Bill > A5637

Introduced Session

This bill provides protections for individuals with developmental disabilities through the establishment of provider governance and service standards. These standards apply to provider agencies that are authorized to bill greater than $250,000 of services in a State Fiscal Year and to deliver services in provider-managed environments, which the bill defines as a "covered provider agency." In these environments, provider agencies substantially control all aspects of the programming and often the physical setting in which programming occurs. This arrangement creates additional vulnerabilities, particularly for individuals that rely on service providers for all of their long-term care needs. This bill sets standards for provider agency governance to ensure that funds paid by the Division of Developmental Disabilities (division) in the Department of Human Services are properly managed and expended on direct client services. Provider agencies within the scope of the bill are required to have a minimum of five board members, the majority of which are required to be independent, as well as to provide transparency on board composition and meetings. The bill requires the appointment a self-advocate or family member or guardian of a service recipient to each board of directors as a board observer to represent the interests of recipients and their families. Covered provider agencies with greater than $2 million of revenue are required to establish an independent audit committee with a minimum of three members. The bill requires each covered provider agency to post the three most recent annual audited financial statements on the provider agency's Internet website. The bill includes several provisions to ensure that funds paid by the division are primarily expended on direct client services. This includes a cap of 15 percent on program revenue expenditures for executive compensation, general and administrative costs, and similar expenses, plus profit and retained earnings. Existing caps on compensation have been incorporated, updated, and indexed to future increases in the State's minimum wage. Similarly, existing prohibitions on loans to staff members are included. The bill provides that no covered provider agency may pay the costs of any individual salary, except under certain circumstances, in excess of the schedule set forth under the bill. This bill protects service recipients from actions taken by covered provider agencies and their owners that create significant financial or programmatic risk. The bill requires that provider agencies inform the division when a variety of events occur that can reasonably be expected to adversely impact the provider agency's operation or service delivery. These provisions also give the division authority to take action to address the situation and prevent future reoccurrence, including the appointment of an independent monitor. This bill requires that covered provider agencies establish policies on the prevention, reporting and disposition of nepotism, conflicts of interest, non-discrimination and retaliation. Policies against retaliation are of particular concern in order to establish a climate where employees, recipients and families are comfortable raising service quality concerns with the provider agency's management and the division. The bill requires each covered provider agency to employ a full-time salaried manager at each site where the provider agency delivers provider-managed services to more than three clients. This bill incorporates existing insurance and indemnification standards, including the division's authority to annually adjust insurance minimums to ensure that coverage remains consistent with the level of protection needed for staff and service recipients. The bill appropriates from the General Fund to the Department of Human Services the sum of $300,000 for the purposes of hiring additional staff members to monitor and enforce the provisions of the bill.

Committee Categories

Carol Murphy (D)*, 

Introduced, Referred to Assembly Aging and Human Services Committee (on 05/08/2025)

Official Document