Orientation to Executive Order 38

1. Orientation to Executive Order 38 Michael Seereiter Director of Planning, NYS Office of Mental Health and EO #38 Implementation Lead

2. Presentation Contents • EO 38 Language • Status of Regulations • Key Elements • Timeline for Implementation • Responsibility of Providers • EO 38 Website/Waiver Application Portal • Preliminary Guidelines • EO 38 Worksheets • Waiver Application Submission Process • Waiver Review Process

3. EO #38 Language Issued January 18, 2012: “…prevent public funds from being diverted to excessive compensation and unnecessary administrative costs, and … ensure that taxpayer dollars are being used to help New Yorkers in need.”

4. Status of Regulations • Drafts published: May 2012, October 2012, March 2013, and April 2013 (DOH only) • Final Regulations published May 29, 2013 • Regulations become effective July 1, 2013 • Applicability of regulatory limits on Administrative Expenses and Executive Compensation take effect on the first day of the Covered Provider’s Covered Reporting Period on or after July 1, 2013

5. Status of Regulations, cont. • Agencies that published draft regulations: • Agriculture & Markets • Division of Criminal Justice Services • Department of Corrections and Community Supervision • Department of Health • Department of State • Homes and Community Renewal • Office for the Aging • Office of Alcoholism and Substance Abuse Services • Office of Children and Family Services • Office of Mental Health • Office for People with Developmental Disabilities • Office of Temporary and Disability Assistance • Office of Victim Services

6. Key Elements of Regulations • EO #38 applies to Covered Providers, which are individuals/entities: • That are not exempt under the regulations, • That receive State Funds / State Authorized Payments (SF/SAP) • To render Program Services during the Covered Reporting Period, • That received at least an average of $500K in SF/SAP in the Covered Reporting Period and the one-year period immediately prior, and • For which the SF/SAP received was at least 30% of total in-state revenue in the Covered Reporting Period and the one-year period immediately prior. Limitations apply only to individuals/entities that qualify as a Covered Provider for the Covered Reporting Period

7. Steps to Determine Covered Provider Status 1. Governmental Exemption? 2. Covered Reporting Period and One-Year Period Immediately Preceding Determination – Cost Report period, or fiscal year/calendar year 3. Program Services provided in CRP? 4. Other Exemptions? e.g. Primarily products v. services, Specific child care subsidies, DOH and OCFS specific exemptions 5. State Funds/State-Authorized Payments (SF/SAP) – Calculate for CRP and one-year period immediately prior from list of government programs, eliminating excluded amounts 6. $500,000 Test – Average annual amount of SF/SAP received $500,000 or greater in CRP and one-year period immediately prior? 7. 30% Test – At least 30% of in-state revenues received in CRP and one-year period immediately Preceding from SF/SAP?

8. Key Elements – Administrative Expenses Limitations • Must not exceed 25% for a Covered Reporting Period beginning between July 1, 2013 and June 30, 2014; • Must not exceed 20% for a Covered Reporting Period beginning between July 1, 2014 and June 30, 2015; and, • Must not exceed 15% for a Covered Reporting Period beginning July 1, 2015 or thereafter.

9. Key Elements – Executive Compensation Limitations • Must not exceed $199K if compensating only with SF/SAP • If Executive Compensation exceeds $199,000 using sources of funding other than SF/SAP: 1) the compensation must not exceed the 75th percentile of compensation for comparable executives in comparable providers; AND, 2) must be reviewed and approved by the Board of Directors

10. Key Elements – EO #38 Disclosure Form • Covered Providers must submit EO #38 Disclosure Form no later than 180 days after the last day of the Covered Reporting Period (July 1, 2014, at the earliest). • Disclosure Form will require attestation from Covered Provider about Administrative Expenses and Executive Compensation paid • Limits will be enforced, unless a waiver was granted.

11. Key Elements - Waivers • Applications for waiver from Executive Compensation and Administrative Expenses limits may be submitted starting July 1, 2013 • Waiver submission may occur at any point, but no later than the submission of the EO #38 Disclosure Form for the Covered Reporting Period • Waivers granted before last day of Covered Reporting Period based on projected data will be conditional and will need to be substantiated with actual data submitted on the EO #38 Disclosure Form.

12. Key Elements – Corrective Action Plans and Penalties • Upon EO #38 Disclosure Form submission and finding of non-compliance, Covered Provider may be required to develop and implement Corrective Action Plan • If Corrective Action Plan not implemented properly, Covered Provider may be subject to penalties

13. Implementation Timeline 2013 June • EO #38 website launched • Publication of Preliminary Guidelines for affected parties July 1 • Regulatory limitations go into effect • Waiver application web portal opens and submissions begin; State agency reviews begin

14. Implementation Timeline 2014 June • Publication of Final Guidelines for affected parties • EO #38 Disclosure Form portal (with revised Waiver application submission capacity) opens July 1 • EO #38 Disclosure Form filings begin (will be a different process than for Waiver Applications) • Waiver applications submissions continue

15. Responsibility of Providers • Read and understand regulations • Read and utilize Preliminary Guidance and worksheets • For those that expect to qualify as a Covered Provider, ensure compliance with regulatory limits once the Covered Reporting Period begins on or after July 1, 2013, and/or seek a waiver.

16. EO 38 Website/Waiver Application Portal

17. Preliminary Guidelines For Providers • Published June 2013 • Step-by-step guidance and worksheets to assist with: • Covered Provider Determination • SF/SAP Calculation • Administrative Expenses and Program Services Expenses Calculation • Covered Executive Determination and Executive Compensation Calculation • Waiver application submission instructions

18. EO 38 Worksheets • Covered Provider Determination Worksheet • State Funds/State-Authorized Payments (SF/SAP) Worksheet • Administrative Expenses and Program Services Expenses Calculation Worksheet • Executive Compensation Calculation Worksheet

19. Waiver Application Submission Process 1. User Account Creation • Covered Provider submits request for account via EO #38 web portal • Request routed to State agency identified by Covered Provider as Lead agency (greatest amount of SF/SAP) • Agency verifies Lead agency status (discussion with other agencies) • Lead agency creates user account for Covered Provider 2. Submission of Waiver Applications • Provider submits waiver application via EO #38 web portal • Lead agency notifies other agencies of pending waiver application ready for review

20. Waiver Review Process • Waiver application submitted to Lead Agency • Lead agency assembles all other State agency reviews, if applicable • Once waiver application determination made, Lead Agency notifies Covered Provider • Lead Agency serves as point of contact for Covered Provider throughout waiver process (determinations, additional information requests), for submission of the EO 38 Disclosure Form, and, if necessary, into Corrective Action Plan and Penalties period.