The 2022-23 Budget: Department of Developmental Services

The 2022-23 Budget: Department of Developmental Services MARCH 2022 Summary. In this post, we provide an Regional Center (RC) overview of the proposed 2022-23 Department Service Coordination of Developmental Services (DDS) budget RCs Coordinate and Pay for Individuals’ and assess the three main new discretionary Services. DDS contracts with 21 nonprofit RCs, proposals. We then raise oversight issues for which coordinate and pay for the direct services legislative consideration. provided to “consumers” (the term used in statute). Services are delivered by a large network of private BACKGROUND for-profit and nonprofit providers. Eligibility for DDS Services Statute Stipulates Caseload Size for RCs’ Service Coordinators. Statute sets the following Lanterman Act Lays Foundation for average service coordinator-to-consumer ratios “Statutory Entitlement.” California’s Lanterman for RCs: Developmental Disabilities Services Act (Lanterman Act) originally was passed in 1969 • 1:62 for consumers enrolled in Medicaid and substantially revised in 1977. It amounts to a waiver programs. statutory entitlement to services and supports for • 1:62 for consumers who transitioned from individuals ages 3 and older who have a qualifying a developmental center into a community developmental disability. Qualifying disabilities setting at least 12 months ago. include autism, epilepsy, cerebral palsy, intellectual • 1:45 for consumers who transitioned from disabilities, and other conditions closely related to a developmental center into a community intellectual disabilities (such as a traumatic brain setting fewer than 12 months ago. injury) that require similar treatment. The disability • 1:62 for infants and toddlers under age 3. must be substantial, expected to continue • 1:25 for consumers who have complex needs. indefinitely, and start before the age of 18. There • 1:66 for all others. are no income-related eligibility criteria. DDS currently serves about 325,000 Lanterman-eligible In addition, the 2021-22 budget approved individuals and another 1,600 children ages 3 and funding for caseload ratios of 1:40 for consumers 4 who are provisionally eligible (described later in who have a low level or no services purchased by this post). RCs (on the basis that these consumers may be California Early Intervention Services Act underserved). However, this caseload ratio was not Ensures Services for Eligible Infants and stipulated in statute. Toddlers. DDS also provides services via its Early Processes for Children Under Age 5 Start program to any infant or toddler under the age of 3 with a qualifying developmental delay or who Toddlers in Early Start Transition to are at risk of developmental disability. There are Schools at Age 3. While the Early Start program no income-related eligibility criteria. DDS currently receives the large majority of its support from serves about 48,000 infants and toddlers in the the General Fund, it also receives federal funding Early Start program. from the Medicaid program and from Part C of the Individuals With Disabilities Education Act (IDEA). At age 3, the toddlers who continue to 2022-23 Budget Series 1 need services to address developmental delays Chapter 339 of 2021 (SB 639, Durazo) or disabilities transition from Part C to Part B of Phases Out Subminimum Wage. Currently, IDEA at age 3. The California Department of about 3,800 consumers who are working earn Education (CDE) manages Part B and schools less than minimum wage. About 3,600 of these provide the services, which include evaluation and consumers are served in work activity programs screening; special education; speech, physical, (WAPs), where they earn a wage based on their and occupational therapies; and communications specific level of productivity. Paying subminimum assessments and adaptive communication wage to an individual with a disability requires equipment. California must adhere to federally a federal certificate issued under the Fair Labor established Part B and Part C time lines and other Standards Act. Chapter 339 phases out the use of rules as a condition of receiving IDEA funding. these certificates in California by January 1, 2025 Provisional Lanterman Act Eligibility for (or when the required multiyear phaseout plan led Children Ages 3 and 4. At age 3, toddlers also by State Council on Developmental Disabilities is may be assessed by RCs for Lanterman Act released, whichever is later). eligibility. If eligible, they could then receive DDS State Funds CIE Incentives and Paid services, which at that age could include respite, Internship Programs to Encourage durable medical equipment, home health care, Employment. Chapter 3 of 2016 (AB X2 1, or day care, among other services. For some Thurmond) provided DDS an annual $20 million children, however, determining at age 3 whether General Fund augmentation to support they have a substantial, indefinite, and qualifying (1) incentive payments for supported employment disability is difficult, and yet they may benefit from providers and (2) consumers’ paid internships in receiving additional DDS services. Addressing CIE environments. this issue, the 2021-22 budget began allowing Recent Budget Included $10 Million General RCs to grant provisional Lanterman Act eligibility Fund for Employment-Related Grants. for children ages 3 and 4 whose disability status The 2021-22 budget provided $10 million one-time is ambiguous and to reassess them at age 5. General Fund to DDS to support grants to Currently, DDS is serving about 1,600 children with organizations developing innovative strategies to provisional eligibility. increase CIE among consumers. Consumer Employment Issues Major Federal Rule Change Affecting California Is an “Employment First” Home- and Community-Based Services State. State and federal policy have shifted (HCBS) Taking Effect in 2023 in recent years toward promoting competitive Nearly All Types of RC-Coordinated HCBS integrated employment (CIE) for individuals Services Are Eligible for Federal Funding. with developmental disabilities. (In this context, HCBS services are considered services and “competitive” means market rate wages.) supports that allow an individual to live in Chapter 667 of 2013 (AB 1041, Chesbro) created community-based settings, rather than in California’s employment first policy, which makes institutional settings. They include residential CIE the highest priority for working age consumers, services, independent and supported living regardless of the severity of their disability. In services, day programs, transportation, supported 2014, Congress passed the Workforce Innovation employment, and respite. Nearly all types of and Opportunity Act, which promotes CIE and RC-coordinated services are considered HCBS and increased training and supports (particularly for are eligible to receive federal HCBS funding (when those age 24 and younger), and generally prohibits provided to a consumer enrolled in Medi-Cal, the employers from paying less than minimum wage to state’s Medicaid program). employees with developmental disabilities. 2022-23 Budget Series 2 Service Provider Compliance With New (The latter assumes the temporary increase, which Federal Rule Required to Draw Down Federal is tied to the federal public health emergency Medicaid Funding. The federal Centers for declaration, ends June 30. If the federal declaration Medicare and Medicaid Services approved a new is extended further, General Fund costs will be lower rule in 2014 that requires states to ensure that than assumed in the budget.) any Medicaid-funded HCBS services promote New Proposals Are Relatively Small in person-centered planning, individual choice, Number and Total Cost. New discretionary and increased independence and are provided proposals—including increasing the number of in the most integrated setting possible. The rule, service coordinators for young children, conducting originally set to take effect in 2019, has been communications assessments for consumers who pushed back twice and now is set to take effect have hearing impairments, and developing a pilot on March 17, 2023. California’s service providers project for individuals transitioning from WAPs—total must be in compliance with the final HCBS rule $73 million General Fund in 2022-23, declining to for the state to draw down Medicaid funding for $61 million in 2023-24, and to $59 million in 2024-25 HCBS services. and ongoing. State Funds Grants to Assist Providers in Caseload Estimates Appear High. Caseload Reaching Compliance. Chapter 3 provided DDS estimates for 2021-22 and 2022-23 appear slightly $11 million General Fund annually beginning in high and we would expect a downward revision 2016-17 to support grants for service providers to in May. Such a downward revision could reduce modify their programs and services to make them General Fund spending by more than $200 million compliant with the final HCBS rule. across 2021-22 and 2022-23. PROPOSED 2022-23 DDS BUDGET Proposal for Early Childhood and Transition to Schools Overview The proposal includes $65.5 million total funds Proposed Budget Reflects Significant ($45.1 million General Fund) in 2022-23 and Growth. The Governor’s budget proposal includes $82.5 million total funds ($55.8 million General $12.4 billion total funds in 2022-23, up $1.5 billion Fund) in 2023-24 and ongoing and includes (13.6 percent) over the revised 2021-22 level three components: ($10.9 billion). Of the proposed 2022-23 total, $7.5 billion is from Figure 1 the General Fund, up $1.2 billion (18.4 percent) over the revised DDS Spending Continues to Grow Rapidly 2021-22 level ($6.3 billion (In Billions) General Fund). This significant year-over-year growth in DDS $14 spending follows the spending 12 Federal and Other Fundsa growth trend over the past ten General Fund 10 years, as shown in Figure 1. Primary drivers of the year-over-year General 8 Fund growth include: growth in 6 caseload, increased utilization 4 of services, additional costs for 2 ramping up 2021-22 initiatives, and the cost of a temporary 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 6.2 percentage point increase in a The bulk is federal Medicaid funding, with minor other federal and state special funds. federal Medicaid funding ending. Note: 2021-22 amounts are estimated and 2022-23 amounts are proposed. DDS = Department of Developmental Services. 2022-23 Budget Series 3 • Caseload Ratios. The proposal includes services, supporting families when they first receive $51.1 million total funds ($31.9 million General their child’s disability diagnosis, outreach and Fund) in 2022-23 and $68.1 million total education to underserved populations (to increase funds ($42.6 million General Fund) in 2023-24 Early Start take-up rates), and providing technology and ongoing to reduce the average service tools related to screening and assessments. coordinator-to-consumer caseload ratio at Assessment. There are known problems with each RC to 1:40 for children ages 5 and under. DDS meeting federal IDEA time line requirements As noted earlier, the current statutory ratio in its Early Start program and in transitioning for children under 3 is 1:62. (Caseloads for children from Part C to Part B. A statutorily children under age 3 averaged 59 per service required workgroup, including CDE and DDS, coordinator across RCs as of March 2021.) recently examined ways to improve Part C to Part Currently, there are no statutory caseload B transitions. It recommended maximum Early rules based specifically on ages 3 through 5. Start caseloads of 45 per RC service coordinator The current proposal notes potential positive (but noted additional research may be needed). outcomes that could result from smaller The Governor’s budget in 2020 also proposed service coordinator caseloads, such as caseload ratios of 1:45 for ages 3, 4, and 5, but the service coordinators having more encounters proposal was withdrawn once the pandemic hit. with the family and attending the school While the administration’s justification for selecting individual education plan (IEP) meetings with a 1:40 ratio is fairly reasonable, DDS also may the family. achieve the desired results with a 1:45 ratio—as • RC and DDS Specialists. The proposal recommended by the workgroup—at a lower cost includes $4.4 million total funds ($3.2 million (we estimate about $14 million General Fund less General Fund) in 2022-23 and ongoing for in the first year and nearly $19 million General Fund one IDEA specialist per RC and six childhood less annually thereafter). specialists at DDS, several of whom would We also note that the administration’s proposed focus primarily on early childhood (including trailer bill language does not include a provision the transition from IDEA Part C to Part B). requiring RCs to implement the 1:40 ratio for RC specialists would train and support service children ages 5 and under. Instead, the language coordinators working with children exiting indicates that DDS would handle caseload ratios Part C to move to Part B and would provide for this age group administratively, through its technical assistance to the RC and the school contracts with RCs. This approach deviates from providing infant and toddler services. previous practice and we suggest the Legislature • Preschool Inclusion and Accessibility. codify in statute the final agreed-upon ratio. The proposal includes $10 million General Having the ratio in statute provides a benchmark Fund ongoing to improve the inclusion of the Legislature can use in its oversight of DDS, children with developmental disabilities at particularly given that the administration believes preschools. For context, the CDE budget these smaller caseloads will improve the quality of includes funding for related proposals RC service and outcomes for young children. requiring state preschools’ enrollment to The Legislature also might consider whether the include at least 10 percent of students having trailer bill should specify additional activities that a disability. would be required, rather than just encouraged, of RC service coordinators. While the language would The proposal complements one-time projects require quarterly meetings between the service funded with American Rescue Plan Act (ARPA) coordinator and family, it does not specify other funds ($23.9 million) provided July 1, 2021 and activities, such as attending IEP meetings with available through September 2023. The one-time families (if families consent). The concern being that projects supported with ARPA funds focus on some of these activities might not always be done if training for earlier intervention service providers to they are not required. provide more culturally and linguistically sensitive 2022-23 Budget Series 4 The proposal to add IDEA specialists at each RC Proposal to Develop Alternatives to (there currently are no such dedicated specialists Subminimum Wage Employment of required) makes sense, particularly to support the Consumers transition to schools that takes place at age 3. Proposal. The proposal includes $8.3 million However, given that RCs vary significantly—in total funds ($5 million General Fund) one time, the number of young children served (and thus available over three years, and one DDS position to service coordinators who would need support), pilot an alternative service model to WAPs and to in demographic traits and number of languages implement Chapter 339. The DDS proposal would spoken, and in the number of schools in the area— focus on alternatives for individuals currently served we question whether having the same number in WAPs or just graduating from high school. of IDEA specialists (one) at each RC is the best approach. For example, might the larger and more Assessment. In concept, the proposal has merit complex RCs warrant more than one specialist? for several main reasons. First, Chapter 339 and the HCBS final rule effectively eliminate most WAPs, The DDS proposal to make preschools more so alternatives will be needed. Second, for some inclusive lacks sufficient detail to assess it; individuals served in WAPs, quickly finding a new consequently, we withhold a recommendation. job that constitutes CIE may be difficult. In such a For example, the proposal as written does not case, the individual currently served in a WAP is at identify whether the preschools include only risk of losing employment altogether as WAPs are state preschools or all preschools of any type. phased out. Consequently, phasing out WAPs and (DDS subsequently indicated the proposal would providing employment alternatives deserve careful include non-state preschools, particularly those consideration. Third, this proposal is consistent in underserved areas, although the preschool with state and federal policy direction. In 2019, inclusion proposal and implementation details are we recommended DDS take a more deliberative not part of the proposed Part C to Part B trailer bill approach to planning the phase out of outmoded language.) The DDS proposal does not define what service models like WAPs. “disability” means in terms of inclusion. (In contrast, CDE’s proposal would require the child to have Despite its merits, the proposal raises a couple of an individualized family service plan or IEP and be issues. First, the pilot would not include individuals receiving associated services.) The DDS proposal making subminimum wage who are served in does not explain how the $10 million estimate other programs, such as day programs or group was developed, how it would use the funding to supported employment programs, meaning that create inclusive preschools, or exactly how it would alternatives to those programs also will need to be coordinate efforts with CDE. The Legislature could developed. Second, the timing of the pilot raises continue to press the administration for additional some concerns. Although the HCBS final rule detail about this proposal, such as: takes effect in March 2023 and subminimum wage should be fully phased out by January 2025, this • How will DDS identify and reach out to three-year pilot would not begin until December providers that need support to ensure their 2022 and end until December 2025. This raises the programs are inclusive? following questions: • What would constitute inclusion for a • Will all WAPs be closed by March 2023 preschool to receive support from DDS? when the HCBS final rule takes effect? If so, • Why is the administration proposing what will happen to the individuals currently $10 million for this purpose? How many and served in these programs if they have not what share of preschools is this amount meant found alternatives? to help? What exactly will this $10 million be • What options will be available to individuals used for? who are not participating in the pilot given the timing of both the HCBS final rule and phase out of subminimum wage? 2022-23 Budget Series 5 • If some WAPs remain operational following some questions for legislative consideration. As March 2023, but are found to be out of DDS will continue to implement significant new compliance with the HCBS final rule, does programs and policies over the next several years, DDS expect the General Fund to backfill lost considering some of these questions now could federal funds? help in the process of identifying implementation challenges and possible solutions to ensure these Proposal for Resources to Support resources and programmatic changes are having Individuals Who Are Deaf the intended effect. Proposal. The proposal includes $14.3 million Recent Major Spending Initiatives total funds ($8.4 million General Fund) one Major New Spending Initiatives in Recent time to conduct communications assessments Years Are Meant to Improve Consumer to inform individual program planning for the Outcomes and Sustain Service Provider estimated 14,300 consumers who are deaf or Network. The 2021-22 budget—and the spending hard of hearing. Communications assessments plan associated with federal HCBS funding in this context ascertain the ways an individual provided by ARPA—included at least 21 fully with a developmental disability and who is deaf new efforts in the DDS system. Among others, or hard of hearing best expresses themselves these include rate reform and the associated and receives information. It also identifies the quality incentive program, which together are supports and adaptive technology they will meant to sustain the service provider network need to communicate (including identifying the while improving consumer outcomes. They also competencies support staff will need) as well as include programs meant to improve the quality assesses an individual’s communication potential and equitable delivery of services, such as direct (including recommendations for what they need service provider training and certification, an to increase their success in communicating). This RC performance incentive program, and RC implicit proposal comes on the heels of a 2021-22 ongoing bias training. The General Fund cost of these augmentation of $2.4 million total funds ($1.6 million 21 initiatives will continue to ramp up significantly, General Fund) to support one deaf service as follows: specialist at each RC and one deaf specialist at DDS. It also is related to litigation by Disability • $250 million in 2021-22. Rights California on behalf of deaf consumers • $524 million in 2022-23. who allege discrimination by RCs for not providing • $896 million in 2023-24. sufficient accommodation and supports to engage • $923 million in 2024-25. in community life, resulting in isolation and lack of • $1.45 billion in 2025-26 and ongoing. meaningful communication. The 2021-22 budget also augmented several Assessment. This proposal appears to be other initiatives that began in recent years, including a good step toward providing better service to the Self-Determination Program (SDP), forensic consumers who are deaf or hard of hearing. diversion, and RC crisis training. DDS OVERSIGHT ISSUES In addition, resources have been targeted in recent years to address several specific issues, In recent years, the DDS system has undergone including in the area of CIE and HCBS compliance some significant changes that warrant the (as noted earlier) and in the areas described below. Legislature’s oversight of their implementation and related outcomes. Below, we discuss two Racial/Ethnic Disparities in the Per Person broad sets of changes to frame this discussion: Amount Spent on Services. $11 million General (1) major new spending initiatives in recent Fund annually since 2016-17 for grants to RCs years and (2) governance and process changes and community-based organizations ($66 million intended to better identify and address system cumulatively to date) to close disparities challenges. Given these recent actions, we pose in spending. 2022-23 Budget Series 6 Implementation of SDP. $6.8 million General Ongoing Issues and Challenges Persist Fund in each of 2021-22, 2022-23, and 2023-24, Despite some of the recent efforts and targeted and declining to $2.2 million General Fund annually funding to address particular issues, our review of thereafter for the ongoing implementation of the available data finds that there are ongoing issues SDP. In addition, $1 million General Fund annually and challenges that persist. We discuss a number was provided beginning in 2021-22 for a new Office of these below. of the SDP Ombudsperson. Chapter 683 of 2013 Racial/Ethnic and Other Disparities in (SB 468, Emmerson) established the SDP, yet Spending Persist. Despite DDS’s numerous the program did not begin until 2018 when DDS recent initiatives and grants to address inequities, received federal approval allowing the state to draw disparities in spending across racial/ethnic groups down federal funds for the program. persist. The 2021-22 budget approved funding Recent Governance and for DDS to evaluate the various small projects supported with the targeted funding, which could Process-Related Changes potentially identify scalable promising practices Governance/Process-Related Changes to improve equity in the system. Nevertheless, the Intended to Increase Transparency/ most recently available statewide spending data Accountability and Improve Decision-Making. from 2020-21 shows that the average per person The 2019-20 budget included funding for a amount spent on services for white consumers significant reorganization of DDS headquarters ($28,000), for example, is more than twice that to help the department align resources with new spent on services for Latino consumers ($12,100). or expanded responsibilities and modernize the Some of this disparity can be explained by more department to reflect changing expectations of Latino than white consumers living in the family individuals with developmental disabilities. Over the home rather than in a group home or on their own past several years, DDS has increased the amount (which is more costly), but it does not explain all of of publicly available data and information about the disparity. For example, in 2020-21, all but one its programs and the individuals served to provide RC spent more (on average, 23 percent more) on greater transparency into its activities. It also has white consumers living with their parents than on improved the online display and interactive features Latinos consumers living with their parents. Every of some of this information, including for example, RC spent more (on average, 61 percent more) on data about the purchase of services, results from independent or supported living services for white the National Core Indicators survey, and select consumers living on their own relative to Latino information about RCs. consumers in similar situations. There has not Budget-related legislation from 2019-20 been a formal research study to understand the included new reporting requirements for both RCs major causes and nuanced underlying reasons as and DDS and also shifted the focus of quarterly to why RCs spend more on some consumers than briefings for legislative staff to the broader DDS on others. system. (Previously, these quarterly briefings were DDS Consumer Employment Rates Remain focused on the closure of developmental centers.) Low. According to Employment Development Both of these changes were meant to increase Department data presented on DDS’s RC accountability and enhance legislative oversight. Oversight Dashboard, the employment rate for DDS also recently expanded and reformulated people with developmental disabilities in California its Developmental Services Taskforce and created has remained below 17 percent since 2016-17, or reorganized numerous workgroups. The and it worsened during the COVID-19 pandemic, membership within each of these groups is meant dropping from 16 percent in 2019 to 13.5 percent to reflect the geographic and demographic diversity through the first half of 2020. Figure 2 on the next of the DDS system and include consumers, family page, shows that of the funding provided for CIE members, RCs, service providers, and other incentives and paid internships each year, a majority stakeholders. DDS relies on these groups to goes unused. understand issues, develop new ideas, and inform key decisions. 2022-23 Budget Series 7 SDP Rollout Continues to Lag. Chapter 683 created a phase-in period Figure 2 for SDP, limiting enrollment during the first three years to 2,500 individuals. Majority of Funding to Promote Competitive Integrated During these first three years (July 2018 Employment and Paid Internships Goes Unused through June 2021), DDS and RCs enrolled just 625 participants, with Share of Available Funding Spent Number of Consumer Participants two RCs enrolling fewer than ten 3,402 people. Per Chapter 683, the program 3,248 was made available to all interested consumers as of July 2021. As of 2,073 1,972 December 2021, 1,102 people were 43% 45% enrolled and this group did not reflect the racial/ethnic composition of the 691 24% 25% DDS consumer population. Figure 3 shows that the plurality of participants 6% is white (44 percent), despite whites 2016-17 2017-18 2018-19 2019-20 2020-21 making up 29 percent of all DDS consumers. By comparison, Latinos comprise only 27 percent of SDP participants, but 40 percent of all DDS consumers. Many Providers Still Are Not in Compliance With HCBS Final Rule Figure 3 Set to Take Effect in March 2023. SDP Enrollment Disproportionate As of October 2021, 43 percent of Across Racial/Ethnic Groups the 9,050 providers of which DDS As of December 2021 required a self-assessment or on-site assessment reported they do not meet or only partially meet all federal requirements, as shown in Figure 4. Latino Recommended Reporting Recommend Legislature Ask White DDS to Report on the Following Topics. We cite some of the examples above as a cautionary note when Asian overseeing the new programs approved in 2021-22 and significant levels of funding approved to flow to Black/ Share of DDS population DDS over the next several years. We African American Share of SDP Participants recommend the Legislature continue to ask DDS for ongoing updates about the implementation of these programs Other and recommend it ask DDS some of the following questions as a way to understand any implementation 10 20 30 40 50 60% challenges and identify any changes DDS = Department of Developmental Services and SDP = Self-Determination Program. that may be helpful to ensure the success of these programs. 2022-23 Budget Series 8 • What Is DDS’s Plan for Making Iterative • What Is DDS’s Plan for Overhauling Two Improvements in New Programs? Questions Key Information Technology Systems? could include: As DDS implements rate reform The spending plan associated with HCBS and the quality incentive program, are any ARPA funds included planning dollars to statutory or rate model changes needed now to overhaul two important data systems—the improve a rate-setting system that presumably consumer records management system and will be in place for some time? How will DDS the uniform fiscal system (which supports identify and address needed refinements in invoicing and payment of service providers). rate-setting, the quality incentive program, The Governor’s budget proposal for 2022-23, and the RC performance incentive program however, provides no detail about this effort. going forward? These systems will be vital to implementing • What Is DDS’s Process for Identifying and the two performance-based programs Addressing Problems in Service Delivery? approved in 2021-22 and to understanding Questions could include: What methods system trends, including consumer outcomes, does DDS use to understand why certain consumer service needs, gaps in service problems (such as racial/ethnic disparities, provider availability, performance of RCs and low employment, or low SDP participation) service providers, equity in the purchase of persist? Has it identified the particular causes services, and spending trends. We have been of these problems? Has DDS sought the advice recommending better data systems since of other states that have been more successful 2017. What can DDS tell the Legislature about in certain areas (if that is the case)? How does its planning process, time line, and goals DDS use the currently available data and for these systems and about their desired information to understand issues and propose functionality? Who does DDS intend to include solutions? How is workgroup input used in in planning conversations? Will all users—from developing policy and procedures? How is data DDS program staff to RC staff and service used in tandem with workgroup input to refine coordinators to families and consumers and proposals and programs? service providers—be allowed to provide input? What currently available software has or will • Do DDS, RCs, and Service Providers Have DDS consider, such as software used in other Capacity Challenges? Do DDS, RCs, and states or by other human services programs? service providers have capacity problems that How will DDS implement performance-based limit their ability to achieve desired outcomes programs without these systems in place? and to implement the many new programs and projects created in the past several years to address system challenges? How much of an impact do capacity limitations have on the success of a project or program? Figure 4 Many Service Providers Not Yet in Full Compliance With HCBS Final Rule As of October 1, 2021 Completed Assessment? Meet All Federal Requirements? Service Type Identified for Assessment Completed Assessment (%) Yes (%) No or Meet Some (%) Residential 6,401 77% 62% 38% Day Service 2,405 82 49 51 Supported Employment 168 89 35 65 Work Activity Program 76 79 25 75 Overall 9,050 78% 57% 43% HCBS = home- and community-based services. 2022-23 Budget Series 9 2022-23 Budget Series 10 2022-23 Budget Series 11 LAO PUBLICATIONS This post was prepared by Sonja Petek, and reviewed by Mark C. Newton and Carolyn Chu. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2022-23 Budget Series 12