May 19, 2004

The Hon. Wes Chesbro, Chair
Senate Budget and Fiscal Review Committee
State Capitol, Room 4203
Sacramento, CA 95814

RE: Comments on Administration's IHSS May Revise proposals

Dear Senator Chesbro:

United Domestic Workers of America is pleased that the Administration has elected to seek a federal waiver for the IHSS Residual caseload. UDW was one of the early voices encouraging this action. This prudent move will enable California's state and county governments to conserve scarce resources while maintaining service to this fragile population. We offer the following comments on the entire May Revise proposal:

1. The Residual caseload must be protected even if the entire federal waiver is not obtained. Draft language proposed by the Administration indicates that portions of the Residual caseload might summarily be terminated if the portion of the waiver request that covers them is denied. Particularly distressing is their proposal to do so via the adoption of emergency regulations. This is inappropriate, not only because there is no emergency (state funding would still be available), but also because legislative review is required to ensure that these individuals would retain the right to live safely in their own homes, as guaranteed by the U.S. Supreme Court in Olmstead v. L.C. Moreover, as our previous testimony illustrates, eliminating services to this caseload will increase state costs by shifting care to hospitals, nursing homes, Regional Centers and other more expensive modes of care.
   

   Requested Committee Action: Adopt language in budget trailer bill clarifying that should the federal waiver be denied in whole or in part, Residual program services will continue intact.

2. Reduction of State Match for wages above the minimum wage of $6.75 and elimination of the Employer of Record mandate. The most harmful part of this proposal is, of course, its potential impact on worker wages and health care. Reducing IHSS worker wages would exacerbate the shortage of available workers, already cited by CDSS and bolstered through additional research.
   

   Such a reduction in the home care worker labor pool would not only jeopardize care for thousands of severely disabled individuals who already face great difficulty in recruiting and retaining qualified providers but it would also subject the state and counties to multiple lawsuits similar to the successful case that eliminated the proposed cut in Medi-Cal reimbursement rates last summer. Statewide discussions with disability and labor rights advocates indicate that litigation would immediately follow any such reduction in the state match for IHSS wages. A restraining order preventing the implementation of such reductions is foreseeable.

   The Employer of Record was established by bi-partisan action of the Legislature to provide a framework for strengthening services to the IHSS population and enabling local jurisdictions to enact necessary program standards. Eliminating this mandate unwisely reopens questions surrounding legal liability and exposes counties and the state to lawsuits from which they are now immune. It would also remove protections for collective bargaining and well-established market procedures for peaceably resolving labor disputes. As noted above, increased wages are necessary not only for worker welfare but to protect IHSS recipients and safeguard their Olmstead rights. Lowering wages would violate social security law requiring payments to be "consistent with … economy and quality of care," and are sufficient to enlist enough providers so that services are available at a level equal to those available to the general public. It was on this basis that the federal courts denied the 5% reduction in Medi-Cal rates.

   The Administration proposes a quality assurance initiative and then proposes to eliminate the administrative structure necessary to implement such procedures. The Public Authority and agency contract employers of record provide the IHSS infrastructure for worker training, coordination of services, monitoring and program accountability.

   Requested Committee Action: Reject these proposals in their entirety.

3. Shared Domestic Services. The Administration restores funds for Necessary Domestic Services for recipients who live with family members. They would then initiate a request for a waiver from federal comparability requirements. If this waiver were granted, immediate reductions in these services would be made. Although the Administration has clarified the conditions under which these reductions would be made, we are concerned about their implementation in the absence of clarifying regulations. Moreover we are skeptical about the projected savings. As we noted in our earlier publication, the $26.3 million estimate includes federal, state and county funds.

   Requested Committee Action: Adopt budget trailer bill language clarifying that should the federal waiver be denied in whole or in part these domestic services will continue intact.

4. Quality Assurance proposals. The Administration proposes to develop improved program oversight and fraud investigation activities, including training county staff. They estimate that annual savings of $92 million may be possible.

   UDW supports the quality assurance goals and the development of clear and fair guidelines for awarding IHSS hours. More uniform standards may result in decreases or increases in service authorizations. We oppose the imposition of changes in law and regulation via all-county letters and emergency regulations. Utilizing these vehicles to reduce services would violate the Administrative Procedures act, as no emergency exists and eliminate the opportunity for legislative oversight or stakeholder participation, both of which we view as critical to any quality assurance process.

UDW is grateful for your efforts. Your continued vigilance is crucial to protect IHSS workers and consumers. Sincerely,
Ken Seaton-Msemaji President	Fahari Jeffers Secretary-Treasurer