S4387

An Act concerning direct support professionals and supplementing Title 30 of the Revised Statutes.

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

1. This act shall be known and may be cited as the “Intellectual and Developmental Disabilities Provider Transparency and Financial Accountability Act.”

2. As used in this act:

“Administrative costs” means expenses related to the general management and administration of a provider agency, including but not limited to executive salaries, legal fees, marketing, lobbying, and central office expenses.

“Commissioner” means the Commissioner of Human Services.

“Department” means the Department of Human Services.

“Direct care ratio” means staffing standards that limit the number of individuals with intellectual or developmental disabilities a direct support professional can provide services to at one time and measure the amount of direct care hours provided per individual in a given time period.

“Direct support professional” means a person employed by a provider managed residence or program whose primary job responsibility is to provide support, care, and services directly to individuals with intellectual or developmental disabilities.

“Provider managed residence and program” means a residence, facility, or program that is managed by an individual, entity, or business concern that is licensed, certified, or otherwise authorized by the department to provide services to individuals with developmental or intellectual disabilities.

“Related-party transaction” means any business arrangement between a provider managed residence or program and an entity in which the residence and program’s board members, executives, or their immediate family members have a financial interest. “Standardized chart of accounts” means a uniform listing of financial reporting categories developed by the department to ensure consistent data collection across all provider managed residences and programs.

3. a. Within 180 days of the effective date of this act, the commissioner, in consultation with the State Comptroller, shall develop, and require every provider managed residence and program to submit, a standardized chart of accounts, disaggregated by each residence and program, which shall include, in separate line items, at a minimum, the following information:

(1) base wages, overtime pay, special pay for special or extra work paid, fringe benefits earned, and payroll taxes paid by provider managed residences and programs for direct support professionals;

(2) salaries and bonuses for the five highest-compensated employees of the provider managed residence and program and the total compensation package for any executive earning more than $150,000 annually, including base salary, bonuses, deferred compensation, and fringe benefits;

(3) provider managed residence and program costs, including, but not limited to, capital investments, mortgage payments, rent, utilities, insurance, and taxes;

(4) related-party transaction costs; and

(5) Expenses related to marketing, advertising, public relations legal, consulting, and lobbying services.

b. (1) Beginning on the first day of the fiscal year following the development of the standardized chart of accounts, every provider managed residence and program receiving more than $250,000 annually in State and federal funds to provide services to individuals with developmental or intellectual disabilities shall submit a quarterly expenditure report to the department with the information included in the standardized chart of accounts pursuant to subsection a. of this section.

(2) Each quarterly expenditure report shall also include an attestation from the provider managed residence and program’s chief financial officer confirming the information contained in the report is accurate. Failure to submit a report as required in accordance with paragraph (1) of this subsection within 30 business days of the end of the quarter may result in the department withholding up to 10 percent of the residence and program’s monthly reimbursement until the report is filed.

c. The commissioner shall submit copies of the standardized chart of accounts and quarterly expenditure reports submitted by provider managed residence and program pursuant to subsections a. and b. to the State Comptroller no later than 30 business days after the receipt of the charts and expenditure reports in order that the State Comptroller conduct the financial audits required pursuant to section 5 of this act.

4. a. Every provider managed residence and program shall file an annual disclosure statement with the commissioner identifying all related-party transactions involving State or federal funds. The statement shall include the names of the parties involved, the nature of the transaction, and the total dollar amount exchanged.

b. The provider managed residence and program shall file the annual disclosure statement within six months following the end of the residence and program’s fiscal year.

5. a. The State Comptroller shall conduct annual financial audits, in accordance with prevailing national and professional standards, rules, and practices relating to such audits, of no less than five percent of provider managed residences and programs to verify the accuracy of the information submitted by the residences and programs pursuant to section 3 of this act.

b. If the State Comptroller determines that the audits conducted pursuant to subsection a. of this section contains material misrepresentations, the State Comptroller may direct the department to initiate proceedings to suspend or revoke the provider managed residence and program’s license or certification, if applicable, or impose a civil penalty against the residence and program.

6. a. The department shall create, maintain, and make publicly available, a provider managed residence and program transparency Internet-based web portal, which shall be fully operational within 12 months of the effective date of this act.

b. The web portal shall aggregate the information submitted by every provider managed residence and program pursuant to section 3 this act to:

(1) allow the public to search and view such information in one place; and

(2) assist the public to compare the total revenue spent on direct care and direct support professional wages and administrative costs and expenditures incurred by different residences and programs.

7. Three years following the development of the standardized chart of accounts pursuant to section 3 of this act, the commissioner shall submit a report to the Governor and the Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), with an analysis of the information submitted to the commissioner by provider managed residences and programs pursuant to section 3 of this act. The analysis shall, at a minimum:

a. determine the average percentage of revenue spent on direct care and provide recommendations on whether a mandatory direct care ratio or administrative cost cap is necessary to increase the salaries of direct support professionals employed by provider managed residences and programs while also ensuring the fiscal health of provider managed residences and programs;

b. compare the percentage of total revenue spent on the compensation paid to direct support professionals employed by provider managed residences and programs versus administrative costs and expenditures incurred by such residences and programs; and

c. comprise of recommendations concerning adjustments to payment structures and reimbursement rates for, and wages paid to, direct support professionals employed by provider-managed residences and programs.

8. Pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), the Department of Human Services shall adopt any rules and regulations necessary to effectuate the purposes of this act.

9. This act shall take effect on the first day of the third month after enactment.

STATEMENT

This bill, to be known as the “Intellectual and Developmental Disabilities Provider Transparency and Financial Accountability Act,” requires the Commissioner of Human Services (commissioner), in consultation with the State Comptroller, to develop, and every provider managed residence and program to submit, a standardized chart of accounts which includes information enumerated in the bill.

As defined in the bill, “provider managed residence and program” means a residence, facility, or program that is managed by an individual, entity, or business concern that is licensed, certified, or otherwise authorized by the Department of Human Services (department) to provide services to individuals with developmental or intellectual disabilities.

Following the development of the standardized chart of accounts, provider managed residences and programs receiving more than $250,000 annually in State and federal funds are to submit quarterly expenditure reports to the department. If the residences and programs fail to submit the report, part of their monthly reimbursements could be withheld until the report is filed.

The bill stipulates that provider managed residences and programs file with the commissioner an annual disclosure statement identifying all related-party transactions involving State or federal funds.

The bill requires the State Comptroller to: (1) conduct annual financial audits for a certain percentage of provider managed residences and programs to verify the accuracy of the information contained in the audits, and (2) permit the department to suspend or revoke residence and program licenses or certifications or impose a civil penalty if the audits contain material misrepresentations.

Under the bill’s provisions, the department is to: (1) create, maintain, and make publicly available, a provider managed residence and program transparency Internet-based web portal; and (2) submit a report to the Governor and the Legislature with an analysis of the information submitted to the commissioner by provider managed residences and programs pursuant to the bill.