LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 5637

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: JUNE 23, 2025

 

 

SUMMARY

 

Synopsis:

Establishes certain governance and service standards for developmental disability service providers; appropriates $300,000.

Type of Impact:

Annual State expenditure increase.

Agencies Affected:

Department of Human Services.

 

 

Office of Legislative Services Estimate

Fiscal Impact

Annual

 

State Expenditure Increase

Indeterminate

 

 

 

 

·       The Office of Legislative Services (OLS) concludes that State salary and benefits costs incurred by the Department of Human Services may increase by an indeterminate amount in order ensure the necessary staffing level to monitor and enforce the governance and service standards established under the bill.  These standards apply to certain providers who render services to individuals with developmental or intellectual disabilities. 

·       The number of additional staff needed will be dependent on several variables, including: the frequency with which providers will be reviewed by the department for compliance with the newly established standards; whether tracking compliance with the newly established standards will be incorporated into existing departmental tools and procedures used to monitor providers; the interaction of the standards established under the bill with existing standards for providers; and how the monitoring of the standards set forth under the bill will be allocated across the various departmental entities that have oversight responsibilities over the applicable providers. 

 

BILL DESCRIPTION

 

      This bill establishes governance and service standards for providers who render day habilitation services, individual support services, long-term care services, and residential services to individuals who are eligible for those services under the Division of Developmental Disabilities in the Department of Human Services and who are enrolled in one of the division’s home and community-based Medicaid waiver programs.  These standards are limited to provider agencies that are authorized to bill greater than $250,000 of services in a State fiscal year.

      The standards established under the bill require providers to: form a board of directors with a minimum of five board members, the majority of which are required to be independent; establish an independent audit committee with a minimum of three members, if the provider’s revenues are over $2 million in the prior fiscal year; post the three most recent annual audited financial statements on the provider agency’s website; ensure that funds paid by the division are primarily expended on direct client services; pay the costs of any individual salary, except under certain circumstances, according to a schedule set forth under the bill; inform the division, service recipients, and others, within 10 days, of certain events such as the addition or elimination of significant personnel or program functions, sale or disposition of assets under certain circumstances, changes in compensation, bonuses, or benefits to staff under certain circumstances, and any other event that can reasonably be expected to adversely impact the provider agency’s operation or service delivery; establish policies on the prevention, reporting and disposition of nepotism, conflicts of interest, non-discrimination and retaliation; and employ a full-time salaried manager at each site where the provider agency delivers provider-managed services to more than three clients.

      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.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS concludes that State salary and benefits costs incurred by the department may increase by an indeterminate amount in order ensure the necessary staffing level to monitor and enforce the governance and service standards established under the bill.  These standards apply to certain providers who render services to individuals with developmental or intellectual disabilities.  The number of additional staff needed will be dependent on several variables, including: the frequency with which providers will be reviewed by the department for compliance with the newly established standards; whether tracking compliance with the newly established standards will be incorporated into existing departmental tools and procedures used to monitor providers; the interaction of the standards established under the bill with existing standards for providers; and how the monitoring of the standards set forth under the bill will be allocated across the various departmental entities that have oversight responsibilities over the applicable providers.     

      There are several entities within the department which, based upon their existing responsibilities, may be involved in monitoring and enforcing the standards set under the bill.  These include the Division of Developmental Disabilities, the Office of Program Integrity and Accountability, and the Quality Management Unit within the Division of Medical Assistance and Health Services.   Currently, these entities exercise oversight responsibilities that pertain to the bill through the collection of various documents and information from applicable providers, including:  organizational charts; affirmative action employee information reports; dated current board member lists; lists of existing contracts; certification of employee information reports; conflict of interest policies; and financial status reports. 

      The OLS notes that the bill appropriates $300,000 for the purposes of hiring additional staff members to monitor and enforce the provisions of the bill.  This would translate to approximately two additional staff members with an annual salary of $90,000, plus benefits, or three additional staff members with an annual salary of $60,000, plus benefits. 

 

 

Section:

Human Services

Analyst:

Sarah Schmidt

Principal Research Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).