Budget Deal Agreed – Mixed Bag for DD Providers

June 9, 2019

The Budget Conference Committee met tonight to finalize legislative actions on outstanding Budget issues. After reaching a deal with the Governor for a final Budget deal, the Committee met and closed out all final issues ahead of a final Budget Bill.

The final deal for provider rates showed that significant stakeholder and Legislative pressure on the Governor was effective, even if the final deal does not fully represent our ask. The Conference Committee voted on a compromise deal with the Administration that added $25 million General Fund (GF) in FY 2019-20, and $50 million annually thereafter to the Governor’s May Revise proposal of approximately $200 million annually ($97.5 million in FY 2019-20). That yields a total investment in provider rates of approximately $250 million annually, though those increases have a sunset date of December 31, 2021. These increases are scheduled to begin January 1, 2020.

These increases will largely be distributed across-the-board as an 8.2% increase, but some service codes will see lower increases, and a number of service codes will get no increase under the final deal. While some will clearly be left out, there’s no question that we made progress in pushing the Administration down a more positive path going forward (more detail below).

The Conference Committee compromise also:

  • Suspends the Uniform Holiday Schedule until December 31, 2021, after both Budget Subcommittees voted to repeal it outright. We avoid its re-implementation for now, and will have to fight it out another day.
  • Takes no action to address the minimum wage quirk, meaning no relief for those operating under local minimum wage ordinances.
  • Does not repeal half-day billing, so the policy will continue for FY 2019-20.
  • Does not restore social recreation and camp services.

Before the Conference Committee voted on our issues, Barry had a conversation with Ana Matosantos, the Governor’s Cabinet Secretary, and Michelle Baass, Undersecretary of CA Health and Human Services Agency, about the final agreement regarding provider rates. Ana Matosantos clarified that this was the first step in a four-year plan to address provider rates and rate reform. They want to work in partnership to resolve funding discrepancies and structural rate issues. Barry expressed concern that decisions were being made on the basis of an incomplete rate study, and that we needed more detail before we could fully weigh in.

Subsequently, we received the following in an email from Michelle Baass:

May Revision General Fund funding plus $25 million GF in 19/20, $50 million GF in 20/21, and $25 million GF in 21/22 to fund an across-the-board rate increase for all services that would have received a rate increase above 0 percent in the rate study. This results in an across-the-board ceiling of about 8.2 percent, with four service codes receiving an increase of less than 8.2 percent, as indicated by the rate study. There are a handful (12) service codes that would not receive any increase as the rate study noted those should be 0 percent or decrease.

The specific codes getting a lower increase under the compromise broad-based rate proposal are:

  • 952-Supported Employment, Individual (7.6% which is higher than the across the board proposal, but lower than the other 8.2% increases)
  • 073-Parent Coordinator Supported Living Program (6.3%)
  • 605-Adaptive Skills Trainer (3.9%)
  • 635-Independent Living Specialist (2.4%)

The specific codes getting no increase under the compromise broad-based rate proposal are:

  • 505-Activity Center
  • 520-Independent Living Program
  • 525-Social Recreation Program
  • 620-Behavior Management Consultant
  • 680-Tutor
  • 805-Infant Development Program
  • 883-Transportation Broker
  • 894-Supported Living Services, Vendor Administration
  • 954-Rehab Work Activity Program
  • 113-ARFPHSN
  • 103/106/115/117-specialized therapeutic services
  • 116-Early Start Specialized Therapeutic Services
  • 900-Behavioral Home Facility Component
  • 905-920 CCF SSI Amounts”

We will continue to work on the Administration going forward to address necessary reforms and know that there’s more to be done.

We also want to take a moment to express our sincere gratitude and appreciation to our members for the tireless efforts and advocacy this year. The 8% campaign began in our Public Policy planning meeting last year, was embraced by the larger stakeholder community, and we’ve all collectively carried it this far. While it’s not everything we want it to be, never doubt how much your efforts meant to getting it to this point. Thank you for all you do.