A6138

An Act concerning certain providers of services to individuals with intellectual or developmental disabilities and supplementing Title 30 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. As used in this section:

“Department” means the Department of Human Services.

“Commissioner” means the Commissioner of Human Services.

“Provider” means an entity, licensed by the State, that is responsible for providing services associated with the operation of a community-based residential program for adults or children with intellectual or developmental disabilities.

b. The Commissioner of Human Services shall establish a direct care ratio requirement for providers which mandates that at least 70 percent of a provider's aggregate revenue from State and federal sources in a given fiscal year is expended on the direct care of residents.

c. Providers shall annually report to the department by October 31 of each year the total revenues collected by the provider from State and federal sources in the previous fiscal year, along with the portion of revenues that were expended on direct care staff wages, other staff wages, taxes, administrative costs, investments in improvements to the provider's equipment and physical plant, profits, and any other factors as the commissioner shall require. The commissioner shall determine which components under this report shall be attributed to direct care of residents and use that data to calculate a provider’s direct care ratio for the applicable fiscal year.

d. In each case where the commissioner determines that a provider’s direct care ratio fails to comply with the requirement established pursuant to subsection b. of this section, the provider shall issue a credit to the State in such an amount that, if subtracted from the provider’s administrative costs and profits for the non-compliant fiscal year, at least 70 percent of a provider's aggregate revenue from State and federal sources in that fiscal year would have been expended on the direct care of residents. Providers may issue credits to the State via partial payments, provided that all credits shall be issued in full by June 30 of the fiscal year following the fiscal year in which the direct care ratio requirement was not satisfied.

e. The department shall ensure that any portion of credits received under this section that represent federal revenues collected by a provider are returned to the applicable federal entities.

f. The commissioner or an entity designated by the commissioner may conduct an audit of the information reported by a provider pursuant to subsection c. of this section to ensure the accuracy of the information reported and compliance with the requirements of this section, as well as to identify and recover any credits, as required under subsection d. of this section.

g. The commissioner shall coordinate with all applicable State entities to ensure the implementation of this section, including: the Division of Developmental Disabilities in the Department of Human Services, the Division of Medical Assistance and Health Services in the Department of Human Services, and the Division of the Children’s System of Care within the Department of Children and Families.

2. The Commissioner of Human Services shall adopt rules and regulations, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate the provisions of this act.

3. The Commissioner of Human Services shall apply for such State plan amendments or waivers as may be necessary to implement the provisions of this act and to secure federal financial participation for State Medicaid expenditures under the federal Medicaid program.

4. This act shall take effect immediately.

STATEMENT

This bill establishes a direct care ratio requirement for providers, licensed by the State through the Department of Human Services (DHS) or the Department of Children and Families (DCF), that are responsible for providing services associated with the operation of a community-based residential program for adults or children with intellectual or developmental disabilities (providers). Specifically, the bill mandates that at least 70 percent of a provider’s revenue from State and federal sources in a given fiscal year is expended on the direct care of residents. As there currently are direct care funding ratio requirements in other areas, such as nursing home care, the sponsor believes the substantial public funding for the care of persons with intellectual or developmental disabilities warrants similar measures to ensure that sufficient funding is reserved for the direct care of those persons. Press reports and reports issued by the New Jersey Office of the Ombudsman for Individuals with Intellectual or Developmental Disabilities and Their Families appear to indicate that some providers may not be allocating sufficient financial resources for vital direct care, according to the sponsor. It is the sponsor's intent that the provisions of this bill will be applied to providers licensed by either the DHS or DCF.

The bill directs providers to report to the Department of Human Services by October 31 of each year the total revenues collected by the provider from State and federal sources in the previous fiscal year, along with the portion of revenues that were expended on direct care staff wages, other staff wages, taxes, administrative costs, investments in improvements to the provider's equipment and physical plant, profits, and any other factors as required by the Commissioner of Human Services (commissioner). The commissioner is to determine which components under this report are attributed to direct care of residents and use that data to calculate a provider’s direct care ratio.

In each case where the commissioner determines that a provider’s direct care ratio fails to comply with the provisions of the bill, the provider is required to issue a credit to the State in such an amount that brings the direct care ratio into compliance with the bill’s provisions for the applicable fiscal year. Providers may issue credits via partial payments, provided that all credits are required to be issued in full by June 30 of the fiscal year following the fiscal year in which the direct care ratio requirement was not satisfied.

The bill authorizes the commissioner or an entity designated by the commissioner to conduct an audit of the information reported by a provider under the bill: to ensure the accuracy of the information reported and compliance with the direct care ratio requirement; and to identify and recover any applicable credits. The bill also directs the commissioner to coordinate with all applicable State entities to ensure the implementation of the direct care ratio requirement.