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Informational Hearing, Update Rate Study and Reform in the Developmental Services System

Post Date:January 24, 2020

From the Association of Regional Center Agencies:

On Wednesday, January 22, 2019 the Senate Budget Subcommittee #3 on Health and Human Services (“Sub 3,” the main Senate committee for discussing our system’s funding) held an informational hearing on the rate study. A summary of the hearing, following the day’s agenda, follows. The study was authorized in 2016, and was focused on service provider rates. Regional center operations, including service coordination, were not part of the study or this hearing.

The Committee has two members, Senator Richard Pan (Alta catchment) and Senator Melissa Hurtado (CVRC, KRC catchments). Both were in attendance. The third seat is currently vacant, and was formerly held by former Senator Jeff Stone (IRC).


Senator Pan welcomed attendees and panelists, and noted that this informational hearing is meant to guide discussions in the Budget process.


Sonja Petek, of the Legislative Analyst’s Office, gave a brief history of the rate study’s origins, noting the numerous range of billing codes for providers, and the complexity inherent to those codes. She referenced a handout that describes rates, their history, and other info (available online).


Nancy Bargmann, Director of the Department of Developmental Services (DDS), described the Department’s administrative role in the rate study. Stephen Pawlowski, of Burns and Associates, discussed the how the study was structured, and gave details about the provider survey. That survey explored a range of questions related to provider costs, and was buttressed by other business expenses such as workers compensation. Rate models were built based on that data, and also included local costs issues. An additional comment period was provided once the full study was released; rate revisions were subsequently issued, generally in the form of rate increases. Additionally, new cost data was incorporated, with the rate models meant to anticipate point-in-time costs with a January 2020 implementation.


Michele Rogers (Executive Director, Early Learning Institute) spoke about some of the challenges currently facing providers, specifically highlighting (within her field) caseload issues, cancellation rates, and administrative costs as still being unaddressed in the rates

Lori Anderson (President and CEO, United Cerebral Palsy of Los Angeles, Ventura, and Santa Barbara Counties) urged the adoption of the rate study and ongoing collaboration to ensure the service system can be stabilized.

Kevin Rath (Executive Director, Manos Home Care) spoke to the importance of developing a definition for quality services, to serve as a metric for service funding, delivery, and outcomes. He also specifically referenced the work of the State Council on Developmental Disabilities in this area, including the concept of value-based purchasing.


Stephen Pawlowski detailed the three elements of changes made in response to public comment. First, cost data and program use estimates were updated. Second, external costs (e.g., mileage rates) were updated based on new data. And third, rate models themselves were changed in various cases.

Nancy Bargmann discussed the importance of ensuring that, in past and ongoing conversations, all elements of the community are appropriately represented. Additionally, long-term changes to the work of both providers and regional centers will continue to be explored through various avenues.

Senator Pan expressed strong interest in the implementation of the study, and repeatedly pressed the issue with Director Bargmann, including asking for a timeline and goal set for implementation.

Representatives of the Department of Finance (DOF) (Jay Kapoor, Brent Houser) stated that future funding estimates are based on caseload growth and minimum wage costs.

In response to questions from Senator Pan, both DDS and DOF said that some implementation of the rate study and regional center performance incentives would require trailer bill language. It is currently expected to be made public on February 1st. [Note: Trailer Bill Language is a term for bills that are needed to change state law in order to legally enact Budget proposals. This is a common annual practice.]


Public comment included requests for full implementation of the rate study, retroactive increases for the providers not previously included, and staffing needs. Rick Rollens, speaking on behalf of ARCA, thanked Sen. Pan for holding this hearing, and working to ensure additional funding for providers. He also stated that ARCA supports the Lanterman Coalition’s funding request, and will be providing more detailed information in the near future.


Senator Pan thanked the panelists for their participation and input, Pan asked for the plan by the time of the March Budget hearing. However, he noted a recognition of the need to balance the overall Budget and the possibility that DDS’ position could be that the state does not plan to implement the rate models moving forward.


Hearing Agenda “ Update Rate Study and Reform in the Developmental Services System”:

Video of the hearing: