DDS Letter Outlines the Increases in Provider Rates That Will take Effect July 1, 2016

CDCAN News Updates

Rates for Direct Care Worker Pass Through Are Included –

SACRAMENTO, CA – The Department of Developmental Services released early this evening a four page letter to regional centers (and 6 pages of attachments) that outlines the increases in provider rates that will take effect July 1, 2016, including rates for the direct care worker pass through, as authorized by the health care funding special session legislation passed earlier this year, ABx2 1 that was tied to the successful passage of a revised managed care organization tax reform proposal. The letter and enclosures will likely be posted and available on the Department of Developmental Services website by early next week at: www.dds.ca.gov (it is not yet available there as of 8:43 PM, Friday evening). A copy of the letter is attached as a pdf document copy to this email.

The attachments or enclosures to the letter covered the following subjects:

Enclosure A: ABX2 1 Service Provider Reimbursement Rate Increases Effective July 1, 2016

Enclosure B: Work Activity Program Service Code 954 Upper Limits and Supported Employment Programs Service Codes 950 and 952 Hourly Rates

Enclosure C: Community Based Day Programs and In-Home Respite Agencies Allowable Range of Rates and Temporary Payment Rates

Enclosure D: Community Care Facility Rates Five Beds or More Per Facility

Enclosure D: Community Care Facility Rates Four Beds or Less Per Facility

The rate increases linked to specifically to increase wages and benefits for direct service staff – sometimes referred to as a “direct worker wage pass through”, and also increases for administrative expenses, were of interest to providers and advocates since the actual specific amounts were to be determined by the Department of Developmental Services based on random provider survey.

Those direct service or direct care worker wage pass through are in some cases, higher than what many advocates expected – though the rate increases for administrative costs turned up probably lower than what advocates hoped for. Those direct service or direct care worker wage pass through are in some cases, higher than what many advocates expected – though the rate increases for administrative costs turned up probably lower than what advocates hoped for. Still policymakers in both houses and from both parties, along with advocates across the State, welcomed the rate increases as a critical step in restructuring and rebuilding the community-based services and supports for hundreds of thousands of children and adults with developmental disabilities.

Here are the CDCAN compiled list of the direct service/direct care worker wage pass through rates, administrative rates and any 5% provider rate increases that will go into effect July 1, 2016 as reported by the Department of Developmental Services today (each rate increase will be applied to service provider rate amount as of June 30, 2016, according to the department):

RESIDENTIAL SERVICES

The following – 905 Residential Facility Serving Adults/Owner Operated; 910 Residential Facility Serving Children/Owner Operated; 915 Residential Facility Serving Adults/Staff Operated; 920 Residential Facility Serving Children/Staff Operated; 090 Crisis Intervention Facility/Bed; and 096 Geriatric Facility – all received the same rate increases as follows:

  • Direct Service Pass Through: 7.40%
    Administrative Rate Increase: 0.35%
    5% Rate Provider Rate Increase: N/A
    Total Increase for Residential Services Providers Above: 7.75%

FAMILY HOME AGENCY

The following – 904 Family Home Agency – received the rate increases as follows:

  • Direct Service Pass Through: 1.84%
    Administrative Rate Increase: 0.28%
    5% Provider Rate Increase: N/A
    Total Increase for Family Home Agency Providers Above: 2.12%

SPECIALIZED REHABILITATION FACILITIES

The following – 113 DSS Licensed/Spec Residential Facility/Habilitation; and 114 Specialized Residential Facility/Health – received the same rate increases as follows:

  • Direct Service Pass Through: 6.54%
    Administrative Rate Increase: 0.41%
    5% Provider Rate Increase: N/A
    Total Increase for Specialized Rehabilitation Facilities Providers Above: 6.95%

DAY SERVICES

The following day services – 028 Socialization Training Program; 055 Community Integration Program; 063 Community Activities Support Services; 091 In-Home/Mobile Day Program; 094 Creative Arts Program; 505 Activity Center; 510 Adult Development Center; 515 Behavior Management Program; 525 Social Recreation Program; 805 Infant Development Program; 810 Infant Development Specialist – received the same rate increases as follows:

  • Direct Service Pass Through: 6.66%
    Administrative Rate Increase: 0.46%
    5% Provider Rate Increase: N/A
    Total Increase For Day Services Providers: 7.12%

SUPPORTED EMPLOYMENT

The following supported employment services – 950 Supported Employment/Group; and 952 Supported Employment/Individual – received the same rate increases as follows

  • Direct Service Pass Through: 7.19%
    Administrative Rate Increase: 0.37%
    5% Provider Rate Increase: N/A
    Total Increase For Supported Employment Providers: 7.56%

Note: In addition, according to the Department of Developmental Services, under Welfare and Institutions Code 4691.10 and 4691.11, the hourly rate, effective July 1, 2016, for supported employment programs (service codes 950 and 952) shall be $36.57

WORK ACTIVITY PROGRAM

The following – 954 Rehab Work Activity Program – received the following rate increases as follows:

  • Direct Service Pass Through: 4.99%
    Administrative Rate Increase: 0.66%
    5% Provider Rate Increase: N/A
    Total Increase for Work Activity Program Providers: 5.66%

Note: Work Activity Program (service code 954) upper limits for work activity programs, effective July 1, 2016 as follow –

  • Small Vendors (0 to 30 consumers) – $62.19 per consumer per day
    Medium Vendors (31 to 100 consumers) – $44.69 per consumer per day
    Large vendors (101 or more consumers) – $33.28 per consumer per day
    Statewide Average Temporary Rate – $37.29 per consumer per day

BEHAVIORAL SERVICES

The following – 017 Crisis Team/Evaluation and Behavior Modification; 048 Client/Parent Support Behavior Intervention Training; 077 Parent-Coord Home Based Behavioral Intervention Program for Autistic Children; 605 Adaptive Skills Training; 612 Behavioral Analyst; 613 Associate Behavioral Analyst; 615 Behavioral Management Assistant; 616 Behavioral Technician/Paraprofessional; 620 Behavioral Management Consultant; 625 Counseling Services/Family Counselor/Social Worker; 670 Developmental Specialist – all received the same rate increases as follows:

  • Direct Service Pass Through: 8.11%
    Administrative Rate Increase: 0.38%
    5% Provider Rate Increase: N/A
    Total Increase for Behavioral Services Providers Above: 8.49%

INDEPENDENT LIVING SERVICES (ILS) AND SUPPORTED LIVING SERVICES (SLS)

The following – 520 Independent Living Services; and 896 Supported Living Services – received the same rate increases as follows:

  • Direct Service Pass Through: 7.85%
    Administrative Rate Increase: 0.49%
    5% Provider Rate Increase: 5%
    Total Increase For Independent Living Services and Supported Living Services: 13.34%

Note: this increase does not include the 5.82% rate increase given to Supported Living Services to help off-set impact of federally required overtime, effective December 1, 2015.

PERSONAL ASSISTANCE

The following personal assistance services – 062 Personal Assistance; 073 Parent Coordinator Support Living Program; 093 Parent Coordinated Personal Assistance Service; 635 Independent Living Specialist; and 858 Homemaker – received the same rate increases as follows:

  • Direct Service Pass Through: 7.85%
    Administrative Rate Increase: 0.49%
    5% Provider Rate Increase: N/A
    Total Increase for Personal Assistance Services: 8.34%

RESPITE SERVICES

The following respite services – 862 In-Home Respite Services Agency; 868 Out-of-Home Respite; 869 Respite Facility – received the same rate increases as follows:

  • Direct Service Pass Through: 8.82%
    Administrative Rate Increase: 0.37%
    5% Provider Rate Increase: 5%
    Total Increase for Respite Services Providers Above: 14.19%

Note: see also category under “100% Direct Services Costs – Respite”

RESPITE SERVICES – CAMPING

The following respite services – 850 Camping Services – received the following rate increases:

  • Direct Service Pass Through: 8.82%
    Administrative Rate Increase: 0.37%
    5% Provider Rate Increase: N/A
    Total Increase For Respite Service – Camping Above: 9.19%

TRANSPORTATION

The following transportation services – 875 Transportation Company; 880 Transportation/Additional Component; 882 Transportation/Assistant; and 883 Transportation Broker – all received the same rate increases as follows:

Direct Service Pass Through: 5.31%
Administrative Rate Increase: 0.42%
5% Provider Rate Increase: 5%
Total Increase for Transportation Providers Above: 10.72%

DAY CARE INDIVIDUAL PROVIDERS

The following day care/individual providers – 405 Day Care Voucher; and 455 Day Care – received the same increases as follows:

Direct Service Pass Through: 11.25%
Administrative Rate Increase: 0.00%
5% Provider Rate Increase: N/A
Total Increase for Day Care Individual Providers Above: 11.25%

DAY CARE AGENCY PROVIDERS

The following – 851 Child Day Care; and 855 Adult Day Care – received the same increases as follows:

  • Direct Service Pass Through: 6.19%
    Administrative Rate Increase: 0.64%
    5% Provider Rate Increase: N/A
    Total Increase for Day Care Agency Providers Above: 6.84%

100% ADMINISTRATIVE COSTS – FINANCIAL MANAGEMENT SERVICES

The following – 490 Financial Management Services F/EA; and 491 Financial Management Services/Co-Employer – received the same increases as follows:

  • Direct Service Pass Through: 0.00%
    Administrative Rate Increase: 1.96%
    5% Provider Rate Increase: N/A
    Total Increase for 100% Administrative Costs – Financial Management Service Providers Above: 1.96%

100% ADMINISTRATIVE COSTS – SLS VENDOR ADMINISTRATION

  • Direct Service Pass Through: 0.00%
    Administrative Rate Increase: 1.96%
    5% Provider Rate Increase: 5%
    Total Increase for 100% Administrative Costs – SLS Vendor Administration Provider Above: 6.96%

100% DIRECT SERVICES COSTS – PARTICIPANT DIRECTED COMMUNITY BASED TRAINING SERVICE FOR ADULTS

The following – 475 Participant Directed Community Based Training Service for Adults – received the following rate increases:

  • Direct Service Pass Through: 11.25%
    Administrative Rate Increase: 0.00%
    5% Provider Rate Increase: N/A
    Total Increase for 100% Direct Services Costs – Participant Directed Community Based Training Services for Adults Providers Above: 11.25%

100% DIRECT SERVICES COSTS – RESPITE

The following – 420 Voucher Respite; 465 Participant Directed Respite Services; and 864 In-Home Respite Worker – all received the same rate increases as follows:

  • Direct Service Pass Through: 11.25%
    Administrative Rate Increase: 0.00%
    5% Provider Rate Increase: 5%
    Total Increase for 100% Direct Services Costs – Respite Above: 16.25%
    Note: see also category under “Respite”

INDIVIDUALIZED PROFESSIONAL OR SUPPORT SERVICES

The following – 025 Tutor Services/Group; 102 Individual or Family Training; 108 Parenting Support Services; 109 Program Support Group/Residential; 110 Program Support Group/Day Service; 111 Program Support Group/Other Services; 645 Mobility Training Services Agency; 650 Mobility Training Service Specialist; and 680 Tutor – all received the same rate increases as follows:

  • Direct Service Pass Through: 8.63%
    Administrative Rate Increase: 0.34%
    5% Provider Rate Increase: N/A
    Total Increase for Individualized Professional or Support Services Above: 8.97%

HEALTH AND THERAPEUTIC SERVICES

The following – 103 Specialized Health, Treatment and Training Services; 106 Specialized Recreational Therapy; 056 Interdisciplinary Assessment Services; 115 Specialized Therapeutic Services/Consumers 3 to 20; 116 Early Start Specialized Therapeutic Services; and 117 Specialized Therapeutic Services/Consumers 21 and Older – all receied the same rate increases as follows:

  • Direct Service Pass Through: 8.36%
    Administrative Rate Increase: 0.31%
    5% Provider Rate Increase: N/A
    Total Increase For Health and Therapeutic Services Providers Above: 8.67%

TEXT OF LETTER FROM DEPARTMENT OF DEVELOPMENTAL SERVICES TO REGIONAL CENTERS ON RATES

DEPARTMENT OF DEVELOPMENTAL SERVICES
1600 NINTH STREET, Room 320, MS 3-8
SACRAMENTO, CA 95814

TTY (916) 654-2054 (For the Hearing Impaired)
(916) 654-1954

DATE: JUNE 24, 2016

TO: REGIONAL CENTER EXECUTIVE DIRECTORS

SUBJECT: NEW PROVIDER RATES EFFECTIVE JULY 1, 2016

The State budget for Fiscal Year 2016-17, and Assembly Bill (AB) X2-1 (Chapter 3, Statutes of 20161) provides for a number of rate changes and/or increases for some service providers. The rate increases, effective July 1, 2016, are only applicable for providers with rates set by the Department2 (including rates set in statute or regulation), or providers with rates set through negotiation between regional centers and the provider. The rate increases do not apply for providers with usual and customary rates or rates that are set by other entities.

This correspondence addresses the following rate changes:
1. Five percent (5%) rate increases for supported living, independent living, respite and transportation.
2. Survey based rate increases:
a. For the purpose of enhancing wages and benefits for staff who spend a minimum of 75 percent of their time providing direct services to
consumers; and
b. For provider administrative expenses.
3. New rate for supported employment.
4. Establishment of Alternative Residential Model (ARM) rates for community care facilities vendored to serve four or fewer consumers.

Five Percent (5%) Increase for Specified Services Several sections of the Welfare and Institutions Code (WIC) were amended to authorize rate increases of 5%, to the rate in effect on June 30, 2016, for specified services. The applicable categories and service codes are detailed below.

  • ·Supported Living (WIC section 4689.8)
    894-Supported Living Administration
    896-Supported Living Services
  • Independent Living (WIC section 4691.6)
    520-Independent Living Program
  • Respite (WIC section 4690.5 and 4691.6)
    Family Member-provided Respite
    420-Respite Service-Family Member
    465-Participant Directed Respite Service-Family Member
    In-home Respite
    862 In-home Respite Services Agency
    864 In-home Respite Worker
    Out-of-home Respite
    868-Out-of-home Respite Services
    869-Respite Facility
  • Transportation (WIC section 4691.9)
    875-Transportation Company
    880-Transportation-Additional Component
    882-Transportation-Assistant
    883-Transportation Broker

Increases for Wages and Benefits for Direct Service Staff and Administrative Expenses

Unlike the specific percentage rate increases described above, ABX2-1 provided a set amount of funds for rate increases, based on the rates in effect on June 30, 2016, for direct service ($294.8 million) [includes federal reimbursement amounts in addition to the General Fund amounts appropriated in ABx2 1] and administrative ($17.3 million) [includes federal reimbursement amounts in addition to the General Fund amounts appropriated in ABx2 1] expenses.

As a result, the Department was required to conduct a survey of a sample of providers to determine the percentage rate increases. The survey was necessary because the percentage of provider costs for direct services and administrative costs varies by category.

Therefore, to maintain the same level of increase for direct service and administrative costs for each service, the resulting overall provider rate increases vary by service category. An overview of how this calculation was done can be found at http://www.dds.ca.gov/vendorsurvey/docs/ExampleCalculatingRateIncreases.pdf. Note, the numbers in this example are for demonstration purposes only and are not from the actual results of the survey.
Enclosure A contains the percentage increases for each service category and the service codes within each category.

Future Survey Regarding Rate Increase for Direct Services:

Providers granted a rate increase to increase wages and benefits for staff who provide direct services must
maintain documentation, subject to audit by the Department or regional center, that the rate increase was used solely to increase wages, salaries and benefits of staff who spend a minimum of 75 percent of their time providing direct services to consumers. Additionally, by October 1, 2017, the Department, with regional center participation, will conduct a survey of all providers that received this rate increase to determined how the increase was used. It is important to note that any provider that does not report the information requested by October 1, 2017, will forfeit the rate increase.

New Supported Employment Rate

WIC section 4860 was amended to increase the rate for supported employment to $34.24 per hour. Additionally, as a result of the direct service and administrative cost increases, which also apply to supported employment rates, the hourly supported employment rate, effective July 1, 2016, will be $36.57.

Calculating New Rates

When applicable, a provider may receive more than one of the percentage rate increases described above. To determine the new rate effective July 1, 2016, each percentage increase is calculated from the June 30, 2016, rate and then summed together. The following is an example of how this would work for a provider eligible for a 5% increase, as well as an increase for direct services and administrative expenses.

The example below assumes a service rate of $10.00 per hour in effect on June 30, 2016, and will receive a 5% increase, a 7% increase for wage and benefits for direct service staff, and a 1% rate increase for administrative expenses.

Step 1: Calculate separately the dollar amount for each increase (multiply the rate in effect on June 30, 2016, by the percentage increase).
1. Specified service: $10.00 x 5% = $0.50
2. Wage and benefits for direct service staff: $10.00 x 7% = $0.70
3. Administrative expenses: $10.00 x 1% = $0.10

Step 2: Add the amounts to get the total increase.
$0.50 + $0.70 + $0.10 = $1.30 total increase

Step 3: Add the total increase to the rate in effect on June 30, 2016, to get the new rate.
$1.30 + $10.00 = $11.30 new rate. Adding the percentage increases also leads to the same result. In this example, 5% + 7% + 1% = 13%. 13% of $10.00 is $1.30.

Enclosure A contains information on all service codes eligible for the various increases and the total percentage rates will increase effective July 1, 2016. Note, these increases do not apply to providers with usual and customary rates or rates set by another entity, even if the provider’s service code is listed in the enclosure. Also enclosed are the following updated rate schedules, effective July 1, 2016, reflecting all applicable rate increases:

  • Enclosure B – Work Activity and Supported Employment Rates
    Enclosure C – Community-Based Day Program and Respite Agency Rate Schedule
    Enclosure D – Community Care Facility Rates

Additionally, rates for the following services/codes, updated as applicable, effective July 1, 2016 are:

  • · Respite – Service codes 420, 465 and 864; rate is $15.23 per hour
    · Financial Management Services FE/A – Service Code 490; new maximum rates are $45.88, $71.37 or $96.86 per month depending on the number of participantdirected
    services used.
    · Financial Management Services Co-Employer – Service Code 491; new maximum rate is $96.86 per month Participant-Directed Community-Based Training Services – Service code 475; rate is $14.99 per hour

Notification to Providers:

The Department will adjust rates and send new rate letters to all community-based day, in-home respite agency, and work activity providers. Regional centers will need to make applicable rate adjustments and notify all other providers of the new rates effective July 1, 2016.

4-Bed ARM Rates

The budget for Fiscal Year 2016-17 and accompanying trailer bill language, allow the Department to establish a rate schedule for community care facilities vendored to provide services to a maximum of four individuals. This schedule, effective July 1, 2016, can be found in Enclosure D.

If you have any questions regarding this correspondence, please contact Greg Nabong at (916) 653-3749, or greg.nabong@nulldds.ca.gov.

Sincerely,
Original signed by
JIM KNIGHT
Assistant Deputy Director
Community Services Division

Enclosures
cc: Regional Center Administrators
Regional Center Chief Counselors
Regional Center Community Services Directors
Association of Regional Center Agencies

TEXT OF LEGISLATION – ABX2 1

The pdf document copy of ABx2 1 as signed into law by Governor Brown on March 1, 2016 can be viewed or downloaded at:
http://www.leginfo.ca.gov/pub/15-16/bill/asm/ab_0001-0050/abx2_1_bill_20160301_chaptered.pdf

The sections in that special session bill that covered developmental services funding (linked to the passage of the managed care organization tax reform bill that also passed and was signed into law in March by Governor Brown) are on page 13 and reproduced by CDCAN below:

SEC. 9. Section 4691.10 is added to the Welfare and Institutions Code, to read: 4691.10. (a) (1) Notwithstanding any other law or regulation, and to the extent funds are appropriated in the annual Budget Act for this purpose, the department shall provide a rate increase for the purpose of enhancing wages and benefits for staff who spend a minimum of 75 percent of their time providing direct services to consumers. The department shall not allocate more than one hundred sixty-nine million five hundred thousand dollars ($169,500,000) of the amount appropriated in the act that added this section for this purpose, plus any associated matching funds.

The rate increase shall only apply to services for which rates are set by the department or through negotiations between the regional centers and service providers, and to the rates paid for supported employment services, as specified in subdivisions (a) and (b) of Section 4860, and vouchered community-based services, as specified in paragraph (7) of subdivision (c) of Section 4688.21.

This section shall not apply to those services for which rates are determined by other entities, including, but not limited to, the State Department of Health Care Services or the State Department of Social Services, or are usual and customary. (2) For the purposes of this subdivision, “direct services” are services, supports, care, supervision, or assistance provided by staff directly to a consumer to address the consumer’s needs, as identified in the individual program plan, and include staff’s participation in training and other activities directly related to providing services to consumers, as well as program preparation functions as defined in Section 54302 of Title 17 of the California Code of Regulations. State employees participating in the Community State Staff Program are ineligible for the wage increase described in this section.

(b) The rate increase specified in subdivision (a) shall be implemented in the following manner:
(1) With regional center participation, the department shall conduct a survey of a random sample of service providers in each service category eligible for the rate increase. The survey shall request information regarding all of the following and shall be returned to the regional center and department by April 15, 2016:

(A) Number of employees who spend a minimum of 75 percent of their time providing direct services to consumers and their total salary, wage, and benefit costs.
(B) Administrative costs as specified in subdivision (b) of Section 4629.7, including the number of employees and total salary, wage, and benefit costs associated with those administrative costs.
(C) Any other staff and their total salary, wage, and benefit costs that are not included in either subparagraph (A) or (B).
(D) Any other costs to the provider, other than the costs described in subparagraphs (A) to (C), inclusive.
(E) Any additional information, as requested by the department, to assist\ in the determination of rate increases.
(2) The vendoring regional center shall certify that, to the best of its knowledge, the survey results accurately reflect the services provided by each surveyed service provider. The results from the survey shall be used by the department to determine the rate increase to be applied, by service category. The rate increase shall be the same for all eligible providers in each service category and is intended to provide comparable increases across service categories for staff providing direct services as described in
subdivision (a).
(3) By July 1, 2016, utilizing the data derived from paragraph (1), the department shall do both of the following:
(A) For those service providers whose rates are set by the department, notify those providers and the associated regional centers of the amount by which the rates are to be increased.
(B) For those service providers whose rates are set by negotiation with the regional center, notify the regional center of the amount by which the rates are to be increased.
(4) With regional center participation, the department shall conduct a survey, in a format determined by the department, of all providers who received the rate increase described in subdivision (a). Providers shall submit the completed survey to the department by October 1, 2017. The survey shall request information on how the rate increase was used by\ providers and shall include, but is not limited to, the following:
(A) Number of employees and their salary, wage, and benefit costs, and increases provided as a result of this subdivision.
(B) Percentage of time each employee spends providing direct services.
(C) Administrative expenses, consistent with subdivision (b) of Section 4629.7.
(D) Any additional information as determined by the department.
(c) Providers granted a rate increase pursuant to this section shall maintain documentation, subject to audit by the department or regional center, that the rate increase was used solely to increase wages, salaries, and benefits of eligible staff members spending a minimum of 75 percent of their time providing direct services to consumers.
(d) The rate increases calculated by the department pursuant to this section shall be effective July 1, 2016, and implemented as described in subdivision (b).
(e) Any provider that fails to report the information required by paragraph (4) of subdivision (b) to the department by October 1, 2017, shall forfeit the increases described in subdivision (a).
(f) In its 2017–18 May Revision fiscal estimate, the department shall describe the implementation of the increases provided pursuant to this section.
SEC. 10. Section 4691.11 is added to the Welfare and Institutions Code, to read:
4691.11. Notwithstanding any other law or regulation, and to the extent funds are appropriated in the annual Budget Act for this purpose, the department shall allocate no more than nine million nine hundred thousand dollars ($9,900,000) plus any associated matching funds for the purpose of administrative expenses for service providers. The department shall provide a rate increase for the purpose of administrative expenses that shall apply only to providers for which rates are set by the department or through negotiations between the regional centers and service providers, and to the rates paid for supported employment services, as specified in subdivisions (a) and (b) of Section 4860, and vouchered community-based services, as specified in paragraph (7) of subdivision (c) of Section 4688.21.
This increase shall be determined using the information collected pursuant to subdivision (b) of Section 4691.10. This increase shall be consistent for providers within each service category and is intended to provide comparable increases for administrative expenses across service categories. This section shall not apply to those services for which rates are determined by other entities, including, but not limited to, the State Department of Health CareServices or the State Department of Social Services, or are usual and customary

Posted In: News
06.24.2016

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