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CDCAN Reports on Proposed 1.25% RC and Provider Payment Reduction



#088-2012 – MAY 14, 2012 –  MONDAY

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State Budget Crisis:


SACRAMENTO, CA (CDCAN)  [Last updated 05/014/2012  10:25 AM]  –  Governor Brown’s revised budget proposal – known as the “May Revise” – calls for implementing a $200 million in State general fund reductions with a partial extension of the existing payment reductions to regional center operations and most regional center providers.  The Governor’s plan calls for a 1.25% payment reduction for a savings to the State general fund of $30.7 million beginning July 1, 2012, instead of the existing 4.25% payment cut.  The reduction is less than what many advocates feared given the size the budget hole the State is facing.  However the Governor’s proposal now includes the developmental services budget – $50 million in State general fund spending for the 2012-2013 State budget year in unspecified cuts – if voters reject his tax initiative proposal on the November 2012 ballot.  That number would expand to $100 million in subsequent years.

In a major development, the Governor’s budget revision also proposes a moratorium on most admissions to the State’s four developmental centers and one smaller community facility except for limited circumstances, where the courts refer people with developmental disabilities due to competence related issues.  The department would work to restore competency for those individuals.

Other major areas where the Governor is proposing to achieve the $200 million reduction to developmental services budget:

· $30.7 million in State general fund cuts resulting from partial extension of payment reduction to regional center operations and most providers (1.25% instead of the existing 4.25%) beginning July 1, 2012.

· $61 million in State general fund savings resulting from an “aggressive” effort to add more people with developmental disabilities onto the federal Medicaid waivers under the developmental services budget

· $79.8 million in State general fund savings as a result of the July 1, 2012 implementation of SB 946, the autism health insurance mandate bill.  The original savings estimate of $61 million was increased as a result of a determination by the Department of Managed Health Care that CALPERS and the Healthy Families program would be required to comply with the provisions of SB 946 due to compliance of the mental health parity law.

· $4.2 million in savings to the State general fund by implementing the independent assessments of people with developmental disabilities in the Supported Living program, but eliminating the previous proposal that called for an independent assessor to do that work.  $3 million of the $4.2 million savings would result from not going forward with an independent assessor – and adopting the proposal put forward by the association of supported living agencies.

· $20 million in reductions and savings to the State general fund impacting people with developmental disabilities identified as people with “challenging needs” or “difficult to serve”.  That would be achieved through a moratorium on most admissions to the developmental centers and the one community facility.  Would include a new program at Fairview Developmental Center for those persons who are admitted through a court referral to restore “competence” in a 30 or 90 day program.  The Department of Developmental Services will be proposing budget related legislative language to implement this reduction and savings program.

CDCAN will issue additional reports within the next hour or two covering more details on this budget area and other budget areas including IHSS and Medi-Cal.

Not part of the $200 million reduction in State general fund spending is the inclusion of developmental services – about $50 million in State general funding that may be part of the 2012-2013 State Budget “trigger cuts” if the Governor’s proposed tax initiatives does not pass in November.  The $50 million would expand to $100 million in the following budget years.

The proposed reduction was announced this morning (May 14) as part of the Governor’s proposed budget revisions to the 2012-2013 State Budget plan he submitted to the Legislature in January.  His proposals, especially those requiring changes in State law to implement actual spending reductions, will require approval from the Legislature.

Both houses will be holding a final round of budget subcommittee hearings likely to begin the week of May 21st, taking final actions before the budget process moves to a special joint committee composed of members of both houses called a “budget conference committee”.

The developmental services budget funds many – but not all –  services and supports for over 250,000 eligible children and adults with developmental disabilities coordinated by the 21 non-profit regional centers under the Department of Developmental Services.    The department also owns and operates four facilities known as developmental centers and one smaller community facility where approximately 1,800 adults with developmental disabilities reside.  The department also is the lead agency of the State’s early intervention program – called “Early Start” that provides certain services for eligible families whose infants or toddlers have a developmental delay or disability or an established risk condition with a high probability of resulting in a delay.


As previously reported, the Senate released on May 11th, Friday a tentative final round hearings of the Senate Budget Subcommittee on Health and Human Services, where action on many of the Governor’s proposals – including new proposals in his “May Revise” – will be taken up.

The Assembly has not yet released a specific schedule of final budget subcommittee hearings to take final action and also to review and act on new proposals from the Governor’s May Revise but is expected to do so sometime this week.

CDCAN will issue a report when this information becomes available:

MAY 21, 2012 – MONDAY (subject to change)


10:00 AM

State Capitol – Room 4203

Budget Items: Mainly health budget items

CDCAN COMMENT:  Could include Medi-Cal related issues, including proposed expansion from 4 to 10 counties of the demonstration project plan to shift people with disabilities and seniors who are eligible for both Medicare and Medi-Cal into Medi-Cal managed care-type plans beginning in January 2013 [Note: developmental services budget items will be heard on May 22 under “human services” in the Senate Budget Subcommittee #3 on Health and Human Services].

MAY 22, 2012 – TUESDAY (subject to change)


01:30 PM

State Capitol – Room 4203

Budget Issues: mainly Human Services budget items and issues

CDCAN Note: these items will include developmental services budget items and any In-Home Supportive Services budget items

MAY 24, 2012 – THURSDAY (subject to change)


Upon Adjournment of Senate Appropriations Committee hearing

State Capitol – Room 112

Budget Issues: Health and Human Services Realignment and “open” issues

CDCAN COMMENT: Could include Governor’s proposals regarding CalWORKS, Child Care, etc.


· FULL BUDGET COMMITTEE INFORMATIONAL HEARINGS – The full budget committees of both the Assembly and State Senate will likely hold overview informational hearings on the Governor’s proposed budget revisions sometime this week, hearing an overview – but not specific details of each proposal – from the Governor’s Department of Finance and the non-partisan Legislative Analyst Office which reviews budget issues for the Legislature.  Action on budget items are not taken at these hearings and public comment is usually not taken before the full budget committee for these informational hearings [public comment on new or revised proposals contained in the Governor’s May Revise will be taken during the budget subcommittee hearings the following week however].

· BUDGET SUBCOMMITTEE HEARINGS – The Legislature will resume a quick round of budget subcommittee hearings likely the week of May 21st , with many actions taken.  Public comments will be taken likely only on new budget proposals by the Governor (or budget proposals with new details, including those impacting developmental services).  Both the Senate and Assembly have largely held off taking action on the Governor’s major reductions proposals he made in January, with the Democratic leadership in both houses saying they wanted to delay action until the Governor’s budget revisions – and new updated spending and revenue numbers would be available before taking final action on cuts.

· BUDGET CONFERENCE COMMITTEE – the final round of budget subcommittee hearings will be followed within days of the formation of a special joint committee of the State Senate and Assembly – called a budget conference committee, made up of 3 Assemblymembers (2 Democrats and 1 Republican) and 3 State Senators (2 Democrats and 1 Republican).  That conference committee will meet through early to mid-June, and will attempt to resolve any different actions taken on the Governor’s proposals, or come up with new proposals each house can agree on. While these hearings are public, no public comment is taken.

· FINAL FLOOR VOTES ON BUDGET BY ASSEMBLY AND SENATE – Sometime before July 1st, both the full Senate and Assembly will take final floor votes on the proposed 2012-2013 State Budget as modified by the subcommittees and budget conference committee. Even at this stage, changes, new proposals can be added – or taken out of the budget.  Floor action is televised and streamed live on the CalChannel website – but no public comment is taken (people can write letters, call or visit legislator’s offices however).  A budget is expected to pass, by majority vote, on or before July 1st avoid members being penalized (losing a day of pay each day a budget is not passed).

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