the adult has not yet reached the existing 60- month time limit. The Department estimates that 26,500 of these families (with 47,600 children), would lose all aid on July 1, 2011. The remaining 16,400 families are assumed to meet work requirements and continue to receive aid in the safety net (for children only). There are around 52,300 families (with 127,600 children) in safety net cases after the parent(s) timed off of aid. The Department estimates that 36,600 of these families, (with 87,800 children), would lose all aid on July 1, 2011. The remaining 15,700 families are assumed to meet work requirements and would continue to receive aid in the safety net. The Department estimates that 51,900 of child-only cases (with 98,600 children) would lose all aid on July 1, 2011. The Department estimates that none of these families would continue to receive aid for children only, as it does not expect the adults to meet work requirements or other criteria. There are 214,600 families projected to receive CalWORKs assistance in child-only cases. According to the Department, adults who would time off of CalWORKs aid at 48 months under the Governor’s proposal would not be eligible for General Assistance (GA) under California law. However, at this point it is less clear whether children who would lose CalWORKs assistance as a result of the Governor’s proposals would be eligible for some form of assistance at the local level. GA benefits vary significantly from county- to-county, but are generally significantly less than the cash assistance and welfare-to- work services provided by CalWORKs. As an example, the maximum GA grant in Los Angeles County (called General Relief) for a family of three was $450 per month in 2010. Questions for DSS. Studies have indicated that the families who remain on aid the longest are often the families with adults who have the greatest barriers to employment (e.g., physical or mental health challenges, less work experience, etc.). Many are already living below the poverty line, and unemployment in the state is over 12 percent. What can we expect to happen when 115,000 of these families lose all assistance on July 1? To the families and their children? To rates of homelessness? SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 7 To the counties’ and other areas of the state’s budget (e.g. child welfare services and foster care)? To the economy? Please describe the administration’s forthcoming proposal on eligibility for General Assistance. PROPOSAL TO REDUCE GRANTS BY 13 PERCENT The Governor’s budget proposes $14 million GF savings in 2010-11 and $405 million in 2011-12 from reducing CalWORKs grants by 13 percent, effective June 1, 2011 (based on enactment in March). Background and Impacts. In 2010-11, the maximum monthly CalWORKs assistance grant for a family of three in high-cost counties is $694 and in low-cost counties is $661. The maximum monthly grant was also $694 (in real dollars, before adjusting for inflation) twenty years ago in 1989. This proposal would impact all families receiving cash assistance through CalWORKs. The Department estimates that by the 2011-12 budget year, 5,300 families would lose all CalWORKs assistance as a result of this reduction. For a family of three, the Governor’s proposal would reduce maximum monthly grants for basic necessities from $694 to $604 in high-cost counties and from $661 to $575 in low-cost counties. CalWORKs grants were reduced in the 2009-10 budget by four percent, taking the grant down to the current $694 level from $723. DSS states that based on its CalWORKs Characteristic Survey Data, the percentage of this reduction proposal to the CalWORKs average cost per case is approximately 14.7 percent. For families with no other income who also receive CalFresh (food stamp) benefits (which may increase slightly as a result of the families’ reduced income under this proposal), this would place their household incomes at approximately $1,090 or 71 percent of the Federal Poverty Level (FPL) (from the current $1,155 or 76 percent of the FPL). Grant Level Comparisons. After adjusting for housing costs, the Center on Budget & Policy Priorities found that California’s current grant levels were lower than those in 20 other states. According to the Department, which has not adjusted grants in the comparison to other states as part of its analysis, CalWORKs grants after the 13 percent proposed reduction would be the ninth highest in the nation. Questions for DSS. Please explain how the administration arrived at the 13 percent grant reduction proposal. What costs of living, including housing costs, were taken into consideration and how? SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 8 At what other points in the history of California’s cash assistance program for families has the grant been as low as it’s being proposed by the Governor now? PROPOSAL TO REDUCE EMPLOYMENT SERVICES AND CHILD CARE AND REMOVE RELATED EXEMPTIONS The Governor’s budget proposes to extend a reduction of $376.9 million GF to the counties’ single allocation for CalWORKs (block grant funding for Administration, Child Care, and Employment Services). The 2009-10 Budget Act (Chapter 4, Statutes of 2009, Fourth Extraordinary Session, AB X4 4) included similar sized reductions for 2009-10 and 2010-11, but also included corresponding short-term reforms to the CalWORKs program. The Governor’s current proposal does not include the main policy changes in effect during those years, and is instead an unallocated reduction. According to DSS, counties would therefore need to re-prioritize the use of the single allocation funds to serve clients in the most efficient and effective manner. The Governor’s budget does, however, propose to continue flexibility that counties have had in 2009-10 and 2010-11 to redirect funding for Substance Abuse and Mental Health Services to and from CalWORKs Employment Services funding. Background on Policies Connected to Prior Reductions. Under AB X4 4, counties may provide time-limit exemptions to adults who have been granted good cause due to lack of supportive services, and may exempt families with young children (i.e., 12-23 months or if two or more children are under the age of six) from welfare-to-work requirements. The Welfare Data Tracking Implementation Project (WDTIP), which counties use to track time on aid, reported that in the quarter ending in September 2010, 46,000 families were granted exemptions that may have resulted from these policies. AB X4 4 also contained statutory provisions like those in the Governor’s proposal that allow counties greater flexibility to redirect mental health and substance abuse funding. Impacts. Because the Governor’s budget does not offer any direction as to how counties should implement this very large reduction to funding for CalWORKs administration and for welfare-to-work services, including child care and other education and employment-related services, it is very difficult to predict which families and children would be affected by this proposal and in what ways. In general, there will be significantly less funding available for the supports that assist families in obtaining and keeping employment. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 9 Questions for DSS. Please summarize the impacts of the 2009-10 and 2010-11 reductions to the single allocation to date (on clients, counties, and the overall CalWORKs program). How does the department envision that the results of the proposed reduction would differ or be similar? The proposed reduction does not include the corresponding CalWORKs policy changes that were included in the prior reductions. Please explain why these were not included and how would implementation and the savings estimates change if those policies were again included? How many counties took advantage of the flexibility to move substance abuse and mental health funding to and from other purposes? What, if any, have been the consequences to the availability of treatment when it may be needed to remedy barriers to employment or education? SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 10 ISSUE 2: WORK INCENTIVE NUTRITIONAL SUPPLEMENT (WINS) AND TEMPORARY ASSISTANCE PROGRAM (TAP) WINS. DSS proposes, in trailer bill language, to repeal statutes requiring the department to create and implement the WINS program. Based on preliminary estimates, the department anticipates that after automation changes costing $2 million GF in the first year of implementation, costs (countable as Maintenance of Effort [MOE] for the federal Temporary Assistance for Needy Families [TANF] program) for WINS would be $18 million in the second year and $28.4 million each year thereafter. TAP. DSS proposes, in trailer bill language, to repeal statutes requiring the department to create and implement TAP. Based on preliminary cost estimates, after automation changes of $5.3 million GF, if excess-MOE funds are available when it is implemented, TAP is effectively cost-neutral to the state because funds needed for the program ($220 million in recipient benefits) are already included in the CalWORKs budget. GF resources that would otherwise be used to meet the MOE would instead be shifted to fund the solely-state funded TAP (which is not countable as MOE). However, according to the Department, TAP could also result in a revenue loss to the state because of an associated loss of public assistance cost recoupment through child support payments. Background. Under WINS, which was originally authorized in 2008 (AB 1279, Chapter 759, Statutes of 2008), the state would pay 100 percent of the costs of a $40 per month supplemental food benefit to working families who are receiving CalFresh benefits but are not receiving CalWORKs assistance, if they are participating in sufficient hours of paid employment to meet the TANF work participation rate (WPR). As a result, the state would improve its WPR as measured by the federal government. A related working group was created to explore options for offsetting a potential increase in the state’s CalWORKs caseload (and possible resulting decrease in its federal caseload reduction credit) that could result from WINS. As a result of enacted implementation delays, the Department is prohibited from paying WINS benefits prior to October 1, 2012, and is required to fully implement the program by April 1, 2013. TAP was authorized in the 2006 human services trailer bill (AB 1808, Chapter 75, Statutes of 2006) as a voluntary program to provide cash aid and other benefits with solely state funding to a group of current and future CalWORKs recipients who are exempt from state work participation requirements (previously estimated to apply in 24,000 cases). TAP was intended to allow these recipients to receive the same assistance benefits through TAP as they would have under CalWORKs, but without any federal restrictions or requirements. As a result of TAP, California would improve its WPR. To date, implementation complexities, largely due to challenges with child support automation and rules, have prevented TAP from moving forward. As a result, trailer bill language was adopted four years in a row to delay TAP implementation. The Department reports no new progress in overcoming those challenges to implementing TAP. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 11 PANELISTS DSS Please briefly describe the proposals on WINS and TAP. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 12 ISSUE 3: STATE AND COUNTY PEER REVIEW PROCESS DSS proposes trailer bill language to continue the inactive status of the CalWORKs state and county peer review process in 2011-12. The process was suspended for 2010-11, but the Department is currently required to implement it statewide no later than July 1, 2012. This proposal would extend that deadline for statewide implementation by two years to July 1, 2014. Background. A 2006 budget trailer bill (AB 1808, Chapter 75, Statutes of 2006) originally required DSS to establish a state and county peer review process statewide by July 1, 2007. The purpose was to assist counties in implementing best practices and improving their performances in the CalWORKs program. Prior to last year, eight peer reviews were conducted (three in 2008 and five in 2009). PANELISTS DSS Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 13 ISSUE 4: INFORMATIONAL ITEM — PROPOSAL TO LOWER THE AGE AT WHICH CHILDREN ARE ELIGIBLE FOR CHILD CARE (STAGE 1 IMPACTS) As this issue is being covered in the morning hearing on February 2, 2011 on Child Care issues in a Joint Hearing with Subcommittee No. 2 on Education Finance, this issue is included for informational purposes only and no presentation, testimony, or public comment will be taken, unless the Chair directs differently. The Governor’s budget proposes $34.0 million GF savings from eliminating Stage 1 child care for 11 and 12-year-olds and lowering the limit on age-related eligibility to the age of ten. The expected overall Stage 1 child care expenditures for 2011-12 are approximately $649 million. Background and Impacts. California offers subsidized child care to parents currently participating in CalWORKs (Stage 1); and families transitioning off of (Stage 2) or no longer receiving aid (Stage 3). DSS administers Stage 1 child care, while CDE administers Stages 2 and 3, as well as subsidized care for families with exceptional need who have not been CalWORKs recipients. After adjusting for the reduction to the CalWORKs single allocation, 51,200 children are expected to receive Stage 1 child care in 2010-11. Without that reduction, the caseload would have been larger. As a result of this proposed change in age eligibility, approximately 4,300 children from 2,500 families would lose Stage 1 child care services. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 14 CALFRESH (CALIFORNIA’S FOOD STAMP PROGRAM) ISSUE 1: CALFRESH NUTRITION EDUCATION (CNE) UNIT STAFFING DSS requests, in a budget change proposal, $350,000 (withheld federal funds) to make three existing limited-term staff positions (one Staff Services Manager and two Associate Governmental Program Analysts) into permanent positions in the CNE. Background. The CNE’s goals are to educate low-income CalFresh-eligible individuals regarding healthy lifestyles and how to best use limited food budgets. Its total budget includes $246 million ($129 million for a state share, which is paid by school districts, county health departments and other local entities). DSS contracts with two partners, the University of California-Davis (UCD) and the California Department of Public Health (DPH) to carry out the CNE program. For 2006 through 2008, the federal government disallowed some costs of the program as a result of fraud and embezzlement discovered to have been perpetrated by a UCD employee. The CNE Unit was established in 2009-10 with limited-term positions to provide increased oversight of the CNE program and its contractors. PANELISTS DSS Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 15 ISSUE 2: ELECTRONIC BENEFITS CARD USAGE AT FARMERS’ MARKETS DSS requests, as part of its local assistance estimates, $1.6 million ($788,000 GF) to provide EBT services (point-of-sale devices, service, and transaction fees) to over 700 new farmers’ markets in 2011-12. Background. Of the 800 farmers markets in California, 111 markets are currently equipped to accept EBT at 280 locations. Enacted last year, AB 537 (Arambula, Chapter 435, Statutes of 2010) allows, but does not require, groups or associations of produce sellers to operate as Food and Nutrition Service (FNS) agents by accepting EBT. PANELISTS DSS Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 16 0530 OFFICE OF SYSTEMS INTEGRATION (HEALTH AND HUMAN SERVICES AGENCY) 5180 DEPARTMENT OF SOCIAL SERVICES (DSS) ISSUE 1: CASE MANAGEMENT, INFORMATION, AND PAYROLLING SYSTEM II (CMIPS II) DSS requests a one year extension of four (4.0) existing Limited Term (LT) positions at a total cost of $467,000 ($233,000 General Fund) in 2011-12 to support CMIPS II activities which include Implementation and Maintenance and Operations efforts, as well as providing support for the In-Home Supportive Services (IHSS) program CMIPS II functions within the Department. The positions include three Associate Governmental Program Analyst (AGPA) positions in the Adult Programs Division (APD), as well as one Staff Counsel III in the Legal Division. The one-year extension of these positions will ensure CMIPS II staff continues to provide oversight of all phases of the CMIPS II project according to the schedule timeframes and milestones. These positions are currently set to expire in June 2011. DSS states that these requested resource are vital for a successful transition of the CMIPS II system from the Legacy CMIPS system, in place since 1979 and operated continuously by the same vendor, in order not to disrupt services or payroll to the many recipients who depend on it. The implementation of the CMIPS II system, which is currently in progress, will begin to move into the Maintenance and Operations phase in FY 2010-11 and will require long term, active oversight to ensure the interests of the state are being met. DSS asserts that positions familiar with the program are crucial to maintaining CMIPS II, an intricate system integral to the viability of the IHSS program. PANELISTS DSS Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 17 ISSUE 2: LOS ANGELES ELIGIBILITY, AUTOMATED DETERMINATION, EVALUATION AND REPORTING (LEADER) REPLACEMENT SYSTEM (LRS) OSI requests a decrease of $7.0 million in the 2010-11 budget for LRS as a result of contract finalization. The total 2010-11 budget for LRS, which includes six-months of design, development, and implementation, would thus be $38.4 million ($14.3 million GF\/TANF). OSI also proposes an increase of $37 million ($12.6 million GF\/TANF) for a full year of project design, development, and implementation in 2011-12. Including these proposed funds, the 2011-12 budget for LRS would be $75.5 million ($27 million GF\/TANF). OSI anticipates total costs for LRS development and implementation of $370.2 million over four years ($137.7 million GF\/TANF, $205.7 million federal funds and $26.8 million county funds) before reaching the Maintenance & Operations (M&O) phase of the project after December 2014. Although the differing functionalities of the systems make direct comparison difficult, it is worth noting that OSI estimates $63.5 million annual operations costs for LRS ($24.9 million GF\/TANF) or about double the costs for LEADER. Background on LEADER. With 2010-11 M&O costs of $30.7 million ($15.7 million GF\/TANF), LEADER is one of four consortia within the Statewide Automated Welfare System (SAWS). The system that is being replaced by LRS has been in its M&O phase since 2001, with its latest Unisys contract scheduled to expire on April 30, 2011. To accommodate the LRS schedule, OSI is seeking approval to again extend that contract for additional years. Background on LRS Project. According to OSI and Los Angeles (LA) County, LEADER technology is outdated and cumbersome. LRS will streamline LA’s business practices, eliminate duplicative data entry, and minimize errors. OSI also indicates that LRS will expand clients and service providers’ ability to apply for benefits or report case changes online. In addition, LRS will minimize the state’s dependency on one vendor’s proprietary hardware and software components to run LEADER. The federal government has previously expressed concerns about the state and county’s continued non-competitive use of the same vendor; and OSI has indicated that no other qualified vendors have been willing to enter a bid to operate the LEADER system. Planning activities are currently wrapping up and design, development, and implementation of the LRS project is scheduled to begin shortly. OSI anticipates that the project could be completed in December 2014. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 18 PANELISTS OSI Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 19 ISSUE 3: CHILD WELFARE SERVICES (CWS)\/WEB PROJECT OSI requests $2.1 million ($951,000 GF that is reflected in the DSS budget) for four additional staff and additional contract resources to support its project management role in the development of the new CWS\/Web system. These four positions would be in addition to 29 existing OSI positions and another ten OSI-contract staff currently supporting this phase of the project. DSS requests, in a budget change proposal, $304,000 ($139,000 GF) for the extension, for an additional two years, of three limited-term staff who support the child welfare program-side of the project’s development. These three staff (in a manager, office technician, and legal counsel position) would be in addition to three existing DSS positions supporting this phase of the project. Including the requested positions, the total 2011-12 budget for the project would include $13.2 million ($6.0 million GF). OSI estimates a total cost of $351.2 million ($165.5 million GF) for the project over the decade between 2006-07 and 2016-17. Of this amount, the one-time costs to implement the project are estimated to be $215.3 million ($97.5 million GF), with maintenance and operations costs of $135.9 million ($68 million GF). According to the current project schedule, the project will be fully implemented by the Fall of 2015. Background. California’s CWS system includes a variety of state-supervised, county- administered interventions designed to protect children. Major services consist of emergency response to reports of suspected abuse and neglect, family maintenance or reunification, and foster care. The Child Welfare Services\/Case Management System (CWS\/CMS) is the existing automated system that provides case management capabilities for CWS agencies, including the ability to generate referrals, county documents, and case management and statistical reports. The CWS\/CMS system was implemented statewide in 1997, and OSI has stated that CWS\/Web is necessary because the CWS\/CMS technology is outdated. In addition, OSI and DSS report that the CWS\/Web system will increase efficiency and better comply with federal system requirements (which are tied to federal funding). The CWS\/Web project is currently in a planning stage, preparing for a full implementation after development ends in 2014. When CWS\/Web is completed, the system will rely on a more modern, web-based technical architecture. According to OSI and DSS, the requested positions are needed to keep pace with critical quality assurance, design, and development tasks. Without the requested resources, OSI indicates that it will be difficult to keep the project on time and within its budget. SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 20 PANELISTS OSI and DSS Please briefly describe the proposal and address the following questions: o Please briefly describe the status of the CWS\/Web project development and its current and anticipated staffing. What is the rationale for requesting these additional positions at OSI and at DSS at this time? o If these positions are not approved, what consequences would result? Please provide specific examples. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 21 ISSUE 4: CWS\/CASE MANAGEMENT SYSTEM (CMS) MAINTENANCE AND OPERATION The Child Welfare Services\/Case Management System (CWS\/CMS) is the first phase of complying with the federal Statewide Automated Child Welfare Information System (SACWIS) requirements in California. The CWS\/CMS development and implementation phase have been completed and has moved into the Maintenance and Operation (M&O) phase. The remaining CWS\/CMS functionality is scheduled to be completed through the CWS\/Web Project. The 58 counties and DSS have been converted to a common database and are in production. This budget request proposes an ongoing decrease in the DSS Local Assistance budget in the amount of $1,304,738. This request also reflects a decrease in the OSI spending authority in the same amount for the CWS\/CMS Office. The adjusted funding level represents an adjustment to Prime Vendor Services associated with the recent relocation of CWS\/CMS from the Cannery campus to the Gold Camp campus. This is a one-time change associated with this move. No issues have been raised with this request and the request aligns with the expectations of the project as documented by OSI and DSS. PANELISTS OSI Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 22 ISSUE 5: CONSORTIUM IV PROJECT AND ISAWS CONSORTIUM MIGRATION PROJECT Consortium IV (C-IV) is one of the three consortia within the Statewide Automated Welfare System (SAWS) Project. State project management and oversight for SAWS is provided by OSI SAWS Project. The C-IV system continues to serve Merced, Riverside, Stanislaus, and San Bernardino counties. The four counties represent approximately 15 percent of the clients statewide based on the FY 2008-09 Persons Count. The C-IV system is in the maintenance and operations (M&O) phase. The ISAWS Migration project transitioned the 35 ISAWS Consortium counties to the C- IV system. The Migration project encompassed planning, development, implementation and initial operation activities for the 35 ISAWS counties. Planning activities for the Migration project began in July 2006 and were completed in June 2008. Development activities for the Migration project began in August 2007 and completed in June 2010. The implementation phase began in October 2008 and will be completed in August 2010. The Migration counties implemented the C-IV system using a wave-based approach in three waves of geographically proximate counties. The three waves were roughly equivalent in terms of caseload; Wave 1 comprised approximately 36%, Wave 2 included approximately 35% and Wave 3 contained approximately 29% of the caseload. As of June 2010, all 35 former ISAWS counties have successfully transitioned to the C-IV system and Wave 3 counties are scheduled to complete case clean up by November 2010. The expanded C-IV Consortium represents approximately 29 percent of the clients statewide based on the SFY 2008\/09 Persons Count. With the addition of the 35 former ISAWS counties, the C-IV system supports approximately 13,050 users. C-IV Project Request. OSI requests an increase due to the combination of the budget of the 35 former ISAWS counties within the C-IV project budget. This is due to the closing of the ISAWS Migration project. Therefore, a four-month period of four-county costs and an eight-month period of 39-county costs will be required for FY 2011-12. Costs are expected to increase from FY 2010-11 to FY 2011-12 primarily due to the addition of the 35 former ISAWS counties. There is no impact to OSI spending authority as counties are reimbursed for their costs directly by DSS. The DSS Local Assistance budget request is $65.8 million for FY 2011-12, which equates to an increase of $19.6 million from the FY 2010-11 appropriation. ISAWS Project Request. OSI requests a reduction due to all 35 ISAWS Migration counties transitioning into the C-IV system in FY 2009-10, minimal remaining D&I costs and four months of M&O in FY 2011-12 as the project is scheduled to end in October 2011. There is no impact to OSI spending authority as counties are reimbursed for their costs directly by DSS. The DSS Local Assistance budget request is $8.9 million SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES FEBRUARY 2, 2011 ASSEMBLY BUDGET COMMITTEE 23 for FY 2011-12, which equates to a reduction of $21.7 million from the FY 2010-11 appropriation. PANELISTS OSI Please briefly describe the proposal. Department of Finance Legislative Analyst’s Office Public Comment ”

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” SUBCOMMITTEE #3: Health & Human Services Chair, Senator Mark Leno Senator Elaine K. Alquist Senator Roy Ashburn April 22, 2010 9:30 a.m. or Upon Adjournment of Session Room 4203 Committee Staf f : Jennifer Troia Item Department 4700 Department of Community Services and Development 5180 Department of Social Services (See Table of Contents on page 2 for More Specific Listing of Issues.) Please note: The Committee will discuss only the items contained in this agenda at this hearing. Please see the Senate File for dates and times of subsequent hearings. The Committee will discuss the issues in the order noted in the agenda, unless otherwise directed by the Chair. Pursuant to the Americans with Disabilities Act, individuals who, because of a disability, need special assistance to attend or participate in a Senate Committee hearing, or in connection with other Senate services, may request assistance from the Senate Rules Committee, 1020 N Street, Suite 255 or by calling 916-651-1505. Requests should be made one week in advance whenever possible. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 2 of 25 Agenda (Vote-Only Items indicated by *) Item Department Page 4700 Department of Community Services and Development 1. Weatherization Assistance Program . . 7 5180 Department of Social Services Community Care Licensing (CCL) 1. CCL Program Update …10 2. Proposal for CCL Inspection & Fee Changes …12 Children’s Programs 1. Kinship-Guardianship Assistance Program\/Subsidized Relative Guardianship Proposal* . . 3 2. Probation Access to Child Welfare Services\/Case Management System (CWS\/CMS)* 5 3. Child Welfare Services (CWS) Performance and Program Improvement Update ..14 4. 2009-10 Veto of CWS Funding 16 5. Trailer Bill Language (TBL) for Implementation of Federal Fostering Connections to Success & Increasing Adoptions Act (FCSA) 19 6. TBL to Clarify Law Related to Independent Adoptions 21 7. TBL for Proposed Suspensions of CWS Programs ..22 8. TBL for Extension of Residentially Based Services Pilot.. ..23 Other 9. Unaccompanied Refugee Minor Program* 6 10. Positions Related to Recently Enacted Legislation .24 Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 3 of 25 Vote-Only Agenda 5180 Department of Social Services DSS Issue 1: Kinship-Guardianship Assistance Payment Program (Kin-GAP) \/ Subsidized Relative Guardianship Proposal Budget Issue: The 2009-10 budget for Kin-GAP includes a total of $144.9 million ($110.5 million GF). The Governor’s budget for 2010-11 proposes trailer bill language (TBL) that allows the state, beginning October 1, 2010, to opt into newly available federal financial participation in the costs of a subsidized relative guardianship program that is similar to the state’s existing Kin-GAP program. Under the Governor’s proposal, the state would pay 60 percent of nonfederal costs, and the counties would pay 40 percent. This would be a change from the existing Kin-GAP, in which the state pays for roughly 80 percent of the program. The Governor’s budget estimated savings of $1.3 million GF in 2010-11 from opting into the federally subsidized relative guardianship program. However, the Administration has since acknowledged that this estimate included an error and is still working on a revised estimate. Kin GAP is currently part of the state’s CalWORKs program; and its state and county expenditures count toward the MOE requirement imposed on the state as a condition of receiving federal Temporary Assistance to Needy Families (TANF) funds for the CalWORKs welfare-to-work program. As a result, the state’s Kin-GAP expenditures are also eligible for American Recovery and Reinvestment Act (ARRA) Emergency Contingency Fund (ECF) resources. The Governor’s budget had also assumed GF savings as a result of these ECF stimulus funds for Kin-GAP. Background on Kin-GAP: Kin-GAP was implemented in 2000 to enhance family preservation and stability by placing foster children in long term placements with relative caregivers. Under Kin-GAP, a dependent child who has been living with a relative for at least 12 months in foster care may receive a monthly grant if the relative assumes guardianship and the dependency case is dismissed. The grant is identical to the one the child received while in foster care. The average monthly Kin-GAP caseload is over 14,000 children. Federal Funding Streams: Until the recent passage of the federal Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110 351), there was no option for states to receive federal financial participation in subsidized guardianship programs under Title IV-E of the Social Security Act (which establishes requirements for much of federal child welfare support). Under those new provisions, the federal government would generally provide 50 percent of grant costs for children in subsidized guardianships who meet other eligibility requirements (generally around 70 percent of California’s caseload). During the period of ARRA’s enhanced Federal Medical Assistance Percentage (FMAP) (currently authorized through December 2010, but assumed in the Governor’s budget to be extended through the state fiscal year), the Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 4 of 25 federal share would temporarily be higher at 56.2 percent. In order to draw down these IV-E funds for subsidized relative guardianships, California would have to make some statutory changes to its existing Kin-GAP program. During the time that the TANF ECF is available under ARRA (currently authorized through December 2010, but the Governor’s budget assumes extension through the state fiscal year), federal financial participation in the costs of various components of the CalWORKs program (including Kin-GAP as currently structured and financed) is available at the higher rate of 80 percent to offset costs that exceed the corresponding costs during FFY 2006 07. Estimated Savings When ECF Expires: The LAO estimates that once a federally- supported guardianship program is fully implemented under Title IV-E\u2014including the complete transition of all existing Kin-GAP cases into the new program\u2014GF savings would likely be about $48 million per year under the Governor’s proposed 60\/40 state\/county sharing ratios. If existing 80\/20 state\/county sharing ratios were instead maintained, GF savings would likely be about $35 million per year. Pending Legislation: In addition to other changes to the child welfare system, AB 12 (Beall, Bass), which is currently pending in the Senate, proposes to make the required statutory changes to transform the Kin-GAP program into a federally-eligible subsidized relative guardianship program and to opt the state into Title IV-E funding for Kin-GAP upon a declaration by the Director of DSS that relevant TANF ECF funding is no longer available. Subcommittee Staff Comment & Recommendation: Staff recommends holding this issue open pending an updated estimate from the Administration at May Revision. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 5 of 25 DSS Issue 2: Probation Access to Child Welfare Services\/Case Management System (CWS\/CMS) Budget Issue: DSS proposes, in a new estimate premise, $1.2 million ($552,000 GF) in expenditures for 560 probation officers to receive training on using the CWS\/CMS system and for 385 of those probation officers to newly gain access to the system. Background on Probation-Supervised Foster Care: Children can enter foster care through the involvement of county child welfare agencies or probation departments. In addition, youth with child welfare\/dependency cases who are charged with delinquency offenses may be placed in probation-supervised foster care. Consistent with requirements for federal financial participation in the costs of foster care, probation officers provide case management services in foster care cases that are supervised by probation departments (e.g., prevention, placement, or family reunification services). These are the same services that must be provided by social workers in child welfare- supervised foster care cases. There are currently 66,000 children in foster care statewide. Of those children, approximately 61,000 are under the supervision of county child welfare agencies and close to 5,000 are under the supervision of probation departments. Background on CWS\/CMS: CWS\/CMS is an automated system that provides case management capabilities for child welfare services, including the ability to generate referrals, county documents, and case management and statistical reports. The total 2009-10 CWS\/CMS project budget is $83.3 million ($38 million GF). Subcommittee Staff Comment & Recommendation: Staff recommends approval of the proposed funding for training and access to CWS\/CMS by probation officers who oversee the cases of children in foster care. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 6 of 25 DSS Issue 3: Unaccompanied Refugee Minor (URM) Program Budget Issue: The Governor’s budget includes, in a budget change proposal, $102,000 (all federal funds) for the establishment of one new, permanent position to support the URM program within DSS’s Refugee Programs Bureau. Background: The URM program is administered by the federal Office of Refugee Resettlement (ORR) to provide child welfare and foster care services to refugee, asylee, and trafficked children who have come to the United States without parents or a close relative to care for them. ORR provides funding to DSS to contract with voluntary resettlement agencies in California. This request for expanded state operations staffing for the program is the result of: 1) an anticipated quadrupling in the number of children served (from 29 children in 2008-09 to 111 children in 2010-11), 2) the inclusion of additional youth who have been granted Special Immigrant Juvenile Status (unknown number at this point) as a result of the recent federal Trafficking Victims Protection Reauthorization Act of 2008, and 3) corrective actions required by ORR as a result of its review of the Northern California URM program. These corrective actions are focused on the need for the state to better develop placement sites, monitoring, and data collection policies and procedures. Subcommittee Staff Comment & Recommendation: Staff recommends approval of the proposed funding and position. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 7 of 25 Discussion Agenda 4700 Department of Community Services and Development (CSD) With a total budget of $475.1 million (no GF) and 109 authorized staff positions in 2009- 10, and a proposed budget of $260.2 million (no GF) in 2010-11 (year-over-year reduction largely due to expiration of ARRA federal stimulus funding), CSD administers federal programs to help low-income families achieve and maintain self-sufficiency, meet their home energy needs, and reside in housing free from dangers of lead hazards. CSD works with a network of agencies statewide that provide services and programs directly in the community. CSD Issue 1: Weatherization Assistance Program (WAP) & American Recovery and Reinvestment Act (ARRA) Weatherization for Low-Income Persons Program Budget Issue: The 2009-10 budget for weatherization assistance programs administered by CSD includes $98.5 million federal funds ($17.6 million of which are for state operations with the remainder for local assistance). Of this total, $14.6 million are WAP funds and $83.9 million are one-time stimulus funds as part of ARRA. The Governor’s proposed 2010-11 budget for weatherization assistance administered by CSD includes $99.2 million federal funds ($92.9 million of which are ARRA funds). WAP and ARRA Weatherization Programs: The purpose of California’s weatherization programs is to increase the energy efficiency of homes owned or occupied by eligible low-income citizens, reduce the amount they spend on energy, and improve their health and safety. Preference is given to low-income people who are particularly at risk, such as individuals who are elderly or who have disabilities and those who use a lot of energy. Typical weatherization measures may include weather- stripping, insulation, caulking, water heater blankets, refrigerator replacement, or heating\/cooling system repair or replacement. In July 2009, California received roughly half of the approximately $186 million in ARRA funds awarded to the state for weatherization purposes. To gain access to the remaining funds, CSD must meet performance milestones issued by the federal Department of Energy (DOE). State Audit of ARRA Weatherization Funding: The Bureau of State Audits (BSA) released a report in February 2010 regarding CSD’s implementation of weatherization stimulus funds (available online at: http:\/\/www.bsa.ca.gov\/pdfs\/reports\/2009-119.2.pdf). The audit raised concerns about significant delays in ARRA-funded weatherization efforts. In particular, the Audit found that even though the federal government distributed ARRA funds to CSD in July 2009, no California homes had been weatherized using those resources as of December 1, 2009. Among other Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 8 of 25 recommendations, BSA suggested that CSD ask DoE for extensions of key deadlines, as well as improve its cash management and sub-recipient monitoring practices. Updates and CSD Response to Audit: CSD has stated that a great deal of the initial delays in service provision was due to delayed implementation guidance from the federal government. In addition, the federal government requires that weatherization service providers pay workers the prevailing wage rates for the area as specified by the federal Davis-Bacon Act. These requirements did not previously apply to CSD’s weatherization contractors, and their implementation can be very complex (e.g. an individual provider may provide services using more than one funding stream and differing requirements may now apply). CSD reports that those initial delays have been resolved, and that the Department is on track to meet its established performance metrics. In its initial response to the Auditor’s report, the Department provided the summary of its goals copied below. 2010 2011 2012 Mar Jun Sep Dec Mar Jun Sep Dec Mar Total Planned Units 3,912 5,054 6,179 5,635 4,965 5,215 5,068 4,338 2,784 % of Total Units 9% 12% 14% 13% 12% 12% 12% 10% 6% Total Planned Units at Benchmark on Sep- 2010 15,145 Percentage of overall unit projection 35% Total Planned Units for Grant 43,150 In an April 12, 2010 letter to the Auditor, CSD stated that as of March 31, 2010, the number of dwellings weatherized in the state totaled 2,934, with an additional 1,174 units in process and 1,864 scheduled. Additionally, the Department indicated that it has improved many of its monitoring practices. CSD also reports that it has executed contracts that cover roughly 83 percent of total ARRA funding. The remaining nine contracts, covering approximately 17 percent of ARRA funds, are under negotiation or pending execution. Outstanding contracts include contracts with the Los Angeles Department of Water and Power (6.1 percent of total funds), Sacred Heart Community Service in Santa Clara County (2.7 percent), the City of Oakland and County of Alameda (2.5 percent), and the City and County of San Francisco (1.7 percent). Weatherization of Multi-Family Housing Units: Effective February 24, 2010, DOE amended WAP eligibility rules that apply to multi-unit buildings. As a result, eligibility verification can be streamlined if a multi-unit building under a public housing program is included on a list published by DOE. DOE also provided guidance to states about meeting requirements that benefits of weatherization assistance in these units, including units where the tenants pay for energy through their rent, accrue primarily to low-income tenants. As a model, DOE cited the State of Washington’s policy recognizing that preserved low-income housing, added comfort, and environmental health benefits as a result of weatherization upgrades can be considered direct benefits to tenants. Given Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 9 of 25 these new policies, the City of San Francisco, which is currently negotiating a contract with CSD to provide services directly, intends to focus its efforts on retrofitting non- profit-owned affordable rental housing. Subcommittee Staff Comment & Recommendation: This is an informational and oversight-related item, and no action is required. However, staff does recommend that the Subcommittee continue to monitor CSD’s progress in meeting its weatherization program performance milestones. Questions for CSD: 1) Prior to ARRA, how many units did CSD contractors weatherize in a given year? With both WAP and ARRA funding in 2009-10 and 2010-11, how many units does CSD anticipate will be weatherized? 1) Please briefly summarize challenges the Department faced in getting ARRA funded projects up and running from July to December 2009, and the progress made to address those challenges. 2) What is the current status of the Department’s progress toward meeting its goals for the number of units to be weatherized (including WAP and ARRA funds)? How does the Department plan to further ramp up to meet those goals going forward? 3) How is the Department working toward inclusion of multi-family affordable housing units in its weatherization efforts? What are the considerations involved in a potential expansion of this focus to cities beyond San Francisco? Questions for BSA: 1) Please briefly describe your Audit of CSD’s implementation of ARRA weatherization efforts and the process for your continued involvement. 2) Please summarize any continuing concerns you have regarding CSD’s current oversight and implementation of ARRA weatherization funding. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 10 of 25 5180 Department of Social Services (DSS) See March 18, 2010 Agenda for Subcommittee #3 for DSS budget overview. DSS Issue 1: Community Care Licensing (CCL) Program Update Budget Issue: With a total budget of $107.8 million ($20.7 million GF) and more than 1,000 state operations staff (plus 87 county staff who perform licensing duties locally) in 2009-10, CCL oversees the licensure of approximately 83,000 facilities, and has the responsibility to protect the health and safety of the individuals served by those facilities. For the last several years, DSS has provided an update on the current status of CCL’s workload and performance with respect to statutory requirements. The Department will provide that update again during this hearing. Background on CCL: The facilities licensed by CCL include child care centers; family child care homes; foster family and group homes; adult residential facilities; and residential care facilities for the elderly. CCL does not license skilled nursing facilities (licensed by the Department of Health Care Services) or facilities that provide alcohol and other drug treatment. All individuals seeking to be licensed to operate, work in, or reside at a community care facility (approximately 197,000 in 2009-10) must first complete a criminal background check that is processed (and in some circumstances investigated) by CCL. CCL is also responsible for reviewing and responding to any reports of criminal activity that lead to an arrest subsequent to an initial background check. CCL also performs regular inspection visits to licensed facilities and responds to complaints regarding facilities (roughly 13,000 in 2009-10). Additional Background on Inspection Requirements: DSS is required to conduct pre- and post-licensing inspections for new facilities (including when a previously licensed facility changes hands). In addition, the Department must conduct unannounced visits to licensed facilities under a statutorily required timeframe. Prior to 2003, these routine inspection visits were required annually for all facilities except family child care homes (which received at least triennial inspections). In 2003, a human services budget trailer bill (AB 1752, Chapter 225, Statutes of 2003) reduced the budget for CCL by $5.6 million and reduced the frequency of these inspections. As a result, CCL must visit a small number of specified facilities and conduct random, comprehensive visits to at least 10 percent of the remaining facilities annually. Ultimately, the Department must visit all facilities at least once every five years. In addition, there is a trigger by which annually required inspections increase if citations increase by 10 percent from one year to the next. Finally, CCL is required to respond within 10 days to complaints and may conduct related onsite investigations. After the 2003 changes, DSS fell significantly behind in meeting the new requirements. The trigger for increased annual inspections due to a higher number of complaints was pulled twice and then suspended. In 2006-07, DSS was given 29 limited-term staff specifically for the purpose of ensuring that the Department could visit each facility once Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 11 of 25 every five years. These positions were extended for an additional 18 months, covering part of 2008-09. With these staff, CCL reduced its inspection backlog from over 10,000 to less than 1,000 facilities. Currently, there are 449 due and overdue five year inspections. Current Performance of CCL Duties: In 2009-10, CCL projects that it will conduct 82 percent of its required routine inspection visits within the required timeframe (declining from 97 percent in 2007-08 and 92 percent in 2008-09) and accrue a backlog of 40 overdue inspections each month (down from 236 per month in 2008-09). CCL also projects that it will conduct 93 percent of complaint-related visits on time within 10 days (declining from 96 percent in 2007-08 and 2008-09). Finally, CCL anticipates a declining total number of citations (down to 48,000 from 80,000 in 2007-08 and 66,000 in 2008-09) and of serious incident and citation follow-up visits (down to 19,000 from 23,500 in 2007-08 and 20,700 in 2008-09). The Department attributes these decreases in 2008-09 and 2009-10 at least in part to the impacts of furloughs and staffing cuts. Subcommittee Staff Comment & Recommendation: This is an informational and oversight-related item, and no action is required. Questions for DSS: 1) Please provide an overview of the funding and staffing for CCL in recent years and how the department has performed with respect to its criminal background check, routine inspection, and complaint investigation responsibilities. 2) What are the challenges CCL faces in meeting its statutory duties? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 12 of 25 DSS Issue 2: Proposal for CCL Inspection & Fee Changes Budget Issue: DSS proposes, in a Spring Finance Letter and corresponding Trailer Bill and Budget Bill Language (TBL and BBL), to overhaul, effective January 1, 2011, statutory licensing inspection requirements. The Administration also proposes to raise facility application and annual fees by 10 percent. The BBL would allow the Department of Finance to reduce the GF authority for CCL commensurate with the amount of additional fee revenue that CCL receives (anticipated to be $1.4 million for six months of 2010-11 and $2.8 million annually thereafter). DSS has indicated that the costs for automation changes associated with this proposal would be absorbed as part of its ongoing system maintenance costs. Background on CCL and on Existing Inspection Requirements: See prior agenda item. Proposed Inspection Requirements: The proposed TBL would require annual, unannounced inspections for all facilities, with the exception of biennial inspections for family child care homes. As a result, approximately 42,000 facilities would receive annual inspections and 41,000 would receive biennial inspections. These inspections would, however, use an assessment process that is less comprehensive than existing inspection protocols. The Department anticipates that the changes would reduce by roughly half the time required for an inspection (e.g. from four to two hours for a residential care facility for the elderly). The new protocols would include zero tolerance violations, like fire clearance or access to bodies of water, and key indicators, such as criminal record clearances for adult residents and medication storage requirements. Per DSS, the new protocols would vary by facility category, and details would be developed depending on common complaints and on the input of stakeholders relevant to each of the facility categories. The proposed changes would also eliminate existing requirements for pre-licensing inspections when a facility is sold or transferred to a new owner, and eliminate requirements for all post-licensing inspections (inspections that must occur within 90 days of the facility’s acceptance of its first client for placement). DSS annually conducts approximately 1,800 pre-licensing visits where an existing, previously-licensed facility is changing ownership. The fiscal savings tied to the lack of a requirement for these visits is estimated at $349,000 for 5.5 staff. Justification for Changes in Inspection Requirements: According to DSS, existing law and fluctuations in resources for CCL are placing the health and safety of vulnerable children and adults in community care facilities at risk. More frequent inspections would allow for more opportunities to address health and safety concerns. DSS has also indicated that the current statutory trigger mechanism is not effective because it assumes that increased citations would indicate increased health and safety violations, without taking into account the reduction in citations that may result from reduced frequency of inspections. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 13 of 25 Background on Fees and Proposed Fee Changes: The 2009-10 budget increased application and annual fees by 10 percent, which was the first increase since 2004-05. As a result, fees currently cover about 21 percent of the costs for the state’s licensing and enforcement activities. The chart below compares recent and current annual and application fees to those proposed. In addition, CCL proposes a new $100 fee for any facility in which a citation has been issued and a follow-up inspection is needed to verify compliance. Examples of Current and Proposed CCL Fees Annual Fee Application Fee Facility Type 2008-09 2009-10 2010-11 Proposed 2008-09 2009-10 2010-11 Proposed Family child care home (1-8 children) $60 $66 $73 $60 $66 $73 Child care center (1-30 children) 200 220 242 400 440 484 Adult day facility (16-30 adults) 125 138 152 250 275 303 Residential facility (16-30 residents) 750 825 908 1,500 1,650 1,815 Foster family agency 1,250 1,375 1,513 2,500 2,750 3,025 Subcommittee Staff Comments & Recommendation: Staff recommends holding this issue open. Questions for DSS: 1) Please summarize this proposal, including the process the Department undertook when considering its options for how to meet licensing duties going forward. Please include a high-level description of how the proposal would change the duties and workload of CCL. 2) How did the Department calculate the costs associated with this proposal? How confident is the Department that the proposed inspection requirements are realistic given CCL and local licensing staff levels? 3) How has and will the Department engage with providers and stakeholders regarding these proposed changes? 4) How and when would front-line licensing staff receive training in the new inspection protocols? Would they continue to also receive training on and be expected to cite facilities for observed violations of regulations that are not included in those protocols? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 14 of 25 DSS Issue 3: Child Welfare Services (CWS) Performance and Program Improvement Update Budget Issue: The federal Administration for Children and Families (ACF) conducts reviews (called the Child & Family Services Review or CFSR) of California’s child welfare system. In 2002, California passed two of the seven systemic factors and failed all seven of the outcome measures pertaining to child safety, well-being, and permanency (e.g., committed family relationships). As a result, the federal government assessed $9.0 million (all GF) in initial penalties against the state (plus $2 million in interest that accrued in 2008 and an additional penalty of $1.7 million that year). The state successfully appealed all of those penalties, which the federal government has since rescinded. ACF performed another CFSR in California and published the results in 2008 (summarized below). After this recent CFSR, DSS developed a draft Program Improvement Plan (PIP) to improve outcomes for children and families and hopefully avoid fiscal penalties. Under the worst case scenario, the federal penalty for these recent CFSR results could exceed $107 million GF in 2011-12 or 2012-13. Background on CWS and California’s Recent Performance: The total 2009-10 budget for child welfare services and foster care is $4.2 billion ($1.1 billion GF). The CWS system includes emergency response to allegations of abuse and neglect, supports for family maintenance and reunification, and out-of-home foster care services for approximately 66,000 children. The chart below summarizes the state’s most recent CFSR performance. Safety and Permanency Outcomes Substantial Conformity % of Cases Substantially Achieved Safety Outcome 1: Children are first and foremost, protected from abuse and neglect NO 80.6 Safety Outcome 2: Children are safely maintained in their homes when possible and appropriate NO 76.9 Permanency Outcome 1: Children have permanency and stability in their living situations NO 41.0 Permanency Outcome 2: The continuity of family relationships and connections is preserved NO 79.5 Child and Family Well Being Outcomes Well Being Outcome 1: Families have enhanced capacity to provide for children’s needs NO 58.5 Well Being Outcome 2: Children receive services to meet their educational needs NO 88.0 Well Being Outcome 3: Children receive services to meet physical, mental health needs NO 81.0 (Continued on next page) Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 15 of 25 Systemic Factors Substantial Conformity Scorei Statewide Information System YES 3 Case Review System NO 2 Quality Assurance System YES 3 Training NO 2 Service Array NO 2 Agency Responsiveness to the Community YES 3 Foster and Adoptive Parent Licensing, Recruitment, and Retention NO 2 iScores are based on a scale from 1 to 4, where 1 signifies the lowest and 4 the highest compliance level. According to ACF, challenges facing the state included high caseloads and turnover of social workers, an insufficient number of foster homes and lack of caregiver support and training, a lack of statewide implementation of innovative practices, and a lack of needed services (e.g., mental health and substance abuse treatment services). PIP and Targeted Funding: The state’s PIP was finalized in 2008 and included the goals of expanding or strengthening: 1) case planning strategies that involve youth and families, 2) more consistent efforts to support permanency across a child’s time in foster care, 3) caregiver recruitment, training, and support, 4) flexibility in services and supports to meet children and families’ needs, 5) staff and supervisor training, and 6) implementation of a statewide risk-assessment system. The 2009-10 budget includes $22.2 million ($12.7 million GF), and the Governor’s proposed 2010-11 budget includes $23.1 million ($13.0 GF), in resources designated to support some of these PIP goals. Subcommittee Staff Comments and Recommendation: This is an informational item, and no action is required. Questions for DSS: 1. What are the factors that lead to the state’s poor performance on such critical measures related to the health, safety, and well-being of children who have been abused or neglected? 2. Please summarize the PIP process and the state’s progress to date on meeting its goals. In particular, how has the Department implemented the PIP strategies for which the 2009-10 budget dedicated specific resources? 3. How confident is the Department that the state will meet its PIP goals and will improve on critical performance measures prior to the next federal review of our child welfare system? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 16 of 25 DSS Issue 4: Veto of CWS Funding in 2009-10 Budget Issue: When he signed the amendments to the 2009-10 budget contained in ABx3 1 (Chapter 1, 3rd Extraordinary Session, Statutes of 2009) in July 2009, the Governor used a line-item veto to make an unallocated reduction of $80.0 million GF to CWS and foster care programs. After the Administration allocated the vetoed funding across programs, the total cut to CWS was $133.5 million, including $53.5 million in federal fund losses corresponding to the GF reductions. The Legislature Had Rejected a Proposal for a Smaller Unallocated Cut to CWS: With its passage of ABx3 1, the Legislature rejected the Governor’s prior proposal to reduce CWS funding by $70.6 million GF (and a then unknown amount of additional, corresponding federal funds). During public hearings, members heard and expressed concerns that such a large reduction would too greatly hinder the state’s ability to protect the health and safety of its most at-risk children. The Legislature did, however, adopt other targeted reductions to the CWS system totaling roughly $36.5 million GF (and in some cases, additional corresponding federal funds). In particular, the enacted budget for 2009-10 included: 1) $26.6 million GF savings from a 10 percent reduction to the rates paid to group homes and foster family agencies; 2) $4 million GF savings from a decrease to the maintenance and operations budget for the Child Welfare Services\/Case Management (CWS\/CMS) automated system; 3) $5 million GF savings from a reduction to the Transitional Housing Program Plus, and 4) $900,000 GF savings from reforms to the Adoption Assistance Program. An association of group home providers challenged the group home rate reduction via litigation and as a result, that particular reduction has been enjoined from taking effect. Implementation of the Veto Reductions: According to DSS, the Department adopted guidelines for implementing the veto that focused on the preservation, to the extent possible, of the core CWS program (i.e. county child welfare workers), direct services provided to children and families, and federal funding and mandates. The resulting reductions impacted close to 60 budget estimate premises or programs under CWS. The largest of those reductions for the 56 non-Title-IV-E waiver counties are outlined on the next page. The remaining $19.1 million GF reduction was allocated to Alameda and Los Angeles counties, which are operating under that federal waiver and have greater discretion to determine their CWS expenditures during the period of that waiver. A currently pending appeal to the California Supreme Court challenges the Governor’s authority to increase mid-year reductions in appropriations made by the Legislature for some of these CWS, as well as other social services, reductions. A Court of Appeal decision previously approved the Executive authority at issue in that litigation. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 17 of 25 FY 09-10 Appropriation CY $80M GF Veto ($ in thousands) GF Fed GF Reduction Federal Fund Reduction CWS Programs Included in the CWS Allocation Basic Costs $270,240 $337,687 $24,467 $30,561 Emergency Assistance TANF & Case Management $24,839 $1,106 $2,248 $100 Relative Home Approvals $5,973 $4,799 $541 $434 County Self-Assessment and SIP Development $4,559 $3,585 $413 $324 Statewide Standardized Training $4,577 $7,676 $414 $695 Increase Funding for Caseworker Visits $4,885 $3,841 $442 $348 Increase Relative Search and Engagement $5,498 $4,322 $498 $391 Augmentation to Child Welfare Services $31,678 $25,262 $2,867 $2,286 CWS Outcome Improvement Project $39,367 $21,667 $3,563 $1,961 CWSOIP Grant $11,821 $2,639 $1,070 $239 CWS DR, SA, and PYS $6,800 $3,998 $615 $362 Other Child Welfare Allocations Extended Independent Living Program $15,166 $0 $1,945 $0 Chafee Postsecondary Education and Training Vouchers $5,700 $6,852 $684 $822 Emancipated Foster Youth Stipends $3,602 $0 $432 $0 Group Home Monthly Visits $6,818 $3,752 $818 $450 Health Services for Children in Foster Care $4,680 $0 $562 $0 State Family Preservation $21,493 $3,540 $4,279 $705 Transitional Housing Placement Program (THPP) $3,459 $5,188 $2,200 $3,300 THP Plus – 52 counties $35,878 $0 $2,520 $0 Supportive\/Therapeutic Options Program $9,954 $0 $1,194 $0 Kinship Support Services $4,000 $0 $480 $0 Total Child Welfare Training Program $8,564 $14,763 $2,826 $4,872 CWS\/CMS Ongoing M&O $37,425 $42,402 $2,000 $2,266 CWS\/CMS WEB $3,340 $3,813 $401 $458 Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 18 of 25 Impacts of the Veto on the Health, Safety & Well-Being of Children: It is too early to know all of the impacts of these reductions to the budget for CWS. Preliminary information reported by the counties indicates the loss statewide of more than 500 front- line social workers who investigate emergency reports of abuse and neglect, help families stay together or be reunited, and work to find children permanent homes so that they do not remain in foster care unnecessarily. The most recent analysis of social worker caseloads conducted by the LAO in 2007-08 estimated that in counties representing 98 percent of the foster care caseload, social worker caseloads already exceeded the minimum (not optimal) standards established by a study conducted in response to the requirements of SB 2030 (Chapter 785, Statutes of 1998). Social worker caseloads at the time were estimated to be less than 80 percent of the minimum standard in counties representing 48 percent of the caseload. According to the counties, statewide performance data also indicates that reports of abuse and neglect are less likely to be timely investigated. Foster children are being moved between homes more frequently; and the percentage of children getting timely health examinations is steadily decreasing. In addition, an estimated 16,800 current and former foster youth statewide lost a total of $3.6 million in stipends that would otherwise have been available in grants of $50 to $500 to assist with critical needs (e.g., a security deposit for an apartment or bus pass). In some counties, additional matching funds from community partners for these stipends were also lost. Subcommittee Staff Comment & Recommendation: Given the gravity of health and safety risks to children who have been abused or neglected, staff recommends restoring vetoed funding that supported basic child welfare and social work services; services or benefits provided directly to children and families, such as transitional housing and stipends for emancipated youth; and other efforts that are particularly critical to their health, safety and well-being. Veto-related cuts most likely to be sustained in 2010-11 would thus include some administration, training, or automation costs (including, as appropriate, corresponding reductions to Title IV-E waiver counties’ funding). To operationalize this prioritization, staff should be directed to work with DOF and DSS to finalize a list of which estimate premises and budget allocations would be impacted. Questions for DSS and DOF: 1) How does the Administration reconcile the veto of $133.5 million ($80 million GF) for child welfare services with its 2009-10 requests for additional funding to support the state’s Program Improvement Plan (PIP)? With the need underlying the PIP to improve the state’s ability to meet foster children’s basic health, safety, and well-being-related needs? 2) Please describe how the Department determined, after the budget was enacted, which CWS programs to reduce or eliminate as a result of the vetoed funding. 3) How is the Department tracking the impacts of the vetoes on the state’s ability to protect at-risk children and to meet federal performance requirements? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 19 of 25 DSS Issue 5: Trailer Bill Language (TBL) for Implementation of Federal Fostering Connections to Success & Increasing Adoptions Act (FCSA) of 2008 Budget Issue: DSS proposes, via TBL, to add specified costs of transporting a child to his or her school to those that are included in the definition of foster care maintenance payments, to amend statutes related to the placement of siblings in foster care, and to amend statutes governing adoption or foster care programs operated by Indian tribes. According to the Department, these changes are required for the state to conform to requirements of the federal FCSA (P.L. 110-351). The 2009-10 budget includes $8.7 million ($2.2 million GF, for six months beginning in January 2010), and the Governor’s 2010-11 budget includes $17.4 million ($4.5 million GF), for costs associated with education-related transportation. Background on Reimbursement for Transportation Costs: Among a number of other significant reforms to child welfare and adoption assistance programs, the federal FCSA added reasonable travel for the child to remain in the school in which the child is enrolled at the time of foster care placement to the list of costs that must be included in a foster care maintenance payment made to caregivers or group home facilities. 42 U.S.C. 675(4)(A)). Previously existing state law enacted by AB 490 (Chapter 862, Statutes of 2003) gave foster children the right, if it is in their best interests, to remain in their schools of origin for the rest of the school year following their initial placement in out-of-home care or a subsequent move. AB 490 did not, however, specify who was responsible for providing or funding related transportation to a child’s school of origin. DSS estimates that 13,414 children in foster care whose placement is outside their school district of origin may be impacted by the relevant requirements of AB 490 and the FCSA. The Department assumes that their transportation covers an average of 20 miles roundtrip at a cost of $.55 per mile. AB 1933 (Brownley) is currently pending in the Assembly Appropriations Committee. Among other provisions, AB 1933 would make changes to the statutes created by AB 490 to extend the right of foster children to remain in their schools of origin beyond the existing timeframe of the remainder of one school year. The author states that this change is also necessary to conform to federal requirements under FCSA. Background on Sibling Placement Provisions: Under provisions enacted by the FCSA, states are required to make reasonable efforts to place siblings together and to ensure their visitation or interaction if they are placed separately (as long as it is in their best interests). Current state law includes similar, but not identical, requirements, as well as other protections related to these sibling relationships. Background on Provisions Related to Negotiations with Tribes: Under provisions enacted by the FCSA, Indian tribes and entities are authorized to enter into direct agreements with the federal government to operate foster care and adoption programs Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 20 of 25 for tribal children (as opposed to being required to first enter into an agreement with the state in which the tribal entity is located). Provisions of FCSA also required states to negotiate in good faith with tribes that do wish to operate their own programs via agreements with the state. AB 770 (Chapter 124, Statutes of 2009) made conforming changes to state law. However, according to DSS, some further technical fixes are required to fully comply with federal law. Subcommittee Staff Comment & Recommendation: Staff recommends holding this issue open. Questions for DSS: 1) The 2009-10 budget includes $8.7 million ($2.2 million GF) for six months of funding caregivers’ costs of transporting foster children to their schools of origin from January to July of 2010. How has the Department implemented associated policies and allocated those resources to date? Are those resources reaching the caregivers for whom they were intended? 2) What is the Department’s understanding of whether federal law extends the right to remain in a school of origin to foster children beyond the duration of the school year during which placement occurs? How are those interpretations included (or not included) in the Department’s estimates of relevant transportation-related costs? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 21 of 25 DSS Issue 6: Trailer Bill Language (TBL) to Clarify Law Related to Independent Adoptions Budget Issue: DSS proposes, via TBL, to amend a Family Code provision related to adoption. According to the Department, the proposed change would clarify the application of two differing statutory provisions. As a result, the requirements for a comprehensive evaluation and $4,500 independent adoption fee when relatives seek to adopt children who are not currently dependents of the court would be reinforced. The Department estimates that without the proposed statutory clarification, what the Department considers misapplications of the law could spiral; and the state could lose up to $1 million or $2 million GF in fees paid by relatives for comprehensive evaluations. Instead, those relatives would pay a smaller $500 fee and an abbreviated evaluation would be conducted. Background: According to DSS, at least one Superior Court has recently misapplied existing Family Code statutes. In that case, DSS states that the El Dorado Superior Court required DSS to apply the abbreviated, rather than comprehensive, process in its evaluation of grandparents seeking to adopt their grandchild. As a result, DSS conducted the less thorough evaluation and charged a lower fee to the grandparents. As of April 2010, the Department estimates that there have been approximately 15 such instances of miscategorizations of adoptions statewide. According to the Legislative Counsel Digest for the proposed trailer bill, Under existing law, whenever a petition is filed for the independent adoption of a child, the petitioner is required to pay a nonrefundable fee of $4,500 to [DSS] or to the delegated county adoption agency for the cost of investigating the adoption petition, subject to certain exceptions. Existing law requires that if the prospective adoptive parent is a foster parent with whom the child has lived for a minimum of 6 months or a relative caregiver who has had an ongoing and significant relationship with the child, that an assessment or home study be conducted, but does not specify a fee for this investigation. This bill would specify that the provisions governing adoptions without that fee by relative caregivers or foster parents only apply to the adoption of a child who is currently a dependent of the juvenile court. Subcommittee Staff Comment & Recommendation: Staff recommends rejecting the proposed TBL without prejudice as to its merits. An analysis of existing law and any related clarifications is more appropriate for consideration by the relevant Legislative Policy Committees (possibly including the Judiciary and\/or Human Services Committees). Questions for DSS or DOF: 1) Please briefly summarize the proposal, its genesis, and the assumptions underlying the Administration’s estimates of its fiscal impact. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 22 of 25 DSS Issue 7: Trailer Bill Language (TBL) for Proposed Suspensions of CWS Programs Budget Issue: The Governor’s proposed budget for 2010-11 includes TBL to suspend implementation of statutes enacted by AB 340 (Chapter 464, Statutes of 2007) and AB 2985 (Chapter 387, Statutes of 2006). In both circumstances existing law would be implemented when the Department of Finance determines that sufficient state operations resources have been appropriated. Background on AB 340: The resource family approval pilot established by AB 340 requires a three-year pilot program in up to five counties to establish a single, comprehensive approval process for foster care and adoptive families. This pilot was intended to make the licensing process less cumbersome and to prevent unnecessary delays in finding permanent families for foster children. The current licensing process divides caregivers into relatives, foster family homes, and adoptive homes. All caregivers must meet the same health and safety standards, but the processes for each vary and can be duplicative. This pilot was also included in the state’s Program Improvement Plan in response to the 2002 federal review. The Assembly Appropriations Committee analysis of AB 340 estimated approximately $150,000 GF in state personnel costs for overseeing the development and implementation of this pilot and up to $300,000 GF for its final evaluation. The analysis also recognized that the pilot should lead to some offsetting savings. Local assistance funding of $717,000 ($242,000 GF) was appropriated (but according to CWDA, never allocated to counties) in 2008-09. DSS also submitted a BCP requesting 4.0 limited- term state positions at a cost of $440,000 ($278,000 GF) to implement AB 340 in 2008- 09; however, no state operations resources were included in the budget for that year. Background on AB 2985: AB 2985 requires county welfare departments to request credit checks from a credit reporting agency for every foster child upon his or her 16th birthday. If a credit report contains negative information or evidence of identity theft, the county must refer the child to an approved credit counseling organization from a list developed by DSS. The Senate Appropriations Committee estimated costs of $120,000 GF for the counties to conduct the checks. The 2009-10 budget includes $355,000 ($229,000 GF) for implementation in the 56 non-Title-IV-E waiver counties. Subcommittee Staff Comment and Recommendation: Staff recommends rejecting the proposed TBL, which would transfer the Legislature’s authority to determine the sufficiency of funding for program implementation to the Administration. Staff also recommends holding open the funding for AB 340 implementation. Questions for DSS and DOF: 1) Please briefly summarize these proposals. 2) What have the Department and counties’ efforts to date included with respect to implementing AB 340 and AB 2985? Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 23 of 25 DSS Issue 8: Trailer Bill Language (TBL) to Extend Residentially Based Services (RBS) Pilot Program Budget Issue: DSS proposes TBL to amend and extend the Residentially Based Services (RBS) pilot program established by AB 1453 (Chapter 466, Statutes of 2007), as well as revise the statutory deadline for a resulting plan the Department is required to submit to the Legislature. Background on RBS Pilot: AB 1453 authorized a five-year pilot demonstration project to test alternative RBS program and funding models which are cost-neutral to the GF. The legislation also required DSS to deliver a detailed plan to the Legislature by January 1, 2011 for how to transform the current system of group care for foster children into an RBS system. The envisioned RBS system would provide short-term, intensive, residential treatment interventions along with community-based services and post-residential placement support aimed at reconnecting foster children to their families and communities. It was anticipated that the children enrolled in RBS would require shorter lengths of stay in high-cost group homes and would step down to lower levels of care and to permanent placements more quickly. According to DSS, unanticipated contract and licensing issues contributed to delays in implementing the pilot projects. Proposed Changes to Provisions Enacted by AB 1453: DSS proposes to extend the authorization for the pilot projects and the due date for development of the implementation plan until the pilot demonstration projects can operate for a sufficient amount of time to be fully evaluated. Specifically, the Department proposes to extend the due date for the implementation plan to July 1, 2014 and the authority to conduct the pilots until January 1, 2015. The Department also proposes other changes to statutes governing the RBS pilot. Pending Legislation: AB 2129 (Bass), which is currently awaiting a vote on the Assembly floor, also seeks to extend authorization for the RBS pilot. Subcommittee Staff Comment & Recommendation: Staff recommends rejecting the proposal without prejudice as to its merits. There is a pending policy bill that provides a more appropriate forum for discussion about whether and how to extend this pilot project. Questions for DSS: 1) Please briefly summarize the proposal and its anticipated fiscal impacts in 2010-11. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 24 of 25 DSS Issue 9: Positions Related to Recently Enacted Legislation Budget Issue: The Governor’s proposed budget for 2010-11 includes, in a budget change proposal, $200,000 ($169,000 GF) in temporary help resources to implement recent legislation, including AB 762 (Bonnie Lowenthal, Chapter 471, Statutes of 2009); SB 781 (Leno, Chapter 617, Statutes of 2009); and AB 1325 (Cook, Chapter 287, Statutes of 2009). Background on AB 762 and DSS Request: As a result of this newly enacted legislation, Residential Care Facilities for the Elderly (RCFEs) may accept bedridden, nonambulatory individuals (those who are unable to transfer independently to and from bed, but do not need assistance turning or repositioning or can otherwise move around without assistance) as residents if they have obtained the appropriate fire clearance. Legislative analysis indicated that the bill had negligible state costs. DSS requests $57,000 GF in one-time temporary help funding to update regulations, an evaluator manual, and technical assistance guides, as well as train field staff. Background on SB 781 and DSS Request: As a result of this newly enacted legislation, RCFEs must include additional information when providing notice of eviction to a resident, including the reason for the eviction, the effective date of the eviction, and additional information to inform the resident of his or her rights regarding eviction. Legislative analysis indicated no significant costs associated with the bill. DSS requests $47,000 GF in 2010-11 and $39,000 GF in 2011-12 in temporary help funding to review facility documentation of the required information in applications, admissions agreements, and reports of eviction, as well as respond to any increased complaints that may result from increased information on how to dispute evictions, and train staff. Background on AB 1325 and DSS Request: As a result of this newly enacted legislation, tribal customary adoption is, for a period of three years, an additional exception to the termination of parental rights for parents of Indian children who are dependents of the juvenile court. The Judicial Council is required to study and report to the Legislature on the effects of tribal customary adoption on children, parents, Indian custodians, tribes and courts. The Assembly Appropriations Committee analysis indicated that costs would be minor and absorbable. The Senate Appropriations Committee analysis indicated that this bill would likely apply to less than 10 children per year, but would create the need for one two-year limited term position, at a cost of $59,000 GF annually (with additional federal funds). DSS requests $96,000 ($65,000 GF) in 2010-11 and $88,000 ($59,000 GF) in temporary help funding to conduct implementation workgroup meetings with tribal representatives, counties, adoption agencies, and the Judicial Council. Subcommittee Staff Comment & Recommendation: Staff recommends holding this issue open. Subcommittee #3 April 22, 2010 Senate Budget and Fiscal Review Page 25 of 25 Questions for DSS: 1) Please briefly summarize the anticipated responsibilities associated with the requested staffing resources. 2) For AB 762 and SB 781, why weren’t the proposed resources identified as necessary while the bills were pending passage by the Legislature? ”

pdf April 21, 2010 Assembly Sub. #1 hearing outcomes

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“Actions Taken Subcommittee No. 1 on Health and Human Services Assemblymember Dave Jones, Chair (Members: Beall, Chesbro [Chaired in place of Asm. Jones], De La Torre, Emmerson, and Nestande; Alternate: Blumenfield) Wednesday, April 21, 2010 State Capitol, Room 444 1:30 p.m. Item Topic and Action Taken Vote-Only Items 0530 Health and Human Services Agency Issue 1 April 1 Finance Letter Health Information Exchange Federal Grant Award Action: Approve the request in the Spring Finance Letter. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield 4170 California Department of Aging Issue 1 Transfer MSSP Local Assistance General Fund to DHCS Action: Adopt an alternative technical fix developed by DOF and the Departments. Under this alternative, a new program would be created within CDA’s budget for Medi-Cal program funding and Budget Bill Language (for Provision 2 of Item 4170-101-0001) would be revised to authorize the transfer of funds from that new program to DHCS. This conforms to action taken in Senate Subcommittee No. 3. Vote: 5-0 Ayes: Chesbro, De La Torre, Emmerson, Nestande, and Blumenfield; Not Voting: Beall Issue 2 April 1 Finance Letter Senior Community Service Employment Program Additional Federal Grant Award Action: Approve the request in the Spring Finance Letter. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield 5175 Department of Child Support Services Issue 1 Mother’s Marital Status Trailer Bill Language Action: Approve the proposed TBL, with an amendment to add a cross-reference to existing law that protects the confidentiality of the information shared. This action conforms to action taken in the Senate Budget Subcommittee No. 3. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield Items to be Heard 0530 HHS Agency Office of Systems Integration Issue 1 Statewide Automated Welfare System Project Requests Hold open the budget requests related to the SAWS automation projects pending May Revision. Issue 2 CWS\/CMS Web Project Hold the item open pending May Revision. Issue 3 Statewide Fingerprint Imaging System Hold the item open pending May Revision. Issue 4 April 1 Finance Letter Electronic Benefit Transfer Project Action: Approve the request in the Spring Finance Letter. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield Issue 5 April 1 Finance Letter CMIPS II Action: Approve the request in the Spring Finance Letter. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield 5175 Department of Child Support Services Issue 1 Federal Performance Measures No action taken oversight item. Issue 2 Revenue Stabilization Funding Action: Approve the requested revenue stabilization funds for 2010-11 and continue to monitor the use of those funds and the resulting collections going forward by readopting the TBL that was included in the 2009-10 Budget on this issue, making the report for an annual report required in any year in which this appropriation takes place. Vote: 5-0 Ayes: Chesbro, De La Torre, Emmerson, Nestande, and Blumenfield; Not Voting: Beall Issue 3 April 1 Finance Letter Administrative Order Setting and Modification Process Action: Reject the proposal in the Spring Finance Letter. Direct DCSS to meet with stakeholders, to include legislative staff, as soon as possible toward consideration of a proposal involving the Early Intervention and stipulation-agreement approach included in Tier 1 of the proposal, and, if there are cost savings that maintain security, due process and access to court channels, report back to the Subcommittee at May Revision on an alternative proposal in this vein. Vote: 5-1 Ayes: Chesbro, De La Torre, Emmerson, Nestande, and Blumenfield; No: Beall Issue 4 CCSAS Transition to New State Disbursement Unit Provider Action: Approve the use of new funding of $4.8 million General Fund associated with this request, and sweep all unspent DCSS reappropriation funds, scoring net $1.8 million General Fund. Direct staff to work with DOF and LAO to realize this change and make appropriate BBL changes to align with the action. Vote: 6-0 Ayes: Chesbro, Beall, De La Torre, Emmerson, Nestande, and Blumenfield ”

pdf April 21, 2010 Assembly Sub #1 Hearing Agenda

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“Subcommittee No. 1 on Health and Human Services April 21, 2010 Agenda Subcommittee No. 1 On Health and Human Services Assemblymember Dave Jones, Chair Wednesday, April 21, 2010 State Capitol, Room 444 1:30 p.m. Item Description Page Vote-Only Items 0530 Health and Human Services Agency Issue 1 April 1 Finance Letter Health Information Exchange Federal Grant Award 3 4170 California Department of Aging Issue 1 Transfer MSSP Local Assistance General Fund to DHCS 4 Issue 2 April 1 Finance Letter Senior Community Service Employment Program Additional Federal Grant Award 6 5175 Department of Child Support Services Issue 1 Mother’s Marital Status Trailer Bill Language 7 Items to be Heard 0530 HHS Agency Office of Systems Integration Issue 1 Statewide Automated Welfare System Project Requests 8 Issue 2 CWS\/CMS Web Project 12 Issue 3 Statewide Fingerprint Imaging System 14 Issue 4 April 1 Finance Letter Electronic Benefit Transfer Project 15 Issue 5 April 1 Finance Letter CMIPS II 17 5175 Department of Child Support Services Issue 1 Federal Performance Measures 18 Issue 2 Revenue Stabilization Funding 21 Issue 3 April 1 Finance Letter Administrative Order Setting and Modification Process 23 Issue 4 CCSAS Transition to New State Disbursement Unit Provider 32 VOTE-ONLY ITEMS 0530 Health and Human Services Agency Issue 1: April 1 Finance Letter Health Information Exchange Federal Grant Award For 2010-11, it is requested that Item 0530-017-3163 be added to the Budget Bill to appropriate $17,229,000 from the federally supported California Health Information Technology and Exchange Fund. The proposed funds will be used to contract for a Governance Entity that will implement a statewide collaborative process for expanding capacity for electronic health information exchange ($16.5 million), and to support 3.0 new limited-term positions, through the end of the grant period, and to fund 3.0 existing positions through this federal grant rather than through state reimbursements. background California has been awarded a four-year $38.7 million federal Health and Human Services (HHS) grant, funded under the Health Information Technology for Economic and Clinical Health Act (the HITECH Act), which is part of the American Recovery and Reinvestment Act of 2009 (ARRA). This new Act authorizes HHS to enter into cooperative agreements with states in order to fund efforts to achieve widespread and sustainable health information exchange (HIE) within and among states through sharing of certified Electronic Health Records (EHRs). Staff Recommendation: Staff recommends approval of the BCP request as outlined. 4170 California Department of Aging Issue 1: Transfer MSSP Local Assistance General Fund to DHCS CDA requests, in a budget change proposal, the permanent transfer of $20.1 million GF for MSSP from CDA’s budget to the budget for the Department of Health Care Services (DHCS). The 2009-10 budget for MSSP state operations and local assistance included a total of $46.6 million ($18.6 million GF). CDA states that this technical change is necessary because the current division of funds for the program between CDA and the Department of Health Care Services (DHCS) makes its funding unclear to the general public and to legislative entities. In addition, CDA states that the funding split creates unnecessary duplication of work by CDA and DHCS (e.g., the preparation of budget requests). background MSSP assists elderly Medi-Cal recipients to remain in their homes. Clients must be at least 65 years old and must be certified as eligible to enter a nursing home. The services that may be provided with MSSP funds include: Adult Day Care, Housing Assistance, Personal Care Assistance, Protective Supervision, Care Management, Respite, Transportation, Meal Services, and other Social and Communications Services. The program, which began in 1977 with eight sites, now has 41 sites and serves up to nearly 12,000 clients per month. CDA oversees the operations of the MSSP program statewide and contracts with local entities that directly provide MSSP services. As the single state agency authorized to administer the state’s Medicaid program, DHCS also has an integral role because the program operates under a federal Medicaid Home and Community-Based, Long-Term Care Services Waiver. In 2006, the Legislature transferred the resources at issue to the CDA budget to enhance the Legislature’s ability to oversee the program and to align the program’s GF funding with its management. Several other state programs that receive Medicaid funding are overseen by and also have resources budgeted under departments or agencies other than DHCS. staff comment The continued alignment of the funding and management of MSSP under CDA will best meet the Legislature and public’s needs for information about and oversight of the program. Therefore, staff recommends rejecting this proposal. However, staff recommends adopting an alternative technical fix developed by DOF and the Departments. Under this alternative, a new program would be created within CDA’s budget for Medi-Cal program funding and Budget Bill Language (for Provision 2 of Item 4170-101-0001) would be revised to authorize the transfer of funds from that new program to DHCS. Staff Recommendation: Staff recommends adopting an alternative technical fix developed by DOF and the Departments. Under this alternative, a new program would be created within CDA’s budget for Medi-Cal program funding and Budget Bill Language (for Provision 2 of Item 4170-101-0001) would be revised to authorize the transfer of funds from that new program to DHCS. This conforms to action taken in Senate Subcommittee No. 3. Issue 2: April 1 Finance Letter Senior Community Service Employment Program Additional Federal Grant Award This proposal requests a one-time augmentation of federal budget authority (FY 09-10 of $848,000 and FY 10-11 of $3,392,000) due to the receipt of federal funds from the United States Department of Labor (DOL). The administration states that current year authority will be requested through the Section 28 process. These funds will be used to provide additional support for the existing Senior Community Service Employment Program (SCSEP) administered by the California Department of Aging (CDA) through the Area Agencies on Aging (AAAs). All SCSEP Appropriations Act funds must be expended by June 30, 2011. background SCSEP provides part-time work-based training opportunities at local community service agencies for low-income older workers who have poor employment prospects. While the goal of CDA is to have local entities expend these funds quickly, not all funds will be expended in FY 09-10 due to various local constraints. Therefore any unspent funds allocated in FY 09-10 may be moved into FY 10-11 as allowed per the grant and CDA’s provisional budget act language via the Budget Revision process. DOL has provided funding for an additional 434 participant slots statewide. Additional participant slots will be equitably distributed to the local SCSEP projects according to the CDA funding formula. Without this authority, CDA will be unable to support local activities intended to provide additional subsidized local employment for low-income seniors. Staff Recommendation: Staff recommends approval of the additional federal budget authority sought in the April 1 letter as outlined. 5175 Department of Child Support Services Issue 1: Mother’s Marital Status Trailer Bill Language DCSS proposes, through Trailer Bill Language (TBL), to amend state law to ensure that the Department of Public Health (DPH) can continue to share information about mothers’ marital status with DCSS. DCSS uses this information to meet reporting requirements that are tied to federal incentive funding related to paternity establishment. background The DPH Health Information and Strategic Planning Division maintains and manages vital records (i.e., birth, death, fetal death, adoption, marriage, and dissolution) for the state. State law generally prohibits DPH from sharing data regarding individuals’ marital status. However, DPH currently shares this information with DCSS via an Interagency Agreement, and DCSS is mandated to protect the data in compliance with related privacy and confidentiality requirements. The Departments are seeking to have the authority for this sharing of information by DPH with DCSS formalized in statute. Staff Recommendation: Staff recommends approval of the proposed TBL, with an amendment to add a cross-reference to existing law that protects the confidentiality of the information shared. This action conforms to action taken in the Senate Budget Subcommittee No. 3. ITEMS TO BE HEARD 0530 HHS Agency Office of Systems Integration With a total budget of $251.9 million (OSI Fund, transfers from other mixed sources) in 2009-10 and a proposed budget of $271.6 million in 2010-11, OSI procures and manages automation projects for the Departments of Social Services and Employment Development. Issue 1: Statewide Automated Welfare System Project Requests Overview. The total 2009-10 maintenance & operations (M&O) budget for SAWS is $174.7 million ($93.5 million GF\/TANF). These figures include costs for each of the four consortia plus the Welfare Data Tracking and Implementation Project and the impact of a combined $11.6 million ($4.5 million GF) reduction that was part of the enacted budget. These figures do not include SAWS statewide project management or upgrade and replacement projects. As a point-in-time snapshot, those additional costs in 2009-10 were $113.7 million ($66.7 million GF\/TANF). OSI provides state-level project management and oversight for SAWS, which automates the eligibility, benefit, case management, and reporting processes for a variety of health and human services programs operated by the counties, including the CalWORKs welfare-to-work program, Food Stamps, Foster Care, Medi-Cal, Refugee Assistance, and County Medical Services. There are currently four SAWS consortia. After ISAWS finishes its migration into C-IV (anticipated to occur in June 2010, with some close-out funding for ISAWS remaining in 2010-11), there will be three consortia systems that each contain information for roughly one-third of the statewide caseload. Current requests for the SAWS Consortium are outlined below. ISAWS Budget Request. OSI requests to reduce the budget for the ISAWS Migration project by $75.4 million ($45.2 million GF\/TANF) as a result of the completion of implementation activities. In 2009-10, Development and Implementation costs for the ISAWS Migration are budgeted to be $94.9 million, while Maintenance and Operations (M&O) costs are $11.0 million. By contrast, after the Migration is fully implemented in 2010-11, the Governor’s budget includes $11.4 million for Development and Implementation (a decrease of $83.5 million) and $19.1 million for M&O (an increase of $8.1 million). The Governor’s budget for 2010-11 also continues $23.9 million ($12.9 million GF\/TANF) in full-year funding for ISAWS. OSI has indicated, however, that the ISAWS budget for 2010-11 will be reduced in the May budget revision to instead include a significantly lower amount of closing costs and contingency funding in case of delays in the final stages of the Migration. Background. The ISAWS Migration project is transitioning 35 ISAWS consortium counties to another SAWS consortium called C-IV. After the migration, C-IV will have 13,050 users and include information for approximately 28 percent of clients statewide (according to 2007-08 data). The ISAWS Migration planning phase occurred between July 2006 and June 2008. Implementation began in October 2008, with the actual transition going live in three waves during fiscal year 2009-10. The first of these waves took place in November 2009 and the last is scheduled to take place in June 2010. The Migration Project has provided two months of technical support after each of the waves that have happened to date. CalWIN Budget Request. OSI requests budget changes and technical adjustments resulting in an increase of CalWIN funding authority by $1.5 million for 2009-10 and $4.2 million for 2010-11. The total proposed 2010-11 budget for CalWIN is $74.3 million ($38.8 million GF\/TANF). Background. Cal-WIN is the automation system that supports the Welfare Client Data System, one of four consortia within the Statewide Automated Welfare System (SAWS). CalWIN serves 18 counties with approximately 39 percent of the statewide caseload. The requested adjustments are a result of the following factors: \u00b7 As a result of negotiations with the CalWIN vendor in anticipation of contract extension, the price per case increased from $0.67 to $.75. This change accounts for $2.3 million of the requested increase in 2010-11. \u00b7 The caseload for the consortium’s counties is projected to grow more than previously anticipated (by 5.3 percent, rather than 3.5 percent in the budget year). This accounts for a $1.5 million increase in 2010-11. \u00b7 A higher amount of the 2009-10 budget cuts to the aggregate SAWS consortia system were originally allocated to CalWIN than is the case today. Another consortium, C-IV, instead experienced a greater reduction than was originally anticipated. This accounts for the $1.5 million adjustment in the current year. LEADER Budget Request. OSI requests an increase of $44.3 million as the planning phase of the LRS project ends and the design, development and implementation phase begins. Including the proposed resources, the 2010-11 budget for LRS would be $45.6 million ($23.3 million GF\/TANF). This proposal also includes an additional six-month delay of the beginning of the system’s development (beyond a six-month delay enacted in the 2009-10 budget). The 2009-10 LRS project planning budget is $1.3 million ($671,000 GF\/TANF). OSI anticipates total average costs for LRS development and implementation of $102.2 million annually, for a total of $408.6 million over four years ($208.6 million GF\/TANF, $173.3 million federal funds and $26.7 million county funds) before reaching the M&O phase of the project after December 2014. Although the differing functionalities of the systems make direct comparison difficult, it is worth noting that OSI estimates higher annual operations costs for LRS than those for LEADER. LEADER. With 2009-10 and 2010-11 M&O costs of $30.7 million ($15.7 million GF\/TANF) each fiscal year, LEADER is one of four consortia within SAWS. Los Angeles (LA) County entered into an agreement for Unisys to develop LEADER in 1995 and completed countywide implementation of the system in 2001. The system has been in its M&O phase since that time, with its latest Unisys contract scheduled to expire April 30, 2011. To accommodate the LRS schedule, OSI will seek approval to again extend that contract for four additional years through April 30, 2015. The Legislature has appropriated a total of $5.3 million ($2.7 million GF\/TANF) between fiscal years (FY) 2005-06 and 2009-10 to support the planning process for a new system to replace LEADER. After the February 2009 budget agreement delayed LRS activities for six months, Los Angeles began negotiations for an LRS contract with a vendor in late 2009. Those negotiations are in progress and could result in lower cost estimates. OSI now expects to conclude planning activities at the end of 2010 and to begin design, development, and implementation of the LRS project in January 2011. OSI anticipates that the project could be completed in December 2014. LA County intends for LRS to replace not only LEADER, but also the Greater Avenues for Independence (GAIN) Employment and Reporting System (GEARS) for its welfare-to-work program, as well as its General Relief Opportunities for Work (GROW) system, and to contain options for other functionalities. GEARS is currently funded with $9.2 million TANF funds, while GROW is funded with $2 million county-only funds. According to OSI and LA County, LEADER technology is outdated and cumbersome. In addition to meeting strict federal funding requirements and expectations, LRS will streamline LA’s business practices, eliminate duplicative data entry, and minimize errors. OSI also indicates that LRS will expand clients and service providers’ ability to apply for benefits or report case changes online. LRS will minimize the state’s dependency on one vendor’s proprietary hardware and software components to run LEADER. The federal government has previously expressed concerns about the state and county’s continued non-competitive use of the same vendor; and OSI has indicated that no other qualified vendors have been willing to enter a bid to operate the LEADER system. Panelists \u00b7 DSS\/OSI: Please speak briefly to each budget request. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Staff Recommendation: Staff recommends holding open the budget requests related to the SAWS automation projects pending May Revision. Issue 2: CWS\/CMS Web Project OSI requests $1.8 million ($827,000 GF) for 10 new positions to support the continuing development of CWS\/Web, a replacement system for the existing CWS\/CMS. These 10 positions would be in addition to 12 existing OSI positions and up to another 6 OSI-contract staff currently supporting this phase of the project. The 2009-10 budget for CWS\/Web is $7.1 million ($3.2 million GF). Including the requested funds for OSI staff (and other staff requested by DSS), the 2010-11 budget for the project would increase to $9.4 million ($4.3 million GF). OSI estimates a total cost of $202.8 million ($91.9 million GF) between 2012 and 2014 to complete the implementation of CWS\/Web and enter into its M&O phase. background California’s CWS system includes a variety of state-supervised, county-administered interventions designed to protect children. Major services consist of emergency response to reports of suspected abuse and neglect, family maintenance or reunification and foster care. CWS\/CMS is an automated system that provides case management capabilities for CWS agencies, including the ability to generate referrals, county documents, and case management and statistical reports. The total 2009-10 CWS\/CMS project budget is $83.3 million ($38 million GF). The CWS\/CMS system was implemented statewide in 1997, and OSI states that CWS\/Web is necessary because the CWS\/CMS technology is outdated. In addition, OSI and DSS state that the CWS\/Web system is needed to increase efficiency and to comply with federal system requirements (which are tied to federal funding). The CWS\/Web project is currently in a planning stage, preparing for a full implementation after development ends in 2014. When CWS\/Web is completed, the system will rely on a more modern, web-based technical architecture. According to OSI, the amount and complexity of work related to the CWS\/Web Request for Proposal process is greater than initially anticipated. The requested positions would focus on database administration, security management, development, testing, training, quality assurance, operations and configuration management requirements. Without these resources, OSI states that the risk that the CWS\/Web would ultimately fail to be delivered on time, within budget and in accordance with established requirements would be significantly increased. Panelists \u00b7 DSS\/OSI: Please speak briefly to the budget request. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Possible Questions DSS\/OSI, please briefly explain the need for 10 additional staff at OSI to support the planning process for CWS\/Web. DSS\/OSI, how will these positions fit in with the project’s needs as it moves into development and implementation? Staff Recommendation: Staff recommends holding the item open pending May Revision. Issue 3: Statewide Fingerprint Imaging System The administration requests an increase in OSI spending authority of $8.2 million. The administration states that this is a technical adjustment that will provide conforming authority to spend the $8.2 million already included in the Department of Social Services’ budget for the fingerprint imaging of IHSS recipients. background The administration also requests position authority to establish, out of existing funds, four new OSI positions beginning in fiscal year 2010-11 to staff the project for implementation of the SFIS for IHSS recipients and for ongoing support for SFIS in the CalWORKs, Food Stamps, and GA\/GR programs. Adding the IHSS to the statewide imaging requirements will, at a minimum, add 4,000 new case workers and increase the number of supported workstations by at least 200 percent. Two of the new staff will replace 1.5 contractor staff, and the other two will manage the additional workload required by the IHSS enhancement. No additional funding is being sought for the positions as the funding has already been appropriated. Panelists \u00b7 DSS\/OSI: Please speak briefly to the budget request. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Possible Questions DSS\/OSI, please provide an update on the IHSS Fingerprinting pilot project and how this is informing costs associated with the 2010-11 implementation? Can the administration advise on what changes we might see in this budget area at May Revision? DSS\/OSI, how much General Fund costs are attributable to this new requirement? Staff Recommendation: Staff recommends holding the item open pending May Revision. Issue 4: April 1 Finance Letter Electronic Benefit Transfer Project The administration requests a decrease of $10.3 million in FY 09-10 to both the Department of Social Services Local Assistance and OSI Spending Authority due to cost avoidance under the new prime contractor services contract. This request also includes a decrease of $20.9 million in DSS Local Assistance and a reduction of $19.7 million to OSI Spending Authority in FY 10-11 due to reduction of state staff and OE&E, cost avoidance under the new ACS contract, reduction of other contract costs due to elimination of transition-related costs, and elimination of county and IV&V costs related to the transition. background To expand, the cost avoidance of $10.3 million is due to the transition of EBT services from the J. P. Morgan Electronic Financial Services, Inc. (JPMorgan EFS) EBT system to the ACS State and Local Solutions, Inc. (ACS) EBT system. The ACS contract is a more cost effective solution than the original EBT services contract, primarily due to the following reasons: \u00b7 Nationwide, costs for EBT services today have come down significantly from 2000 when California executed its first EBT contract with Citicorp, which was later taken over by JPMorgan EFS. \u00b7 The initial EBT procurement resulted in only one bidder (Citicorp); hence, California paid premium rates for EBT services. When it was time to procure new EBT services, one of the goals of the reprocurement effort was to develop the Request for Proposal (RFP) in such a way as to encourage competition between EBT service providers. Two bidders submitted proposals (JPMorgan EFS and ACS), which resulted in a cost competition The rate structure under the JPMorgan EFS contract contained unbundled costs where the state paid three different cost-per-case-month (CPCM) rates: food benefits only, cash benefits only, and combined food and cash benefits, along with various other costs for related services and equipment (i.e. calls to the Client Automated Response Unit (ARU), Automated Teller Machine (ATM) cash withdrawals, new and replacement card issuance, pin issuance, monthly payphone surcharge, and purchase of administrative equipment). Research conducted prior to the development of the RFP showed that a bundled rate structure (all costs [except work authorizations] are rolled up into the three different CPCM rates) would likely result in California paying less for ongoing EBT services. This proved true, as the state is now realizing a significant cost avoidance under its new EBT contract. Panelists \u00b7 DSS\/OSI: Please speak briefly to the budget request. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Staff Recommendation: Staff recommends approval of the April 1 Finance Letter. Issue 5: April 1 Finance Letter CMIPS II The administration requests a reduction in the DSS Local Assistance budget in CY 09-10 of $17.8 million and a corresponding reduction of $8.6 million in OSI Spending Authority. Position authority is also requested for one two-year limited term position in FY 10-11. No funding is requested in association with this position. This position is stated to be necessary to support Contract Management and Project Administration activities. The budget reductions reflect the schedule shift due to changes in the development cycle strategy, and transition into the implementation phase of the project. This shift does not affect the total project budget, but redistributes costs over the remaining term of the project. background The purpose of the CMIPS II Project is to design, develop, implement, operate, and maintain a new system to replace the legacy CMIPS system that has been in place for over twenty-five years and supports four In-Home Supportive Services (IHSS) Programs: Personal Care Services Program (PCSP), IHSS Plus Waiver (IPW), IHSS Residual (IHSS-R), and Waiver Personal Care Services (WPCS). These programs provide in-home personal and domestic services to aged, blind, or disabled individuals. These services allow over 400,000 recipients to stay at home and avoid institutionalization. The IHSS program is administered by each county with oversight from the DSS. A competitive bid for CMIPS II was conducted and the prime vendor contract was awarded to EDS on March 31, 2008. The project approach and budget for the implementation phase was approved in the 2007 Implementation Advance Planning Document (IAPD). The IAPD referenced a contract initiation start date of April 1, 2008 and planned 38 months for the Design, Development, and Implementation (DDI) activities. Due to the timing of federal approval and the changes adopted pursuant to legislation included as part of the 2009-10 Budget Act, the project timeline shifted, extending the DDI phase from a total of 38 months to 46 months. Panelists \u00b7 DSS\/OSI: Please speak briefly to the budget request. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Staff Recommendation: Staff recommends approval of the April 1 Finance Letter. 5175 Department of Child Support Services Issue 1: Federal Performance Measures With a total budget of $1.0 billion ($296.3 million GF) and 617 authorized staff positions in 2009-10, and a proposed budget of $1.0 billion ($301.3 million GF) in 2010-11, DCSS oversees child support establishment, collection and distribution services statewide. The 2007 Human Services budget trailer bill (SB 84, Chapter 177, Statutes of 2007) required DCSS to provide an annual update to the Legislature in the subcommittee process, beginning in 2008, on state and local performance on federal outcome measures, and child support collections. The department will provide this annual update during this hearing. background The primary purpose of the child support program is to collect support payments for custodial parents and their children from absent parents. Local Child Support Agencies (LCSAs) provide services such as locating absent parents; establishing paternity; obtaining, enforcing, and modifying child support orders; and collecting and distributing payments. When a family receiving child support is also receiving public assistance (in approximately 20 percent of cases), the LCSAs distribute the first $50 per month collected from the non-custodial parent to the custodial parent and child. Any additional support collected is deposited into the General Fund to partially offset the state’s costs for providing public assistance. Federal Outcome Measures. Since federal fiscal year (FFY) 2000, the federal government has awarded incentive funding to state child support programs based on specific performance measures. In FFY 2009, the total pool of incentive funds available to states is $504 million. DCSS estimates that California will receive incentive funds of $41.7 million in the state’s 2009-10 fiscal year and $40.4 million in 2010-11. The federal government can also penalize states that fall below minimum performance thresholds, up to a maximum penalty of 25 percent of the state’s total Temporary Assistance to Needy Families (TANF) block grant. These federal performance measures and minimum thresholds are described below, along with information on California’s recent performance. Statewide paternity establishment percentage measures the total number of children born out-of-wedlock for whom paternity was acknowledged or established in the fiscal year, compared to the total number of children born out-of-wedlock during the preceding fiscal year. The minimum federal threshold is 50 percent plus a two to six percent increase annually if under 90 percent. In 2009, California ranked 4th out of the 32 states for which PEP outcomes were available. This is an improvement from the state’s ranking of 8th in the prior year. Paternity Establishment Percentage IV-D PEP (measure of entire caseload) FFY 2005 – 86.0% FFY 2007 – 91.3% FFY 2009 – 97.3% Statewide PEP (measure of one year) FFY 2005 106.5% FFY 2007 106.7% FFY 2009 103.4% Percent of cases with a child support order measures cases with support orders, compared to the total caseload. The minimum federal threshold is 50 percent or a five percent annual increase. In 2009, California ranked 35th out of the 51 states (including the District of Columbia) for which this outcome was measured. This is a decline from the state’s ranking of 30th in the prior year. Percent of Cases with a Child Support Order FFY 2005 80.3% FFY 2007 82.1% FFY 2009 78.8% Current collections performance measures the amount of current support collected, compared to the total amount of current support owed. The minimum federal threshold is 40 percent. In 2009, California ranked 45th out of the 51 states (compared with 46th in the prior year). Current Collections Performance FFY 2005 49.3% FFY 2007 51.5% FFY 2009 53.4% Arrearage (past due) collections performance measures the number of cases with child support arrearages for which there are collections during the FFY. The minimum federal threshold is 40 percent. In 2009, California ranked 40th out of the 51 states (compared with 41st in the prior year). Arrearage Collections Performance FFY 2005 56.0% FFY 2007 57.1% FFY 2009 59.4% Cost effectiveness measures the total amount of distributed collections, compared to total program expenditures (expressed as distributed collections per dollar of expenditure). The minimum federal threshold is $2.00. In 2009, California ranked 48th out of the 51 states (although this ranking and the related 2009 cost effectiveness data for California- as reflected below- may be inflated because of a cost offset based on a computation error in the prior year*). Cost Effectiveness Performance Level FFY 2005 – $2.15 FFY 2007 – $2.01 FFY 2009 – $2.10* Panelists \u00b7 DCSS: Please provide a brief update on California’s performance on each of the five federal measures. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Possible Questions Department, please explain the state’s continuing low performance on collections and cost-effectiveness measures when compared to other states? Department, what are your specific plans to improve upon these outcomes? Staff Recommendation: This section is included as an oversight item no action is required. Issue 2: Revenue Stabilization Funding The Administration proposes to continue in 2010-11 an augmentation of $18.7 million ($6.4 million GF) that was enacted in 2009-10. This revenue stabilization funding was intended to support LCSAs in maintaining caseworker staffing levels and stabilizing child support collections. In 2009-10, DCSS estimated that these funds would result in increased recoupment of $14.4 million in public assistance costs ($6.6 million GF revenue, and the rest as revenue to federal and county governments). DCSS also expected these funds to result in collection of an additional $70 million in child support payments that would be passed on to custodial parents and their children. background From 2003-04 to 2009-10, state and federal funding for LCSA basic administrative expenses was held flat, with the exception of two one-time increases. According to DCSS, as a result of this relatively flat funding and local increases in the costs of doing business, LCSA staffing levels declined during that time by 1,935 positions (including 517 caseworkers) or 23 percent from a peak in 2002-03, and child support collections decreased. During that same time, the child support caseload statewide declined by about 11 percent (200,000 cases). The Legislature approved the Administration’s request for revenue stabilization funds in 2009-10. ABx4 4 (Chapter 4, Fourth Extraordinary Session of 2009) also contained enacted TBL related to this funding. That legislation required that 100 percent of the new funds be used to maintain caseworker staffing levels. ABx4 4 also specified that revenue stabilization funds should be distributed to counties based on their performance on two key federal outcome measures Collections on Current Support, and Cases with Collections on Arrears. Finally, ABx4 4 required each LCSA that receives funds to have submitted to DCSS an Early Intervention Plan (EIP) to increase the engagement of non-custodial parents, and required reporting by DCSS to the Legislature on the use and impacts of revenue stabilization funds. According to a survey DCSS conducted of LCSAs, revenue stabilization funding in 2009-10 has led to retention of 245 caseworkers who may otherwise have been laid off. Overall child support collections during the first six months of 2009-10 declined by $3.4 million or three-tenths of one percent when compared with the first six months of 2008-09. The Department estimates that given the recession and high level of unemployment, and based on its assumptions regarding the marginal collections each case worker contributes, the total child support collections during that same time would have dropped by six percent without the work of staff members the LCSAs retained due to stabilization funds. Specifically with respect to collections that become GF revenue (from cases in which the custodial parent receives public assistance), the first six months of 2009-10 showed an increase of $9.9 million GF ($20.8 million total including collections distributed to the federal government) or 10.8 percent when compared to the same time period in 2008-09. The Department estimates that without revenue stabilization funds this increase would have been lower\u2014at about $5.3 million GF ($11.1 million all funds) or 5.8 percent. With respect to non-assistance cases, the first six months of 2009-10 showed a decrease of $24.2 million or 2.8 percent in collections distributed to custodial parents when compared to the same time in 2008-09. The Department estimates that the decrease would have been larger\u2014about $75.2 million or 8.7 percent\u2014without revenue stabilization funds. Panelists \u00b7 DCSS \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Possible Questions Department, please briefly describe how revenue stabilization funds were allocated to LCSAs in 2009-10 and what impact you believe those funds have had on their ability to collect and distribute child support statewide. Department, please briefly describe the early intervention efforts that LCSAs are engaging in and provide specific examples of how these efforts have proven effective so far. Department, in the budget year and future years, how will you continue to track and assess the effectiveness of the proposed augmentation and resulting revenue increase? Staff Recommendation: Staff recommends approval of the requested revenue stabilization funds for 2010-11 and recommends that the Subcommittee continue to monitor the use of those funds and the resulting collections going forward. Issue 3: April 1 Finance Letter Administrative Order Setting and Modification Process The DCSS is requesting authority to establish an administrative process for setting and modifying child support orders. As proposed, this administrative process would be in addition to the current judicial process and would be administered by DCSS and Local Child Support Agency (LCSA) staff. The Department proposed to redirect existing vacancies and associated resources to implement this change. The administration states that the Budget Year cost for training and travel of $324,000 ($110,000 General Fund) will be offset by savings of $3.3 million ($1.1 million GF), for a net savings of $3 million ($1 million GF). For 2011-12, the cost for travel of $77,000 ($26,000 General Fund) will be offset by savings of $17.1 million ($5.8 million General Fund), for a net saving savings of $17 million ($5.8 million GF). background The DCSS proposes to create a three-tier administrative process to establish and modify child support orders. This administrative process would be in addition to the current judicial process. The administration states that the change would improve the timeliness of services and the efficiency and cost effectiveness of child support operations. Current Process. In accordance with federal law, states have considerable flexibility in designing the processes by which they establish and modify child support orders. In some states, executive-branch agencies establish orders administratively. In many, courts play a key role in child support order establishment. An administrative process is one in which a child support program establishes and\/or modifies support orders, often without a court hearing. If an order is contested, the case is heard in the executive branch, and the presiding officer is a non-judge, such as a hearing officer. In this process, attorney involvement is limited. A judicial process is one in which child support orders are established in court. While child support program staff play a large role in this process (e.g., locating parents), an order is generally established on a specified court date. A judge or judge surrogate presides. Contested orders are also heard in court. Attorneys play a central role, often representing the child support agency before the court. Current Court Involvement. In California child support orders are established judicially. Court commissioners or family law judges have the final authority for deciding the amount of child support to be paid and who will be responsible for making the payments. LCSAs obtain support orders from the court, and may ask the court to modify existing orders. The courts use guidelines established by state law to set the amount of child support. The guidelines take into account how much money each parent earns and the amount of time each parent cares for the child. LCSAs may assist parents in preparing a stipulation agreement for child support without having to appear in court. LCSAs use the same guidelines as the court. If the NCP agrees to pay the guideline amount of child support, a stipulation is prepared. The court usually approves this stipulation without requiring a court appearance. Current law allows an individual to request a review of his or her child support order if there has been a change in circumstances. Current law also requires LCSAs to mail written notice to the parties in all cases, at least once every three years, informing them of their right to request that the LCSA review and, if appropriate, seek to modify the child support order. If the LCSA determines that a modification is appropriate, the LCSA files a Notice of Motion or Order to Show Cause with the court. Both parties are served with a copy of the notice, which notifies them of the date, time, and location of the hearing. At the hearing, the court reviews the information to determine the guideline child support amount. When both parties agree to a new child support amount prior to the hearing, LCSAs may assist them in preparing a stipulation agreement. The stipulation is filed with the court without the requirement of a hearing, and once approved by the court, becomes the new child support order. When a hearing is necessary to establish or modify a child support order, child support customers and LCSAs may appear by telephone, audiovisual, or other electronic means. Court commissioners must be physically present in the county courthouse where a matter is to be heard. Many small counties share the same commissioner, who must travel between court locations to preside over child support hearings. Administration’s Arguments. California established a child support commissioner system in 1996, intended to expedite the processing of child support orders. Unfortunately, limited court resources and the inability of local superior courts to coordinate efforts have had a systemic impact on the timely processing of IV-D cases. Child support customers who participate in the current judicial system experience a very lengthy, time-consuming process for establishing orders and obtaining support. On average, it takes six to nine months to establish a court order. Given the current economic condition and the absence of additional resources, proposals to allow the courts to coordinate efforts have been pursued. Steps have been taken to expand the accessibility of IV\u2011D courts by allowing child support customers and LCSAs to appear by telephone, audiovisual, or other electronic means. Under current law however, commissioners can only hear cases when they are physically present in the county courthouse where a matter is to be heard. Many small counties share the same commissioner, who must travel between court locations to preside over child support hearings, further limiting the availability of dates and times for matters to be heard. Delays in establishing support orders have a negative impact on families in need of child support, as well as NCPs who often find themselves owing child support arrears based on the amount of time between the filing of summons and the entry of judgment. Delays in modifying support orders to reflect changed circumstances also have the potential to increase uncollectible arrears that can discourage payment of current support obligations by noncustodial parents. Recognizing the importance of creating a good working relationship with participants from the outset of a case, the DCSS recently implemented a statewide focus on early intervention to encourage participants to communicate with the Child Support program. This proposal expands on those efforts by encouraging the efficient, non-adversarial and cost-effective establishment and modification of child support through the use of an innovative hybrid of judicial and administrative processes. Proposed Process. The DCSS proposes to create a three tier administrative process for the establishment and modification of court orders: Tier 1: Office Conference to be held at the LCSA, and administered by a caseworker. To start the process, the LCSA would file either a Summons & Complaint or Notice of Motion to Modify with the court, depending on whether the case is in the establishment or enforcement phase. The LCSA would schedule an office conference approximately 30 calendar days out, and generate a Notice to Appear which would be served on all parties along with a proposed order. The Notice to Appear would notify the parties that they are to appear at the LCSA for an office conference. The office conference would be administered by a Conference Officer (an LCSA caseworker with specialized mediation training). At the office conference, parties would be given an opportunity to provide additional information regarding their income, expenses, and child timeshare. The Conference Officer would calculate support immediately based on the best information available at that time. If the parties appear at the office conference and agree to the terms of support, the Conference Officer would generate a stipulation for the parties to sign immediately. The stipulation would be sent to the court for approval, along with a conference summary written by the Conference Officer. The order would become final when the court files the stipulation. The LCSA would then serve the parties by mail with a copy of the final order. If the parties either do not appear, or appear but do not agree to the terms of support, the Conference Officer would generate an interim order which would be based on the best information available to the LCSA as of that time. The interim order would be sent to the court for approval, along with a conference summary. The order would be considered issued and enforceable once filed by the court. The LCSA would serve the parties by mail with the interim order. If neither party requests a hearing within 20 calendar days from mail service of the interim order, the LCSA would file a Notice of Entry with the court, indicating that the interim order has become the final order. Tier 2: Administrative hearing before a Hearing Officer at the LCSA, administered by a State attorney (upon request only). If either party requests a hearing orally or in writing, within 20 calendar days from mail service of the interim order, the issue would be elevated to a hearing before a Hearing Officer (a State level attorney). The LCSA would file a notice with the court indicating that a hearing would be held, and that the interim order, while still enforceable, has not yet become final. The LCSA would schedule a hearing approximately 30 calendar days out, and notice the parties by mail of the hearing date. The parties could also file a request for hearing directly with the court, which would bypass this step. The hearing before a Hearing Officer would be held at the LCSA. The Hearing Officer would review the evidence regarding income, expenses, and child timeshare and make findings regarding those issues. At the conclusion of the hearing, the Hearing Officer would prepare an interim order based on the information presented. The LCSA would send the interim order to the court for filing, along with a hearing summary written by the Hearing Officer. The new interim order would be considered issued and enforceable once it is filed by the court. The LCSA would serve the parties by mail with the interim order. If neither party requests a hearing within 20 calendar days from mail service of the interim order, the LCSA would file a Notice of Entry with the court, indicating that the interim order has become the final order. Tier 3: Court hearing, administered by a Court Commissioner or Family Law Judge (upon request only). If either party wished to have a hearing before a Court Commissioner or Family Law Judge, they could request such a hearing within 20 days from service of the interim order. The LCSA would facilitate the scheduling of a court hearing, and an LCSA attorney would appear at the hearing to represent the agency. The court would consider the issues and issue a final order. To assist with the timely processing of child support hearings at the judicial level, this proposal would authorize the Title IV-D commissioners to hold hearings on cases managed by LCSAs from any physical court location within any county. Title IV-D commissioners could hear cases in person, by telephone, by audiovisual means or by other electronic means. The office conference process would be more user friendly and accessible, as it would engage child support customers at the beginning of the process and encourage them to fully participate in all aspects of establishing or modifying child support orders. The process would ensure the accuracy of support orders by relying on current income information, and would allow for more timely payments by noncustodial parents on current support and arrears. Furthermore, by reducing the time involved in establishing or modifying orders to an average of sixty days, the office conference process would assist in preventing the accrual of arrears and result in more efficient use of both LCSA and court resources. Implementation. DCSS states that implementation of this process would be accomplished in two phases. The first phase would implement the administrative process for all modifications statewide effective January 1, 2011. After one year of operation and evaluation of the process, the second phase would implement the administrative process statewide for the establishment of all child support orders, effective January 1, 2012. This timeline provides the necessary time for DCSS and the LCSAs to conduct necessary activities prior to implementation of the administrative process, including re-engineering of staff activities, hiring, and critical staff training. In addition, this timeline provides DCSS with the necessary time for the development of forms and automation changes. Fiscal. The fiscal breakdown as provided by the DCSS is included in the next two pages. Attachment 1 Net Cost Reduction SFY 2010-11 SFY 2011-12 SFY 2012-13 SFY 2013-14 SFY 2014-15 Cumulative Totals JCC Contract Reduction \\1 $ (2,710,664) $ (13,892,803) $ (27,955,347) $ (33,546,417) $ (33,546,417) $ (111,651,648) Potential Staff Changes (24.2) (99.9) (125.7) (50.0) – (299.8) LCSA Legal Staff \\2 $ (621,460) $ (3,185,133) $ (6,409,182) $ (7,691,018) $ (7,691,018) $ (25,597,811) Potential Staff Changes (10.9) (17.1) (28.4) (11.3) – (67.7) Hearing Officers & Support \\3 $ – $ – $ – $ – $ – $ – Proposed Staff Changes 18.0 2.0 – – – 20.0 One-Time Costs \\4 $ 250,000 $ – $ – $ – $ – $ 250,000 Ongoing Costs \\5 $ 74,000 $ 77,000 $ 50,000 $ 50,000 $ 50,000 $ 301,000 Net Change Total $ (3,008,124) $ (17,000,936) $ (34,314,529) $ (41,187,435) $ (41,187,435) $ (136,698,459) SGF $ (1,022,762) $ (5,780,318) $ (11,666,940) $ (14,003,728) $ (14,003,728) $ (46,477,476) \\1 Assumes a cost reduction for Court Commissioner Services as the processing of court orders shifts from a Judical to Administrative process. \\2 Assumes a reduction in local staffing (attorney classifications) as county representation in judical hearings decreases. Reduction based on statewide weighted average salary for all legal classifications. \\3 Assumes Staff Counsel IIIs (State level) will act as Hearing Officers under the new administrative hearing process for Child Support Orders. This proposal requests 14.0 SCIIIs, 3.0 SCIII (Supervisors), and 3.0 MSTs. \\4 Assumes one-time costs of $250,000 for curriculum development and training. \\5 Assumes ongoing costs of $50,000 for in-state travel for Hearing Officers. Admin Process – Fiscal Summary – By Tier 04.19.2010 Tier 1 Net Cost Reduction SFY 2010-11 SFY 2011-12 SFY 2012-13 SFY 2013-14 SFY 2014-15 Cumulative Totals JCC Contract Reduction \\1 $ (2,418,626) $ (12,249,436) $ (24,577,024) $ (29,492,429) $ (29,492,429) $ (98,229,944) Potential Staff Changes (21.6) (87.8) (110.2) (43.9) – (263.5) LCSA Legal Staff \\2 $ (554,506) $ (2,808,366) $ (5,634,651) $ (6,761,581) $ (6,761,581) $ (22,520,684) Potential Staff Changes (9.8) (15.0) (24.9) (9.9) – (59.5) Hearing Officers & Support $ – $ – $ – $ – $ – $ – Proposed Staff Changes – – – – – – One-Time Costs $ – $ – $ – $ – $ – $ – Ongoing Costs $ – $ – $ – $ – $ – $ – Net Change Total $ (2,973,132) $ (15,057,802) $ (30,211,675) $ (36,254,010) $ (36,254,010) $ (120,750,628) SGF $ (1,010,865) $ (5,119,653) $ (10,271,969) $ (12,326,363) $ (12,326,363) $ (41,055,214) Tier 2 Net Cost Reduction SFY 2010-11 SFY 2011-12 SFY 2012-13 SFY 2013-14 SFY 2014-15 Cumulative Totals JCC Contract Reduction \\1 $ (292,038) $ (1,643,368) $ (3,378,323) $ (4,053,988) $ (4,053,988) $ (13,421,704) Potential Staff Changes (2.6) (12.1) (15.5) (6.0) – (36.2) LCSA Legal Staff \\2 $ (66,954) $ (376,767) $ (774,531) $ (929,437) $ (929,437) $ (3,077,127) Potential Staff Changes (1.2) (2.1) (3.5) (1.4) – (8.2) Hearing Officers & Support $ – $ – $ – $ – $ – $ – Proposed Staff Changes \\3 18.0 2.0 – – – 20.0 One-Time Costs $ 250,000 $ – $ – $ – $ – $ 250,000 Ongoing Costs $ 74,000 $ 77,000 $ 50,000 $ 50,000 $ 50,000 $ 301,000 Net Change Total $ (34,992) $ (1,943,134) $ (4,102,854) $ (4,933,425) $ (4,933,425) $ (15,947,831) SGF $ (11,897) $ (660,666) $ (1,394,970) $ (1,677,365) $ (1,677,365) $ (5,422,263) \\1 Assumes a cost reduction for Court Commissioner Services as the processing of court orders shifts from a Judicial to Administrative process. \\2 Assumes a reduction in local staffing (attorney classifications) as county representation in judicial hearings decreases. Reduction based on statewide weighted average salary for all legal classifications. \\3 Assumes Staff Counsel IIIs (State level) will act as Hearing Officers under the new administrative hearing process for Child Support Orders. This proposal requests 14.0 SCIIIs, 3.0 SCIII (Supervisors), and 3.0 MSTs. Panelists \u00b7 DCSS \u00b7 DOF \u00b7 LAO \u00b7 Public Comment staff COMMENT Staff has received considerable reaction and input from stakeholders, including the Judicial Council, the Association of Child Support Attorneys of Los Angeles County, and the Family Law Section of the Orange County Bar Association. The principals concerns heard from advocates include the following: \u00b7 The Spring Finance Letter includes massive policy and process changes for child support enforcement without a stakeholder or policy formulation process. \u00b7 The proposal runs contrary to the findings of the Governor’s Child Support Task Force Report issued April 28, 1995 and with the recommendations issued by the Elkins Family Task Force issued in 2009. \u00b7 The child support determination frequently invokes judicial discretion in such issues as hardship deductions, deviation from guidelines, and add-on costs, cases that would necessitate a court hearing from the outset. \u00b7 The proposal does not address the issues of a long timeframe for order establishment and efficiencies at LCSAs, but rather depends upon LCSAs and current problematic processes more heavily and for more decision-making. \u00b7 The projected cost-savings do not account for needed system and process costs associated with these large-scale changes. The ability of these changed processes to improve California’s performance for federal indicators is highly questionable. \u00b7 The administrative approach, without informing consumers of their rights and offering them court review at the outset of the process, raise serious due process concerns. \u00b7 The process poses major conflict of interest issues and raises separation of powers concerns. \u00b7 The comparison of this proposal with the Pennsylvania model are worth close examination, as that administrative process operates with major differences that include legal safeguards that this proposal lacks. \u00b7 The ethnical oversight over the administrative order-setting is severely lacking. \u00b7 The process creates a system where access to the courts is unequal, leading to unequal justice, particularly for the most low-income and otherwise vulnerable of clients and families. Possible Questions Department, please walk through the changes at LCSAs necessary to achieve this proposed change in process and what costs or savings are associated with these. Department, what consultation took place with stakeholders in the development of this proposal? Department, how does the administration respond to the due process, conflict of interest, and equal protection issues raised by critics of the proposal? Staff Recommendation: First, staff recommends rejection of the proposal on the basis that it raises serious overarching and technical questions that cannot be appropriately considered or vetted in the budget review process. Second, staff recommends that the Subcommittee consider directing DCSS to meet with stakeholders as soon as possible toward consideration of a proposal involving the Early Intervention and stipulation-agreement approach included in Tier 1 of the proposal, and, if there are cost savings that maintain due process and access to court channels, report back to the Subcommittee at May Revision on an alternative proposal in this vein. Issue 4: CCSAS Transition to New State Disbursement Unit Provider This Spring Finance Letter (SFL) requests resources for one-time costs associated with transitioning the Child Support Enforcement (CSE) system from vendor-provided services to the State. This SFL updates the DCSS Budget Change Proposal (BCP) #1 and requests an increase of $14.1 million ($4.8 million General Fund [GF]) in State Fiscal Year (SFY) 2010\/11 to pursue a non-competitive bid with IBM for CSE transition services. These costs will be reflected in the CCSAS 2010 Annual Advanced Planning Document Update (APDU) and the related Child Support Enforcement (CSE) Special Project Report 15 (SPR #15) scheduled for release April 1, 2010. Additionally, resources are requested for one-time start-up costs for the new SDU Service Provider (SP) beginning April 1, 2011. The administration states that funding for these adjustments will be provided through re-appropriated funds. Federal law requires each state to operate a child support program and meet specified performance measures. Federal law also requires each state to have a single statewide automation system for its child support program. On June 20, 2008, California received approval from the federal government for an Alternative System Configuration (ASC) certification. More than $190 million in General Fund penalties were returned to California following that approval. To date, $2.2 billion has been invested in the creation of the CCSAS system. The Business Partner (BP), an alliance led by IBM, is currently on contract to develop and implement the CCSAS CSE system, provide two years of maintenance and operations (M&O) services and data center hosting. At the end of the contract period, October 2010, services provided by the BP will become the State’s responsibility. To fulfill this responsibility, the Department must have in place all the resources, including personnel, equipment, and facilities, required to continue CCSAS operations without impact to system reliability, availability and performance. Panelists \u00b7 DCSS \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Staff Recommendation: Staff recommends approval of the use of new funding of $4.8 million General Fund associated with this request, and sweep all unspent DCSS reappropriation funds, scoring net $1.8 million General Fund. Direct staff to work with DOF and LAO to realize this change and make appropriate BBL changes to align with the action. 1 Assembly Budget Committee ”

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“Subcommittee No. 1 on Health and Human Services May 12, 2010 Agenda Subcommittee No. 1 On Health and Human Services Assemblymember Dave Jones, Chair Wednesday, May 12, 2010 State Capitol, Room 4202 1:30 pm Item Description Page Vote-Only Items 4300 Department of Developmental Services Issue 1 Additional Resources to Increase Federal Funds Participation 2 Issue 2 Porterville New Main Kitchen Re-appropriation 3 5180 Department of Social Services Issue 1 In-Home Supportive Services Oversight on Adopted Reductions (Action Items Carried Over from May 5, 2010 Hearing) 4 Issue 2 Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) Program (Action Item Carried Over from May 5, 2010 Hearing) 5 Issue 3 BCP #2 Conlan v. Shewry 6 Issue 4 BCP #6 Unaccompanied Refugee Minor Program Support Position 7 Issue 5 DSS TBL #640 ITFC and MTFC Rates 8 Issue 6 State\/County Peer Review 9 Items to be Heard 4300 Department of Developmental Services Issue 1 Deficiency Funding Request 10 Issue 2 Update on 2009-10 Budget Reductions 12 Attachment 1 Notification of Exemption 18 Attachment 2 ICF-DD Billing 19 5180 Department of Social Services 0530 Office of Systems Integration Issue 1 IHSS Changes in SFIS 21 Issue 2 DSS Spring Finance Letter State Hearings 23 Issue 3 BCP #3 CWS Web Project 25 Issue 4 DSS BCP #4 EBT System Ongoing Maintenance 26 VOTE-ONLY ITEMS 4300 Department of Developmental Services Issue 1: Additional Resources to Increase Federal Funds Participation The Governor’s Budget requests five two-year, limited-term position and the associated cost of $515,000 ($228,000 General Fund and $287,000 in reimbursement authority). background The Department of Developmental Services was required to make a $334 million reduction in 2009-10. As a part of the $334 million savings plan, the Department assumed a significant amount of additional Federal Financial Participation (FFP). This proposal would help the Department implement this proposal. The additional positions will help the Department capture $78.8 million Federal Financial Participation (FFP) in 2009-10 and $132.5 million in 2010-11. Of these new federal dollars, $64.6 million FFP and $117.1 million in 2010-11 are associated with: (1) Submission to the Centers for Medicare and Medicaid Services (CMS) of a 1915 (i) Medicaid State Plan Amendment (SPA). The SPA allows for federal funds for services to consumers who are Medi-Cal eligible, but are not on the existing Home and Community-Based Services (HCBS) Waiver; (2) Submission to CMS of a state plan amendment seeking federal participation in cost of the day and non-medical transportation services received by regional center consumers residing in Skilled Nursing Facilities (SNF’s), as well as day and transportation services of Intermediate Care Facilities Developmental Disabilities (ICF-DD) residents; and, (3) Working with DHCS and CMS to develop a payment process for providers receiving Medicaid dollars through the 1115 Medi-Cal waiver. staff comment The new waiver submission will help the state address consumers who are on Medi-Cal but are not eligible for the Home and Community Based Waiver because they do not meet the institutional level of care required for Waiver eligibility. Specifically, $64.6 million and $117.1 million in 2010-11 will maximize FFP for regional center consumer services. Early establishment of these positions was necessary in order for the Department to generate the required $64.6 million this current year. As a result, the Department administratively established the positions January 1, 2010 and redirected resources to fund current year costs. However, the Department is currently under furlough days and has no elasticity to absorb long-term cost. Therefore, the establishment of five two-year, limited-term positions as of July 1, 2010 is still necessary to ensure the success of the three SPA’s and ultimately, the 1915 (i). The Departments current vacancy rate is 8 percent, but due to the magnitude of the work to be accomplished, approval of this proposal is critical to obtain future federal funds, achieve a General Fund (GF) savings, reduce reliance on state general fund dollars in the delivery of services to individuals with developmental disabilities and make California the second state with an approved CMS 1915 (i). Staff Recommendation: Approve as budgeted. Issue 2: Porterville New Main Kitchen Re-appropriation The Department of Developmental Services (DDS), request re-appropriation of the budget authority from 2006 and 2008 to complete the Porterville New Main Kitchen Project. The request is a three year re-appropriation of $25.4 million to June 30, 2014 for the construction phase of the project. background In December of 2008, as a result of the state’s deteriorating cash position in the Pooled Money Investment Account (PMIA) the Administration issued Budget Letter 08-33, directing departments to suspend any projects that required cash disbursements from the PMIA loans. Funding for this project was originally approved in 2006 and 2008. In 2006, $19.9 million were appropriated and in 2008, $5.4 million were appropriated, for a total of $25.4 million. These funds are due to expire June 30, 2011 for the Porterville New Main Kitchen Project. staff comment Once bonds are sold in the fall, the DDS will be able to access the construction balance of the lease revenue bonds. Cost for the preliminary plans and working drawings for the project have already been incurred. The Department notes that the 2011 deadline may be sufficient, but it does not account for unforeseen delays in the bidding process, that may jeopardize funds if exceeded. The new expected completion date is estimated to be October 10, 2012. Staff Recommendation: Approve as budgeted. 5180 Department of Social Services Issue 1: In-Home Supportive Services Oversight on Adopted Program Changes This issue was heard at the Subcommittee’s May 5, 2010 hearing (please see that agenda for a complete narrative on the issue). In that hearing, program changes in IHSS that were adopted as part of the 2009-10 budget were discussed and questions were posed to the administration on various elements of implementation. The action items on this issue were carried forward to this hearing for consideration. In the absence of formal action last Wednesday, the Chair made requests for information and a follow-up document containing these questions was sent to the administration and shared with stakeholders. Staff Recommendation: Staff has revised the recommendation to reconcile with what was requested by the Chair in the prior hearing, and so the action items recommended for this hearing include the following (each recommendation may be taken as a separate motion): Recommendation 1 – Provide for Inclusive Stakeholder Process for IHSS Program Changes. Aligning with prior requests, provide formal direction to the DSS to coordinate and conduct a stakeholder working group, including representatives from consumer and provider groups, to meet on a regularly scheduled basis (e.g. monthly) where the administration will describe its implementation efforts across the IHSS recent program changes and provide written updates to this effect to the group and legislative staff, answer questions from stakeholders, and take feedback on issues of concern. DSS is asked to provide information on when these meetings are scheduled and which organizations or entities are included in each to legislative staff. DSS is asked to consider modeling this stakeholder process after its prior efforts in IHSS Quality Assurance over the years and to look to the Department of Developmental Services for a current model on this type of stakeholder convening and process. Recommendation 2 Reject Requested Positions for DSS Reject the Administration’s proposal for six new positions for IHSS Anti-Fraud and Program Integrity Mandates and hold open the request for $500,000 in authority to contract for support in developing the required report. This is consistent with action taken in the Senate. Recommendation 3 Require Cost-Benefit Analysis Adoption of placeholder trailer bill language to require the administration, led by the Health and Human Services Agency, to collaborate with stakeholders, including academia and social science experts in the field, to construct a cost-benefit model for analysis of anti-fraud program changes and report on the considerations, costs, thresholds for fraud deterrence assumptions, and risks that should be assessed for (1) implementation of anti-fraud activities in IHSS, before or when a request is made to the Legislature for any resources associated with design, soft roll-out, and\/or full implementation, and (2) for future proposals in IHSS or other social service programs at any point at which these come forward. This model shall include all costs and benefits and specifically detail the basis for all assumptions, including the analytical basis for deterrence assumptions. Program changes to be implemented that are subject to this cost-benefit analysis include the unannounced home visits and targeted mailing policies that have yet to be analyzed or designed. Issue 2: Supplemental Security Income\/State Supplementary Payment (SSI\/SSP) Program This issue was heard at the Subcommittee’s May 5, 2010 hearing (please see that agenda for a complete narrative on the issue). In that hearing, the proposed grant reduction for SSI\/SSP was discussed and was held open pending the May Revision. In that agenda, the SSI\/SSP cash-out policy was discussed. Recapping briefly, in California, recipients of SSI\/SSP are not eligible for federal food stamp benefits. This is because California has opted to increase the SSP portion of the grant (by $10 monthly) rather than administer food stamps to SSI\/SSP recipients. This is known as the food stamp cash out policy. The Legislature has the option of reversing the cash out policy to allow SSI\/SSP recipients to apply for food stamps. Reversing the cash out would benefit some SSI\/SSP recipients by making them eligible for food stamps, while reducing food stamp benefits for others. Generally, those who would benefit from the reversal of the cash out would be those with lower income who live in households comprised only of SSI\/SSP recipients. The households most likely to experience a reduction in food stamp benefits would be in cases where SSI\/SSP recipients reside with other existing food stamp recipients whose total income tends to be higher. Staff Recommendation: Staff has revised the recommendation from last week due to further discussion with stakeholder and staff now recommends: Adopt Supplemental Report Language (SRL) to direct the Department of Social Services to convene a working group of stakeholders, to include policy and budget staff of the Legislature, to evaluate the estimated effects of eliminating California’s SSI cash-out policy. This direction is only valid if the following two conditions are met (1) the State receives a positive response from the USDA given its requests made in the April 1, 2010 letter from DSS Director John Wagner to the USDA and (2) the response allows for California to pursue a policy that has no deleterious impact on SSI\/SSP members in mixed households, thereby allowing for a partial cash-in for California SSI\/SSP recipients with only changes that benefit recipients, and hold harmless policy for anyone who wouldn’t. Issue 3: BCP #2 Conlan v. Shewry DSS requests, in a Budget Change Proposal, $113,000 ($56,000 GF) to establish one new position to review claims filed by IHSS recipients under the Conlan II court decisions. DSS also requests to permanently extend one limited-term manager position that would otherwise expire in June 2011 (at an annual cost of $128,000 [$64,000 General Fund]). If these requests are granted, the Conlan II unit at DSS would consist overall of one Staff Services Manager and three other permanent positions. DSS states that all of these positions are necessary to meet the provisions of the Conlan II court order. In 2009-10, the Legislature approved DSS’s request for the creation of one new position and extension of two additional positions, but rejected the request for a fourth position, to review recipients’ claims for reimbursement under Conlan II. The Administration also proposes to continue its authority, in BBL, to transfer local assistance funding that would otherwise be directed to counties to instead be used for state operations costs and administratively established positions associated with Conlan II workload. As in prior years, the Department of Finance would be required to notify the Legislature of any transfers pursuant to this section. To date, the Administration has used this authority once- to transfer $57,000 ($29,000 GF) for the administrative establishment of one position in 2007-08. background Conlan II was a series of lawsuits that resulted in court decisions regarding the reimbursement of IHSS recipients for specified out-of-pocket, medically-necessary expenses they paid beginning in 1997. The court approved the state’s plan for implementing the decisions in 2006. Under this plan, there are two time periods for which recipients can claim expenses: 1) claims for services received between 1997 and November 16, 2006, which must have been filed by November 16, 2007, and 2) claims for services received after November 16, 2006, which must be submitted within one year of service receipt. According to DSS, as of January, 2009, the department was out-of-compliance with the 120-day processing timeframe required by the Conlan II court order. DSS has stated that the Conlan II cases have resulted in an increasing and permanent workload. In 2009, the Department estimated that the workload could include up to 400 claims per year. The Department now estimates that the annual total may be even higher. The Department estimates that most claims take 12 hours to review (with some taking up to 20 hours). Staff Recommendation: Staff recommends approving the requested positions and BBL. In future years, however, the Subcommittee may wish to revisit whether the authority granted to the Administration in the BBL continues to be necessary and consistent with the Legislature’s oversight of staffing for the workload associated with implementing these court decisions. This is consistent with action taken in the Senate. Issue 4: BCP #6 Unaccompanied Refugee Minor Program Support Position The Governor’s budget includes, in a budget change proposal, $102,000 (all federal funds) for the establishment of one new, permanent position to support the URM program within DSS’s Refugee Programs Bureau. background The URM program is administered by the federal Office of Refugee Resettlement (ORR) to provide child welfare and foster care services to refugee, asylee, and trafficked children who have come to the United States without parents or a close relative to care for them. ORR provides funding to DSS to contract with voluntary resettlement agencies in California. This request for expanded state operations staffing for the program is the result of: 1) an anticipated quadrupling in the number of children served (from 29 children in 2008-09 to 111 children in 2010-11), 2) the inclusion of additional youth who have been granted Special Immigrant Juvenile Status (unknown number at this point) as a result of the recent federal Trafficking Victims Protection Reauthorization Act of 2008, and 3) corrective actions required by ORR as a result of its review of the Northern California URM program. These corrective actions are focused on the need for the state to better develop placement sites, monitoring, and data collection policies and procedures. Staff Recommendation: Staff recommends approval of the proposed funding and position. This is consistent with action taken in the Senate. Issue 5: DSS TBL #640 ITFC and MTFC Rates The Governor’s proposed budget for 2010-11 includes TBL to suspend implementation of statutes enacted by SB 1380 (Chapter 486, Statutes of 2008). Similar to the TBL proposed for two other child welfare issues heard by the Subcommittee on April 28, 2010, existing law would be implemented when the Department of Finance determines that sufficient state operations resources have been appropriated. Again, the effect would be to transfer Legislative authority to the Administration. background SB 1380 expanded eligibility and revised operational, reporting, and training requirements for the Intensive Treatment Foster Care (ITFC) program. ITFC was originally established in 1990 to ensure that foster children with emotional challenges could thrive in a family home with therapeutic services, rather than high-level and more expensive group homes. The Assembly Appropriations Committee analysis of SB 1380 indicated that the bill would result in net savings because foster children would be placed in less costly, less restrictive home settings, as opposed to more costly group home environments. The Administration has indicated that it may be reconsidering whether to continue pursuing this TBL and\/or to amend its proposal. Staff Recommendation: Staff recommends taking action to reject the proposal. This is consistent with action taken in the Senate. Issue 6: State\/County Peer Review DSS proposes to reduce 2009-10 funding for the state and county CalWORKs peer review process to $37,000 (TANF funds) and to de-fund the program entirely in 2010-11. The 2009-10 budget for the program was $221,000 (TANF) in local assistance funding for the counties. DSS also proposes trailer bill language to suspend the statutory requirement for the Department to implement the process statewide by July 2007 and to instead require its implementation only in the year for which a sufficient appropriation is made in the Budget Act. background A 2006 budget trailer bill (AB 1808, Chapter 75, Statutes of 2006) required DSS to establish a state and county peer review process statewide by July 1, 2007. The purpose was to assist counties in implementing best practices and improving their performances in the CalWORKs program. Given the $221,000 appropriation for 2009-10, the Department anticipated that 18 peer reviews would be conducted. Under this proposal, three reviews would be conducted in 2009-10 and none would occur in 2010-11. Staff Recommendation: Staff recommends approving the proposed suspension of funding for the peer review process for 2010-11 and adopting placeholder trailer bill language to effectuate this. This action rejects the Administration’s proposal to transfer Legislative authority to determine the sufficiency of program funding to the Department of Finance. This is consistent with action taken in the Senate. ITEMS TO BE HEARD 4300 Department of Developmental Services The Department of Developmental Services (DDS) is responsible under the Lanterman Act for ensuring that more than 240,000 Californians with developmental disabilities receive the services and supports needed to live independent and productive lives. To be eligible for services, the disability must begin before the consumer’s 18th birthday; be expected to continue indefinitely; present a significant disability; and be attributable to certain medical conditions, such as, mental retardation, cerebral palsy, epilepsy or autism. Services are delivered through four state-operated developmental centers (Fairview, Lanterman, Porterville, and Sonoma) and two community facilities, and under contract with a statewide network of 21 nonprofit regional centers (RC’s). Approximately 99 percent of consumers live in the community and slightly more than one percent lives in a State-operated Developmental Centers. Issue 1: Deficiency Funding Request The Joint Legislative Budget Committee received notification of Receipt and Approval of a Deficiency Funding Request from the Department of Developmental Services. As a result of the outcome of Shaw v. Chiang litigation, DDS has a net deficiency of $131,137,000 (GF). background As proposed by the Governor, the Budget Act of 2009 (July) appropriated $138,275,000 in Public Transportation Account (PTA) funds, to backfill for General Fund support for regional center (RC) transportation services, which are an entitlement under the Lanterman Act. PTA funds derive primarily from sales taxes on gasoline and diesel fuels and its purpose of use is delineated in Section 14506 of the Government Code for expenditures. The Administration believed RC transportation needs were within the intended purpose. However, Shaw v. Chiang disallowed the use of PTA funds for this activity, as well as for other purposes. As a result, GF is required to maintain the program funding level. The Department was able to offset a net decrease of $7,138,000 GF through a fund shift resulting from the receipt of increased federal funds in the Early Start Part C programs, but a net deficiency of $131,137,000 GF still remains. staff comment The decision to use PTA funds was made by the Business and Transportation Commission, thus this is a technical issue. However, the DDS requests $131 GF due to re-estimated caseload and expenditures for the 2010-11 November estimate using updated data through May 2009. The General Fund backfill is necessary by June 30, 2010 or else the state would be in violation of the Lanterman Act and the \”Olmstead\” decision. Panelists \u00b7 DDS Please respond to the questions below. \u00b7 DOF \u00b7 LAO Questions: What is the importance of funding this deficiency? If funds are not appropriated by June 30, what may happen and how will the state be vulnerable to further litigation? Staff Recommendation: The Committee may wish to share their position on funding this deficiency with the Joint Legislative Budget Committee. Issue 2: Update on 2009-10 Implemented Budget Reductions The Budget Act of 2009 proposed a $334 million (GF) reduction, with a corresponding federal fund reduction. The Legislature restored $234 million (GF) of this amount in its February 2009 budget, thereby reducing the DDS expenditures by only $100 million (GF). As part of this February Action, the Legislature directed the DDS to convene a diverse \”workgroup\” to assist in developing a cost reductions and efficiencies plan. Fifteen proposals were identified through this process. However, the state’s fiscal status deteriorated and the Legislature was compelled by the Governor to reduce the DDS budget by another $234 million (GF). Ultimately, the DDS was instructed to make a $334 million reduction. In conjunction with the workgroup, the DDS implemented a total of 25 proposals to generate the desired savings. background The 25 implemented proposals are as follows: Proposal Description Anticipated Savings Update 1. Expanded Federal Funding (a) amending the 1915 (i) Medicaid plan, (b) adding services to existing waivers, (c) pursue the Department becoming an Organized Health Care Delivery System and (d) restricting regional centers from purchasing community care that does not qualify for federal Medicaid funds. $78.8 million General Funds Savings will be achieved. 2. Changes to Developmental Centers (a) Closure of Sierra Vista, (b) Delayed capital outlay, (c) transfer of 30 Porterville residents, (d) furloughs and (e)staff reductions $27.2 million General Funds Savings will be achieved. 3. Changes to Regional Center (RC) General Standars (a) Prohibit purchase of experimental treatments, therauputic services or devices, (b) require RC’s to use generic services when available, (c) Medical and dental services will not be purchased without denial from insurance, (d)use of least costly provider and (e) RC’s will provide consumers a summary of cost and services each year $45.9 million General Funds Savings will not be achieved, but it is difficult to tell which implementation is or is not on track. 4. Transportation Reform (a) Requires RC to pursue lower cost transportation services that can meet the consumer’s individual needs, including: public transportation and utilizing the familiy as the source of transportation. $16.9 million General Funds Savings will be achieved. 5. Uniform Holiday Schedule (a) This proposal standardized the holidays schedule for most day programs, look-alike day programs and work activity programs and (b) extended the number of holidays from 10 to 14 days. $16.3 million General Funds Savings will be achieved. 6. New Service for Seniors at Reduced Rates This proposal required most day programs, look-alike day programs and work activity programs to offer a senior component to their current program design. *This was an optional new service. $1 million General Funds Savings have not been achieved. 7. Custom Endeavors Option This proposal expanded (through day programs, look-alike day programs and work activity programs) options for consumers to gain employment, work experience through volunteerism, and\/or start their own business. *This option is provided to consumers through their Individual Program Plan (IPP). $12.7 million General Funds No savings have been achieved. (Only 11 participants have enrolled.) 8. In-Home Supportive Services (IHSS) Requires RC’s to use generic services such as IHSS by: (a) requiring providers to help consumers get IHSS within 5 days of moving into supported living and (b) paying providers the IHSS rate for IHSS type services, while the consumer is waiting for IHSS services. $1.3 million General Funds Savings will be achieved. 9. Supported Living Services (SLS) (a) RC’s will work with SLS providers on rates of payment no higher than the rate on July 1, 2008, (b) unless needed to implement the consumers IPP RC’s are not allowed to pay a consumer’s rent, and (c) as long as needs are met, the RC will attempt to have consumers who share a home use the same SLS provider. $6.9 million General Funds Savings will be achieved. 10. Utilization of Neighboorhood Preschools Supports a different service delivery model whereby families, can have their toddler’s attend local preschools with the RC’s also providing the necessary supports. $8.9 million General Funds Savings will be achieved. 11. Group Training for Parents on Behavioral Intervention Techniques Required RC’s to consider providing group training to parents in lieu of proving some or all of the in-home parent training component of the behavior intervention services. $6.4 million General Funds Savings will be achieved. 12. Behavioral Services Established RC to: (a) purchase Applied Behavior Analysis (ABA) or Intensive Behavior Intervention (IBI) services if the service provider uses evidence-based practices and the service promotes positive social behaviors; (b) in order to purchase ABA or IBI parents of children must participate as described in the intervention plan; (c) ABA or IBI may not be used for purposes of providing respite, day care, or school services, or solely as emergency crisis services; (d) RC’s will discontinue purchasing particular ABA or IBI when the consumer’s treatment goals are achieved; (e) ABA or IBI hours will be evaluated at least every 6 months. $19.3 million General Funds Savings will be partially achieved. 13. Early Start Eligibility Criteria Elimination of eligibility for \”at risk\” infants and toddlers age 24 months or greater who are ‘developmentally delayed’ or have a risk of a developmental delay. $15.5 million General Funds Savings will be achieved, but it may be due to population decreases. 14. Early Start Program Proposals (Prevention Program) Established a limited services program for those no longer eligible for Early Start. Services are restricted to case management, and information and referral to other agencies. RC’s are also not required to provide: child care, diapers, dentistry, access to an interpreter and translator, genetic counseling, music therapy, and respite hours. $19.5 million General Funds Savings will be achieved. 15. Early Start Use Private Insurance Required parents of children under 3 to ask their private insurance or health providers to cover medical services. $6.5 million General Funds Savings will be achieved. 16. Expansion of In-Home Respite Agency Worker Duties Allowed respite workers to assist consumers with colostomies\/ileostomies, catheters and gastronomies. $3.0 million General Funds Savings will not be achieved. No applications were received. 17. Parental Fee Program Established a monthly fee that varies by family size and income. $900,000 General Funds A $500,000 savings has been achieved. The Department notes that the state of the economy has impacted a family’s ability to pay. 18. Individual Choice Budget This proposal would implement the ICB, which would give consumers flexibility. It would save money in purchase of service expenditures. No savings until implemented This proposal has not been implemented. 19. Respite Program Temporary Service Standards The proposal limited out of home respite to a maximum of 21 days per year and in-home respite to a maximum of 90 hours per quarter (30 hours per month). It also prohibited the use of respite for Day Care services. *This proposal will be lifted upon certification of the Individual Choice Budget. $4.8 million General Funds Savings have been exceeded. 20. Temporary Suspended Services Temporarily suspended: (a) social\/recreational activities, (b) camping services, (c) educational services for minor, school-aged children, and (d) non-medical theraphies. $27.4 million General Funds Savings have not been fully realized. This may be due partially, because the proposal was implemented after the summer and the number of exemptions granted through the fair hearing process. 21. Quality Assurance Consolidation Combined quality assurance studies. $2.0 million General Funds Savings will be achieved. 22. Suspended Wellness and Physician Training Program Suspended training for consumers, families, providers and physicians. $1.3 million General Funds Savings will be achieved. 23. Eliminate Triennial Quality Assurance Review Eliminated funding for triennial reviews, but maintained quarterly consumer visits and an annual facility monitoring visit. $1.0 million General Funds Savings will be achieved. 24. Reduction in One Time Regional Center Funding Further reduced funding for RC’s. $3.5 million General Funds Savings will be achieved. 25. Additional Regional Center Operations Budget Savings This this was an additional reduction to the 3 percent reduction in Operations funding. $7.0 million General Funds Savings will be achieved. staff comment At the DDS Work Group meeting on April 19, 2010, the DDS provided an update on current year implementations. The conclusion was that some of the proposals yielded the savings intended, others did not, and some exceeded the intended savings. Up to date data is not available to the Department, therefore it has been difficult for the Department to determine the exact reason for outcomes. The Department notes that a decreasing birth rate and various other interrelated factors could be responsible, but notes that those solutions which were optional, did not achieved the estimated reduction. Overall, the pressing issues for the Committee to consider are the following: 1. Notification of Exemptions: Savings have been exceeded in Respite and in the area of Suspended Services, savings have not been achieved. Issues related to these areas include the process and consistency for notifying consumers of exemptions to these and other implemented reductions. In some cases, consumers have been verbally noticed by regional centers of termination of services and in other cases; consumers have not been informed of exemptions or the fair hearing process. Specifically, the Committee should consider clarification on what constitutes \”adequate notice.\” Adequate notice should inform the applicant, recipient, and authorized representative in writing of the action the agency proposes to take, whether the individual is eligible for an exemption waiver, exceptional funding, or other exceptions. It is recommended that the committee adopt placeholder trailer bill language, such as that proposed in attachment 1. 2. Intermediate Care Facilities-DD Billing Issue: In order for the Department to achieve the intended savings for the Expansion of Federal Funding, the approval of the Medicaid State Plan Amendment (SPA) requires Trailer Bill Language. Language provided by the DDS allows for payment of Intermediate Care Facilities for Transportation and Day Treatment Costs, modeled to the process of the Department of Health Care Services. The Department notes that the language has not been finalized. Please see attachment 2 for the most recent version. Panelists Please provide a high-level overview of the implemented proposals and fiscal outcome, but provide specific information on the highlighted proposals. For the highlighted proposals, please comment on why they were effective, why they were not effective and the impact to consumers. \u00b7 DDS Please direct your comments to the request above and respond to the questions below. \u00b7 DOF \u00b7 LAO \u00b7 Public Comment Questions: Please explain the proposed trailer bill language for the technical billing issue on the ICF-DD. (Attachment 2). Do you have updated language? Can the Department describe how exemptions are communicated to consumers and information about the fair hearing process is shared with consumers? Will the Department be on budget? Staff Recommendation: Adopt placeholder trailer bill language to clarify what constitutes notification of exemption and adopt in concept the necessary trailer bill language to resolve the ICF-DD billing issue. Attachment 1 Notification of Exceptions Section 4701 of the Welfare and Institutions Code is amended to read: 4701. \”Adequate notice\” means a written notice informing the applicant, recipient, and authorized representative of at least all of the following: (a) The action that the service agency proposes to take, including a statement of the basic facts upon which the service agency is relying, and whether or not the individual is eligible for an exemption, waiver, exceptional funding, or other exception to the action; (b) The reason or reasons for that action. (c) The effective date of that action. (d) The specific law, regulation, or policy supporting the action including any relevant exemption, waiver, exceptional funding, or other exception. Attachment 2 Intermediate Care Facilities Payment for Transportation and Day Treatment Costs Proposed Amendments Section 1. Section 4646.55 is added to the Welfare and Institutions Code to read: 4646.55 (a) Notwithstanding any other provision of law or regulation to the contrary and to the extent federal financial participation is available, effective July 1, 2007, the California Department of Developmental Services is hereby authorized to make supplemental payment to enrolled Medi-Cal providers that are licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled for day treatment and transportation services provided pursuant to Sections 4646, 4646.5 and applicable regulations and 14132.95, to Medi-Cal beneficiaries residing in a licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled. These payments shall be considered supplemental Medi-Cal payments to the enrolled Medi-Cal provider and paid accordingly (without a separate DDS contract). (b) Notwithstanding any other provision of law and to the extent federal financial participation is available, and in furtherance of this section and 14132.95, the Department shall amend the regional center contracts for the fiscal year 2007-08 to extend the contract liquidation period until June 30, 2011. The contract amendments and budget adjustments shall be exempt from the provisions of Article 1, (commencing with Section 4620) of Chapter 5 of Division 4.5 of the Welfare and Institutions Code. Section 2. Section 14132.925 is added to the Welfare and Institutions Code to read: (a) Notwithstanding any other provision of law or regulation to the contrary and to the extent federal financial participation is available, and in furtherance of Section 14105.06 and subdivisions (a) and (c) of Section 14132.92 effective July 1, 2007, a licensed intermediate care facility\/developmentally disabled-habilitative, a licensed intermediate care facility\/developmentally disabled-nursing or a licensed intermediate care facility\/developmentally disabled shall be responsible for providing day treatment and transportation services consistent with 14105.06 and subdivision (a) of Section 14132.92 that are selected and authorized through the individual program plan process pursuant to Sections 4646, 4646.5 and applicable regulations for each beneficiary receiving such services who resides in that licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled. These services shall be arranged by the regional center pursuant to Sections 4646, 4646.5 and applicable regulations, and the licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled, shall reimburse the regional center for the costs incurred in arranging for such services. Nothing herein shall authorize the licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled to substitute day treatment or transportation services not selected and authorized through the individual program plan process pursuant to Sections 4646, 4646.5 and applicable regulations. (b) The State Department of Developmental Services shall be responsible for reimbursing a licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled for the costs incurred pursuant to subdivision (a), (a reasonable coordination fee shall be provided method of payment TBD). This payment shall be a supplement to the Medi-Cal payment from the Department of Health Care Services described in 14105.06 and 14132.92. A licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled may authorize the regional center to invoice the State Department of Developmental Services on its behalf for the services described in subdivision (a). The licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled shall dispense payment to the regional center within 30 days of receipt of payment from the State Department of Developmental Services pursuant to instruction from the State Department of Developmental Services. Failure to pay the regional center within 30 days shall result in (TBD). (c) A licensed intermediate care facility\/developmentally disabled-habilitative, licensed intermediate care facility\/developmentally disabled-nursing or licensed intermediate care facility\/developmentally disabled shall report the costs incurred pursuant to subdivision (a) according to instruction from the Department of Health Care Services. Notwithstanding Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department may implement this subdivision by means of a provider bulletin or similar instruction from the Department of Health Care Services. (d) If services meeting the conditions of subdivision (a) have been provided to a Medi-Cal beneficiary on or after July 1, 2007, and, notwithstanding Section 14115, an invoice for the day treatment and transportation services is submitted, the services shall be reimbursed. The department shall seek federal financial participation, including American Recovery and Reinvestment Act money, pursuant to a federally approved state plan amendment authorizing reimbursement for these services provided during that period. Upon approval of the amendment the payments made pursuant to this section shall be subject to the Quality Assurance fee provided for in Health and Safety Code Sections 1324 through 1324.14. If federal financial participation is not made available for that period, the services nonetheless shall be reimbursed from the General Fund by the Department of Developmental Services. (Note: This subsection is placeholder language that may need DHCS edits) Section 3. Due to a change in the availability of federal funding that addresses the ability of California to capture additional federal financial participation for day treatment and transportation services provided to a Medi-Cal beneficiary residing in a licensed intermediate care facility\/developmentally disabled-habilitative, a licensed intermediate care facility\/developmentally disabled-nursing or a licensed intermediate care facility\/developmental disability, as specified in Section 4646.55 and 14132.925, funds appropriated in Item 4300-101-0001, Budget Act of 2007 (Chapters 171 and 172, Statutes of 2007), shall be available for liquidation until June 30, 2011. 5180 Department of Social Services 0530 Office of Systems Integration Issue 1: IHSS Related Changes in SFIS This issue was considered at the April 21, 2010 Subcommittee hearing and was held open at that time. To recap, the Governor’s budget for 2009-10 includes, in a Budget Change Proposal, an increase in OSI spending authority of $8.2 million ($4.4 million GF) for the use of SFIS to collect fingerprint images from In-Home Supportive Services (IHSS) recipients. These funds were already included in the DSS budget, but there was no conforming authority for SFIS or for OSI’s project management role. The Administration is awaiting a formal response from the federal government with respect to its willingness to financially participate in these proposed expenditures, and future, ongoing anticipated costs. The total SFIS budget for 2009-10 includes $20.1 million ($9.5 million GF). The administration also requests position authority for four new SFIS-related positions at OSI. Two of the positions would replace 1.5 contract staff who provide training coordination and application support for the use of SFIS in the CalWORKs, Supplemental Nutrition Assistance, and General Assistance\/General Relief programs. The state has contracted these duties out for the last decade. Funded as part of the $8.2 million mentioned above, the other two positions would support new sites and equipment to begin the use of SFIS for IHSS recipients. OSI currently has five permanent staff members assigned to SFIS and oversees six additional contract staff who work the equivalent of three full-time positions. background SFIS is a statewide automated system that was created in response to the requirements of SB 1780 (Chapter 206, Statutes of 1996) for applicants and recipients of California Work Opportunity and Responsibility to Kids (CalWORKs) and Food Stamp program benefits to be fingerprint imaged as a condition of eligibility for those programs. OSI provides state-level project management and oversight for SFIS. The state recently entered into a new contract for its maintenance and operations for eight years from September 2009 until September 2017. The fingerprint images contained in SFIS are used to verify eligibility and to check for duplicate aid applications by one individual. The Administration states that the existence of the fingerprint requirements and of the SFIS system deter a significant amount of fraud. A 2003 audit by the Bureau of State Audits found that DSS implemented SFIS without determining the extent of duplicate-aid fraud throughout the State, and that Social Services did not implement SFIS in a manner that would allow it to collect key statewide data during its implementation of SFIS. The auditor was therefore unable to determine whether SFIS generates enough savings from deterring individuals from obtaining duplicate aid to cover the estimated $31 million the State has paid for SFIS or the estimated $11.4 million the State will likely pay each year to operate it This issue was discussed in the May 5, 2010 Subcommittee agenda in the context of all of the IHSS program changes adopted as part of the 2009-10 Budget agreement. Outstanding questions and areas of concern were outlined in the agenda and discussed in the hearing. Recipient Fingerprinting Requirements. Among these program changes made in 2009 was the requirement, beginning April 1, 2010, for finger imaging of IHSS consumers. Under the requirements of ABx4 19 (Chapter 17, 4th Extraordinary Session, 2009), this fingerprinting must take place in the new consumers’ homes at the time of their initial assessment for eligibility. Current consumers (460,000) were to be finger imaged at their next reassessment, conducted annually and also in the home. These statutes included exemptions for minors and those physically unable to provide fingerprints due to amputation. They do not require a picture image to be taken of the consumer. Finally, the statutes require DSS to consult with county welfare departments to develop protocols to carry out these requirements. As discussed in the aforementioned April 21 and May 5 hearings, the administration is currently conducting pilots to test mobile fingerprint imaging devices, each costing $5,000, that would allow for implementation of these requirements by gathering fingerprints and photo images in recipients’ homes, to later be uploaded into SFIS. DSS has stated that it intends to utilize social worker and consumer feedback gathered during the pilots to inform its policies and protocols for larger-scale implementation of the new fingerprinting requirements; however, the timelines, specifics, and costs of the ultimate roll-out are still unknown. Panelists \u00b7 DSS and OSI Please be prepared to address the following in your testimony: \u00b7 What efforts did the Administration undertake to measure the occurrence of duplicate aid fraud in the IHSS program prior to proposing the requirements for recipient fingerprinting? \u00b7 On what did the Administration base its estimates for the costs and savings from implementing these fingerprint requirements? \u00b7 Department of Finance \u00b7 Legislative Analyst’s Office \u00b7 Public Comment Staff Recommendation: Staff recommends rejection of the $8.2 million ($4.4 million GF) in OSI spending authority for 2009-10 and $5.65 million ($2.9 million GF) included in 2010-11, and any additional associated funding, for the purposes of fingerprinting IHSS recipients. Furthermore, sweep any funds in the DSS budget that have not yet been spent (or obligated for reimbursement). Adopt corresponding placeholder trailer bill language to repeal the statutory requirement for fingerprinting recipients and the requirement for fingerprints on timesheets (Sections 12305.73 and subdivision (c) of 12301.25 of the Welfare and Institutions Code, respectively). Hold open the requested conversion of contract authority to state staff for future action. This action conforms to the Senate action taken on May 6, 2010. Issue 2: DSS Spring Finance Letter State Hearings DSS is proposing, in an April 1 Finance Letter, statutory changes to \”modify the existing penalty structure for state hearings, providing more flexibility when there are sudden increases or decreases in caseload, and ensure that penalty payments are only provided to recipients who have gone without benefits while awaiting a state hearing\” and to \”allow all state hearing requests to be held by video conference, unless a finding of good cause is made to require face-to-face hearing.\” If the Legislature does not adopt these program changes, the administration seeks additional funding for unbudgeted penalty costs and personnel costs to travel to each county hearing location for face-to-face hearings, which DSS states that it is unable to absorb within its existing resources. background The State provides due process to recipients of California welfare benefits through state hearings conducted by DSS. These requirements are mandated by statute and regulations. The State Hearings Division (SHD) is required to provide full, impartial, and timely state hearings to recipients and applicants of various California public assistance programs who have disputes with their local county welfare departments or with a state program administering the benefit. The primary programs include CalWORKs, the Food Stamp program, Medi-Cal, In-Home Supportive Services, and Foster Care\/Adoption Assistance Program. Federal mandates require that all requests for hearings be adjudicated within 90 days of a recipient’s request, except Food Stamp cases which must be completed within the federally mandated timeframe of 60 days. Two court orders, King v. McMahon and Ball v. Swoap, impose financial penalties on DSS for failure to adjudicate 95 percent of all hearing decisions within the 60 to 90 day time frame. The daily penalty rate starts at $5.00 per day. Panelists \u00b7 DSS Please briefly outline the proposal and then address the questions listed below. \u00b7 Legislative Analyst’s Office \u00b7 Department of Finance \u00b7 Public Comment Possible Questions \u00b7 How much is each proposed change expected to save? What is the methodology for this? Does it account for the additional costs of videoconferencing and training? \u00b7 How is good cause defined? Who determines this? How does SHD and DSS ensure that this is a uniform standard? How is it evaluated? \u00b7 Has there been an increase in claims by either claimants or counties? If so, in which programs? \u00b7 Is there a relationship between the hearing limits requested by DSS and the actual cause of the increase in penalties? \u00b7 To what degree are the DSS proposals a result of the highly controversial changes made last year in CalWORKs, IHSS, Medi-Cal, child welfare, Healthy Families and other health and human service programs? \u00b7 If equipment and maintenance is not available, as well as the ALJs to go with it, could this proposal lead to extensive delays in getting hearings scheduled, and then started in a timely manner, leading to even higher penalty costs as well as an additional burden on the claimants? \u00b7 What percentage of the caseload are Aid Paid Pending? What ensure timely decisions in these cases under the proposal? Staff Recommendation: Due to the scope of the changes being proposed, the lack of detail in the proposal, and the questionability of proposing these changes in a budget context, staff recommends that the Subcommittee reject the State Hearings Spring Finance Letter on the basis that this proposal requires careful, thorough consideration through the policy process. In light of the increased demands for state hearings, assumed to be due in part to the programmatic changes adopted as part of the 2009-10 Budget and limited state resources, provide funding in 2010-11 for three additional ALJs ($450,000 total funds, approximately $215,500 GF), to assist with workload. Issue 3: BCP #3 CWS Web Project To support the development of CWS\/Web, the Governor’s 2010-11 budget for DSS requests, in a budget change proposal, $436,000 ($199,000 GF) to: 1) establish one two-year limited-term position, 2) extend an existing managerial position for another two-year limited term, and 3) augment by $240,000 DSS contracts with county consultants. As the Committee discussed on April 21, 2010, the Governor’s budget for CWS\/Web project management by Office of Systems Integration (OSI) additionally requests $1.8 million ($827,000 GF) for 10 new positions. The 2009-10 budget for CWS\/Web is $7.1 million ($3.2 million GF). OSI estimates a total cost of $202.8 million ($91.9 million GF) between 2012 and 2014 to complete implementation of CWS\/Web and enter its maintenance and operations (M&O) phase. background Stated Rationale for Additional Resources. The federal Department of Health and Human Services, Administration for Children and Families (ACF) has expressed concerns that the CWS\/Web project is significantly understaffed in terms of programmatic and technical resources. DSS currently has seven staff members to assist with its programmatic support for CWS\/Web planning. The Department anticipates that their workload will increase dramatically as the project advances into its design and implementation phases. The Department intends for one of the requested positions to be filled by an individual with knowledge of the adoptions process who can participate in the design, development, testing, training, and implementation activities of the adoptions component of the new CWS\/Web system. The request to extend authorization of the second position is for a manager to provide supervision to this individual, as well as three other staff members. Panelists \u00b7 DSS Please briefly describe the requested resources and related communications with ACF. \u00b7 Legislative Analyst’s Office \u00b7 Department of Finance \u00b7 Public Comment Staff Recommendation: Consistent with the Subcommittee’s vote on April 21, 2010 regarding the requested resources for additional OSI staff to support CWS\/Web development, staff recommends holding this issue open pending May Revision. Issue 4: DSS BCP #4 EBT System Ongoing Maintenance The overall budget for the EBT system in 2009-10, including project management, is $47.3 million ($27.0 million GF\/TANF). The Administration requests, in a Spring Finance Letter dated April 1, 2010, a decrease of $10.3 million ($2.4 million GF) in that same year to both the Department of Social Services Local Assistance budget and corresponding OSI spending authority. The proposed 2009-10 decrease is a result of cost reductions under a new contract. The Administration also requests a decrease of $20.9 million ($5.4 million GF) in DSS Local Assistance and a corresponding reduction of $19.7 million in OSI Spending Authority for 2010-11. The proposed 2010-11 decrease includes contract cost changes, as well as the expiration of limited-terms for staff and the completion of other transition-related tasks. The Governor’s budget for 2010-11 also proposes $177,000 ($66,000 GF) to extend, for another two years, two existing limited-term positions that support the EBT system at DSS. One position would continue to provide program support to the counties and the other to OSI. DSS has sought, and been granted authority for, extensions of these two limited-term positions six times since the EBT system was mandated in 1997. background The EBT system eliminates the need for coupons or checks to deliver Supplemental Nutrition Assistance Program (food stamps) and cash aid benefits. Instead, the EBT system provides benefits through automated teller machines (ATMs) and point-of-sale terminals (e.g., in grocery stores). The EBT system works by automating benefit authorization, delivery, redemption, and settlement processes through computers, plastic debit cards, and telecommunications technology. OSI provides state-level project management and oversight for the system. Changes in EBT Contract Costs: The proposed cost reductions in 2009-10 and 2010-11 are due to the transition of EBT services to a new contract (from J. P. Morgan Electronic Financial Services, Inc. [JPMorgan EFS] to ACS State and Local Solutions, Inc. [ACS]). The lowered costs are reflective of decreased costs for EBT services nationwide since 2000, when California executed its first EBT contract with Citicorp (later taken over by JPMorgan EFS). They also reflect a change from an unbundled cost structure (with differing rates for food benefits only, cash benefits only, and combined food and cash benefits, along with various other costs for related services and equipment) to a bundled rate (e.g. eliminated some costs for related services and equipment and are bundled in the benefit costs). Panelists \u00b7 DSS and OSI Please briefly outline the proposal and then address the questions listed below. \u00b7 Legislative Analyst’s Office \u00b7 Department of Finance \u00b7 Public Comment Possible Questions \u00b7 Have there been any system issues that have caused benefits to be denied to recipients? What are the problems due to? \u00b7 Is there a plan to fix and what is it? Is there a corrective action plan from the vendor, ACS? \u00b7 How many times did this problem or others occur in implementation? How many times has it occurred since the system change in September? \u00b7 Please walk through how a recipient could be affected if there is a system-related benefit denial at a grocery check-out. \u00b7 What communication and\/or contract changes have occurred with the vendor to ensure that disruptions in service are minimized? \u00b7 What communications occur with the county, banks, and grocery vendors on these issues? \u00b7 What communications occur with the recipients to inform them of the problems? How does the state and vendor ensure that recipients calling in distress receive the most up to date and relevant information? Staff Recommendation: Staff recommends approving the requested budget decreases contained in the OSI request, as well as the proposed extension of the two limited-term positions at DSS. Adopt Supplemental Report Language requiring OSI and DSS to provide an update to the Legislature and to stakeholders, including CWDA, CSAC, WCLP, and the California Food Policy Advocates, on (1) efforts with the vendor to limit disruption in EBT benefit access, (2) communications with counties about any problems and resolutions as they arise, and (3) how consumers are being informed of issues and recourse when disruptions do occur. [image: image1.png] 27 Assembly Budget Committee ”

pdf 5-2-12 Assembly Sub. 1 Actions Taken

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” SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES MAY 2, 2012 A S S E M B L Y B U D G E T C O M M I T T E E ACTIONS TAKEN ASSEMBLY BUDGET SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, MAY 2, 2012 1:30 P.M. – STATE CAPITOL ROOM 437 ITEMS TO BE HEARD ITEM DESCRIPTION 5180 DEPARTMENT OF SOCIAL SERVICES 1 ISSUE 1 CHILD WELFARE SERVICES: PROGRAM REVIEW AND UPDATE This item was included for informational and context-setting purposes. No action is required. 1 ISSUE 2 GROUP HOME RATE-SETTING AND REFORM ACTION: Adopt placeholder trailer bill language to extend the group home moratorium indefinitely, but with a modification to the current exception process that would allow group homes below RCL 10 to only apply for an exception associated with a program change, such as a RCL increase, during the 2012-13 fiscal year. This would in effect and for that time disallow these same providers from seeking exceptions for a new program, a new provider, a program capacity increase, or a program reinstatement, as are available and would continue to be available as additional exceptions to RCLs at 10 or above. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 5 SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES MAY 2, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 1 ISSUE 3 PROPOSED CHANGES TO DUAL AGENCY RATES ACTION: Approve the administration’s proposal to apply 2011-12 and 2012- 13 COLAs to dual-agency rates. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 4 1 7 ISSUES WITHIN 2011 REALIGNMENT OF HEALTH AND HUMAN SERVICES PROGRAMS 8 ISSUE 1 BACKGROUND AND OVERVIEW As these issues are under review by the Subcommittee through May Revision and feedback from stakeholders has not yet been fully heard and vetted, the Subcommittee held open all of the items under Realignment at this time. 8 CONSISTENT WITH THE ABOVE, NO ACTIONS WERE TAKEN FOR THE REMAINING ISSUES ON THE AGENDA. 5180 DEPARTMENT OF SOCIAL SERVICES 16 ISSUE 1 REALIGNMENT OF CHILD WELFARE SERVICES 16 ISSUE 2 ADDITIONAL AREAS OF REALIGNMENT IN DSS 21 4200 DEPARTMENT OF ALCOHOL AND DRUG PROGRAMS 23 4260 DEPARTMENT OF HEALTH CARE SERVICES ISSUE 1 REALIGNMENT OF SUBSTANCE ABUSE SERVICES 23 4260 DEPARTMENT OF HEALTH CARE SERVICES 25 ISSUE 1 REALIGNMENT OF MENTAL HEALTH SERVICES 25 ATTACHMENT A CHILD WELFARE SERVICES PROGRAMMATIC REALIGNMENT LANGUAGE 30 ATTACHMENT B SUBSTANCE ABUSE SERVICES PROGRAMMATIC REALIGNMENT LANGUAGE 37 ATTACHMENT C MENTAL HEALTH SERVICES PROGRAMMATIC REALIGNMENT LANGUAGE 51 ”

pdf 5-10-12 Senate Budget Sub. #3 Outcomes-DSS-DCSS-DOR-Mandates – outcomes

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pdf 5-10-12 Senate Budget Sub #3 Human Services Open Issues

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” 1 SUBCOMMITTEE #3: Health & Human Services Chair, Senator Mark DeSaulnier Senator Elaine K. Alquist Senator Bill Emmerson May 10, 2012 9:30 a.m. or Upon Adjournment of Session Room 4203 (John L. Burton Hearing Room) Agenda II Staf f : Jennifer Tro ia & Brady Van Engelen PLEASE NOTE: Only those items contained in this agenda will be discussed at this hearing. Please see the Senate File for dates and times of subsequent hearings. Issues will be discussed in the order noted in the Agenda unless otherwise directed by the Chair. Pursuant to the Americans with Disabilities Act, individuals who, because of a disability, need special assistance to attend or participate in a Senate Committee hearing, or in connection with other Senate services, may request assistance at the Senate Rules Committee, 1020 N Street, Suite 255 or by calling 916-324-9335. Requests should be made one week in advance whenever possible. Thank you. 2 Agenda (Vote-Only Items indicated by *) Item Department Page 5160 Department of Rehabilitation 1. Rehabilitation Appeals Board .3 5180 Department of Social Services (& 0530 Office of Systems Information) 1. Child Health & Safety Fund .4 2. Moratorium on Group Home Rate-Setting ….4 3. LEADER Replacement System (LRS) ..7 8885 Commission on State Mandates 1. Proposed Repeal of Mandate Related to Counsel in Conservatorship Proceedings ..5 5175 Department of Child Support Services 1. Department Overview …10 2. Revenue Stabilization …11 3. Child Support Automation 12 4. Suspension of County Share …13 5. Health Insurance Incentives 13 6. Performance Incentives 14 7. Investment Authority ..15 3 VOTE-ONLY AGENDA 5160 Department of Rehabilitation (DOR) 1. Rehabilitation Appeals Board Budget Issue: The Governor proposes to achieve savings and efficiencies from eliminating the Rehabilitation Appeals Board (RAB), which currently reviews appeals filed by applicants for, or consumers of, DOR services. The associated responsibilities would be transferred to impartial hearing officers (IHOs) through an interagency contract with the Office of State Hearings or another state entity. The Administration estimates that contracting with IHOs will save around $30,000 ($6,000 GF). Additional background is available in the Subcommittee’s agenda from March 15th (online at http:\/\/sbud.senate.ca.gov\/sites\/sbud.senate.ca.gov\/files\/SUB3\/31512AgendaforCDA_D OR_DSS.pdf). Staff Comment & Recommendation: Staff recommends approving the Administration’s proposal to change the appeals process so that impartial hearing officers review appeals, rather than the Rehabilitation Appeals Board. Correspondingly, staff also recommends approving modifications to the proposed trailer bill language intended to safeguard the due process rights and needs of appellants (including unrepresented parties). The language, which would be refined as part of the trailer bill process and would rely in large part on examples from statutes that apply to developmental services and special education appeals processes, would: \uf0b7 Provide for appeals to be heard by impartial hearing officers who have no conflict of interest and who are knowledgeable about federal and state laws and regulations applicable to DOR services and the Vocational Rehabilitation program. \uf0b7 Require DOR to contract with another department, office, or entity for the provision of independent hearing officers. \uf0b7 Provide that the time and place of the hearing be agreed upon by the appellant and the hearing officer and be reasonably convenient to the appellant and their designated representative, if applicable. This may include conducting all or part of the fair hearing by alternatives other than in person, if agreed upon by the appellant and if the alternative means allows for full participation. \uf0b7 Provide, among other procedural allowances and requirements, that the hearings will not be conducted according to the technical rules of evidence and those related to witnesses and that all testimony shall be under oath. \uf0b7 Outline basic procedural and adjudication expectations for hearing officers, including the consideration of presentation of viewpoints about the issues of disagreement, examination of the evidence presented during the hearing, and issuance of a decision including findings and grounds to the parties within 30 days of the completion of the hearing. http:\/\/sbud.senate.ca.gov\/sites\/sbud.senate.ca.gov\/files\/SUB3\/31512AgendaforCDA_DOR_DSS.pdf http:\/\/sbud.senate.ca.gov\/sites\/sbud.senate.ca.gov\/files\/SUB3\/31512AgendaforCDA_DOR_DSS.pdf 4 \uf0b7 Provide for training of hearing officers to include, but not be limited to, information on protecting the rights of consumers at administrative hearings, emphasizing how to fully develop the appeal record with consumers who are representing themselves or who are represented by another who may also require additional support. \uf0b7 Permit implementation by emergency regulations until January 1, 2014, after which time implementation should be completed using the regular rule-making process and review by the Office of Administrative Law. 5180 Department of Social Services (DSS) 1. Child Health & Safety Fund Budget Issue: The budget proposes savings of $501,000 GF from trailer bill language to redirect a portion of revenues collected through a specialized license plate program to fund additional DSS licensing activities related to children’s day care programs. These resources would otherwise be used to prevent unintentional injuries to children, such as drowning or poisoning. AB 3087 (Chapter 1316, Statutes of 1992) established the Have a Heart, Be a Star, Help Our Kids specialized license plate program. Revenues from these license plate fees, totaling $4.1 million in 2009-10 and $4.0 million in 2010-11, are deposited into the Child Health & Safety Fund. State law (Welfare & Institutions Code Sections 18285 and 18285.5) specifies how those revenues are distributed. Currently, the first 50 percent supports specific DSS responsibilities for child day care licensing. Of the remaining 50 percent, up to 25 percent supports child abuse prevention and the rest supports programs that address injury prevention. Under the Governor’s proposal, those remaining funds would be used for additional day care licensing activities in addition to injury prevention efforts. Staff Comment & Recommendation: Staff recommends that the Subcommittee approve the Governor’s proposal to redirect $501,000 in Child Health & Safety Fund resources as additional support for day care licensing activities. Correspondingly, staff recommends making technical changes to the proposed trailer bill language to specify this dollar amount and to embed the change into the section of the statute that currently addresses other licensing activities. As a result, specified licensing activities would receive 50 percent plus $501,000 in funding before the remaining funds would be distributed to the other specified programs. 2. Moratorium on Group Home Rate-Setting Budget Issue: Beginning in 2010-11, the budget has included $195.8 million ($51.7 million GF) to fund a court-ordered increase of 32 percent in the monthly payment rates 5 for group homes. The court order also requires the state to annually adjust these rates based on the California Necessities Index. In 2012-13, group home rates are proposed to range from $2,158 to $9,146 per child, per month. In response to this increased cost and other concerns about the use of group home placements in California, as well as the need for DSS to redirect staff toward developing alternative placement options, the 2010-11 budget included a moratorium, with some allowable exceptions, on the licensing of new group homes or approvals of rate or capacity increases for existing providers, as well as additional statutory changes detailed in the Subcommittee’s agenda from March 19, 2012. The moratorium was subsequently extended in trailer bill language through the end of 2012. The Governor’s budget proposes to make it permanent and to limit future exceptions to higher-level group homes [licensed at a Rate Classification Level (RCL) of 10 or over on a scale of one to 14]. Staff Comment & Recommendation: Staff recommends approving the Administration’s proposal to make the moratorium and exceptions framework permanent. Staff also recommends approving the Administration’s proposal to narrow the allowable exceptions with respect to RCLs one through nine. However, staff recommends refining this second part of the action to apply the new restrictions temporarily (for the 2012-13 fiscal year) and in a more limited way. Specifically, no exceptions would be allowable with respect to the establishment of new RCL one through nine group homes or approval of capacity increases for existing providers of homes at those levels. As a result, the existing exceptions process would continue to be available to group homes with an RCL of one to nine during 2012-13 for the purposes of seeking a change in rate classification only. The intent is to gain experience with these new restrictions before making a decision about whether to extend or make them permanent. This action would conform to action recently taken by the Assembly on this issue. 8885 Commission on State Mandates 1. Proposed Repeal of Mandate Related to Counsel in Conservatorship Proceedings Budget Issue: Under existing law, courts are required to appoint the public defender or private counsel to represent the interests of conservatees, proposed conservatees, or individuals alleged to lack legal capacity in specified legal proceedings if: a) they are unable to retain legal counsel and request appointment of counsel, b) the court determines that the appointment of counsel would be helpful or is necessary to protect the individual’s interests, or c) the proceeding is about the establishment of a limited conservatorship. The court is then required to set a reasonable sum for compensating counsel and to determine whether the person can pay some or all of that amount (including payment out of the proceeds of community property at issue in the proceeding, if applicable). When the person lacks the ability to pay counsel, the county is required to do so. 6 The Administration proposes trailer bill language to repeal the statutes that create these requirements, which it indicates include mandates that have been suspended since 2009. According to the Administration, these requirements are now standard operating procedures, and the mandate for local jurisdictions to meet them is no longer necessary. If the mandate is not suspended or repealed, the Department of Finance indicates that the state would need to pay $349,000 GF in prior year claims costs. Advocates and representatives of the courts have raised concerns about the proposal to repeal these laws because they indicate that courts have long been (and are still) guided by the statutory framework that establishes the grounds and procedures for appointing counsel. This issue was discussed during the Subcommittee’s March 19th hearing. Background on Conservatorships and Limited Conservatorships: A conservatorship can be established by California courts when a judge appoints a responsible person or organization (called the conservator ) to make decisions for another adult (called the conservatee ) who is not able to care for him or herself and\/or to manage his or her own finances. Conservatorships are most commonly established based on the laws of the California Probate Code, including those that are the subject of this proposal. General conservatorships are frequently established for elderly individuals, but can also be established for younger adults who have serious impairments. Limited conservatorships can be utilized when adults with developmental disabilities do not need the comprehensive assistance that is offered by a general conservatorship, but do need assistance in some decision-making. [Another kind of conservatorship, commonly known as a Lanterman-Petris-Short (LPS) conservatorship can be used for adults with serious mental disorders who are \”gravely disabled\” and unable to provide for their food, clothing, or shelter.] Conservators of a person are required to arrange for the conservatee’s care and protection, including making decisions about where the conservatee will live and receive meals, health care, etc. Conservators of an estate are required to manage the conservatee’s finances, including controlling their assets, collecting income, paying bills, and investing money. Staff Comment & Recommendation: Given the concerns raised by stakeholders regarding the reliance of courts and advocates on this statutory framework and the significance of the individual rights at issue, staff recommends rejecting the proposed trailer bill language to repeal these sections of statute. 7 DISCUSSION AGENDA 5180 Department of Social Services (DSS) 1. Los Angeles Eligibility Automated Determination, Evaluation & Reporting (LEADER) Replacement System (LRS) Budget Issue: LEADER is one of three existing consortia systems that comprise the Statewide Automated Welfare System (SAWS). SAWS automates the eligibility, benefit, case management, and reporting processes for a variety of health and human services programs operated by the counties, including the CalWORKs welfare-to-work program, Food Stamps, Foster Care, Medi-Cal, Refugee Assistance, and County Medical Services. The LEADER system serves Los Angeles (LA) County, while a consortium called C-IV serves 39 additional counties and another called Cal-WIN serves the remaining 18 (though each system houses information for roughly one-third of the statewide caseload). The total 2011-12 maintenance & operations (M&O) budget for SAWS is $178 million ($91 million GF\/TANF). The 2011-12 M&O costs for LEADER include $31 million ($15 million GF\/TANF). In 2011, OSI estimated a total cost of $370.2 million over four years ($196.1 million GF\/TANF, $147.3 million federal funds and $26.8 million county funds) for development and implementation of a new system to replace LEADER (LRS). Prior to that time, around $6 million ($2 million GF) in planning funds had been spent on the project. As a part of its May Revision in 2011-12, the Administration proposed suspending LRS development. At the time, the Administration also reported that the federal government had indicated it would not approve funding for the project until it received, reviewed, and approved of the state’s long-term plan for its overall eligibility system. The final budget, however, continued $31.7 ($12 million GF) for LRS planning and development work in 2011-12. Trailer bill language (Chapter 13, Statutes of 2011) also directed OSI to migrate the 39 counties currently in the C-IV consortium to the new LRS. As a result, LRS would replace both LEADER and C-IV, and the state would have a two-consortia SAWS system. The Governor’s January budget for 2012-13 includes $35.3 million for LRS, but the Department notes that final funding will be subject to federal approval of the project and applicable federal financial participation rates and cost allocation formulas. The Need to Replace LEADER: LA County entered into an agreement for Unisys to develop LEADER in 1995 and completed countywide implementation of the system in 2001. The most recent contract extends through April 2015. According to OSI and LA County, LEADER technology is outdated and cumbersome (e.g., it uses outdated COBOL language with 9.5 million lines of code). In addition, LEADER relies on proprietary hardware and software components created by its vendor. The federal government has expressed concerns about the state and county’s resulting non- competitive use of that same vendor; and OSI has indicated that no other qualified 8 vendors have been willing to enter a bid to operate the LEADER system. The Administration indicates that LRS would streamline LA’s business practices, eliminate duplicative data entry, and minimize errors. The Legislature first appropriated funding to support the planning process for a new system to replace LEADER in 2005-06. The project has since been delayed several times. 2009 Trailer Bill Language: The 2009 budget included trailer bill language (in Chapter 7, Statutes of 2009) that directed the Departments of Health Care Services and Social Services to develop a plan to streamline the eligibility determination process for health and human services programs. The trailer bill also established a goal of minimizing the number of information systems performing eligibility functions, including a required analysis of the costs, benefits, and risks of moving to a single statewide system. After initial efforts to implement this language, the Schwarzenegger Administration suspended its work to create the required plan. And as indicated above, the direction to consolidate to a two-consortia system was enacted later (following upon the completion of a consolidation from four to three systems in 2010). When the planned migration of C-IV was enacted, however, these older statutes regarding the need for a plan to streamline eligibility processes were not amended or repealed. LAO Report: In a February report entitled Consolidating California’s Statewide Automated Welfare Systems, the LAO notes that the 2012 trailer bill language establishing the requirement to migrate C-IV into the new LRS system does not require the Administration to develop a feasibility study report (FSR), cost-benefit analysis, or other plan, but rather directs the Administration to oversee the migration under the LRS contract. As a result, the Administration has indicated its intent to include the migration work as a part of its contract with the chosen LRS vendor (Accenture LLP). The LAO recommends that the Legislature instead reconsider alternative procurement processes for the C-IV migration, including reopening the LRS procurement, planning the migration as a separate project, or breaking the migration into multiple contracts. The LAO also recommends consideration of a cost reasonableness assessment or study conducted by contracted experts who collect data on the costs of other public and private sector efforts and extrapolate to determine whether the proposed costs for a project are within the realm of reasonableness. The Franchise Tax Board recently used a cost-reasonableness assessment to validate the costs of its Enterprise Data to Revenue project. That project has an estimated total cost of $520 million. A six-week cost reasonableness assessment (at a cost of $75,000) indicated that the vendor’s proposed costs were within the range of reasonableness. Finally, the LAO recommends that the Legislature improve its oversight of LRS development and the new migration project by requiring more frequent reporting from the Administration on the project’s progress (in addition to the existing requirement for an annual report on the implementation of SAWS more generally). Staff Comment & Recommendation: Staff recommends that the Subcommittee hold open the overall budget for LRS and the C-IV migration, and: 9 1) Adopt the requirement for a cost-reasonableness assessment to be conducted with respect to whether the costs proposed by the vendor for migrating C-IV into the new LRS system are within range of reasonableness based on the proposed project requirements and risks, among other factors. 2) Adopt supplemental reporting language directing the Administration to conduct regularly scheduled briefings with legislative staff, and to offer updates during budget Subcommittee hearings, as efforts to develop LRS and migrate C-IV continue. 3) Repeal outdated trailer bill language regarding eligibility system streamlining from 2009 (in Chapter 7 of that year’s statutes, as described above). Questions for DSS & OSI: 1) What is the latest anticipated timeline for developing and implementing LRS? 2) What has been done to date with respect to planning for the migration of C-IV into LRS? What can you say about the anticipated timeline and costs for that migration? 3) What has the state heard from the federal government regarding its approval of funding for LRS and for the migration of C-IV? Questions for LAO: 1) Please summarize your recommendations, including the recommendation to conduct a cost reasonableness assessment. 10 5175 Department of Child Support Services (DCSS) Department Overview The mission of the California Child Support Program is to enhance the well-being of children and the self-sufficiency of families by providing professional services to locate parents, establish paternity, and establish and enforce orders for financial and medical support. The Child Support Program is committed to ensuring that California’s children are given every opportunity to obtain financial and medical support from their parents in a fair and consistent manner throughout the state. The Child Support Program is committed to providing the highest quality services and collection activities in the most efficient and effective manner. The Department of Child Support Services is the single state agency designated to administer the federal Title IV-D state plan. The Department is responsible for providing statewide leadership to ensure that all functions necessary to establish, collect, and distribute child support in California, including securing child and spousal support, medical support and determining paternity, are effectively and efficiently implemented. Eligibility for California’s funding under the Temporary Assistance to Needy Families (TANF) Block Grant is contingent upon continuously providing these federally required child support services. Furthermore, the Child Support Program operates using clearly delineated federal performance measures, with minimum standards prescribing acceptable performance levels necessary for receipt of federal incentive funding. The objective of the Child Support Program is to provide an effective system for encouraging and, when necessary, enforcing parental responsibilities by establishing paternity for children, establishing court orders for financial and medical support, and enforcing those orders. Child Support Administration: The Child Support Administration program is funded from federal and state funds. The Child Support Administration expenditures are comprised of local staff salaries, local staff benefits, and operating expenses and equipment. The federal government funds 66 percent and the state funds 34 percent of the Child Support Program costs. In addition, the Child Support Program earns federal incentive funds based on the state’s performance in five federal performance measures. Child Support Automation: Federal law mandates that each state create a single statewide child support automation system that meets federal certification. There are two components of the statewide system. The first is the Child Support Enforcement (CSE) system and the second is the State Disbursement Unit (SDU). The CSE component contains tools to manage the accounts of child support recipients and to locate and intercept assets from non-custodial parents who are delinquent in their child support payments. In addition, it funds the local electronic data processing maintenance and operation costs. The SDU provides 11 services to collect child support payments from non-custodial parents and to disburse these payments to custodial parties. Department of Child Support Services 2012-13 Budget Overview Fund Source 2010-11 2011-12 2012-13 General Fund $308.34 $320.41 $313.23 Federal Trust Fund $498.10 492.96 $459.83 Child Support Collections Recovery Fund $206.96 $217.12 $225.62 Reimbursements $0.12 $0.17 $0.12 Total Expenditures $1,013.53 $1,030.67 $998.79 Positions 525.6 573.5 573.5 1. Revenue Stabilization Background: In the 2009-10 Governor’s Budget, the administration proposed an augmentation of $18.7 million ($6.4 million GF) for Local Child Support Agencies (LCSAs) to maintain revenue generating caseworker staffing levels in order to stabilize child support collections. The Legislature approved the request for this funding in the 2009 Budget Act and directed that 100 percent of the new funds be used to maintain revenue generating caseworker-staffing levels. For Fiscal Year 2009-10, the initial augmentation year, the General Fund share of the allocation was $6.4 million dollars; the return to the General Fund was $8.9 million dollars, a return on investment of $2.5 million dollars. Collection data for Fiscal Year 2010-11 indicates the revenue stabilization funds continue to have a positive effect of maintaining statewide child support collections levels. In Fiscal Year 2010-11, LCSAs were able to retain 239 of the originally retained 245 revenue generating caseworker staff with the revenue stabilization funding. This number was calculated based on a 2.4 percent reduction to actual total caseworker staffing in 2010-11. Child support collections would have declined by this amount had staff not been retained. This would have been 4.1 percent less than the 2009-10 collections for this same time period. For the $6.4 million General Fund investment, the Department states that $9 million in General Fund assistance collections were retained in 2010-11, yielding a net return of $2.6 million General Fund to the state. According to the DCSS, the LCSAs continue to routinely incorporate these early intervention activities in their work on cases. The Department believes the early intervention activities contribute to the stabilization of the collection levels given the economy. LCSAs will continue to use early intervention activities in their casework as well as other individual efforts to improve collections. 12 Questions for the Administration: 1) Please describe the Revenue Stabilization Funding and the impact that the General Fund contribution has had on collections to date. 2) Please describe what, if any, impact utilizing early intervention strategies which were a condition of receiving this funding, have had on the child support collection process. Staff Recommendation: Item included for informational purposes. 2. Child Support Automation Background: Beginning in 2008, the California Child Support Automation System was fully implemented. Total cost of the application was approximately $1.5 billion dollars and took nearly eight years to implement. Shortly thereafter, the application received its federal certification as the statewide automation system. The Department of Child Support Services is responsible for maintaining the functionality of the automation system and also responsible of ensuring the LCSAs have access to the system. The 2012-13 Budget includes a request for $99.34 million to support the Department’s Child Support Automation System. Of that, $14.97 million will be directed towards the State Disbursement Unit, the remaining $84.37 million will be directed towards the other component of the Automation System, the Child Support Enforcement System. This request reflects a reduction of $4.5 million dollars ($1.5 million in General Fund) in the 2012-13 Budget when compared to the 2011-12 Budget. The Department has completed the procurement of a new Service Provider contract for the State Disbursement Unit (SDU), which has lowered contract rates below the existing rate. The Department, in conjunction with the California Technology Agency, is required to annually submit a report that highlights the following components: \uf0b7 Breakdown of funding elements for past, current, and future years. \uf0b7 Description of active functionalities and how they support efforts in child support collections. \uf0b7 Review of current considerations and their relationship to federal law and policy. \uf0b7 Description on future, planned changes to the Automation System and how they support greater collections for the state, receipt of payment for the family, and enhance work activities. 13 Questions for the Administration: 1) Please provide us with a brief update on the Automation System project to date. Staff Recommendation: Item included for informational purposes. 3. Suspension of County Share Governor’s Budget Request: The Governor’s 2012-13 Budget includes a suspension of Child Support collections in 2012-13. The suspension is accompanied by trailer bill language. The county share of collections is estimated to be $34.5 million in 2012-13. Under this proposal, the entire non-federal portion of child support collections will benefit the General Fund on a one-time basis, much like the proposal adopted in 2011- 12. Background: Child support payments from non-custodial parents are collected and distributed to either families or governments. Collections made on behalf of families who have not received public assistance are distributed to custodial parents. Collections made on behalf of families who have received public assistance are retained by the government to repay past welfare costs. These assistance collections are shared by the federal, state, and county governments. The 2011 12 budget package suspended the county share of collections for one year, which results in an increase in General Fund revenue of about $24 million in the budget year. Typically, when Local Child Support Agencies collect child support on behalf of families receiving CalWORKs, the county retains a portion (2.5 percent) of the collections. Based on the most recent DCSS survey of counties, most counties transfer their share of collections to the local welfare agency to offset the county share of welfare costs. Los Angeles County and San Diego County reinvest the collections into the local child support program, and other counties transfer the funds to their county general funds. Questions for the Administration: 1) Please explain the impact that this proposal will have on counties and the various county-based programs. Staff Recommendation: Hold Open. 4. Health Insurance Incentives Governor’s Budget Request: The Administration, through trailer bill language, proposes to eliminate the requirement to provide an incentive to LCSAs of $50 per case 14 for obtaining third-party health coverage\/insurance for cases that have never had – and\/or have lapsed – coverage\/insurance rather than pursuing an additional time-limited extension. Background: Pursuant to Welfare and Institutions Code Section 14124.93, DCSS is to provide an incentive to LCSAs for obtaining third-party health coverage\/insurance for cases that have never had – and\/or have lapsed – coverage\/insurance. These incentives have been suspended since fiscal year 2002-03; the suspension ends after 2011-12. This Section has been amended three times over the past ten years to suspend the health insurance incentive payments to the LCSAs due to budget constraints. Staff Comment: These incentives, when not suspended, are paid for with 100 percent General Fund (GF). There are no federal matching funds available. The budgeted amount for 2001-02 for these incentives was $3.0 million GF. Current data is not readily available on the costs as the form that LCSAs submitted the data on was discontinued in 2002-03. Staff Recommendation: Reject proposed trailer bill language and suspend health insurance incentives for three more years. 5. Performance Incentives Governor’s Budget Request: The Administration proposes, through trailer bill language, to eliminate statute which states that the top ten performing LCSAs, as defined per Family Code Section 17704, are to receive an incentive equal to five percent of the state’s share of their LCSA’s assistance recoupment. Additionally, the request, through trailer bill language, asks that the department provide no further incentive funds to be transferred to the LCSAs. Background: As noted above, pursuant to Family Code Section 17706, effective with fiscal year 2000-01, the top ten performing LCSAs, as defined per Family Code Section 17704, are to receive an incentive equal to five percent of the state’s share of their LCSA’s assistance recoupment. These incentives have been suspended since 2002-03; the suspension ends after 2011-12. Staff Comment: Family Code Section 17706 has been amended three times over the past ten years to suspend the top ten performance incentive payments to the LCSAs due to budget constraints. Staff Recommendation: Reject trailer bill language and suspend performance incentives for three more years. 15 6. Investment Authority Governor’s Budget Request: The administration has requested an amendment to Family Code (FC) section 17311.5 in order to provide specific investment authority to DCSS. The trailer bill language accompanying this request provides investment authority to the department. DCSS holds funds for the child support payments it has disbursed to the participants of the child support program until such time as they are negotiated. The non-negotiated child support payments are held in an Investment Sweep Account (ISA) outside the state treasury. Background: Funds in the ISA are invested each night in funds that comply with Section 16430 of the Government Code. Undisbursed child support funds are held in the Child Support Payment Trust Fund and are invested by the state treasury in the Surplus Money Investment Fund. The administration also states that statutory change will also resolve a contract issue with the vendor responsible for collecting and disbursing child support collections. Additionally, investing collections funds would maximize the utilization of these funds. In an effort to provide more clarification regarding this issue, DCSS is seeking explicit legislative authority. The ISA account average daily balance is over $30 million. Absent investment, the account will require collateralization, which the administration asserts will create a budget pressure on the state. According to the Department of Finance, absent investment authority, the account would require collateralization. Utilizing collateralization creates additional budget pressure by increasing future contracting costs. Increased contracting costs would result given that a vendor would need to provide collateral to the over $30 million (average daily balance) residing in the account\u2014which could lead to the need for increased budgeted resources by DCSS. Staff Recommendation: Adopt proposed trailer bill language for 2012-13 only, with review after the one year regarding its extension or permanent nature. In addition, staff recommends that the Subcommittee direct the administration to begin a discussion with Banking and Finance policy staff regarding this issue to obtain counsel and advice on the propriety of the proposal in the budget and whether such a change should be sought permanently as part of a policy bill. ”

pdf 4.19.12 Senate Budget Sub. # Outcomes for CWS & Automation

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” SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E ACTIONS TAKEN ASSEMBLY BUDGET SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, APRIL 18, 2012 1:30 P.M. – STATE CAPITOL ROOM 444 ITEMS TO BE HEARD ITEM DESCRIPTION 5175 DEPARTMENT OF CHILD SUPPORT SERVICES ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE This item was included for informational and context-setting purposes. ISSUE 2 GOVERNOR’S PROPOSAL TO CONTINUE SUSPENSION OF COUNTY SHARE Held open. ISSUE 3 PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION 1. Proposal to Eliminate Health Insurance Incentives for Local Child Support Agencies. Adopted trailer bill language to additionally suspend the health insurance incentive requirement for the 2012-13 fiscal year. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 4 1 2. Proposal to Eliminate Child Support Performance Incentives for Local Child Support Agencies. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 2 Adopted trailer bill language to additionally suspend the performance incentive statute for the 2012-13 fiscal year. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 4 1 3. Proposal to Provide Explicit Investment Authority for Non-Negotiated Child Support Payments. Held open. 5180 DEPARTMENT OF SOCIAL SERVICES ISSUE 1 COMMUNITY CARE LICENSING OVERVIEW AND PROGRAM UPDATE This item is included for informational and oversight item. ISSUE 2 PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION RELATED TO CCL 1. Distribution of the Child Health and Safety Fund Held open. 2. Eliminate Fingerprint Licensing Fee Exemption Held open. ISSUE 3 DISABILITY DETERMINATION SERVICES DIVISION OVERVIEW AND PROGRAM UPDATE This item was included for informational and oversight purposes. ISSUE 4 REALIGNMENT OVERVIEW AND ISSUES FOR LEGISLATIVE CONSIDERATION This issue will be discussed in depth for all Sub.1 affected programs at the May 2, 2012 Sub. 1 hearing. ”

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” SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E AGENDA ASSEMBLY BUDGET SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, APRIL 18, 2012 1:30 P.M. – STATE CAPITOL ROOM 444 ITEMS TO BE HEARD ITEM DESCRIPTION 5175 DEPARTMENT OF CHILD SUPPORT SERVICES 1 ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE 1 ISSUE 2 GOVERNOR’S PROPOSAL TO CONTINUE SUSPENSION OF COUNTY SHARE 6 ISSUE 3 PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION 7 5180 DEPARTMENT OF SOCIAL SERVICES 10 ISSUE 1 COMMUNITY CARE LICENSING OVERVIEW AND PROGRAM UPDATE 10 ISSUE 2 PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION RELATED TO CCL 12 ISSUE 3 DISABILITY DETERMINATION SERVICES DIVISION OVERVIEW AND PROGRAM UPDATE 14 ISSUE 4 REALIGNMENT OVERVIEW AND ISSUES FOR LEGISLATIVE CONSIDERATION 16 SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 1 ITEMS TO BE HEARD 5175 DEPARTMENT OF CHILD SUPPORT SERVICES ISSUE 1: DEPARTMENT OVERVIEW AND PROGRAM UPDATE The mission of the California Child Support Program is to enhance the well-being of children and the self-sufficiency of families by providing professional services to locate parents, establish paternity, and establish and enforce orders for financial and medical support. The Child Support Program is committed to ensuring that California’s children are given every opportunity to obtain financial and medical support from their parents in a fair and consistent manner throughout the state. The Child Support Program is committed to providing the highest quality services and collection activities in the most efficient and effective manner. OVERVIEW OF MAJOR AREAS The Department of Child Support Services is the single state agency designated to administer the federal Title IV-D state plan. The Department is responsible for providing statewide leadership to ensure that all functions necessary to establish, collect, and distribute child support in California, including securing child and spousal support, medical support and determining paternity, are effectively and efficiently implemented. Eligibility for California’s funding under the Temporary Assistance to Needy Families (TANF) Block Grant is contingent upon continuously providing these federally required child support services. Furthermore, the Child Support Program operates using clearly delineated federal performance measures, with minimum standards prescribing acceptable performance levels necessary for receipt of federal incentive funding. The objective of the Child Support Program is to provide an effective system for encouraging and, when necessary, enforcing parental responsibilities by establishing paternity for children, establishing court orders for financial and medical support, and enforcing those orders. Child Support Administration. The Child Support Administration program is funded from federal and state funds. The Child Support Administration expenditures are comprised of local staff salaries, local staff benefits, and operating expenses and equipment. The federal government funds 66 percent and the state funds 34 percent of the Child Support Program costs. In addition, the Child Support Program earns federal incentive funds based on the state’s performance in five federal performance measures. Child Support Automation. Federal law mandates that each state create a single statewide child support automation system that meets federal certification. There are two components of the statewide system. The first is the Child Support Enforcement (CSE) system and the second is the State Disbursement Unit (SDU). The CSE component contains tools to manage the accounts of child support recipients and to locate and intercept assets from non-custodial parents who are delinquent in their child support payments. In addition, it funds the local electronic data processing maintenance and operation costs. The SDU provides services to collect child support payments from non-custodial parents and to disburse these payments to custodial parties. Child Support Automation is discussed in further depth below. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 2 FISCAL OVERVIEW Fund Source 2010-11 Actual 2011-12 Projected 2012-13 Proposed BY to CY Change % Change General Fund $308,337 $320,414 $313,226 ($7,188) -2.2% Federal Trust Fund 498,106 492,956 459,828 ($33,128) -6.7% Child Support Collections Recovery Fund 206,964 217,125 225,621 $8,496 3.9% Reimbursements 127 178 123 ($55) -30.9% Total Expenditure 1,013,534 1,030,673 998,798 ($31,875) -3.1% Positions 525.6 573.5 573.5 $0 0.0% ADDITIONAL BUDGET DETAIL 2012-13 State Operations \uf0b7 State Operations budget $151.9 million \uf0b7 Reduction of 19 positions and $15 million ($5 million GF) to meet the Control Section 3.91 statewide reduction target. 2012-13 Local Assistance Expenditures \uf0b7 $860.5 million ($267.3 million GF) in total Child Support Program Costs \uf0b7 $761.1 million ($233.5 million GF) in Child Support Administration Costs \uf0b7 $99.3 million ($33.8 million GF) in Child Support Automation Costs Item SFY 2011\/12 (Dollars in 000’s) Change (Dollars in 000’s) SFY 2012\/13 (Dollars in 000’s) Child Support Administration $761,143 $0 $761,143 Child Support Automation $103,823 -$4,480 $99,343 CCSAS – SDU $19,446 -$4,480 $14,966 CCSAS – CSE $84,377 $0 $84,377 Total $864,966 -$4,480 $860,486 Child Support Administration. The 2012-13 Local Assistance Estimate includes a reduction of $266,000 General Fund (GF) due to a projected increase in federal funds for increased incentives. Overall funding remains the same as SFY 2011-12. Child Support Automation. DCSS recently completed procurement of a new Service Provider contract for the State Disbursement Unit (SDU). The new contract rates are lower than the existing rates resulting in savings of $4.5 million ($1.5 million GF) in SFY 2012-13. Child Support Collections. Child Support Collections increased 0.5 percent in 2011 despite California’s soft economy. \uf0b7 $2.4 billion Total Collections \uf0b7 $1.8 billion Non Assistance collections \uf0b7 $564.4 million ($263.4 million GF) in Assistance Collections SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 3 Item SFY 2011\/12 (Dollars in 000’s) Change (Dollars in 000’s) SFY 2012\/13 (Dollars in 000’s) Assistance Collections $541,702 $22,715 $564,417 General Fund $253,465 $9,919 $263,384 Other Funds $288,237 $12,796 $301,033 Non Assistance Collections $1,767,133 $19,388 $1,786,521 Total $2,308,835 $42,103 $2,350,938 FFY 2011 FEDERAL PERFORMANCE MEASURES \uf0b7 Statewide Paternity Establishment Percentage (PEP) for California measured 107.0 percent for Federal Fiscal Year (FFY) 2011. California’s performance increased in this measure by 4.4 percentage points from FFY 2010 to FFY 2011, a 4.3 percent change. Since FFY 2000, Statewide PEP has been above 100 percent. The national average for FFY 2010 was 94.7 percent. \uf0b7 IV-D Paternity Establishment Percentage for California measured 92.2 percent for IV-D PEP in FFY 2011. California’s performance increased in this measure by 3.6 percentage points from FFY 2010 to FFY 2011, a 4.1 percent change. The national average for FFY 2010 was 94.1 percent. \uf0b7 Cases with Support Orders Established for California measured 85.8 percent for FFY 2011. California’s performance increased in this measure by 3.3 percentage points from FFY 2010 to FFY 2011, a 4.0 percent change. The national average for FFY 2010 was 80.1 percent. \uf0b7 Collections on Current Support for California measured 58.6 percent for FFY 2011. California’s performance increased in this measure by 2.6 percentage points from FFY 2010 to FFY 2011, 4.6 percent change. The national average for FFY 2010 was 62.0 percent. \uf0b7 Cases with Collections on Arrears for California measured 61.6 percent for FFY 2011. California’s performance increased in this measure by 1.3 percentage points from FFY 2010 to FFY 2011, a 2.2 percent change. The national average for FFY 2010 was 62.1 percent. \uf0b7 Cost Effectiveness for California measured $2.29 for FFY 2011. California’s performance declined in this measure by $0.09 from FFY 2010 to FFY 2011, a 3.8 percent change. The national average for FFY 2010 is $4.86. REVENUE STABILIZATION UPDATE In the 2009-10 Governor’s Budget, the administration proposed an augmentation of $18.7 million ($6.4 million GF) for Local Child Support Agencies (LCSAs) to maintain revenue generating caseworker staffing levels in order to stabilize child support collections. The Legislature approved the request for this funding in the 2009 Budget Act and directed that 100 percent of the new funds be used to maintain revenue generating caseworker-staffing levels. Collection data for 2010-11 indicates the revenue stabilization funds continue to have a positive effect of maintaining statewide child support collections levels. In 2010 11, LCSAs were able to SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 4 retain 239 of the originally retained 245 revenue generating caseworker staff with the revenue stabilization funding. This number was calculated based on a 2.4 percent reduction to actual total caseworker staffing in 2010-11. Child support collections would have declined by this amount had staff not been retained. This would have been 4.1 percent less than the 2009 10 collections for this same time period. For the $6.4 million GF investment, the Department states that $9 million in GF assistance collections was retained in 2010-11, yielding a net return of $2.6 million GF to the state, for a cost effectiveness ratio of $1.41. Collection Category SFY 2010\/11 Collections With Revenue Stabilization SFY 2010\/11 Collections Without Revenue Stabilization SFY 2010\/11 Amount Impact of Revenue Stabilization SFY 2010\/11 Percent Impact of Revenue Stabilization Total Collections $2,266.8 m $2,136.9 m $129.9 m 5.7% Assistance Collections $519.0 m $500.0 m $19.0 m 3.7% General Fund Recoupment $219.4 m $210.4 m $9.0 m 4.1% Non-Assistance Collections $1,747.8 m $1,636.9 m $110.9 m 6.3% In addition, DCSS states that reports from the LCSAs indicate early intervention strategies, which were required as a condition of this funding, are increasing the engagement of parents in their child support cases and positively influencing payment behavior. CHILD SUPPORT AUTOMATION UPDATE In 1999, the Legislature passed Assembly Bill 150, which directed the Department to develop, implement, maintain, and operate a new statewide child support system. The California Child Support Automation System (CCSAS) Project contract was initiated in 2003-04 to create a single statewide child support system that automates and centralizes all child support activities, including locating absent parents, establishing paternity, and obtaining, enforcing, and modifying child support orders. In December 2008, the conversion of all county LCSA operations to the single statewide system was completed. Pursuant to Section 17561 of the Family Code, the California Technology Agency and the Department are required to produce an annual report to the appropriate policy and fiscal committees of the Legislature by March 1 of each year. The report is required to include the following components: (a) A clear breakdown of funding elements for past, current, and future years. (b) Descriptions of active functionalities and a description of their usefulness in child support collections. (c) A review of current considerations relative to federal law and policy. (d) A policy narrative on future, planned change to CCSAS and how those changes will advance activities for workers, collections for the state, and payments for recipient families. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 5 Consistent with the statutory requirement, the annual summary is available and the Department has been asked to present a brief update on CCSAS at the hearing per the questions included below. PANEL \uf0b7 Department, please respond to the following requests and questions: o Provide an overview of the State’s performance according to federal measures and how these have changed from the prior year. Please describe how economic conditions have affected these and other circumstances involving collections. o Describe the Revenue Stabilization funding and what effect this General Fund investment has had on collections since adopted. o Provide a brief review of the CCSAS Project, including highlights of program performance, accomplishments, and planned system changes. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment on any issue not otherwise agendized that relates to this department. Staff Recommendation: This item is included for informational and context-setting purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 6 ISSUE 2: GOVERNOR’S PROPOSAL TO CONTINUE SUSPENSION OF COUNTY SHARE BACKGROUND The 2011 12 budget package suspended the county share of collections for one year, which results in an increase in General Fund revenue of about $24 million in the budget year. Typically, when Local Child Support Agencies collect child support on behalf of families receiving CalWORKs, the county retains a portion (2.5 percent) of the collections. Most counties use these funds for the support of their CalWORKs programs. BUDGET PROPOSAL The Governor’s Budget again suspends the county share of child support collections in 2012-13, with associated trailer bill language. The county share of collections is estimated to be $34.5 million in 2012-13. Under this proposal, the entire non-federal portion of child support collections will benefit the General Fund on a one-time basis. This will not reduce the revenue stabilization funding of $18.7 million ($6.4 million General Fund) counties receive for caseworker staff in order to maintain child support collections. PANEL \uf0b7 Department, please describe the proposal. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public Comment. Staff Recommendation: Staff recommends holding this item open. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 7 ISSUE 3: PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION The Administration has proposed additional trailer bill for DCSS, with each described below, followed by staff commentary and recommendations. 1. ELIMINATE HEALTH INSURANCE INCENTIVES Background. Pursuant to Welfare and Institutions Code Section 14124.93, DCSS is to provide an incentive to LCSAs of $50 per case for obtaining third-party health coverage\/insurance for cases that have never had – and\/or have lapsed – coverage\/insurance. These incentives have been suspended since fiscal year 2002-03; the suspension ends after 2011-12. This Section has been amended three times over the past ten years to suspend the health insurance incentive payments to the LCSAs due to budget constraints. Proposal. The Administration proposes to eliminate the requirement in lieu of an additional time-limited extension. Part of the administration’s justification is that the incentives, when not suspended, are paid for with 100 percent General Fund (GF). There are no federal matching funds available. The budgeted amount for 2001-02 for these incentives was $3.0 million GF. Current data is not readily available on the costs as the form that LCSAs submitted the data on was discontinued in 2002-03. STAFF COMMENT & RECOMMENDATION Staff recommends adoption of trailer bill language to additionally suspend the health insurance incentive requirement given continuing state budget constraints for the 2012-13 fiscal year. Elimination of sections of code is generally avoided in budgeting, as this does not have the benefit of review under the policy process. The administration is urged to consider proposing this repeal through a policy bill. 2. ELIMINATE PERFORMANCE INCENTIVES Background. Pursuant to Family Code Section 17706, effective with fiscal year 2000-01, the top ten performing LCSAs, as defined per Family Code Section 17704, are to receive an incentive equal to five percent of the state’s share of their LCSA’s assistance recoupment. These incentives have been suspended since 2002-03; the suspension ends after 2011-12. Family Code Section 17706 has been amended three times over the past ten years to suspend the top ten performance incentive payments to the LCSAs due to budget constraints. Proposal. The administration proposes to eliminate the top ten-performance incentive statute and provide no further incentive funds to be transferred to the LCSAs. The incentives, when not suspended, are paid with 100 percent General Fund. There are no federal matching funds available. The budgeted amount for 2001-02 was $1.0 million GF. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 8 STAFF COMMENT & RECOMMENDATION Staff recommends adoption of trailer bill language to additionally suspend the performance incentive statute given continuing state budget constraints for the 2012-13 fiscal year. Elimination of sections of code is generally avoided in budgeting, as this does not have the benefit of review under the policy process. The administration is urged to consider proposing this repeal through a policy bill. 3. INVESTMENT AUTHORITY Proposal. The administration states that an amendment to Family Code (FC) section 17311.5 is needed to provide specific investment authority to DCSS. DCSS holds funds for the child support payments it has disbursed to the participants of the child support program until such time as they are negotiated. The non-negotiated child support payments are held in an Investment Sweep Account (ISA) outside the state treasury (State Administrative Manual Section 8002, FC 17311). In 2005, when the child support collection and disbursement activities were transitioned from the counties to the state, the Department of Finance (DOF) granted DCSS approval to invest under broad authority in FC 17308. The ISA account average daily balance is over $30 million. Absent investment, the account will require collateralization, which the administration asserts will create a budget pressure on the state. Funds in the ISA are invested each night in funds that comply with Section 16430 of the Government Code. Undisbursed child support funds are held in the Child Support Payment Trust Fund and are invested by the state treasury in the Surplus Money Investment Fund. The administration also states that statutory change will also resolve a contract issue with the vendor responsible for collecting and disbursing child support collections. Additionally, investing collections funds would maximize the utilization of these funds. In an effort to provide more clarification regarding this issue, DCSS is seeking explicit legislative authority. STAFF COMMENT & RECOMMENDATION Staff notes that this trailer bill proposal has no specific associated savings or budget link. Staff recommends holding open the trailer bill language to allow for further review and urges the administration to seek a legislative vehicle for this piece of language in lieu of proposing it through the budget process. PANEL \uf0b7 Department, please describe each trailer bill proposal. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight. \uf0b7 Public Comment. Staff Recommendation: Staff recommendations are repeated here from above: SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 9 1. Proposal to Eliminate Health Insurance Incentives for Local Child Support Agencies. Staff recommends adoption of trailer bill language to additionally suspend the health insurance incentive requirement given continuing state budget constraints for the 2012-13 fiscal year. 2. Proposal to Eliminate Child Support Performance Incentives for Local Child Support Agencies. Staff recommends adoption of trailer bill language to additionally suspend the performance incentive statute given continuing state budget constraints for the 2012-13 fiscal year. 3. Proposal to Provide Explicit Investment Authority for Non-Negotiated Child Support Payments. Staff recommends holding open the trailer bill language to allow for further review and additionally urges the administration to seek a legislative vehicle for this piece of language in lieu of proposing it through the budget process. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 10 5180 DEPARTMENT OF SOCIAL SERVICES ISSUE 1: COMMUNITY CARE LICENSING BUDGET REVIEW AND PROGRAM UPDATE BACKGROUND AND OVERVIEW Community Care Licensing (CCL) oversees the licensure of approximately 83,000 facilities, and has the responsibility to protect the health and safety of the individuals served by those facilities. For the last several years, DSS has provided an update on the current status of CCL’s workload and performance with respect to statutory requirements. The Department will provide this update again during this hearing. The facilities licensed by CCL include childcare centers; family childcare homes; foster family and group homes; adult residential facilities; and residential care facilities for the elderly. CCL does not license skilled nursing facilities (these are licensed by the Department of Health Care Services) or facilities that provide alcohol and other drug treatment (these are licensed by the Department of Alcohol and Drug Programs). All individuals seeking to be licensed to operate, work in, or reside at a community care facility (approximately 197,000 in 2009-10) must first complete a criminal background check that is processed (and in some circumstances investigated) by CCL. CCL is also responsible for reviewing and responding to any reports of criminal activity that lead to an arrest subsequent to an initial background check. CCL also performs regular inspection visits to licensed facilities and responds to complaints regarding facilities. DSS is required to conduct pre- and post-licensing inspections for new facilities, including when a previously licensed facility changes hands. In addition, CCL must conduct unannounced visits to licensed facilities under a statutorily required timeframe. Prior to 2003, these routine inspection visits were required annually for all facilities except family childcare homes (which received at least triennial inspections). In 2003, a human services budget trailer bill (AB 1752, Chapter 225, Statutes of 2003) reduced the budget for CCL by $5.6 million and reduced the frequency of these inspections. As a result, CCL must visit a small number of specified facilities and conduct random, comprehensive visits to at least 10 percent of the remaining facilities annually. Ultimately, the CCL must visit all facilities at least once every five years. In addition, there was a trigger by which annually required inspections increase if citations increase by 10 percent from one year to the next. Finally, CCL is required to respond within 10 days to complaints and may conduct related onsite investigations. PANEL \uf0b7 Community Care Licensing, please respond to the following requests and questions: o Please provide an overview of the funding (total funds and General Fund) and staffing (total number of positions, total vacancies) for CCL in recent years and how the department has performed with respect to its criminal background check, routine inspection, and complaint investigation responsibilities. o What are the challenges CCL faces in meeting its statutory duties? Is there currently a backlog? o Describe the Key Indicator Tool (KIT) and the roll-out of this new protocol. What has changed as a result of use of the KIT? SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 11 \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment on any issue not otherwise agendized that relates to CCL. Staff Recommendation: This item is included for informational and oversight item. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 12 ISSUE 2: PROPOSED TRAILER BILL LANGUAGE FROM THE ADMINISTRATION RELATED TO CCL 1. CHILD HEALTH AND SAFETY FUND Background. AB 3087 (Speier), Chapter 1316, Statutes of 1992, established the Have A Heart, Be a Star, Help Our Kids specialized license plate program and requires that revenues derived from the special fees established for Kids’ Plates be deposited in the Child Health and Safety Fund (CHSF). Welfare and Institutions Code (WIC) Section 18285 mandates that 50 percent of the monies derived from the Kids’ Plates license plate program be appropriated to DSS to administer specific responsibilities surrounding child day care licensing. Of the remaining 50 percent, WIC 18285 (e) specifies that not more than 25 percent is also appropriated for child abuse prevention, while the remaining 25 percent is appropriated to programs that address the prevention of unintentional injuries to children. Proposal. WIC Section 18285.5 (a) specifies that the programs set forth in WIC Section 18285 are to be funded and implemented in the order they are listed in statute. The CDSS proposes to amend this list. The remaining 50 percent would be appropriated first to child abuse prevention, of which not more than 25 percent could be used for this purpose, then to the licensing activities of the DSS child day care program; and then to programs that address the prevention of unintentional injuries to children. The administration states that the Kid’s Plates program relies solely on income generated by the sale of Kids’ Plates specialized license plates and makes all expenditure decisions to remain within the available annual appropriation. By allowing child day care licensing activities to receive an appropriation from the CHSF in FY 2012-13, CDSS is able to allocate $501,000 to fund the licensing activities of the CDSS child day care program. The General Fund (GF) allotment is proposed to be reduced by $501,000 accordingly. STAFF COMMENT & RECOMMENDATION Staff recommends holding this item open for further review and to receive the benefit of stakeholder feedback. 2. FINGERPRINT LICENSING FEE EXEMPTION Background. Sections 1522(a)(3) and 1596.871(a)(3) of the Health and Safety Code prohibit the Department of Justice (DOJ) and DSS from charging fingerprint fees after FY 2011-12, pursuant to past suspensions prohibiting this fee exemption from taking effect. These fingerprint fees are for fingerprinting an applicant for a license to operate a community care facility (other than a foster family home or certified family home) that provides nonmedical care for six or less children or a child day care facility (center) that serves six or fewer children or any family day care facility (large or small) (referred to below as Applicant(s) ). The fingerprinting allows the DSS to complete a criminal background check of the Applicant to ensure the safety of the clients in care. For each fiscal year since 2003-04, sections 1522(a) (3) and 1596.871(a) (3) have been amended to allow the Department to charge a fee in the respective fiscal year. Most recently, the licensing fee exemption was continued on a two-year basis. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 13 Proposal. The administration’s trailer bill proposes to repeal the fee prohibition. The administration states, One of the most important protections provided by the DSS is the requirement that individuals who are licensed to operate these facilities, provide care to facility clients, or adults who reside at designated facility types, receive a comprehensive background check. This check is intended to ensure that individuals with criminal histories are thoroughly evaluated and\/or investigated before they are allowed to have contact with clients. Currently the DSS’s cost for fingerprinting and obtaining criminal histories of Applicants is offset by a $35 fee paid by the individual ($16 Live scan fee and $19 FBI fee). Not charging this fee pursuant to sections 1522(a) (3) and 1596.871(a) (3) would result in a cost to the General Fund. STAFF COMMENT & RECOMMENDATION Staff recommends holding this item open for further review. Elimination of sections of code is generally avoided in budgeting, as this does not have the benefit of review under the policy process. The administration is urged to consider proposing this repeal through a policy bill. PANEL \uf0b7 Department, please review each proposed piece of trailer bill for the Subcommittee. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight. \uf0b7 Public Comment. Staff Recommendation: Staff recommendations are repeated here from above: 1. Distribution of the Child Health and Safety Fund Staff recommends holding this item open for further review. 2. Eliminate Fingerprint Licensing Fee Exemption Staff recommends holding this item open for further review. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 14 ISSUE 3: DISABILITY DETERMINATION SERVICES DIVISION OVERVIEW AND PROGRAM UPDATE BACKGROUND The Disability Determination Service Division (DDSD) is responsible for determining the medical eligibility of California residents for benefits under United States Codes, Title II (Disability Insurance), Title XVI (SSI), and Title XIX (Medically Needy Only) of the Social Security Act. The state augments the SSI with the State Supplementary Payment (SSP). The State Division of DDSD is responsible for the development, evaluation, and adjudication of Medi-Cal, Medically Needy Only cases under Title XIX, which establishes eligibility for the full range of Medi-Cal services for those found disabled. BUDGET CONTEXT DSS requested, and was granted, as part of the 2011-12 Budget, $20.5 million (100 percent federal funds) to establish 245 new positions to process Social Security and SSI disability claims. The additional staff members would mainly be located in a new San Diego office and an expanded Roseville office. Disability claims have recently been increasing nationwide by 12 to 14 percent, and the federal government expects this trend to continue for several more years. In 2008 in California, the DDSD processed 349,000 disability claims. That number jumped to 397,000 in 2009 and 412,000 in 2010. According to the Department, the requested positions were needed to keep pace with the growing workload associated with processing these applications for benefits and for conducting continuing disability reviews (CDRs). The Department also indicated that ten percent of CDRs result in decisions to discontinue SSA\/SSI benefits, which leads to General Fund cost avoidance (as a result of the SSP portion of SSI\/SSP benefits that would otherwise be paid). DSS additionally requested, and was granted, also part of the 2011-12 Budget, $540,000 ($270,000 GF) for annualized increased rent costs related to the relocation of the LA branch of the DDSD to a site that meets the state’s seismic criteria. The Department of General Services’ Real Estate Services office identified the need for this move. Currently, the LA branch occupies approximately 20,866 square feet at a rental rate per square feet of $1.78. The projected rental rate for relocation to a similar-sized space that is seismically compliant at current market rates is $4.00 per square foot, resulting in $45,000 of increased lease costs per month beginning in 2011-12. One-time costs in the amount of $633,750 (redirected General Fund) have also been placed in an Architectural Revolving Fund for this relocation. The lease for the current office space expired on April 30, 2009; however, a soft- term lease extension was negotiated and lasts through April 2012. The Department is continuing in the process of securing an alternative space. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 15 PANEL \uf0b7 DDSD, please provide an update on your caseload and current program efforts. Please describe the nature of the situation involving the two budgeted issues for 2011-12 reviewed in the agenda. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight. \uf0b7 Public Comment. Staff Recommendation: This item is included for informational and oversight purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 16 ISSUE 4: REALIGNMENT OVERVIEW AND ISSUES FOR LEGISLATIVE CONSIDERATION BACKGROUND In 2011-12, the State began a process to realign certain Public Safety, Health, and Human Services programs to counties. As originally envisioned, the realignment was to be coupled with a Constitutional amendment that would guarantee ongoing funding for the programs that would have been before voters in June of 2012. Because the June 2011 Special Election did not occur, the process for realigning responsibilities for these programs to counties was started, but it is still being implemented in the 2012-13 budget. The budget did dedicate 1.0625 percent of State sales tax and $462 million of Vehicle License Fee revenue for the realigned costs in 2011-12. The Governor’s temporary tax initiative would provide the Constitutional protection for this revenue dedicated to Realignment and guarantee that it would continue. This initiative would shield local governments from some future costs, as well as provide mandate protection for the state. The 2011 Realignment included a diverse basket of programs, these included: \uf0b7 Custody of Low-Level Offenders \uf0b7 Juvenile Justice \uf0b7 Adult Parole \uf0b7 Court Security \uf0b7 Mental Health Services \uf0b7 Substance Abuse Services \uf0b7 Foster Care and Child Welfare Services \uf0b7 Adult Protective Services The 2011-12 also included only a one-year temporary funding structure for the realigned programs, which essentially funded them at the same level as the prior year and did not allow counties flexibility to move funds from one program to another. The 2012-13 Budget includes intent for a permanent funding structure and revenue allocation mechanism for realignment. This mechanism should address three major issues: 1) How much flexibility will counties have in moving money between programs? 2) How will funding be allocated to counties? 3) What happens to natural growth in the dedicated sales tax revenue? SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 17 FUNDING STRUCTURE The administration provided the following charts as part of the Governor’s January Budget. The Administration states that the proposed funding structure is intended to provide local entities with a stable funding source for realigned programs. Within each Subaccount, counties will have the flexibility. Counties will also be able to use their funds to draw down the maximum amount of federal funding for these programs. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 18 Growth Funding. The budget also proposes to distributes program growth on a roughly proportional basis, first among accounts, and then by subaccounts. Within each subaccount, federally required programs should receive priority for funding if warranted by caseload and costs. Growth funding for the Child Welfare Services (CWS) program would be a priority once base programs have been established. Over time, CWS would eventually receive an additional $200 million per year. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 18, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 19 ISSUES FOR THE LEGISLATURE TO CONSIDER The 2011 realignment package left a significant series of implementation matters unresolved, including critical issues such as the design of the funding system and allocation of revenues among counties. Over the months since enactment of the realignment package, the administration, counties, and some stakeholders have met to work on the implementing legislation. The administration has indicated that it expects information and trailer bill language to be made available soon, more specifically prior to and at the May Revision. Thus far, nothing has been released publicly. Due to the disadvantage this may place the Legislature in for adequate consideration and thoughtful deliberation of language, it is recommended that the Subcommittee schedule a hearing on May 2, 2012 to review all released information at that time on realignment of health and human services programs and to review what else is coming and the essential contents of what it will include. These issues are technical and complex, and the Legislature should be afforded the opportunity to understand and deliberate on as much as possible prior to adoption of additional trailer bill on this subject as part of the 2012-13 Budget. PANEL \uf0b7 Department of Social Services and Department of Finance, please respond to the following questions: o What will be released prior to May 1 and what will this include? Similarly, what will be released after? o What efforts has the administration made to include feedback from stakeholders? o How can the Legislature be included as additional refinements are made prior to the official release so that the Legislature is party to the discussions? \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight on the realignment topic. \uf0b7 Public Comment as time permits. Additional time for public comment will be provided on this subject at the May 2nd hearing. ”

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” SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E AGENDA ASSEMBLY BUDGET SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, APRIL 11, 2012 1:30 P.M. – STATE CAPITOL ROOM 437 ITEMS TO BE HEARD ITEM DESCRIPTION 4170 DEPARTMENT OF AGING 1 ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE 1 ISSUE 2 GOVERNOR’S PROPOSAL ON MULTIPURPOSE SENIOR SERVICES PROGRAM (MSSP) 4 5180 DEPARTMENT OF SOCIAL SERVICES 6 ISSUE 1 IN-HOME SUPPORTIVE SERVICES PROGRAM OVERVIEW 6 ISSUE 2 GOVERNOR’S PROPOSAL ON DOMESTIC AND RELATED SERVICES 9 ISSUE 3 GOVERNOR’S PROPOSAL ON 20 PERCENT REDUCTION IN IHSS HOURS 11 ISSUE 4 UPDATES ON IMPLEMENTATION OF PROGRAM CHANGES PREVIOUSLY ADOPTED A. EXTENSION OF SALES TAX TO HOMECARE SERVICES B. MEDICATION DISPENSING MACHINE PILOT PROJECT C. COMMUNITY FIRST CHOICE OPTIONS D. PUBLIC AUTHORITY ADMINISTRATIVE METHODOLOGY E. CLEAN-UP TO LANGUAGE ON BACKGROUND CHECKS 13 ISSUE 5 SUPPLEMENTAL SECURITY INCOME\/STATE SUPPLEMENTARY PAYMENT 17 4700 DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT 18 ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE 18 ISSUE 2 UPDATE ON STATUS OF USE OF FEDERAL WEATHERIZATION FUNDS 20 5160 DEPARTMENT OF REHABILITATION 22 ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE 22 ISSUE 2 GOVERNOR’S PROPOSAL TO ELIMINATE REHABILITATIONS APPEALS BOARD 24 SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 1 ITEMS TO BE HEARD 4170 DEPARTMENT OF AGING ISSUE 1: DEPARTMENT OVERVIEW AND PROGRAM UPDATE BACKGROUND The California Department of Aging’s (CDA’s) stated mission is to promote the independence and well-being of older adults, adults with disabilities, and families through: \uf0b7 Access to information and services to improve the quality of their lives; \uf0b7 Opportunities for community involvement; \uf0b7 Support to family members providing care; and \uf0b7 Collaboration with other state and local agencies. As the designated State Unit on Aging, the Department administers Older Americans Act programs that provide a wide variety of community-based supportive services as well as congregate and home-delivered meals. It also administers the Health Insurance Counseling and Advocacy Program. The Department also contracts directly with agencies that operate the Multipurpose Senior Services Program. The Department administers most of these programs through contracts with the state’s 33 local Area Agencies on Aging (AAAs). At the local level, AAAs contract for and coordinate this array of community-based services to older adults, adults with disabilities, family caregivers and residents of long-term care facilities. OVERVIEW OF DEPARTMENT’S MAJOR AREAS Nutrition. The Nutrition Program provides nutritionally-balanced meals, nutrition education and nutrition counseling to individuals 60 years of age or older. In addition to promoting better health through improved nutrition, the program focuses on reducing the isolation of the elderly and providing a link to other social and supportive services such as transportation, information and assistance, escort, employment, and education. Senior Community Employment Services. The federal Senior Community Service Employment Program, Title V of the Older Americans Act, provides part-time subsidized training and employment in community service agencies for low-income persons, 55 years of age and older. The program also promotes transition to unsubsidized employment. Supportive Services and Centers. This program provides supportive services including information and assistance, legal and transportation services, senior centers, the Long-Term Care Ombudsman and elder abuse prevention, and in-home services for frail older Californians as authorized by Titles III and VII of the Older Americans Act. The services provided are designed to assist older individuals to live as independently as possible and access the programs and services available to them. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 2 Special Projects. This program includes the community-based Health Insurance Counseling and Advocacy Program (HICAP). HICAP provides personalized counseling, community education and outreach events for Medicare beneficiaries. HICAP is the primary local source for accurate and objective information and assistance with Medicare benefits, prescription drug plans and health plans. Medi-Cal Programs. This program includes the Multipurpose Senior Services Program (MSSP) and Adult Day Health Care (ADHC) program, which will be eliminated effective February 29, 2012. The new Community-Based Adult Services (CBAS) program will begin March 1, 2012 and will provide necessary medical and social services to those in the elder community with the greatest need. The CBAS program is to be operated by the Department of Health Care Services, which will require a revision to the proposed budget to reflect this shift in program operation. The MSSP provides health\/social case management to prevent premature and unnecessary long-term care institutionalization of frail elderly persons. The Department provides program oversight of the MSSP via an interagency agreement with the Department of Health Care Services. FISCAL OVERVIEW Fund Source 2010-11 Actual 2011-12 Projected 2012-13 Proposed BY to CY Change % Change General Fund $32,218 $32,398 $32,591 193 0.6% Federal Trust Fund 166,248 153,856 148,565 (5,291) -3.4% Reimbursements 7,585 8,649 8,571 (78) -0.9% State HICAP Fund 2,464 2,474 2,475 1 0.0% Skilled Nursing Facility Quality and Accountability Fund 1,900 1,900 1,900 – 0.0% Special Deposit Fund 507 1,187 1,188 1 0.1% Mental Health Services Fund 206 – – – – Total Expenditure $211,128 $200,464 $195,290 (5,174) -2.6% Positions 117.2 124.6 124.2 – -0.3% BUDGET CONTEXT Severe reductions were made in the 2009-10 Budget for Aging programs. The Legislature had modified the Administration’s proposals at the time, which were to eliminate all General Fund within CDA. Despite this, Governor Schwarzenegger vetoed remaining General Fund for programs that had been fiscally stripped of resources over the course of several budget cycles. The 2011-12 budget provided $33 million from the General Fund for the Department of Aging, a one percent decrease in funding compared to the revised 2010 11 funding level. Savings from a reduction in the Multipurpose Senior Services Program are largely offset by expiration of federal ARRA funding, which had previously been used to offset General Fund costs. \uf0b7 Multipurpose Senior Services Program. The budget adopted a reduction of up to $2.5 million to MSSP and rejected the remainder of the Governor’s proposal to eliminate the program, with budget bill language directing the administration to consult with the federal government about how to achieve the savings operationally and minimize any impacts on the number of clients served. The reduction amounted to an approximate 13 SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 3 percent cut. The MSSP Program is discussed in further background as part of this agenda. \uf0b7 Long-Term Care Ombudsman Program. The budget approved the Governor’s proposal to shift funding for the Long-Term Care Ombudsman Program from the Federal Citations Penalties Account to a combination of the State Health Facilities Citation Penalties Account ($1.2 million) and the Skilled Nursing Facility Quality and Accountability Fund ($1.9 million). It also approved a corresponding statutory change to include the program as an allowable use of resources in the State Health Facilities Citation Penalties Account. PANEL \uf0b7 Department, please provide an overview of the conditions of programs and services provided under your purview, highlighting major changes or shifts in funding, operation, and impact where this is significant for the Subcommittee’s working knowledge of your program and fiscal state. \uf0b7 Department, please describe the recent history of General Fund expenditures for programs at Aging. Please describe the condition of funding for the Long-Term Care Ombudsman Program. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment on any issue not otherwise agendized that relates to this department. Staff Recommendation: This item is included for informational and context-setting purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 4 ISSUE 2: GOVERNOR’S PROPOSAL ON MULTIPURPOSE SENIOR SERVICES PROGRAM (MSSP) BUDGET ISSUE The budget proposes $40.5 million ($20.2 million GF) for local assistance and $2.5 million ($1.2 million GF) for state operations related to the MSSP program. The budget also proposes to integrate MSSP, along with other long-term care supports and services, into Medi-Cal managed care over a period of three years. BACKGROUND ON MSSP MSSP provides care management services for frail, elderly clients who wish to remain in their own homes and communities. Clients must be age 65 or older, eligible for Medi-Cal, and certified or certifiable as eligible for placement into a nursing home. Teams of health and social service professionals assess each client to determine needed services and then work with the clients, medical providers, families, and others to develop an individualized care plan. Services that may be provided with MSSP funds include, but are not limited to: care management, adult social day care, housing assistance, in-home chore and personal care services, respite services, transportation services, protective services, meal services, and special communication assistance. CDA currently oversees operation of the MSSP program statewide and contracts with local entities that directly provide MSSP services. The program operates under a federal Medicaid Home and Community-Based, Long-Term Care Services Waiver. PROPOSAL TO INTEGRATE LONG-TERM CARE SERVICES AND SUPPORTS As discussed during the joint Sub. 1 and Committee on Aging hearing on March 7, 2012, the Governor’s budget includes a Coordinated Care Initiative for Medi-Cal enrollees. The Administration intends for the initiative to improve service delivery for 1.2 million people who are eligible for both Medi-Cal and Medicare (dual eligibles) and 330,000 Medi-Cal enrollees, many of whom rely on long term support services (LTSS). To achieve these improvements, the Administration proposes to combine the full continuum of medical services and LTSS, including MSSP, into a single benefit package delivered through the Medi-Cal managed care delivery system starting on January 1, 2013. Additional information on the Coordinated Care Initiative is available in the agenda for the March 7 hearing. The core MSSP service is care coordination using a multidisciplinary team that identifies and responds to health and social service needs of seniors who are eligible to enter into a nursing home. In 2013, in counties not involved in the Dual Demonstration, the Administration proposes to maintain the MSSP program’s current eligibility process and programmatic requirements. In Demonstration Counties, the Demonstration sites (through managed care plans) would be expected to contract with existing MSSP sites to provide care coordination to the plans’ enrollees. In 2014, the managed care plans would be responsible for assessing the needs of all plan members and providing necessary health and LTSS. Along with those responsibilities, they would have flexibility to determine how to provide care coordination to their members. They could contract with MSSP sites, hire and incorporate the current MSSP staff into the health plans’ care management team, or choose other strategies. In 2015, eligibility for LTSS would be assessed by Demonstration sites using the proposed universal assessment tool. Between 2013 and 2015, as managed care plans and the Demonstration expand to all counties, SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 5 MSSP program’s care coordination functions would become part of the plans’ care coordination systems. In other words, it appears that MSSP may not necessarily continue to exist as a discrete program. REDUCTION TO MSSP IN 2011-12 BUDGET The 2011 Budget Act included a reduction of up to $5 million ($2.5 million GF) to MSSP. Related budget bill language directed CDA and DHCS to consult with the federal government about how to achieve the savings operationally and to minimize any impacts on the number of clients served. The Department reports that minor administrative savings were achieved, but the bulk of the reduction was ultimately achieved reducing the number of clients served. There are 11,789 statewide slots for MSSP clients. After a reduction in 2008-09, the sites were operating at 87 percent of capacity. After this latest reduction, they are now operating at 77 percent of capacity. PANEL \uf0b7 Department, please respond to the following questions: o How was the 2011-12 reduction to MSSP implemented? What efforts did the Administration undertake to achieve the savings operationally? o Please describe the existing relationships between managed care plans and MSSP sites. o Under the administration’s proposal, how is MSSP budgeted and what are the major assumptions that drive its funding and formulation, both in the near and long-term? o How would the transition to receiving LTSS through managed care work for current MSSP clients and those currently waiting for services? o How is the Administration engaging MSSP sites and staff as the Coordinated Care Initiative is being developed and refined? o What role does CDA have for MSSP under the proposal? Who would authorize MSSP services? \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public Comment. Staff Recommendation: Staff recommends holding open the integration of MSSP into managed care, as this action will ultimately conform to any action related to the larger proposal from the Governor and administration on LTSS Integration. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 6 5180 DEPARTMENT OF SOCIAL SERVICES ISSUE 1: IN-HOME SUPPORTIVE SERVICES PROGRAM OVERVIEW BACKGROUND With a 2011-12 budget of $5.0 billion ($1.4 billion GF), the IHSS program provides personal care services to approximately 440,000 qualified low-income individuals who are blind, aged (over 65), or who have disabilities. IHSS services include tasks like feeding, bathing, bowel and bladder care, meal preparation and clean-up, laundry, and paramedical care. These services frequently help program recipients to avoid or delay more expensive and less desirable institutional care settings. There are 440,000 low-income IHSS recipients who are aged, blind, or who have disabilities. There are 366,125 IHSS providers whose wages vary from $8.00 to $12.20 hourly. In 2012-13, services are estimated to cost an average of $11,420 annually per client. Funding and Oversight. IHSS is funded with federal, state, and county resources. Recently, the state opted to implement the program under a new federal Medicaid waiver option called the Community First Choice Option (CFCO), which offers an enhanced rate of 56 percent federal financial participation (six percent over the base rate of 50 percent). The state is also benefitting from an additional enhanced rate of 75 percent for a period of one year for IHSS recipients transitioning from nursing facilities to community-based settings. The state and counties split the non-federal share of IHSS funding at 65 and 35 percent, respectively. The average annual cost of services per IHSS client is estimated at $11,420 for 2012-13. Program Structure and Employment Model. County social workers determine eligibility for IHSS after conducting a standardized in-home assessment, and periodic reassessments, of an individual’s ability to perform specified activities of daily living. Once eligible, the recipient is responsible for hiring, firing, and directing an IHSS provider or providers. The counties or public authorities must conduct a criminal background check and provide an orientation before a provider can receive payment. At the end of 2011, there were just over 366,000 working IHSS providers. County public authorities are designated as employers of record for collective bargaining purposes, while the state administers payroll, workers’ compensation, and benefits. Hourly wages for IHSS providers vary by county and range from the minimum wage of $8.00 per hour in nine counties to $12.20 in one county. The state participates in the costs of wages up to $12.10 ($11.50 plus $.60 for health benefits) per hour, with counties paying the difference if they negotiate a higher wage. In approximately 72 percent of cases, IHSS recipients choose a family member to provide care (including roughly 45 percent of providers who are a spouse, child, or parent of the recipient). In around half of cases, IHSS providers live with the recipients. SUMMARY OF RECENT BUDGET CHANGES The last three budgets included significant changes to IHSS. The following are in effect or pending implementation (savings are annual for 2012-13 unless otherwise noted): SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 7 \uf0b7 Additional program integrity measures, including background checks and criminal records exclusions for providers, more training for social workers, changes to time sheets, and directed mailings or unannounced home visits when there is a concern. \uf0b7 Savings of $151.1 million General Fund from a requirement for recipients to obtain from a licensed health professional a certification of their need for services to prevent risk of out-of-home care. \uf0b7 Savings of $145.1 million General Fund from the federal CFCO waiver option. \uf0b7 Upon federal approval, savings of $95.5 million General Fund as a result of a sales tax on supportive services and matching funds for the use of the tax revenues. \uf0b7 Current year savings of $64.4 million General Fund from an across-the-board reduction of 3.6 percent in all recipients’ authorized hours until July 1, 2012. \uf0b7 Increases in out-of-pocket costs for consumers (resulting from elimination of what was called a share-of-cost buy-out ). \uf0b7 Reductions in administrative funding for Public Authorities. The following changes were also enacted, but federal courts have stopped them from taking effect as a result of ongoing litigation: \uf0b7 Savings of approximately $222.0 million General Fund (full year impact) from an across- the-board reduction, subject to specified exemptions and exceptions, of 20 percent of authorized hours. This reduction was triggered by lower than anticipated 2011-12 revenues. \uf0b7 Savings of $65.5 million General Fund from reducing to $10.10 ($9.50 plus $.60 per hour for health benefits) the maximum provider wages the state participates in. \uf0b7 Elimination of eligibility, subject to exemptions, for domestic and related services or all services, for individuals whose needs were assessed to be below a specified threshold. This reduction has been statutorily delayed until July 1, 2012, subject to a final court order upholding the policy. No updated estimate of the savings associated with the policy is available at this time. The 2011-12 budget also established a pilot that requires DHCS to identify Medi-Cal beneficiaries at high risk of not taking medications as prescribed and to procure automated machines to assist them. If the pilot and any enacted alternatives for achieving savings would not together result in $140 million General Fund, an across-the-board reduction in IHSS services, with specified exceptions, would begin October 1, 2012. Some of these policy changes are discussed in further detail later in this agenda under other issue headings. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 8 IHSS AND THE GOVERNOR’S LTSS PROPOSAL As discussed in detail in the aforementioned March 7 hearing, the Governor’s Budget also establishes a new program for care for IHSS Dual Eligible beneficiaries, to be phased in over a three-year period. This proposal purports to coordinate IHSS, other home and community-based services, and institutional long-term care. Under the Governor’s proposal, all individuals receiving both Medi-Cal and Medicare benefits (dual eligible beneficiaries) will be required to enroll in managed care health plans for their Medi-Cal benefits. No IHSS savings are estimated to result from this proposal in 2012-13. PANEL \uf0b7 Department, please provide an overview of the conditions of the IHSS program, highlighting major caseload and provider trends and program priorities. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment will be taken on IHSS issues once at the end of all of the IHSS items. Staff Recommendation: This item is included for informational and context-setting purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 9 ISSUE 2: GOVERNOR’S PROPOSAL ON DOMESTIC AND RELATED SERVICES BUDGET ISSUE The budget proposes $206.2 million net GF savings in 2012-13 from the elimination of domestic and related IHSS services for approximately 245,000 IHSS recipients who reside in shared living arrangements and currently receive these services on a pro-rated basis and 80,000 who reside in shared living arrangements and currently receive these services without prorating (with some duplication between these groups). In roughly 0.2 percent or around 1,000 of these cases [accounting for $1.2 million ($0.4 million GF) of the proposed savings], the recipient is a child under the age of 18. The estimated savings account for administration costs of $9.4 million ($3.3 million GF) associated with the policy changes. There would also be corresponding losses of $317.0 million and $4.7 million in federal funds for services and administration, respectively. The budget assumes enactment of this policy by April 1, 2012, which would allow for a full-year of implementation to begin 90 days after enactment on July 1, 2012. The administration made a similar proposal last year, which was rejected by the Legislature. BACKGROUND Domestic and related services include housework, meal preparation, meal clean-up, laundry, shopping, and errands. The proposal also impacts heavy cleaning and yard hazard abatement services. Currently, if IHSS recipients who share their homes with other individuals have some of these needs met in common by their households, the social worker who determines their eligibility for IHSS services can pro-rate or reduce the authorized hours of IHSS services related to those activities. The administration proposes to instead make all IHSS beneficiaries residing in shared living arrangements ineligible for domestic and related services based on the presumption that the underlying needs can be met in common. The proposal includes exceptions that rebut that presumption when: a) all other household members are IHSS recipients (estimated to be the case for one percent of domestic and related service recipients), or b) all other household members have physical or mental impairments that prevent them from performing domestic and related services (the prevalence of which the Department was unable to estimate). Under the proposed policy, the existence of an impairment would have to be verified by reliable evidence, such as social worker observation or medical certification. LEGAL RISK According to the LAO, Washington State recently enacted a restriction on domestic and related services for individuals who lived with their IHSS providers. The state’s Supreme Court determined, however, that the policy violated federal requirements regarding the equal treatment of Medicaid beneficiaries. In addition to concerns about the violation of Medicaid rules, the LAO also raises that the proposal could potentially violate the federal Americans with Disabilities Act (ADA). The LAO states that anytime IHSS services are reduced or eliminated, there is risk of asserting that the change puts recipients at risk of institutional placement. In order to qualify for IHSS services, recipients must now secure documentation from a health care provider that indicates that SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 10 without IHSS they are at risk of placement in a facility. If recipients have a signed document indicating that IHSS services are needed, it may be legally difficult to eliminate a portion of those services without risk of litigation invoking the ADA. ANTICIPATED IMPACTS Recipients who reside in shared living arrangements and currently receive pro-rated domestic and related services would lose an average of 14 hours of services per month, effective 90 days after enactment of the proposed change. Recipients who live with others and have non-pro- rated hours today would lose an average of 9 hours of domestic and related services per month, effective after notice following their next reassessment. PANEL \uf0b7 Department, please respond to the following questions: o Under the proposed policy, would an IHSS recipient potentially be eligible for domestic and related services if his\/her need was not being met in common for reasons other than a housemate’s receipt of IHSS or physical or mental impairment (e.g., because the housemate is not available or not willing to assist)? o Does the presumption that domestic and related needs are met in common extend to areas of the house that are not shared (e.g., cleaning the recipient’s bedroom and bathroom) or responsibilities that are not shared (e.g., laundering the recipient’s sheets if s\/he sleeps alone)? o What analysis has the administration conducted to determine whether this reduction would comply with federal and state Medicaid and disability-related laws? o How does this proposal fit in with the administration’s Coordinated Care Initiative proposal, which relies on an increased investment in IHSS and other long-term care supports and services in order to reduce costs associated with hospitalizations and nursing home stays. Describe what weatherization means for homes and what kinds of homes are being targeted for improvement. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public comment will be taken on IHSS issues once at the end of all of the IHSS items. Staff Recommendation: Staff recommends rejection of this proposal given the ample concerns raised around consumer impact and the federal restrictions that would inhibit this kind of policy from taking effect if it were adopted, as raised by the LAO. The IHSS budget remains open pending review in May, when the Legislature will have the benefit of updated fiscal reports and projections. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 11 ISSUE 3: GOVERNOR’S PROPOSAL ON 20 PERCENT REDUCTION IN IHSS HOURS BACKGROUND AND BUDGET ISSUE The 2012-13 Budget created a trigger mechanism, if specified revenues were not obtained and conditions met as specified in Section 3.94(b) of the 2011 Budget Act, for implementing an across-the-board reduction in IHSS services of 20 percent, beginning January 1, 2012. The trigger was to yield savings of $100 million, with specified notice requirements and exceptions. The trigger was ultimately pulled by Governor Brown in December 2011, but its implementation was halted by a federal court order. BUDGET ISSUE In the Governor’s proposed budget, the Administration proposes to make the 20 percent January 1, 2012 trigger reduction in IHSS operational by April 1, 2012 unless inhibited by a court decision. The budget adjusts its projected savings resulting from the delayed implementation of the 20 percent across-the-board reduction that was to implement January 1, 2012 but was delayed due to the court injunction. The budget instead assumes implementation on April 1, 2012 of the 20 percent cut, for a savings of $39.4 million GF in the current year, and $179 million in the budget year. The budget also includes a set-aside to fully fund the program in the event that the court rules in favor of the plaintiffs and against the state. PROPOSED TRAILER BILL As part of the above-referenced proposal, the Administration proposes trailer bill language to provide additional detail to statutes that establish a 20 percent reduction in authorized hours of IHSS services for each IHSS recipient, subject to specified exemptions and exceptions. Specifically, existing law requires DSS to work with the counties to develop a process for counties to preapprove supplemental IHSS hours for individuals who clearly meet the criteria for an exception to the reduction policy. The Department indicates that it has worked with the counties to develop the required policy detail and now seeks to codify more specific criteria, which include preapproval for individuals who: a) receive Early and Periodic Screening, Diagnosis, and Treatment services, b) are authorized to receive the statutory maximum of 283 hours of services per month, c) are authorized to receive protective supervision, or d) have been assessed to have a particular level of need (a functional ranking of 5) for certain specified services. The statutory provisions the Administration proposes to amend were established as part of the 2011-12 budget and is the subject of active litigation, as mentioned. The proposed amendments seem intended to provide additional detail, and not to make substantive changes in how the Department would implement the law. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 12 PANEL \uf0b7 Department, please provide a description of the proposed trailer bill and its intent. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the proposed trailer bill language. \uf0b7 Public Comment will be taken on IHSS issues once at the end of all of the IHSS items. Staff Recommendation: Staff recommends rejecting the administration’s trailer bill proposal in this area. The language proposes to modify an area of statute under active litigation as crafted. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 13 ISSUE 4: UPDATES ON IMPLEMENTATION OF PROGRAM CHANGES PREVIOUSLY ADOPTED This part of the agenda will walk through select changes to the IHSS program made in previous budgets and associated changes or updates that are being brought forward either by the administration or stakeholders for review. A. EXTENSION OF SALES TAX ON SUPPORTIVE SERVICES The 2010-11 budget established a sales tax on specified supportive services, which includes IHSS, and assumed $190 million General Fund (GF) savings due to enhanced federal funding from matching the use of revenues obtained pursuant to the tax. Related statutory provisions established supplementary payments for IHSS providers that would equal the portion of their gross receipts that is subject to state and federal taxation as a result of the tax on supportive services. These provisions are scheduled to take effect when the federal Centers for Medicare and Medicaid Services (CMS) approves implementation of the state’s related Medicaid plan amendment, but no earlier than July 1, 2010. Because the state is still awaiting a response to its proposed plan amendment from the federal government, the Administration proposes to update the effective date of the statute to be no earlier than January 1, 2012. PANEL AND STAFF RECOMMENDATION \uf0b7 Department, please describe the trailer bill proposal and provide an update to the Subcommittee on discussions with the federal administration on this subject. \uf0b7 Staff recommends approving the proposed technical change to the effective date of these statutory provisions. B. MEDICATION DISPENSING MACHINE PILOT PROJECT The 2011-12 budget established a medication dispensing machine pilot project that requires DHCS to identify Medi-Cal beneficiaries at high risk of not taking medications as prescribed and to procure automated machines to assist them. If the pilot and any enacted alternatives for achieving savings would not together result in $140 million GF, an across-the-board reduction in IHSS services, with specified exceptions, would begin October 1, 2012. The 2012-13 budget proposes to repeal these statutory requirements. DHCS and the California Medicaid Research Institute (CaMRI) contracted with the University of California, Davis Center for Healthcare Policy and Research (CHPR) to further assess the potential cost savings associated with the MDM pilot enacted last year. Their work was based on a review of the evidence-based literature related to the causes of non-adherence with medication prescriptions (e.g., characteristics of the patient, such as knowledge related to medication or personality factors, and factors related to the medication regimen, such as side effects and complexity). After this review, CHPR concluded that there is insufficient evidence to reliably assess the effectiveness of MDMs for overcoming many of these factors. The Center assumed that MDM would primarily assist patients who do not take medications as prescribed SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 14 because of reasons like forgetfulness, confusion, or other cognitive impairments (and would not necessarily prevent adverse health consequences from other reasons for non-adherence). In addition, data available to DHCS does not allow the Department to clearly identify the group of patients who would be likely to suffer from these particular challenges and to use a high-cost health care service, such as in-patient hospitalization, as a result. For these reasons, CHPR recommended that before moving forward with statewide implementation of the pilot, the state would need to obtain the results of a research study lasting approximately three years and costing $3 million to $3.5 million. DHCS estimates that moving ahead with full-scale implementation this year could result in net Medi-Cal costs from $5.2 up to $57.4 million GF. On the other end of the spectrum, in the most optimistic scenario, the state could instead save $59.9 million if allowed to share savings with the federal government. Ultimately, however, DHCS believes that the potential costs are more likely to be incurred than the savings are to be achieved. As a result, the administration proposes to repeal the MDM pilot rather than invest significant additional time in researching or implementing the project. PANEL AND STAFF RECOMMENDATION \uf0b7 Department, please describe the trailer bill proposal and describe the research findings that led to this proposal. \uf0b7 Staff recommends approving the proposed trailer bill language to repeal the medication dispensing machine pilot and the related trigger for an across-the-board reduction in IHSS hours. C. COMMUNITY FIRST CHOICE OPTION The 2011-12 budget adopted savings of $128 million General Fund in IHSS due to expected approval of an additional six percent in FMAP as a result of IHSS qualifying under the new federal Community First Choice Option (CFCO) made available under section 1915(k) of the federal Social Security Act (42 U.S.C. Sec. 139n(k)). The state submitted the State Plan Amendment (SPA) proposal to the Centers on Medicare and Medicaid Services (CMS) on December 1, 2011. CMS responded on February 28, 2012 with comments and the state has 90 days to respond to the questions raised. PANEL AND STAFF RECOMMENDATION \uf0b7 Department, please describe the issues raised in the CMS letter, your reaction, and next steps. \uf0b7 Staff recommends requesting that DSS provide a summary update in writing to the Legislature and stakeholders on progress toward realizing the CFCO option, indicating any areas of potential challenge, prior to or at May Revision. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 15 D. PUBLIC AUTHORITY ADMINISTRATIVE METHODOLOGY The 2011-12 budget rejected a May Revision proposal that would have reduced administrative funding for Public Authorities by $7.7 million ($3.2 million General Fund). With this action, the budget required DSS, in consultation with designated stakeholders, to develop a new rate- setting methodology for public authority IHSS administrative costs, which is intended to take effect beginning with the 2012-13 fiscal year. Additionally, the budget rejected a May Revision proposal that would have reduced administrative funding for counties to implement the IHSS programs by $12.6 million ($5.2 million General Fund). PANEL AND STAFF RECOMMENDATION \uf0b7 Department, please describe work and progress that has been made to develop the new administrative methodology. The California Association of Public Authorities may also testify to this issue. \uf0b7 Staff has no recommendation at this time. E. CLEAN-UP TO LANGUAGE ON BACKGROUND CHECKS The California Association of Public Authorities (CAPA) is proposing language to clean up sections of law regarding tier two crimes and DSS’s need to receive Criminal Offender Record Information (CORIs) from Public Authorities for general exception applicants under the new provider exclusion policies adopted in IHSS in recent years. The proposed language would amend WIC 12305.87 to change subsection (e)(2) and add Public Authorities to the language that requires counties to submit CORIs to DSS for general exception applicants. CAPA states that per DSS, as of the end of December 2011, there were 41 general exception applications pending which cannot be processed without receiving the CORIs from the Public Authority. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 16 PANEL AND STAFF RECOMMENDATION \uf0b7 CAPA, please describe the proposed language. \uf0b7 Staff recommends holding open the proposed language. Staff Recommendation: As laid out in the individual sections, staff recommends the following under each subtopic in this issue: A. Extension of Sales Tax on Supportive Services – Staff recommends approving the proposed technical change to the effective date of these statutory provisions. B. Medication Dispending Machine Pilot Project – Staff recommends approving the proposed trailer bill language to repeal the medication dispensing machine pilot and the related trigger for an across-the-board reduction in IHSS hours. C. Community First Choice Option – Staff recommends requesting that DSS provide a summary update in writing to the Legislature and stakeholders on progress toward realizing the CFCO option, indicating any areas of potential challenge, prior to or at May Revision. D. Public Authority Administrative Methodology – Staff has no recommendation at this time. E. Clean-Up To Language on Background Checks – Staff recommends holding open the proposed language. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 17 ISSUE 5: SUPPLEMENTAL SECURITY INCOME\/STATE SUPPLEMENTARY PAYMENT BUDGET ISSUE The Governor’s budget recognizes the continuing impact of a 3.6 percent federal cost-of-living adjustment (COLA) that increased SSI\/SSP payments as of January 1, 2012. The increase was $24 (from $830 to $854) for the typical individual recipient and $37 increase (from $1,407 to $1,444) for the typical couple. The budget also estimates that a federal COLA of 0.2 percent will increase grants further as of January 1, 2013. However, the final determination of this 2013 COLA will not be made by the federal government until later in the year. The budget also includes parallel adjustments to grants provided under the Cash Assistance Program for Immigrants (CAPI). CAPI benefits are equivalent to SSI\/SSP benefits, less $10 per individual and $20 per couple (so $844 and $1424, respectively), for legal immigrants who do not qualify for federal assistance. The total budget for CAPI is proposed to be $135.1 million GF. BACKGROUND ON SSI\/SSP The SSI program is a federal cash assistance program that provides income support to low- income individuals and couples who are aged, blind, or who have disabilities. California supplements SSI grants through the state’s SSP. There are approximately 1.3 million SSI\/SSP beneficiaries in 2011-12. Around 70 percent qualify because of a disability, while 28 percent qualify because of advanced age and two percent because of blindness. In prior years when there was a federal COLA that increased SSI benefits, the state was able to simultaneously lower its SSP payments (effectively capturing the federal COLA in order to save GF resources). However, state SSP payments are now at the minimum level required under federal Maintenance of Effort (MOE) requirements that look to the level of 1983 payment standards. If the state were to lower its SSP benefit levels below the federally required MOE, it would lose federal Medi-Cal funding. PANEL \uf0b7 Department, please briefly summarize the changes to SSI\/SSP grant levels in recent years and as proposed for 2012-13. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public Comment. Staff Recommendation: Staff recommends approving the budgeted changes in SSI\/SSP grant levels, which include increases related to federal COLAs. This item was included for informational purposes as the Legislature receives frequent questions from the public about the level of SSI\/SSP grants and impacts of federal COLAs. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 18 4700 DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT ISSUE 1: DEPARTMENT OVERVIEW AND PROGRAM UPDATE BACKGROUND AND OVERVIEW The mission of the Department of Community Services and Development (CSD) is to administer and enhance energy and community services programs that result in an improved quality of life and greater self-sufficiency for low-income Californians. Energy Programs. The Energy Programs assist low-income households in meeting their immediate and long-term home energy needs through financial assistance, energy conservation, and weatherization services. \uf0b7 The Low-Income Home Energy Assistance Program (LIHEAP) provides financial assistance to eligible households to offset the costs of heating and\/or cooling dwellings, payments for weather-related or energy-related emergencies, and free weatherization services to improve the energy efficiency of homes. This program may include a leveraging incentive program in which supplementary LIHEAP funds can be obtained by LIHEAP grantees if non-federal leveraged home energy resources are used along with LIHEAP weatherization related services. \uf0b7 The federal Department of Energy Weatherization Assistance Program provides weatherization related services, while safeguarding the health and safety of the household. \uf0b7 The Lead Hazard Control Program provides for the abatement of lead paint in low- income privately owned housing with young children. Community Services. The Community Services Block Grant Program is designed to provide a range of services to assist low-income people in attaining the skills, knowledge, and motivation necessary to achieve self-sufficiency. The program also provides low-income people with immediate life necessities such as food, shelter, and health care. In addition, services are provided to local communities for the revitalization of low-income communities, the reduction of poverty, and to help provider agencies to build capacity and develop linkages to other service providers. FISCAL OVERVIEW Fund Source 2010-11 Actual 2011-12 Projected 2012-13 Proposed BY to CY Change % Change Federal Trust Fund 398,576 259,695 260,183 488 0.2% Reimbursements 4 – – – – Total Expenditure 398,580 259,695 260,183 488 0.2% Positions 123.0 128.5 128.5 0 0.0% SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 19 PANEL \uf0b7 Department, please provide an overview of the conditions of programs and services provided under your purview, highlighting major changes or shifts in funding, operation, and impact where this is significant for the Subcommittee’s working knowledge of your program and fiscal state. \uf0b7 Department, please describe the recent history of General Fund expenditures for programs at CSD. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment on any issue not otherwise agendized that relates to this department. Staff Recommendation: This item is included for informational and context-setting purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 20 ISSUE 2: UPDATE ON STATUS OF USE OF FEDERAL WEATHERIZATION FUNDS BACKGROUND On February 17, 2009, the federal government enacted the American Recovery and Reinvestment Act of 2009 (Recovery Act), in part, to promote economic recovery and stabilize state and local government budgets. The U.S. Department of Energy (Energy) awarded $185.8 million of Recovery Act funds to CSD for its Weatherization program. The Bureau of State Audits has been monitoring and reporting on CSD’s efforts and progress toward allocating these funds to maximize production and weatherize enough homes to ensure that grant funds are spent so that they don’t revert by the March 31, 2012 deadline, while also ensuring that it meets its production goals under the annual weatherization grants that expire on June 30, 2012. The recent BSA letter report, dated February 2, 2012, concludes that if Energy approves a proposed nine-month extension of the March 31, 2012 deadline, CSD should have ample time to spend the remaining Recovery Act funds. However, because the average cost for weatherizing a home has fallen significantly short of its estimates, as of December 31, 2011, CSD must ensure that its service providers weatherize about 15,000 more homes to spend the remaining funds. Additionally, the BSA letter states that some service providers are not always following the Energy-approved protocols that ensure not only that the measures installed in homes are cost effective, but that they also maximize opportunities for saving energy. PANEL \uf0b7 Department, please respond to the following questions: o Describe what weatherization means for homes and what kinds of homes are being targeted for improvement. o Please provide an overview of the schedule for units weatherized how many have already been weatherized and how many are projected to be weatherized before the federal deadline? o How have federal standards changed for weatherization and what has this meant for implementation of the Recovery Act funds? o What other issues should the Legislature be made aware of at this time? SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 21 \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public Comment. Staff Recommendation: This item does not require action, however the Subcommittee may request to be kept informed on any additional changes, including schedule changes, to implementation of Recovery Act funds. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 22 5160 DEPARTMENT OF REHABILITATION ISSUE 1: DEPARTMENT OVERVIEW AND PROGRAM UPDATE BACKGROUND AND OVERVIEW The California Department of Rehabilitation works in partnership with consumers and other stakeholders to provide services and advocacy resulting in employment, independent living, and equality for individuals with disabilities. Vocational Rehabilitation. The Vocational Rehabilitation Services Program delivers vocational rehabilitation services to persons with disabilities through vocational rehabilitation professionals in district and branch offices located throughout the state. In addition, the Department has cooperative agreements with state and local agencies (education, mental health, and welfare) to provide unique and collaborative services to consumers. The Department operates under a federal Order of Selection process, which gives priority to persons with the most significant disabilities. Persons with disabilities who are eligible for the Department’s vocational rehabilitation services may be provided a full range of services, including vocational assessment, assistive technology, vocational and educational training, job placement, and independent living skills training to maximize their ability to live and work independently within their communities. The Department also provides comprehensive training and supervision to enable persons who are blind or visually impaired to support themselves in the operation of vending stands, snack bars, and cafeterias. Prevocational services are provided by the Orientation Center for the Blind to newly blind adults to prepare them for vocational rehabilitation services and independent living. The Department also works with public and private organizations to develop and improve community-based vocational rehabilitation services for the Department’s consumers. The Department sets standards, certifies Community Rehabilitation Programs, and establishes fees for services provided to its consumers. Independent Living Services. The Department funds, administers, and supports 29 non-profit independent living centers in communities located throughout California. Each independent living center provides services necessary to assist consumers to live independently and be productive in their communities. Core services consist of information and referral, peer counseling, benefits advocacy, independent living skills development, housing assistance, personal assistance services, and personal and systems change advocacy. The Department also administers and supports the Traumatic Brain Injury (TBI) Program. In coordination with consumers and their families, seven service providers throughout California provide a coordinated post-acute care service model for persons with TBI, including supported living, community reintegration, and vocational supportive services. The Department also serves blind and deaf-blind persons through counselor-teacher services, purchase of reader services, and community-based projects to serve the elderly blind. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 23 FISCAL OVERVIEW Fund Source 2010-11 Actual 2011-12 Projected 2012-13 Proposed BY to CY Change % Change General Fund $54,167 $54,554 $55,829 $1,275 2.3% Federal Trust Fund 315,077 348,605 353,249 4,644 1.3% Reimbursements 6,150 7,680 7,680 0 0.0% Traumatic Brain Injury Fund 1,018 1,176 1,168 (8) -0.7% Vending Stand Fund 689 3,361 3,361 – 0.0% Mental Health Services Fund 83 – – – Total Expenditure 377,184 415,376 421,287 5,911 1.4% Positions 1,749.2 1,776.0 1,777.0 1 0.1% PANEL \uf0b7 Department, please provide an overview of the conditions of programs and services provided under your purview, highlighting major changes or shifts in funding, operation, and impact where this is significant for the Subcommittee’s working knowledge of your program and fiscal state. \uf0b7 Department, please describe the General Fund expenditures for programs at DOR and to what standard services are being provided given federal requirements. \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the overview topic of which the Legislature should be aware. \uf0b7 Public Comment on any issue not otherwise agendized that relates to this department. Staff Recommendation: This item is included for informational and context-setting purposes. No action is required. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 24 ISSUE 2: GOVERNOR’S PROPOSAL TO ELIMINATE REHABILITATIONS APPEALS BOARD BUDGET ISSUE The Governor proposes to achieve savings and efficiencies from eliminating the Rehabilitation Appeals Board (RAB), which currently reviews appeals filed by applicants for or consumers of DOR services. The associated responsibilities would be transferred to impartial hearing officers (IHOs) through an interagency contract with the Office of State Hearings or another state entity. The Administration estimates that contracting with IHOs will cost approximately $80,000 and DOR would continue to incur staffing costs of another $95,000 for one staff position to coordinate case referrals. Thus, the total cost for this proposal would be $175,000 per year ($37,000 GF). By contrast, in 2010-11 the budget for RAB was $205,000 ($43,000 GF); but actual expenditures over the last five years averaged $292,000. The Legislature rejected a similar proposal made by the Governor as part of the 2011-12 budget process. According to the Administration, the present RAB appeals process complies with federal law but has several significant drawbacks, including that hearings cannot always be scheduled within the statutory timeframes due to quorum requirements and that the RAB has consistently exceeded its budgeted operating costs. The Administration also indicates that IHOs with more legal and evidentiary expertise will have greater ease in sorting through complex legal questions and documenting related conclusions. BACKGROUND By law, the RAB consists of seven members appointed by the Governor, although at present one seat is vacant. Members serve a term of four years and are subject to Senate confirmation. A majority of board members must be individuals with disabilities who are independently self- supporting in businesses and professions within the community. Board members receive reimbursement for travel expenses and a per diem of $100 for each day spent on their duties. The RAB hears appeals by applicants for DOR services who wish to contest a denial of eligibility and by existing DOR consumers who are not satisfied with the services being provided to them. The DOR provides vocational rehabilitation services to approximately 115,000 Californians with disabilities annually. In federal fiscal year 2011, approximately 11,000 consumers achieved employment outcomes. During that same period of time, 32 requests for appeal were resolved. BUDGET CONTEXT In his 2011-12 Budget, Governor Brown proposed to eliminate the Rehabilitation Appeals Board (RAB), which hears appeals by applicants and consumers of Department of Rehabilitation services who wish to contest a denial of eligibility or are not satisfied with the services being provided to them. The Governor’s proposal was to use administrative law judges to perform this function. Disability rights advocates opposed the elimination, stating that a majority of members on the RAB must be persons with disabilities who are self-supporting and have overcome barriers to employment, making their expertise very difficult to cultivate in other quasi-judicial options. They also cited increased costs associated with adequately addressing consumer complaints and grievances with the department in the absence of the RAB. For its relatively low cost of SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 25 $30,000, the RAB, they argue, performs extremely important functions that cannot be substituted through an option that has not developed expertise with issues specific to rehabilitation. The Legislature chose to reject this proposal when it was forwarded in 2011. PANEL \uf0b7 Department, please respond to the following questions: o Please describe the appeal and decision-making processes, including due process protections, as they exist today and how they would differ under this proposal. o How would the Administration ensure the accessibility of the appeals process to consumers of the department’s services? o Can the administration discuss its perspective on any revisions to their trailer bill language that makes more explicit the process by which hearing officers review cases that would otherwise be reviewed by the RAB? \uf0b7 Department of Finance (DOF), please provide any additional comments. \uf0b7 Legislative Analyst’s Office (LAO), please provide any comments or additional insight regarding the topic of which the Legislature should be aware. \uf0b7 Public Comment. Staff Recommendation: Staff recommends holding this item open pending further review of the trailer bill language and of any modifications to it that would enhance decision-making toward sustained or improved outcomes for consumers with issues that would come to the RAB and that would move to hearing officers under the administration’s proposal. ”

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” SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E ACTIONS TAKEN ASSEMBLY BUDGET SUBCOMMITTEE NO. 1 ON HEALTH AND HUMAN SERVICES ASSEMBLYMEMBER HOLLY MITCHELL, CHAIR WEDNESDAY, APRIL 11, 2012 1:30 P.M. – STATE CAPITOL ROOM 437 ITEMS TO BE HEARD ITEM DESCRIPTION 4170 DEPARTMENT OF AGING ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE This item was included for informational and context-setting purposes. No action was taken. ISSUE 2 GOVERNOR’S PROPOSAL ON MULTIPURPOSE SENIOR SERVICES PROGRAM (MSSP) The proposal to integrate MSSP into managed care as part of the Governor’s Coordinated Care Initiative was held open. Action on this item will ultimately conform to any action related to the larger proposal. 5180 DEPARTMENT OF SOCIAL SERVICES ISSUE 1 IN-HOME SUPPORTIVE SERVICES PROGRAM OVERVIEW This item was included for informational and context-setting purposes. No action was taken. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 1 ISSUE 2 GOVERNOR’S PROPOSAL ON DOMESTIC AND RELATED SERVICES Rejected the proposal given the ample concerns raised around consumer impact and the federal restrictions that would inhibit this kind of policy from taking effect if it were adopted, as raised by the LAO. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 The IHSS budget remains open pending review in May, when the Legislature will have the benefit of updated fiscal reports and projections. ISSUE 3 GOVERNOR’S PROPOSAL ON 20 PERCENT REDUCTION IN IHSS HOURS Rejected the administration’s trailer bill proposal in this area. The language proposes to modify an area of statute under active litigation as crafted. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 2 ISSUE 4 UPDATES ON IMPLEMENTATION OF PROGRAM CHANGES PREVIOUSLY ADOPTED A. EXTENSION OF SALES TAX TO HOMECARE SERVICES Approved the proposed technical change to the effective date of these statutory provisions. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 B. MEDICATION DISPENSING MACHINE PILOT PROJECT Approved the proposed trailer bill language to repeal the medication dispensing machine pilot and the related trigger for an across-the-board reduction in IHSS hours. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 C. COMMUNITY FIRST CHOICE OPTIONS Requested that DSS provide a summary update in writing to the Legislature and stakeholders on progress toward realizing the CFCO option, indicating any areas of potential challenge, prior to or at May Revision. D. PUBLIC AUTHORITY ADMINISTRATIVE METHODOLOGY Held open. E. CLEAN-UP TO LANGUAGE ON BACKGROUND CHECKS Held open. SUBCOMMITTEE NO.1 ON HEALTH AND HUMAN SERVICES APRIL 11, 2012 A S S E M B L Y B U D G E T C O M M I T T E E 3 ISSUE 5 SUPPLEMENTAL SECURITY INCOME\/STATE SUPPLEMENTARY PAYMENT Approved the budgeted changes in SSI\/SSP grant levels, which include increases related to federal COLAs. MEMBERS AYE NO ABSENT NOT VOTING Mitchell (Chair) X Chesbro X Grove X Mansoor X Monning X Total 3 1 1 4700 DEPARTMENT OF COMMUNITY SERVICES AND DEVELOPMENT ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE This item was included for informational and context-setting purposes. No action was taken. ISSUE 2 UPDATE ON STATUS OF USE OF FEDERAL WEATHERIZATION FUNDS Requested that the Subcommittee be kept informed on any additional changes, including schedule changes, to implementation of Recovery Act funds. 5160 DEPARTMENT OF REHABILITATION ISSUE 1 DEPARTMENT OVERVIEW AND PROGRAM UPDATE This item was included for informational and context-setting purposes. No action was taken. ISSUE 2 GOVERNOR’S PROPOSAL TO ELIMINATE REHABILITATIONS APPEALS BOARD Held open. ”