Bill
S 3755
Allows DHS to seek court-ordered receivership to manage or transfer ownership of underperforming developmental disability providers to protect recipients’ life, health, and safety.
S.3755 — Summary
Overview
- Purpose: Authorizes the Department of Human Services (DHS) to seek court appointment of a receiver for certain low-performing providers of services to individuals with developmental disabilities, to protect recipients and ensure ongoing care and safety.
- Status: Referred to Commerce, Economic Development and Small Business (as of January 29, 2025). Previously introduced Oct. 7, 2024; reported by Senate Health, Human Services and Senior Citizens Committee Dec. 19, 2024.
- Relationship: Similar authority exists for the Attorney General and the Department of Health; this bill extends a similar mechanism to DHS for providers of developmental disability services.
What the bill would do
- Establish a framework for DHS to file a court motion requesting the appointment of a receiver to manage or oversee a provider that delivers services to individuals with developmental disabilities.
- Targeted services include community residences, private residential facilities, day habilitation, individual supports, and other long-term care services (provider-managed services).
- A receiver would oversee both financial and operational aspects to protect recipients’ life, health, and safety.
- The bill sets standards for how motions are filed, how courts decide, and how receivership proceeds, including potential transfer of site ownership and provider-managed services to a new provider approved by DHS.
Key provisions and mechanics
- Definitions (Introduced Version):
- Provider-managed services: various licensed residences and long-term care services.
- Recipient: an eligible individual who has received a provider-managed service.
- Site: location where services are provided.
- Grounds for appointment:
- Pattern or practice of substantial violations of health, safety, or recipient care under federal, state, or local law/regulations, or other conditions dangerous to life/health/safety.
- Conditions must be brought to the owner/provider’s attention and not remedied within a reasonable time, or persist habitually.
- Court proceedings:
- Motion must include material facts, remedial efforts or lack thereof, description of needed remedies, and relief sought.
- Owner/provider defenses: opposition can show conditions do not exist or have been remedied, or conditions are not habitual.
- Court outcomes: either dismissal, appointment of a DHS-approved receiver with relief, or other just relief.
- Receiver order: key elements include
- Turnover of assets to the receiver; compensation for the receiver and professionals from receivership assets.
- Injunctions against interference by owners, providers, or others; authority to pay salaries and retention incentives for staff.
- Limited receiver liability; ability to open bank accounts; required bonds and insurance maintained via receivership property.
- Reports to the court; HIPAA considerations; protections against service disruptions or asset disposals without court approval.
- Potential transfer of ownership and provider-managed services to an approved new provider.
- Remedies if work is not proceeding: the court can issue time-bound conditions or immediately render judgment for appointment of a receiver if needed.
Who is affected
- Agencies: Department of Human Services (primary), and the Judiciary (courts) for receivership proceedings.
- Providers of services to individuals with developmental disabilities and their recipients.
- Potential new provider entities that DHS may approve to take over site ownership and provider-managed services.
Fiscal impact
- Separate fiscal note indicates potential annual state expenditure increases and court costs, both indeterminate and dependent on the number of motions filed and related proceedings.
- DHS additional administrative costs and Judiciary costs would vary year to year.
Additional notes
- Related bill: A 5635 (companion).
- Context: The measure aligns DHS oversight with mechanisms used by the Attorney General and Department of Health to address persistently deficient providers.
This summary reflects the introduced and committee-reported language and the fiscal analysis as of the latest available documents.
Compiled from official sources — confirm details with the bill’s official record.
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