ARTICLE 3. Rates of Payment for Community Living Facilities [4680. - 4684.]

Cal. Welfare and Institutions Code - WIC 3.

in effect

Cal. Welfare and Institutions Code - WIC § 4680. Section 4680.

In order to assure the availability of a continuum of community living facilities of good quality for persons with developmental disabilities, and to ensure that persons placed out of home are in the most appropriate, least restrictive living arrangement, the department shall establish and maintain an equitable system of payment to providers of such services. The system of payment shall include provision for a rate to ensure that the provider can meet the special needs of persons with developmental disabilities and provide quality programs required by this article.

Cal. Welfare and Institutions Code - WIC § 4681.1. Section 4681.1.

(a) The department shall adopt regulations that specify rates for community care facilities serving persons with developmental disabilities. The implementation of the regulations shall be contingent upon an appropriation in the annual Budget Act for this purpose. These rates shall be calculated on the basis of a cost model designed by the department that ensures that aggregate facility payments support the provision of services to each person in accordance with his or her individual program plan and applicable program requirements. The cost model shall reflect cost elements that shall include, but are not limited to, all of the following: (1) “Basic living needs” include utilities, furnishings, food, supplies, incidental transportation, housekeeping, personal care items, and other items necessary to ensure a quality environment for persons with developmental disabilities. The amount identified for the basic living needs element of the rate shall be calculated as the average projected cost of these items in an economically and efficiently operated community care facility. (2) “Direct care” includes salaries, wages, benefits, and other expenses necessary to supervise or support the person’s functioning in the areas of self-care and daily living skills, physical coordination mobility, and behavioral self-control, choice making, and integration. The amount identified for direct care shall be calculated as the average projected cost of providing the level of service required to meet each person’s functional needs in an economically and efficiently operated community care facility. The direct care portion of the rate shall reflect specific service levels defined by the department on the basis of relative resident need and the individual program plan. (3) “Special services” include specialized training, treatment, supervision, or other services that a person’s individual program plan requires to be provided by the residential facility in addition to the direct care provided under paragraph (2). The amount identified for special services shall be calculated for each individual based on the additional services specified in the person’s individual program plan and the prevailing rates paid for similar services in the area. The special services portion of the rate shall reflect a negotiated agreement between the facility and the regional center in accordance with Section 4648. (4) “Indirect costs” include managerial personnel, facility operation, maintenance and repair, other nondirect care, employee benefits, contracts, training, travel, licenses, taxes, interest, insurance, depreciation, and general administrative expenses. The amount identified for indirect costs shall be calculated as the average projected cost for these expenses in an economically and efficiently operated community care facility. (5) “Property costs” include mortgages, leases, rent, taxes, capital or leasehold improvements, depreciation, and other expenses related to the physical structure. The amount identified for property costs shall be based on the fair rental value of a model facility that is adequately designed, constructed, and maintained to meet the needs of persons with developmental disabilities. The amount identified for property costs shall be calculated as the average projected fair rental value of an economically and efficiently operated community care facility. (b) The cost model shall take into account factors that include, but are not limited to, all of the following: (1) Facility size, as defined by the department on the basis of the number of facility beds licensed by the State Department of Social Services and vendorized by the regional center. (2) Specific geographic areas, as defined by the department on the basis of cost of living and other pertinent economic indicators. (3) Common levels of direct care, as defined by the department on the basis of services specific to an identifiable group of persons as determined through the individual program plan. (4) Positive outcomes, as defined by the department on the basis of increased integration, independence, and productivity at the aggregate facility and individual consumer level. (5) Owner-operated and staff-operated reimbursement, which shall not differ for facilities that are required to comply with the same program requirements. (c) The rates established for individual community care facilities serving persons with developmental disabilities shall reflect all of the model cost elements and rate development factors described in this section. The cost model design shall include a process for updating the cost model elements that address variables, including, but not limited to, all of the following: (1) Economic trends in California. (2) New state or federal program requirements. (3) Changes in the state or federal minimum wage. (4) Increases in fees, taxes, or other business costs. (5) Increases in federal supplemental security income/state supplementary program for the aged, blind, and disabled payments. (d) Rates established for persons with developmental disabilities who are also dually diagnosed with a mental health disorder may be fixed at a higher rate. The department shall work with the State Department of Health Care Services to establish criteria upon which higher rates may be fixed pursuant to this subdivision. The higher rate for persons with developmental disabilities who are also dually diagnosed with a mental health disorder may be paid when requested by the director of the regional center and approved by the Director of Developmental Services. (e) By January 1, 2001, the department shall prepare proposed regulations to implement the changes outlined in this section. The department may use a private firm to assist in the development of these changes and shall confer with consumers, providers, and other interested parties concerning the proposed regulations. By May 15, 2001, and each year thereafter, the department shall provide the Legislature with annual community care facility rates, including any draft amendments to the regulations as required. By July 1, 2001, and each year thereafter, contingent upon an appropriation in the annual Budget Act for this purpose, the department shall adopt emergency regulations that establish the annual rates for community care facilities serving persons with developmental disabilities for each fiscal year. (f) During the first year of operation under the revised rate model, individual facilities shall be held harmless for any reduction in aggregate facility payments caused solely by the change in reimbursement methodology.

Cal. Welfare and Institutions Code - WIC § 4681.3. Section 4681.3.

(a) Notwithstanding any other provision of this article, for the 1996–97 fiscal year, the rate schedule authorized by the department in operation June 30, 1996, shall be increased based upon the amount appropriated in the Budget Act of 1996 for that purpose. The increase shall be applied as a percentage, and the percentage shall be the same for all providers. (b) Notwithstanding any other provision of this article, for the 1997–98 fiscal year, the rate schedule authorized by the department in operation on June 30, 1997, shall be increased based upon the amount appropriated in the Budget Act of 1997 for that purpose. The increase shall be applied as a percentage, and the percentage shall be the same for all providers. (c) Notwithstanding any other provision of this article, for the 1998–99 fiscal year, the rate schedule authorized by the department in operation on June 30, 1998, shall be increased commencing July 1, 1998, based upon the amount appropriated in the Budget Act of 1998 for that purpose. The increase shall be applied as a percentage, and the percentage shall be the same for all providers. (d) Notwithstanding any other provision of this article, for the 1998–99 fiscal year, the rate schedule authorized by the department in operation on December 31, 1998, shall be increased January 1, 1999, based upon the cost-of-living adjustments in the Supplemental Security Income/State Supplementary Program for the Aged, Blind, and Disabled appropriated in the Budget Act of 1998 for that purpose. The increase shall be applied as a percentage and the percentage shall be the same for all providers. (e) Notwithstanding any other provision of this article, for the 1999–2000 fiscal year, the rate schedule authorized by the department in operation on June 30, 1999, shall be increased July 1, 1999, based upon the amount appropriated in the Budget Act of 1999 for that purpose. The increase shall be applied as a percentage and the percentage shall be the same for all providers. (f) In addition, commencing January 1, 2000, any funds available from cost-of-living adjustments in the Supplemental Security Income/State Supplementary Payment (SSI/SSP) for the 1999–2000 fiscal year shall be used to further increase the community care facility rate. The increase shall be applied as a percentage, and the percentage shall be the same for all providers. (g) Notwithstanding any other provision of law or regulation, for the 2006–07 fiscal year, the rate schedule in effect on June 30, 2006, shall be increased on July 1, 2006, by 3 percent, subject to funds specifically appropriated for this increase in the Budget Act of 2006. The increase shall be applied as a percentage and the percentage shall be the same for all providers. Any subsequent increase shall be governed by Sections 4681.5 and 4681.6.

Cal. Welfare and Institutions Code - WIC § 4681.4. Section 4681.4.

(a) Notwithstanding any other provision of this article, for the 1998–99 fiscal year, the rate schedule increased pursuant to subdivision (d) of Section 4681.3 shall be increased by an additional amount on January 1, 1999, based upon the amount appropriated in the Budget Act of 1998 for that purpose. The rate increase permitted by this section shall be applied as a percentage, and the percentage shall be the same for all providers. (b) Notwithstanding any other provision of this article, for the 1999–2000 fiscal year, the rate schedule authorized by the department in operation on December 31, 1999, shall be increased on January 1, 2000, based upon the amount appropriated in the Budget Act of 1999 for that purpose. The rate increase permitted by this section shall be applied as a percentage and the percentage shall be the same for all providers. (c) In order to help reduce direct care staff turnover and improve overall quality of care in Alternative Residential Model (ARM) facilities, funds appropriated by the Budget Act of 1998 and the Budget Act of 1999 to increase facility rates effective January 1, 1999, excluding any additional funds appropriated due to increases in benefits under Article 5 (commencing with Section 12200) of Chapter 3 of Part 3 of Division 9, and January 1, 2000, respectively, shall be used only for any of the following: (1) Increasing direct care staff salaries, wages, and benefits. (2) Providing coverage while direct care staff are in training classes or taking a training or competency test pursuant to Section 4681.5. (3) Other purposes approved by the director. (d) ARM providers shall report to regional centers, in a format and frequency determined by the department, information necessary for the department to determine, through the regional center, compliance with subdivision (c), including, but not limited to, direct care staff salaries, wages, benefits, and staff turnover. (e) The department shall adopt emergency regulations in order to implement this section, which shall include, but are not limited to, the following: (1) A process for enforcing the requirements of subdivisions (c) and (d). (2) Consequences to an ARM provider for failing to comply with the requirements of subdivisions (c) and (d), including a process for obtaining approval from the director for the expenditure of funds for other purposes, as permitted by paragraph (3) of subdivision (c). (3) A process for adjudicating provider appeals.

Cal. Welfare and Institutions Code - WIC § 4681.5. Section 4681.5.

(a) Notwithstanding any other law or regulation, a regional center shall not approve a service level for a residential service provider, as defined in Section 56002 of Title 17 of the California Code of Regulations, if the approval would result in an increase in state costs or the rate to be paid to the provider that is greater than the rate that is in effect on June 30, 2008, or, for residential service providers subject to subdivision (b), unless the regional center demonstrates to the department that the approval is necessary to protect the consumer’s health or safety and the department has granted prior written authorization. (b) Notwithstanding subdivision (a) or any other law or regulation, the department shall, effective July 1, 2016, establish a rate schedule for residential community care facilities vendored to provide services to a maximum of four persons with developmental disabilities. (c) Community care facilities with rates established pursuant to subdivision (b) are subject to the regulatory requirements contained in Subchapter 4 (commencing with Section 56001) of Chapter 3 of Division 2 of Title 17 of the California Code of Regulations. (d) Rate changes made as a result of implementing the rate schedule established pursuant to subdivision (b) for community care facilities vendored to provide services to a maximum of four persons with developmental disabilities are not subject to the restrictions of subdivision (a) if the approved service level is not higher than the service level in effect at the time of the change. (e) No later than February 1, 2017, regional centers shall report to the department on the number of residential community care facilities with rates established pursuant to subdivision (b). The report shall include, but not be limited to, both of the following: (1) The number of facilities vendored since July 1, 2016, by service level and vendored capacity. (2) The number of facilities vendored prior to July 1, 2016, that have subsequently been approved for a new rate, by service level, vendored capacity, and prior vendored capacity, if applicable.

Cal. Welfare and Institutions Code - WIC § 4681.6. Section 4681.6.

(a) Notwithstanding any other law or regulation, commencing July 1, 2008: (1) A regional center shall not pay an existing residential service provider, for services where rates are determined through a negotiation between the regional center and the provider, a rate higher than the rate in effect on June 30, 2008, unless the increase is required by a contract between the regional center and the vendor that is in effect on June 30, 2008, or the regional center demonstrates that the approval is necessary to protect the consumer’s health or safety and the department has granted prior written authorization. (2) A regional center shall not negotiate a rate with a new residential service provider, for services where rates are determined through a negotiation between the regional center and the provider, that is higher than the regional center’s median rate for the same service code and unit of service, or the statewide median rate for the same service code and unit of service, whichever is lower. The unit of service designation shall conform with an existing regional center designation or, if none exists, a designation used to calculate the statewide median rate for the same service. The regional center shall annually certify to the department its median rate for each negotiated rate service code, by designated unit of service. This certification shall be subject to verification through the department’s biennial fiscal audit of the regional center. (b) Notwithstanding subdivision (a), commencing January 1, 2017, regional centers may negotiate a rate adjustment with residential service providers regarding rates that are otherwise restricted pursuant to subdivision (a), if the adjustment is necessary in order to pay employees no less than the minimum wage as established by Section 1182.12 of the Labor Code, as amended by Chapter 4 of the Statutes of 2016, and only for the purpose of adjusting payroll costs associated with the minimum wage increase. The rate adjustment shall be specific to the unit of service designation that is affected by the increased minimum wage, shall be specific to payroll costs associated with any increase necessary to adjust employee pay only to the extent necessary to bring pay into compliance with the increased state minimum wage, and shall not be used as a general wage enhancement for employees paid above the minimum wage. Regional centers shall maintain documentation on the process to determine, and the rationale for granting, any rate adjustment associated with the minimum wage increase. (c) Notwithstanding subdivision (a), commencing July 1, 2015, regional centers may negotiate a rate adjustment with residential service providers regarding rates that are otherwise restricted pursuant to subdivision (a), if the adjustment is necessary to implement Article 1.5 (commencing with Section 245) of Chapter 1 of Part 1 of Division 2 of the Labor Code, as added by Chapter 317 of the Statutes of 2014. The rate adjustment may be applied only if a minimum of 24 hours or three days of paid sick leave per year was not a benefit provided to employees as of June 30, 2015, and shall be specific to payroll costs associated with any increase necessary to compensate an employee up to a maximum of 24 hours or three days of paid sick leave in each year of employment. (d) For purposes of this section, “residential service provider” includes Adult Residential Facilities for Persons with Special Health Care Needs, as described in Section 4684.50. (e) This section shall not apply to those services for which rates are determined by the State Department of Health Care Services, or the State Department of Developmental Services, or are usual and customary.

Cal. Welfare and Institutions Code - WIC § 4681.7. Section 4681.7.

(a) Effective July 1, 2011, in order to maintain a consumer’s preferred living arrangement and adjust the residential services and supports in accordance with changing service needs identified in the individual program plan (IPP), a regional center may enter into a signed written agreement with a residential service provider for a consumer’s supervision, training, and support needs to be provided at a lower level of payment than the facility’s designated Alternative Residential Model (ARM) service level. The regional center signed written agreement with the provider shall ensure all of the following: (1) Services provided to other facility residents comply with the applicable service requirements for the facility’s approved service level pursuant to Section 4681.1 and Title 17 of the California Code of Regulations. (2) Protection of the health and safety of each facility resident. (3) Identification of the revised services and supports to be provided to the consumer within the ARM rate structure as part of the establishment or revision of an IPP. (4) Identification of the rate. (b) If the service needs of a consumer referred to in subdivision (a) change such that the consumer requires a higher level of supervision, training, and support, the regional center shall adjust the consumer’s service level and rate to meet the consumer’s changing needs. (c) A regional center is authorized to enter into a signed written agreement with a residential service provider for a consumer’s needed services at a lower level of payment and staffing without adjusting the facility’s approved service level. A signed written agreement for a lower level of payment and staffing may only be entered into when a regional center, a consumer, and the facility agree that the facility can safely provide the service and supports needed by the consumer, as identified in the IPP, at the lower level of payment. (d) Any negotiated lower level of payment pursuant to this section shall be consistent with the payment options within the ARM rate structure and with associated ARM service level requirements.

Cal. Welfare and Institutions Code - WIC § 4682. Section 4682.

Under no circumstances shall the rate of state payment to any provider of out-of-home care exceed the average amount charged to private clients residing in the same facility, nor shall the monthly rate of state payment to any such facility, with the exception of a licensed acute care or emergency hospital, exceed the average monthly cost of services for all persons with developmental disabilities who reside in state hospitals.

Cal. Welfare and Institutions Code - WIC § 4683. Section 4683.

It is the intent of the Legislature that rates of payment for out-of-home care shall be established in such ways as to assure the maximum utilization of all federal and other sources of funding, to which persons with developmental disabilities are legally entitled, prior to the commitment of state funds for such purposes.

Cal. Welfare and Institutions Code - WIC § 4684. Section 4684.

(a) Notwithstanding any other law, the cost of providing 24-hour out-of-home nonmedical care and supervision in community care facilities licensed or approved pursuant to Chapter 3 (commencing with Section 1500) of Division 2 of the Health and Safety Code shall be funded by the Aid to Families with Dependent Children-Foster Care (AFDC-FC) program pursuant to Section 11464, for children who are both AFDC-FC recipients and regional center consumers. (b) The cost of providing adoption assistance benefits shall be funded by the Adoption Assistance Program (AAP) under Section 16121, for children who are both AAP recipients and regional center consumers. (c) (1) For regional center consumers who are recipients of AFDC-FC benefits, regional centers shall purchase or secure the services that are contained in the child’s Individualized Family Service Plan (IFSP) or Individual Program Plan (IPP) but that are not allowable under federal or state AFDC-FC provisions. (2) For regional center consumers who are recipients of AAP benefits, regional centers shall purchase or secure the services that are contained in the child’s IFSP or IPP. (3) For regional center consumers receiving services under paragraph (1) or (2), these services shall be separately purchased or secured by the regional center, pursuant to Sections 4646 to 4648, inclusive, Section 4685, and Sections 95018 and 95020 of the Government Code. (4) Regional centers shall accept referrals for evaluations of AFDC-FC-eligible children and children receiving AAP benefits for the purpose of determining eligibility for regional center services, pursuant to Section 4642. Regional centers shall assist county welfare and probation departments in identifying appropriate placement resources for children who are recipients of AFDC-FC and who are eligible for regional center services. (d) (1) For purposes of this section, children who are recipients of AFDC-FC and regional center services shall not be prohibited from receiving in-home respite services, as defined in subdivision (a) of Section 4690.2, if they are residing with any of the following: (A) A relative, as defined in paragraph (2) of subdivision (h) of Section 319, or, in the case of an Indian child, an extended family member, as defined in subdivision (c) of Section 224.1. (B) A nonrelative extended family member, as defined in Section 362.7. (C) A resource family, as defined in paragraph (1) of subdivision (c) of Section 16519.5. (D) A tribally approved home, as defined in subdivision (r) of Section 224.1. (E) A foster family home, as defined in paragraph (5) of subdivision (a) of Section 1502 of the Health and Safety Code, that is not vendored by the regional center as a residential facility. (F) A small family home, as defined in paragraph (6) of subdivision (a) of Section 1502 of the Health and Safety Code, that is not vendored by the regional center as a residential facility. Regional centers shall assess a small family home for service need, including verification of the small family home’s staffing level, through the individual program plan (IPP) process pursuant to Sections 4646 and 4648 or the individualized family service plan (IFSP) process pursuant to Sections 95018 and 95020 of the Government Code, as applicable, prior to approving in-home respite services for children residing in a licensed small family home. (2) AFDC-FC and AAP benefits shall be for care and supervision, as defined in subdivision (b) of Section 11460, and the regional centers shall separately purchase or secure other services contained in the child’s IFSP or IPP pursuant to Section 4646 to 4648, inclusive, Section 4685, and Sections 95018 and 95020 of the Government Code. Notwithstanding any other law or regulation, the receipt of AFDC-FC or AAP benefits shall not be cause to deny any other services that a child or family for which the child or family is otherwise eligible pursuant to this division. (e) This section shall apply to all recipients of AFDC-FC and AAP benefits, including those with rates established prior to the effective date of the act that adds this subdivision, pursuant to Sections 11464 and 16121. (f) For purposes of this section, the terms “child” and “children” include a nonminor dependent, as defined in subdivision (v) of Section 11400. The Legislature finds and declares that this subdivision is declarative of, and clarifies, existing law. (g) Regulations adopted by the department pursuant to this section shall be adopted as emergency regulations in accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, and for the purposes of that chapter, including Section 11349.6 of the Government Code, the adoption of these regulations is an emergency and shall be considered by the Office of Administrative Law as necessary for the immediate preservation of the public peace, health, safety, and general welfare.

Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026