LRB-4410/1
GMM:kjf:jf
2009 - 2010 LEGISLATURE
February 26, 2010 - Introduced by Joint Legislative Council. Referred to
Committee on Children and Families and Workforce Development.
SB567,1,10
1An Act to amend 49.34 (5m) (b) 1. and 2., 49.34 (5m) (em), 49.343 (2) (b) (intro.),
249.343 (2) (b) 5., 49.343 (2) (c), 49.343 (3), 49.343 (4) (a) and 49.343 (4) (c); and
3to create 49.343 (1d) (cg), 49.343 (1d) (cr), 49.343 (2) (b) 1m., 49.343 (2) (b) 6.,
449.343 (5) and 49.343 (6) of the statutes;
relating to: elimination of surplus
5retention limitations for residential care centers for children and youth, group
6homes, and child welfare agencies that provide rate-based services for the
7Department of Children and Families or a county department of human
8services or social services; determination of the rates charged by those
9providers; establishment of a performance-based contracting system for those
10providers; and requiring the exercise of rule-making authority.
Analysis by the Legislative Reference Bureau
This bill is explained in the Notes provided by the Joint Legislative Council in
the bill.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
Joint Legislative Council prefatory note: This bill was prepared for the Joint
Legislative Council's Special Committee on Child Welfare Provider Rate
Implementation.
Surplus Revenue
Under current law, all children and family support services and child welfare
services purchased by the Department of Children and Families (DCF) or a county
department of human services or social services (county department) must meet certain
statutory standards. Under one of those standards, if revenue under a contract for the
provision of a rate-based service exceeds allowable costs incurred in the contract period,
the service provider may retain from the surplus generated by that rate-based service
up to 5 percent of the contract amount. A provider that retains a surplus must use it to
cover a deficit between revenue and allowable costs incurred in any preceding or future
contract period for the same rate-based service that generated the surplus or to address
the programmatic needs of clients served by the same rate-based service that generated
the surplus. Also under current law, a provider may accumulate funds from more than
one contract period except that, if at the end of the contract period the amount
accumulated from all contract periods for a rate-based service exceeds 10 percent of the
amount of all current contracts for that service, the provider must, at the request of a
purchaser, return to the purchaser the purchaser's proportional share of that excess and
use any of that excess that is not returned to a purchaser to reduce the provider's rate for
that service in the next contract period. If a provider has held for four consecutive
contract periods an accumulated reserve for a service that is equal to or exceeds 10
percent of the amount of all current contracts for that service, the provider must apply
50 percent of that accumulated amount to reducing its unit rate per client for that service
in the next contract period.
This bill exempts child welfare agencies, group homes, and residential care centers
for children and youth (RCCs) from the current law that limits the amount that a child
welfare agency, group home, or RCC (provider) may retain from the surplus generated
by a rate-based service in a contract period to 5 percent of the contract amount. The bill
also permits DCF, upon request of a provider, to grant an exception to the requirements
that apply to a provider if the amount of the surplus funds accumulated from all contract
periods for a rate-based service exceeds 10 percent of the amount of all current contracts
for that service.
Rates for Out-of-Home Care
2009 Wisconsin Act 28, the Biennial Budget Act, requires a RCC or a group home
to annually submit to DCF the per client rate that it proposes to charge for services
provided in the next year. Also, a child welfare agency must submit to DCF the proposed
per client administrative rate it proposes to charge for foster care services provided in the
next year. DCF must review the proposed rate and audit the provider to determine
whether the proposed rate is appropriate to the level of services to be provided, the
qualifications of the provider to provide those services, and the reasonable and necessary
costs of providing those services. Current law sets forth the factors that DCF must
consider in reviewing a proposed rate. If DCF determines that a proposed rate submitted
is appropriate, DCF must approve the proposed rate. If DCF does not approve the
proposed rate, DCF must negotiate with the provider to determine an agreed to rate. If
after negotiations a rate is not agreed to, DCF and the provider must engage in mediation
under a rate resolution procedure promulgated by DCF by administrative rule to arrive
at an agreed to rate. If after mediation a rate is not agreed to, the provider may not
provide the service for which the rate was proposed.
The bill adds two factors that DCF must consider in reviewing a proposed rate.
First, DCF must consider changes in the consumer price index for all urban consumers,
U.S. city average, for the medical care group. Second, DCF must consider whether the
provider is accredited by a national accrediting body that has developed child welfare
standards.
The bill also provides that if after mediation, a rate is not agreed to, DCF must
order a rate for the service after considering the factors set forth under current law, as
affected by the bill, for reviewing a proposed rate. Under the bill, a provider may appeal
the rate set by DCF as a contested case under ch. 227, stats., by filing a request for a
hearing with DCF within 30 days after the date of the order.
Performance-Based Contracting System
Finally, the bill establishes a performance-based contracting system for providers
that will be implemented over a three-year period beginning on January 1, 2011. The
bill requires DCF, in consultation with an advisory committee created by the secretary
of children and families, to identify measurements by which to evaluate the performance
of providers in meeting the goals for children placed in their care and goals for the
out-of-home care system, develop payment levels that correspond to the achievement of
those measurements based on the assessed level of care of a child, and, by November 1,
2010, submit a report that outlines a plan for implementing the performance-based
contracting system to the standing committees of the legislature that are concerned with
child welfare issues.
In the year beginning on January 1, 2011, DCF must select a representative sample
of providers and evaluate the performance of those providers in attaining the
measurements identified by DCF in cooperation with the advisory committee. By the end
of 2011, DCF, in consultation with the advisory committee, must adjust those
measurements as needed.
In the year beginning on January 1, 2013, DCF must evaluate the performance of
all providers in the state in attaining the measurements identified by DCF in cooperation
with the advisory committee. By the end of 2013, DCF, in consultation with the advisory
committee, must adjust those measurements as needed. Thereafter, adjustments in the
measurements may be made on an as-needed basis.
SB567, s. 1
1Section
1. 49.34 (5m) (b) 1. and 2. of the statutes are amended to read:
SB567,4,62
49.34
(5m) (b) 1. Subject to subds. 2. and 3. and par. (em), if revenue under a
3contract for the provision of a rate-based service exceeds allowable costs incurred in
4the contract period, the provider may retain from the surplus generated by that
5rate-based service up to 5% of the contract amount. A provider that retains a surplus
6under this subdivision shall use that retained surplus to cover a deficit between
7revenue and allowable costs incurred in any preceding or future contract period for
1the same rate-based service that generated the surplus or to address the
2programmatic needs of clients served by the same rate-based service that generated
3the surplus.
This subdivision does not apply to a child welfare agency that is
4authorized under s. 48.61 (7) to license foster homes, a group home, as defined in s.
548.02 (7), or a residential care center for children and youth, as defined in s. 48.02
6(15d).
SB567,4,227
2. Subject to subd. 3. and par. (em), a provider may accumulate funds from more
8than one contract period under this paragraph, except that, if at the end of a contract
9period the amount accumulated from all contract periods for a rate-based service
10exceeds 10% of the amount of all current contracts for that rate-based service, the
11provider shall, at the request of a purchaser, return to that purchaser the purchaser's
12proportional share of that excess and use any of that excess that is not returned to
13a purchaser to reduce the provider's unit rate per client for that rate-based service
14in the next contract period. If a provider has held for 4 consecutive contract periods
15an accumulated reserve for a rate-based service that is equal to or exceeds 10% of
16the amount of all current contracts for that rate-based service, the provider shall
17apply 50% of that accumulated amount to reducing its unit rate per client for that
18rate-based service in the next contract period.
The department may grant an
19exception to this subdivision upon request of a provider that is a child welfare agency
20that is authorized under s. 48.61 (7) to license foster homes, a group home, as defined
21in s. 48.02 (7), or a residential care center for children and youth, as defined in s. 48.02
22(15d).
Note: Under current law, if revenue under a contract for the provision of a
rate-based service exceeds allowable costs incurred in the contract period, the service
provider may retain from the surplus generated by that rate-based service up to 5
percent of the contract amount. Also under current law, a provider may accumulate funds
from more than one contract period except that, if at the end of the contract period the
amount accumulated from all contract periods for a rate-based service exceeds 10 percent
of the amount of all current contracts for that service, the provider must, at the request
of a purchaser, return to the purchaser the purchaser's proportional share of that excess
and use any of that excess that is not returned to a purchaser to reduce the provider's unit
rate per client for that service in the next contract period. If a provider has held for four
consecutive contract periods an accumulated reserve for a service that is equal to or
exceeds 10 percent of the amount of all current contracts for that service, the provider
must apply 50 percent of that accumulated amount to reducing its unit rate per client for
that service in the next contract period.
This Section exempts providers from the current law that limits the amount that
a provider may retain from the surplus generated by a rate-based service in a contract
period to 5 percent of the contract amount. This Section also permits DCF, upon request
of a provider, to grant an exception to the requirements that apply to a provider if the
amount of the surplus funds accumulated from all contract periods for a rate-based
service exceeds 10 percent of the amount of all current contracts for that service.
SB567, s. 2
1Section
2. 49.34 (5m) (em) of the statutes is amended to read:
SB567,5,92
49.34
(5m) (em) Notwithstanding par. (b) 1. and 2., a county department under
3s. 46.215, 51.42, or 51.437 providing client services in a county having a population
4of 500,000 or more or a nonstock, nonprofit corporation providing client services in
5such a county may not retain a surplus
under par. (b) 1. generated by a rate-based
6service or accumulate funds
under par. (b) 2.
from more than one contract period for
7a rate-based service from revenues that are used to meet the maintenance-of-effort
8requirement under the federal temporary assistance for needy families program
9under
42 USC 601 to
619.
Note: This Section clarifies that although under the bill providers are exempt
from s. 49.34 (5m) (b) 1., stats., and may be granted an exception from s. 49.34 (5m) (b)
2., stats., providers are still subject to s. 49.34 (5m) (em), which prohibits retaining a
surplus generated by a rate-based service or accumulating funds from more than one
contract period for a rate-based service from revenues that are used to meet the
maintenance-of-effort requirement under the federal Temporary Assistance for Needy
Families Program.
SB567, s. 3
10Section
3
. 49.343 (1d) (cg) of the statutes is created to read:
SB567,5,1311
49.343
(1d) (cg) "Performance-based contracting system" means a system of
12paying a provider for services based on the achievement of specified measurable
13outcomes.
Note: Sections 3 and 4 create definitions for "performance-based contracting
system" and "provider."
SB567, s. 4
1Section
4
. 49.343 (1d) (cr) of the statutes is created to read:
SB567,6,32
49.343
(1d) (cr) "Provider" means a residential care center for children and
3youth, a group home, or a child welfare agency.
SB567,6,136
49.343
(2) (b) (intro.) The department shall review a proposed rate submitted
7under par. (a) and audit the
residential care center for children and youth, group
8home, or child welfare agency provider submitting the proposed rate to determine
9whether the proposed rate is appropriate to the level of services to be provided, the
10qualifications of the
residential care center for children and youth, group home, or
11child welfare agency provider to provide those services, and the reasonable and
12necessary costs of providing those services. In reviewing a proposed rate, the
13department shall consider all of the following factors:
Note: This Section deletes "residential care center for children and youth, group
home, or child welfare agency" and substitutes "provider," which is defined in the bill as
a residential care center for children and youth, group home, or child welfare agency.
SB567, s. 6
14Section
6
. 49.343 (2) (b) 1m. of the statutes is created to read:
SB567,6,1815
49.343
(2) (b) 1m. Changes in the consumer price index for all urban
16consumers, U.S. city average, for the medical care group, as determined by the U.S.
17department of labor, for the 12 months ending on June 30 of the year in which the
18proposed rate is submitted.
SB567,6,2321
49.343
(2) (b) 5. Changes in service delivery proposed by the
residential care
22center for children and youth, group home, or child welfare agency
provider and
23agreed to by the department.
Note: This Section deletes "residential care center for children and youth, group
home, or child welfare agency" and substitutes "provider," which is defined in the bill as
a residential care center for children and youth, group home, or child welfare agency.
SB567, s. 8
1Section
8
. 49.343 (2) (b) 6. of the statutes is created to read:
SB567,7,32
49.343
(2) (b) 6. Whether the agency is accredited by a national accrediting
3body that has developed child welfare standards.
Note: Sections 6 and 8 add factors DCF must consider in reviewing a per client
rate proposed by a group home or an RCC or an administrative rate proposed by a child
welfare agency. Under Section 6
, DCF must consider changes in the consumer price
index for all urban consumers, U.S. city average, for the medical care group and whether
the provider is accredited by a national accrediting body that has developed child welfare
standards.
SB567,7,196
49.343
(2) (c) If the department determines under par. (b) that a proposed rate
7submitted under par. (a) is appropriate, the department shall approve the proposed
8rate. If the department does not approve a proposed rate, the department shall
9negotiate with the
residential care center for children and youth, group home, or
10child welfare agency provider to determine an agreed to rate. If after negotiations
11a rate is not agreed to, the department and
residential care center for children and
12youth, group home, or child welfare agency the provider shall engage in mediation
13under the rate resolution procedure promulgated by rule under sub. (4) to arrive at
14an agreed to rate. If after mediation a rate is not agreed to, the
residential care center
15for children and youth, group home, or child welfare agency may not provide the
16service for which the rate was proposed department shall order a rate for the service
17after considering the factors under par. (b). A provider may appeal the rate set by
18the department as a contested case under ch. 227 by filing with the department a
19request for a hearing within 30 days after the date of the order.
Note: This Section provides that DCF must order a per client rate for a group
home or an RCC or an administrative rate for a child welfare agency if the provider's
proposed rate is not approved by DCF and if DCF and the provider do not agree to a rate
after negotiations and mediation. Under this Section, a provider may appeal the rate
set by DCF as a contested case under ch. 227, stats., by filing a request for a hearing with
DCF within 30 days of the order.
SB567,8,53
49.343
(3) Audit. The department may require an audit of any
residential care
4center for children and youth, group home, or child welfare agency
provider for the
5purpose of collecting federal funds.
Note: This Section deletes "residential care center for children and youth, group
home, or child welfare agency" and substitutes "provider," which is defined in the bill as
a residential care center for children and youth, group home, or child welfare agency.
SB567,8,128
49.343
(4) (a) Standards for determining whether a proposed rate is
9appropriate to the level of services to be provided, the qualifications of a
residential
10care center for children and youth, group home, or child welfare agency provider to
11provide those services, and the reasonable and necessary costs of providing those
12services.
Note: This Section deletes "residential care center for children and youth, group
home, or child welfare agency" and substitutes "provider," which is defined in the bill as
a residential care center for children and youth, group home, or child welfare agency.