The 2024-2025 California State Budget Act has the third and final phase of rate reform set to take place January 1 and there has been a flurry of detail released by the Department of Developmental Services in late September.
Under Phase 3, service providers, including Supported Living Agencies, are to receive a baseline rate equal to 90% of the Burns and Associates Rate Study recommendation and lose any “unbundled funding” (in the case of Imagine, this means mileage reimbursement and administrative fees.) Additionally, agencies will have the opportunity to earn the remaining 10% by hitting certain quality goals, through a program called Quality Incentive Payments or QIP.
The rate study is also helpful in benchmarking caregiver compensation. Today, Imagine’s rates are about 70% of the recommended rate while our average caregiver wage exceeds 90% of those recommended. It is proposed to the board of directors that when our revenues are at 90% of the modeled rate, that we can exceed 100% of the recommended caregiver compensation.
The QIP program, for the first 18 months of its existence, is going to be a little funny. Because the work of designing good and valid outcome measures is not complete (the workgroup is still adjusting its vision statement after two years,) the QIP through June 2026 will be earned through administrative activities, half of which I completed in August and the other half of which I plan to finish as soon as it goes live in October. As a consequence, Imagine should receive 100% of the recommended rate from January 1, 2025 through June 30, 2026.
An important thing to note about this, is that the QIP portion of our rate is temporary and if everything goes to plan, a person-centered agency should expect to receive less than the full rate once it is based on outcomes. Part of that is recognition that the outcomes sought by the state will not always match up with those appreciated by every client. We want to be careful not to put the State’s well-intended but generalized goals for those we serve above theirs. That’s one reason to expect the January 1 funding to represent a peak, rather than a plateau.
The other is that California’s State Budget is running at a deficit. There is a rainy day fund to help us through if that deficit turns out to be temporary. In the event that decisions have to be made eventually, regional center providers and other systems and organizations funded by the state may face reductions.
Based on this, expect Imagine’s spending to climb slower than our funding. Management’s goal is that our operations stay sustainable without the QIP program, at least until the state budget is in balance and we know what portion we can expect and aspire to.
As always, thanks to Marty Omoto of CDCAN for amplifying the transparency and circularity of information between the community and policy-makers. If you would like to receive CDCAN’s extensive reporting, write to Marty. CDCAN’s work is entirely funded by the donations of those of us who benefit. Write to me or to Marty if you’d like to kick in. In the photo is Alex Omoto, Marty’s son and my friend, at the Master Plan kickoff meeting, giving events their due.
-Submitted by Doug