Bill > S1030

Introduced Session

This bill provides for oversight of the contracts the Department of Human Services (DHS) enters into with providers serving persons with developmental disabilities who are eligible for services from the Division of Developmental Disabilities (DDD). In August 2009, the Office of the State Comptroller issued a report concerning DDD entitled "A Performance Audit of Oversight of Third-Party Contracts," which raised several concerns and made recommendations to DHS about contracts for DDD services. This bill addresses some of those concerns and recommendations by establishing requirements for provider expenditure reports, a 10 percent cap on providers' general and administrative costs, and performance reviews of providers, in order to ensure that State funds are spent on services that help improve outcomes for persons with developmental disabilities. Specifically, the bill provides that: · With regard to expenditure reports, the Commissioner of Human Services would require a provider of services to persons with developmental disabilities to submit to DDD, no later than 30 days after the end of a quarter or at more frequent intervals as specified by DHS, an expenditure report for each contract the provider has entered into with DHS. If a provider fails to submit the report, the provider's contract would be subject to "negative contracting action," which is defined in the bill as conditional renewal, non-renewal, imposition of a probationary period or termination of a contract, and also includes nonpayment pending compliance with corrective or remedial action; -- The Office of the State Comptroller on a random basis and DDD on an ongoing basis, would review expenditure reports and include in their reviews, at a minimum, an analysis of whether: an expenditure contained in the report and identified by the office is appropriate and reasonable; proper documentation is available to support an expenditure; and expenditures for general and administrative costs are within the 10 percent limit specified in the bill. The office would conduct the review and submit a report of its findings pursuant to P.L.2007, c.52 (C.52:15C-1 et seq.); · With regard to the 10 percent cap on general and administrative costs, a contract entered into on or after the effective date of the bill, including renewal of an earlier contract, would stipulate that the expenditure of State funds for general and administrative costs of the provider shall not exceed 10 percent of the provider's annual expenditure of State contract funds; -- In the case of a provider whose contract is in effect on the effective date of the bill and whose general and administrative expenses exceed 10 percent, DHS would attempt to modify the contract to include the 10 percent cap; and -- If a provider exceeds the 10 percent cap stipulated in a contract, the contract would be subject to negative contracting action; · With regard to performance reviews, the Director of DDD, or his designee, would review a provider's performance to determine whether services for which the provider is under contract are being performed, and whether the provider's performance contributes to the success of a person with a developmental disability attaining the goals and objectives specified in the person's individualized habilitation plan developed pursuant to section 10 of P.L.1977, c.82 (C.30:6D-10). Specifically, -- A contract administrator must, at least once every 12 months, conduct an unannounced visit of a provider to review whether the provider is performing the services specified in the provider's contract and whether those services are contributing to the success of a person with a developmental disability attaining the goals and objectives specified in the person's individualized habilitation plan. The contract administrator would summarize the findings of the visit in a report to be submitted to the director, or his designee, no later than 30 days following the date of the visit; -- Prior to renewal of a contract of a provider, the director, or his designee, would evaluate the contract administrator's report and a summary of the results from a survey of the provider's employees, other persons providing services on behalf of the provider, and the parents and legal guardians of persons with developmental disabilities receiving services from the provider; -- DDD would prepare a survey form for completion by the employees and other persons who perform services and the parents or legal guardians. The survey would provide these persons with an opportunity to provide feedback to the division about the ability of the provider to provide services that contribute to the success of a person with a developmental disability attaining the goals and objectives specified in the person's individualized habilitation plan; and -- If the division director, or his designee, after the evaluation of a report of an unannounced visit and a summary of the results from the survey about a provider, determines that persons with developmental disabilities are not succeeding in attaining the goals and objectives specified in their individualized habilitation plans as a result of the provider's inability to contribute to the success of a person with a developmental disability attaining those goals and objectives, the contract of that provider shall not be renewed and may be subject to other negative contract action, as appropriate; · Before taking negative contracting action, DHS must give notice to a provider personally or by mail to the last known address of the provider with return receipt requested. The notice would afford the provider the opportunity to be heard and to contest the department's action. The hearing would be conducted in accordance with the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.); and · DHS shall examine the feasibility of adopting an outcome-based contracting payment system for DDD that specifies desired outcomes for persons with developmental disabilities receiving services from a provider, and confers payment to the provider as the persons with developmental disabilities who are receiving services reach pre-defined steps or "milestones" along the way to achieving the specified desired outcomes. This type of payment system, known as the "Milestone Payment System," is used in about 15 other states, including, Oklahoma, Massachusetts, Texas, and New York.

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Joe Vitale (D)*, 

Introduced in the Senate, Referred to Senate Health, Human Services and Senior Citizens Committee (on 01/22/2018)