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A 3001

LEGISLATURE AND JUDICIARY BUDGET

2025 Regular Session

Strengthens DHS/DDD provider oversight with quarterly expenditure reports, a 10% G&A cap, random OSC reviews, unannounced site visits, and surveys to improve outcomes.

SUBSTITUTED BY S3001A
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Bill Summary · A 3001

Summary — A3001 (A3001A): Legislature and Judiciary Budget — Contracting by Department of Human Services (Division of Developmental Disabilities)

Status: Introduced Jan 9, 2024; printed as A3001A (May 7, 2025); substituted by S3001A (May 8, 2025). Referred to committee and to Rules; reported and ordered to third reading prior to substitution.

Purpose

To strengthen fiscal and programmatic oversight of providers who contract with the New Jersey Department of Human Services (DHS), Division of Developmental Disabilities (DDD), by requiring regular financial reporting, capping administrative overhead, instituting performance monitoring (including surveys and unannounced visits), and exploring outcome-based contracting.

Key provisions

  • Definitions: clarifies terms including “provider,” “expenditure report,” and “negative contracting action” (conditional renewal, non-renewal, probation, termination, or nonpayment pending compliance).
  • Expenditure reports:
    • Providers must submit an expenditure report to DDD within 30 days after the end of each quarter (or more frequently if required).
    • Failure to submit subjects the contract to negative contracting action.
    • Reports must include summary info by budget category (equipment, personnel, supplies, general & administrative (G&A), etc.).
  • G&A cap:
    • New and renewed DHS contracts must limit State-funded general and administrative costs to no more than 10% of a provider’s annual State contract expenditures.
    • DHS must attempt to modify existing contracts that exceed the 10% cap; exceeding the cap is grounds for negative contracting action.
  • Financial and compliance review:
    • The Office of the State Comptroller (OSC) will perform random reviews of expenditure reports; DDD will perform ongoing reviews.
    • Reviews must assess appropriateness and documentation of expenditures and G&A compliance.
    • OSC must report findings under its statutory reporting authority.
  • Program monitoring and quality measures:
    • Annual, unannounced site visits by a contract administrator to verify services are delivered and that they support clients’ individualized habilitation plan goals. Visit reports are due to the DDD director (or designee) within 30 days.
    • Before contract renewal, the director will evaluate visit reports and survey summaries.
    • Contracts may be non-renewed or subject to other negative actions if provider performance prevents clients from attaining habilitation plan goals.
  • Surveys:
    • DDD must create and distribute survey forms to (a) employees/people who deliver contracted services and (b) parents/legal guardians of clients receiving services.
    • Providers are required to have employees complete the survey; parents/guardians also submit completed forms to DDD. DDD compiles survey results for contract decisions.
  • Due process:
    • Before taking negative contracting action, DHS must give notice (personal or by mail, return receipt requested) and an opportunity for a hearing under the Administrative Procedure Act.
  • Outcome-based contracting:
    • DHS must examine feasibility of adopting an outcome-based payment system for DDD (details truncated in introduced text).

Who is affected

  • For‑profit and nonprofit providers under contract with DHS/DDD to serve people with developmental disabilities.
  • Individuals with developmental disabilities, their parents/guardians, and employees who provide contracted services.
  • DHS/DDD and the Office of the State Comptroller (responsible for oversight activities).

Procedural / timeline notes

  • Introduced in Assembly (Jan 9, 2024); referred to Assembly Aging & Human Services, then Ways & Means; printed as A3001A May 7, 2025.
  • Substituted by companion S3001A on May 8, 2025 — indicating the Senate version was used as the vehicle going forward.

Potential impact

  • Increased financial transparency and accountability for providers through quarterly reporting and OSC reviews.
  • Potential budgetary pressure on providers whose administrative costs exceed the 10% cap; contracts may be modified or not renewed.
  • Greater emphasis on measurable service outcomes and quality through unannounced monitoring visits and surveys; may lead to future payment reforms if outcome-based contracting is adopted.
  • Providers will have procedural protections (notice and hearing) before penalties are imposed.

Related bills

  • S3001 (companion, substituted vehicle)
  • Prior-session: S8301, A8801

(Prepared from the A3001A introduced text and legislative actions up to substitution by S3001A.)

Compiled from official sources — confirm details with the bill’s official record.

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