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(a) The regional center shall monitor, evaluate, and audit habilitation services providers for program effectiveness, using performance criteria that include, but are not limited to, all of the following:
(1) Service quality.
(2) Protections for individuals receiving services.
(3) Compliance with applicable service standards established by the department. The department shall, in consultation with regional centers, providers, and other stakeholders, establish the service standards no later than September 1, 2027. The service standards shall be designed to promote the provision of quality services that enhance individual outcomes while maintaining compliance with federal requirements. From September 2026 until September 2027, the department shall update the Legislature quarterly on progress toward establishment of the service standards, including any considerations or concerns raised by regional centers, providers, and the community.
(b) (1) The regional center may impose immediate sanctions on providers of work activity programs and supported employment programs for noncompliance with service standards contained in regulations adopted by the department, and for safety violations that pose a threat to individuals of habilitation services.
(2) Sanctions include, but are not limited to, any of the following:
(A) A moratorium on new referrals.
(B) Imposition of a corrective plan as specified in regulations.
(C) Removal of individuals from a service area where dangerous conditions or abusive conditions exist.
(D) Termination of vendorization.
(c) A moratorium on new referrals may be the first formal sanction to be taken except in instances in which individuals are at imminent risk of abuse or other harm. When the regional center determines a moratorium on new referrals to be the first formal sanction, a corrective action plan shall be developed. The moratorium shall be lifted only when the conditions cited are corrected per a corrective action plan.
(d) A corrective action plan is a formal sanction, that may be imposed either simultaneously with a moratorium on new referrals, or as a single sanction in circumstances that do not require a moratorium, as determined by the regional center. Noncompliance with the conditions and timelines of the corrective action plan shall result in termination of vendorization.
(e) Removal of individuals from a program shall take place only when dangerous or abusive conditions are present, or upon termination of vendorization. In instances of removal for health and safety reasons, when the corrections are made by the program, as determined adequate by the regional center, individuals may return, at their option.
(f) A provider sanctioned under subparagraph (B) or (C) of paragraph (2) of subdivision (b) may request an administrative review, as specified in Section 4648.1.
(g) A provider sanctioned under subparagraph (D) of paragraph (2) of subdivision (b) shall have a right to a formal review by the Office of Administrative Hearings under Chapter 4 (commencing with Section 11370) of Part 1 of Division 3 of Title 2 of the Government Code.
(h) Effective July 1, 2004, if a habilitation services provider is under sanction under former Section 19354.5, the provider shall complete the requirements of the corrective action plan or any other terms or conditions imposed upon it as part of the sanctions. At the end of the term of the corrective action plan or other compliance requirements, the services provider shall be evaluated by the regional center based upon the requirements in this section.