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P. O. Box 944202
Sacramento, CA 94244-2020

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Reimbursement Rates FAQs

  1. How long must I retain cost and billing documentation and records?
  2. What happens when a supported-living consumer's needs become significantly greater than was the case when the supported living arrangement began?
  3. Are there any requirements for contracting with regional centers?
  4. Where can I find the pertinent Wage Orders for my program?
  5. Whom should I contact if I have questions regarding interpretation or enforcement of Wage Orders?
  6. How are rates determined?
  7. What is a Temporary Payment Rate, and how is it determined?
  8. What are "like programs"?
  9. How are rate adjustments for community-based day programs, when recommended in preliminary audit reports, resolved?
  10. What are my rights if I disagree with the audit?
  11. I'm a respite service provider, providing service to more than one consumer, using the same respite worker in the same home. Is my rate the same as for one consumer?
  12. What is a non-mobile supplemental rate?
  13. What are the different roles of the Department and regional centers in setting community-based day program and respite agency rates?
  14. What is my reimbursement rate if regulations state that I'm covered by a "Usual and Customary"(U&C) rate?
  15. After the State set my rate, my vendoring regional center wanted to negotiate a lower rate. While I might be open to the idea under certain circumstances, what safeguards are in place to ensure that this does not turn into a permanent rate reduction?
  16. What if I'm not satisfied with the rate offered by a regional center during rate negotiations? Is there an appeal process?
  17. Do I have to accept a lower level of payment than the rate established by the Department?
  18. My rate is based on a cost statement that I submitted. Can I correct errors or omissions on this cost statement once my rate has been set?
  19. What is the Schedule of Maximum Allowances (SMA)?
  20. How does a change in ownership of a community-based day program affect the program's rate?
  21. Under what circumstances may I request a rate adjustment for my community-based day program?
  22. What's the difference between 'unanticipated' and 'anticipated' rate adjustment requests?
  23. When my temporary payment rate (TPR) was converted to a permanent payment rate (PPR), the rate went down. How can this happen?
  24. Can vendors bill for absences?
  25. What appeal rights do I have?
  26. How are cost statement rates established?
  27. How does the Department set Supported Living Service (SLS) rates?
  28. Is there a ceiling placed on SLS rates?
  29. Is there a separate SLS rate for a vendor's administrative costs?
  30. Does a consumer or family member have a say in the SLS rate the consumer's SLS provider gets?
  31. Under the cost comparison requirements of Title 17, Section 58617(a), if alternative living arrangement costs were estimated at $50,000 annually, is the consumer entitled to have $50,000 spent on the Supported Living Arrangement?
  32. Can a regional center pay for the rent and utilities of a SLS consumer's apartment?
  33. How are rates for miscellaneous services established?

1. How long must I retain cost and billing documentation and records?
A Records which can be used to verify the billings for services provided to regional center consumers must be maintained for five years after the final payment has been received for any given fiscal year, or until all audit exceptions have been resolved. Consumer records, payroll records, time sheets and any records used to complete a cost statement must be retained for at least five years, or until all audit exceptions have been resolved. (Title 17, Sections 50605, 54326, 56728
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2. What happens when a supported-living consumer's needs become significantly greater than was the case when the supported living arrangement began?
A The cost comparison specified in Title 17, Section 58617 applies only at the time a consumer's supported living arrangement begins. Once the arrangement is established and ongoing, cost limitations on supported living services are subject to the general cost containment provisions of the Lanterman Act (such as maximum use of natural and generic supports, and a cost effectiveness test). For this reason, a consumer's changing needs (increases or decreases) may be mirrored in a corresponding change in the cost of services required to satisfy those needs.
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3. Are there any requirements for contracting with regional centers?
A Regulations contain certain requirements which must be included in all contracts between a regional center and a service provider. While these contracts can include other provisions, Title 17, Sections 50607 and 50608, contain the minimum provisions.
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4. Where can I find the pertinent Wage Orders for my program?
A The Industrial Welfare Commission (IWC), under the Department of Industrial Relations, is responsible for adopting wage orders for all occupations and trades. They may be contacted by writing the Industrial Welfare Commission at 770 L Street, Suite 1170, Sacramento, CA, 95814, Telephone (916) 322-0167. Their web address is www.dir.ca.gov/iwc. Questions can be sent via e-mail to iwc@dir.ca.gov
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5. Whom should I contact if I have questions regarding interpretation or enforcement of Wage Orders?
A The Division of Labor Standards Enforcement (DLSE), also under the Department of Industrial Relations, is responsible for interpreting and enforcing the IWC's Wage Orders. They offer consultation by phone or e-mail, and are the proper source for information on working conditions, rules, and wages. They may be contacted by writing the Division of Labor Standards Enforcement at 455 Golden Gate Avenue, 9th Floor East, San Francisco, CA, 94102, Telephone (415) 703-4810. Their web address, which includes locations of all District Offices, is www.dir.ca.gov/dlsea. Questions can be sent via e-mail to dlse2@dir.ca.gov.
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6. How are rates determined?
A There are several different methods which are used to set reimbursement rates for services provided to regional center consumers, depending on the type of service. For example, services which are similar to services covered by MediCal are paid according to the rate schedule (Schedule of Maximum Allowances [SMA]) maintained by the California Department of Public Health. In-home respite service rates (procured through respite agencies) and community-based day program rates are set by the Community Rate Section. These rates are based on actual costs submitted on cost statements, within a range of lower and upper limits. New programs receive a temporary payment rate. Supported living rates are negotiated between vendors and regional centers, and transportation rates are based upon a standard rate schedule, state mileage rate, SMA, bids or negotiated contracts with regional centers. All other services are either negotiated contracts with regional centers or set at the vendor's 'usual and customary' rate. (Title 17, Sections 57300, 58500, 58501, 58502, 58510, 58511, 58512, 58513, 58520, 58521, 58522, 58523, 58524, 58530, 58531, 58532, 58533, 58534, 58540, 58541, 58542, 58543, 58550, 58551, 58522, 58553, 58555, 58601, 58602)
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7. What is a Temporary Payment Rate, and how is it determined?
A A Temporary Payment Rate (TPR) is the rate paid to a new community-based day or respite programs. This TPR is the mean rate for like programs receiving a permanent payment rate. Within 18 months of the start date of the program, the vendor must submit 12 consecutive months of actual allowable cost information to the Department for conversion to a permanent payment rate. Once the vendor has been notified of the rate established by the Department, the vendor and regional center may negotiate a lower level of payment or a service contract. (Title 17, Sections 57210(a)(17), 57520, 57522, 58000(a)(7), 58120, 58122
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8. What are "like programs"?
A "Like programs" are programs that provide similar services, are assigned the same service code, and provide the same staff-to-consumer ratio. (Title 17, Section 57210)
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9. How are rate adjustments for community-based day programs, when recommended in preliminary audit reports, resolved?
A Rate changes recommended in a preliminary audit report are sent by the regional centers to the Department of Developmental Services' Community Rate Section. The Community Rate Section issues a new rate letter, reflecting the amount verified in the audit, with an effective date based upon the audited cost statement. (Title 17, Sections 50606, 57930)
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10. What are my rights if I disagree with the audit?
A Vendors have multiple appeal rights under regulations. Again, these appeal rights are very specific, so it is best to consult regulations regarding audit appeals. Keep in mind that audit appeals must be submitted to the Department within 30 days of issuance of the final audit report. If an audit finding is overruled on appeal, the rate will be adjusted appropriately. (Title 17, Sections 50730, 50731, 50732, 50750, 50751, 50752, 50753, 50754, 50755)
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11. I'm a respite service provider, providing service to more than one consumer, using the same respite worker in the same home. Is my rate the same as for one consumer?
A The rate established for in-home respite service is a per-consumer per-hour rate. The vendor and regional center may negotiate a contract with a lower level of payment for any additional consumers when a single respite worker will be providing the service. If the vendor is unwilling to negotiate a lower rate for the additional consumer(s) being served by a respite worker, the vendor may be required to provide a respite worker for each consumer served. (Title 17, Section 58140)
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12. What is a non-mobile supplemental rate?
A A non-mobile supplemental rate is a rate of payment for additional direct care staff required for programs serving non-mobile consumers. Activity centers, adult development centers, behavior management, independent living, and social recreation programs may supplement their direct care staff for non-mobile consumers. A supplemental rate may be obtained to provide such extra staff. The rate is based on the prevailing minimum wage, plus 20% for fringe benefits, divided by 10. This amount may be paid for each non-mobile consumer, based on a 1:10 staffing ratio. Requests for supplemental staff must be submitted in writing to the regional center. (Title 17, Sections 56756 and 57530)
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13. What are the different roles of the Department and regional centers in setting community-based day program and respite agency rates?
A For community-based day programs and respite agencies, the Department establishes the temporary payment rate and permanent payment rate based upon documentation submitted by the vendor. Prior to issuance of a temporary payment rate, the Department reviews the documentation submitted to ensure compliance with applicable laws and regulations and establishes the vendor's rate based upon the vendor's service category, staffing ratio, and the mean rate paid to existing vendors providing like services. Regional Centers are responsible for reviewing program cost and vendor income information submitted by vendors for establishment of a permanent payment rate. Regional centers ensure that the information submitted is complete and in compliance with applicable regulations, and that there are no known inconsistencies in the information reported by the vendor. The regional center must report the results of their review to the Department within 30 days from the date the Department notifies them of the review requirements. The Department establishes the permanent payment rate based upon the information submitted by the vendor.
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14. What is my reimbursement rate if regulations state that I'm covered by a "Usual and Customary"(U& C) rate?
A A U& C rate is the rate of reimbursement for vendors who serve the general public and/or regional center consumers and for whom neither the Department nor the Department of Health Services have an established rate. A vendor's U&C rate is the rate the vendor charges to members of the general public for comparable service if 70% or fewer of the individuals served are regional center consumers. If more than 70% of the individuals served are regional center consumers, the vendor and regional center must negotiate the rate of reimbursement. (Title 17, Section 57210(a)(19))
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15. After the State set my rate, my vendoring regional center wanted to negotiate a lower rate. While I might be open to the idea under certain circumstances, what safeguards are in place to ensure that this does not turn into a permanent rate reduction?
A Regulations require any such agreement be mutually agreeable, be in writing, and have an effective date and a termination date. Upon termination, the rate shall return to the level set by the State unless a new agreement is reached. Regional centers must provide both the vendor and the State with a copy of the written agreement. (Title 17, Section 57300(d))
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16. What if I'm not satisfied with the rate offered by a regional center during rate negotiations? Is there an appeal process?
A No. Although a vendor may appeal any action by a regional center which violates Title 17, not being able to reach agreement is always one of the possible outcomes of any negotiation. Well-meaning parties sometimes disagree, and this, in itself, is not in violation of Title 17. (Title 17, Sections 54380, 54382, 54384, 54386, 54388, 54390)
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17. Do I have to accept a lower level of payment than the rate established by the Department?
A No. While there are regulations covering the terms and conditions of negotiating and accepting a lower level of payment than the rate established by the Department, any lower level of payment must be agreed to by both parties. Generally, such agreements are mutually beneficial. For example, vendors sometimes accept a reduced rate for a period of time in cases where the regional center can guarantee a stable or increased number of consumer placements. The vendor can plan on a stable funding base, while the regional center can use scarce purchase of service dollars to provide services for more consumers. (Title 17, Sections 57300(d), 57439)
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18. My rate is based on a cost statement that I submitted. Can I correct errors or omissions on this cost statement once my rate has been set?
A Yes. You may appeal any errors made by you in the cost statement; errors made by the Department in calculating your rate, the effective date of the rate or the denial of requests for rate adjustments. Appeals must be filed within 12 months after the receipt of written notification from the Department of the vendor's rate. Detailed instructions are in regulations. (Title 17, Sections 57940, 57941, 57942)
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19. What is the Schedule of Maximum Allowances (SMA)?
A The Schedule of Maximum Allowances, also known as Medi-Cal rates, as developed by the Department of Health Care Services is established as the maximum rate of reimbursement for services reimbursed under the Medi-Cal program. By regulation, regional centers cannot pay more than the Medi-Cal rate (SMA) for the same service. (Title 17, Sections 57210(a)(14), 57332 (b))
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20. How does a change in ownership of my community-based day program affect the program's rate?
A The rate will not change as long as the staffing ratio and program activities, as identified in the program design, remain unchanged. (Title 17, Section 57300(g))
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21. Under what circumstances may I request a rate adjustment for my community-based day program?
A There are several circumstances under which you can request a rate adjustment, including a modification in program design which results in a change in the approved existing staffing ratio or service code, relocation due to the loss of a tenancy agreement, or the loss or gain in vendor income which was used in calculating your rate. Requests of these types are considered requests for 'anticipated' changes. You may also request rate adjustments as a result of mandated service adjustments due to changes in existing statutes, laws, regulations or court decisions, or due to emergency relocations required to protect the health and safety of the consumers. Requests of this type are considered requests for 'unanticipated' rate adjustments. (Title 17, Sections 57920, 57922)
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22. What's the difference between 'unanticipated' and 'anticipated' rate adjustment requests?
A Besides the circumstances leading to the request, the major difference is that the regional center must fund 'unanticipated' requests effective the date of approval. Funding for 'anticipated' requests must be requested through the normal budget process and, if funding is made available in the Budget Act, becomes effective September 1 of the year following the date of the request or later, depending upon when the cost actually occurs. Requests for 'anticipated' rate adjustments must be made prior to December 1 of the year previous to the fiscal year in which the changes are expected to occur. 'Unanticipated' rate adjustments may be requested any time throughout the year. (Title 17, Sections 57920, 57922, 57924)
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23. When my temporary payment rate (TPR) was converted to a permanent payment rate (PPR), the rate went down. How can this happen?
A The TPR is calculated by taking the mean rate for all like programs receiving a permanent payment rate. The PPR is based on the actual costs of your program, up to the upper limit for your service code and staffing ratio. If the cost statement submitted to establish your permanent payment rate did not result in a rate equal to or greater than the rate you were receiving, your rate was reduced to the cost statement rate. (Title 17, Sections 57652, 58252)
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24. Can vendors bill for absences?
A Regulations prohibit providers of non-residential services from billing for absences. However, for community-based day programs and in-home respite services agencies, absences are built into the rate. In setting the rate, the Department divides a program's total costs by the actual units of service provided (hours or days, depending on the service code). We do not use the authorized number of days/hours that a consumer could have been in a program, but rather the actual days/hours of attendance. This way, each program's actual pattern of absences and the costs incurred are already accounted for in their rate. Regional centers may pay residential facilities for temporary absences. (Title 17, Sections 54326(a)(10) and (11), 56917(h) and (h)(1))
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25. What appeal rights do I have?
A A service provider may appeal the denial of vendorization by a regional center, and perceived non-compliance with the vendorization regulations by regional centers, or the setting of a rate by the Department. There are also appeal provisions for audits. It is probably best to refer to regulations for the specifics of each type of appeal. (Title 17, Sections: Vendorization appeals, 54380, 54382, 54384, 54386, 54388, 54390; Rate appeals, 57940, 57941, 57942, 57944, 57946, 57948; Audit appeals, 50730, 50731, 50732, 50750, 50751, 50752, 50753, 50754, 50755)
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26. How are cost statement rates established?
A For community-based day programs and in-home respite service agencies, each vendor's rate is established utilizing actual allowable cost information and consumer attendance data submitted by the vendor. If the calculated rate is within the allowable range of rates for like programs, the vendor will receive the calculated rate. If, however, the vendor's rate is below the lower limit or above the upper limit, the rate will be adjusted up to the lower limit or reduced to the upper limit, as appropriate. Once the vendor has been notified of the rate established by the Department, the vendor and regional center may negotiate a lower level of payment or a service contract. (Title 17, Sections 57300(d), 58140, 57540)
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27. How does the Department set Supported Living Service (SLS) rates?
A The Department does not set SLS rates, but, through its regulations, requires that SLS rates be arrived at through negotiations between the regional center and each SLS vendor. Once negotiated, the rate or rates are written into the vendor's SLS contract. Title 17, Section 58661 allows great flexibility in negotiated rate types.
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28. Is there a ceiling placed on SLS rates?
A No direct ceiling for SLS rates exists; however, the regional center's latitude in providing for the costs of any consumer's supported living arrangement is governed by cost comparisons. Established limits on costs may indirectly affect SLS service rates. (Title 17, Section 58617)
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29. Is there a separate SLS rate for a vendor's administrative costs?
A Yes. However, often the SLS rate for direct service includes an amount to cover administrative costs. In that event, no separate administrative rate is permitted. (Title 17, Sections 58660, 58662)
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30. Does a consumer or family member have a say in the SLS rate the consumer's SLS provider gets?
A No. Only the regional center and the SLS vendor are parties to the negotiation of rates. However, the consumer and the family or consumer representative have a right to protest to the regional center when they believe necessary services are not being given to the consumer, for whatever cause.
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31. Under the cost comparison requirements of Title 17, Section 58617(a), if alternative living arrangement costs were estimated at $50,000 annually, is the consumer entitled to have $50,000 spent on the Supported Living Arrangement?
A Yes, but only when the full $50,000 is needed to provide a cost effective Supported Living Arrangement for the consumer. The regional center has a standing obligation to spend only that amount which is required to meet a consumer's SLS needs, even if an alternative living arrangement, including a licensed residential facility placement, were to cost more.
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32. Can a regional center pay for the rent and utilities of a SLS consumer's apartment?
A Not ordinarily. The SLS concept holds that a consumer is responsible for the ordinary costs of living in the community (costs that people without disabilities have to pay) such as food, rent, and utilities. SLS is designed to supply the resources needed to overcome the barriers to living in one's own home that result from the developmental disability (help with daily living activities, for example). But an exception exists, as specified in Title 17, Section 58611(b). Under special conditions specified in this regulation, a regional center director may determine it is appropriate to help pay rent and certain other ordinary living expenses for a SLS consumer.
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33. How are rates for miscellaneous services established?
A The maximum rate of reimbursement for miscellaneous services are established in accordance with the Schedule of Maximum Allowances (SMA) established by the Department of Health Care Services for services provided under the Medi-Cal program, the vendor's usual and customary rate if the SMA does not apply to the services provided, or a negotiated rate if the vendor does not have an established usual and customary rate and the SMA does not apply. (Title 17, Section 57336)
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Last Updated: 3/3/2014