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OLR Bill Analysis
sSB 432 (File 397, as amended by Senate "A")*
AN ACT CONCERNING STATE CONTRACTS WITH NONPROFIT
HUMAN SERVICES PROVIDERS.
SUMMARY
This bill generally requires the Office of Policy and Management
(OPM) secretary to review and report on certain issues that affect
nonprofit human services providers that contract with state agencies.
More specifically, it requires him to report (1) every five years on
whether the contracts adequately compensate the providers for the level
of service expected by their contracting state agency and (2) every three
years on any burdensome or duplicative reporting requirements the
providers must meet for the state.
The bill also generally requires the secretary, to the extent allowed
under federal law, to require that state agencies pay the providers
within 45 days after they deliver their contracted services or submit a
properly completed claim, and subjects them to a law requiring interest
on late payments.
Under the bill, a “nonprofit human services provider” is a nonprofit
entity that contracts with the state to provide health and human services
such as (1) services for people with a physical disability; (2) services for
people with intellectual or developmental disabilities, including autism
spectrum disorder; and (3) behavioral health services. A “state agency”
is any department, board, council, commission, institution, or other
executive branch agency.
*Senate Amendment “A” among other things (1) requires the review
and report on provider compensation to occur every five years, instead
of annually, and to cover a portion of the contracts and agencies; (2)
delays the start of these review and reporting requirements from 2025 2024SB-00432-R01-BA.DOCX
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to 2026; (3) requires agency payments to providers within 45 days,
rather than 30, and subjects them to a law requiring interest on late
payments; and (4) removes a provision that would have required OPM
to review and update the state’s CORE-CT system.
EFFECTIVE DATE: Upon passage, except that the provision that
requires the providers to be paid within 45 days is effective July 1, 2024.
ADEQUATE COMPENSATIO N FOR PROVIDERS
The bill requires the OPM secretary, every five years, to annually
review a portion of the state’s purchase of service contracts and personal
service agreements with nonprofit human services providers to
determine whether their pay rates adequately compensate the providers
for the level of service expected by their contracting state agency. The
review must be done in consultation with representatives of these
providers and examine the contracts and agreements of at least two state
agencies each year. The first review must be completed by January 1,
2026.
Then, starting by February 1, 2026, the secretary must submit a report
to the Human Services, Government Administration and Elections
(GAE), and Appropriations committees every five years. The report
must include (1) a summary of the review, (2) any applicable
recommendations on requiring contracting state agencies to reduce
their contractual expectations if they are not adequately funded by the
contract or agreement, and (3) any recommended legislation needed to
implement the recommendations.
Under the bill, a “purchase of service contract” is a contract between
a state agency and a private provider organization or municipality (but
not an individual) to obtain direct health and human services for agency
clients, but generally not for material goods or administrative, clerical,
training, or consulting services.
BURDENSOME AND DUPLI CATIVE REPORTING REQ UIREMENTS
The bill requires the OPM secretary, starting by January 1, 2025, to
triennially review any reports that nonprofit human services providers 2024SB-00432-R01-BA.DOCX
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must file with state agencies. The review must at least look at (1) how
many reports must be filed, (2) the amount of overlapping information
in them, (3) the time and resources needed to prepare and file them, (4)
why the reports are required, and (5) how state agencies use them. State
agencies and the providers must give the secretary any information he
requests for the review.
The bill requires the secretary to eliminate or consolidate any
reporting requirement that he identifies in the review as unduly
burdensome or duplicative, unless it is (1) needed to prevent fraud or
misuse of funds, (2) required by federal law or regulations to use federal
funds, or (3) required by state law (it is unclear whether the secretary
has the authority to eliminate or consolidate a different agency’s
reporting requirements).
Starting by February 1, 2025, the secretary must triennially submit a
report to the Human Services, GAE, and Appropriations committees.
The report must include a summary of the results of the review, any
reporting eliminated or consolidated as required by the bill (it appears
the bill has an incorrect internal reference), and any recommendations
for legislation needed to eliminate burdensome or duplicative reporting
requirements under state law.
PAYMENTS TO PROVIDER S
By law, the OPM secretary must set uniform policies and procedures
for obtaining, managing, and evaluating the quality and cost
effectiveness of direct health and human services purchased from
private provider organizations or municipalities. Under the bill, these
policies and procedures must include, to the extent allowed under
federal law, a requirement that a private provider organization be paid
for services it delivers under a purchase of service contract within 45
days after receipt of the services or a properly completed claim,
whichever is later. In addition, the payments must be made under the
law on prompt payment by state departments and agencies, which
generally requires state agencies to pay interest on amounts due when
they fail to make timely payments. 2024SB-00432-R01-BA.DOCX
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As under existing law, the secretary must require all state agencies
that purchase direct health and human services to comply with these
policies and procedures.
COMMITTEE ACTION
Government Administration and Elections Committee
Joint Favorable
Yea 19 Nay 0 (03/22/2024)