A National Imperative: Joining Forces to Strengthen Human Services in America (Jan 2018)

• • Map the comprehensive portfolio of regulations impacting CBOs, and developed a shared view of the intent and expected benefits associated with each • • Determine where outdated and duplicative regulations can be pared back and overlapping regulations clarified • • Determine where regulations fail to produce intended effects and work to pare back/ replace such regulations • • Determine where regulations are particularly costly, relative to their benefits, and work to pare back/replace/find alternatives • • Even in the absence of any change in regulation, work with peers to develop the least burdensome interpretation and to coordinate oversight wherever possible In addition to this comprehensive review, we recommend two specific areas of regulation for immediate reform. The first relates to litigation risk, which has become a serious issue for CBOs. CBOs provide services to populations including at risk and difficult to serve individuals. Recent litigation has established costly precedent that CBOs can be held financially liable for a wide range of actions by recipients of their services, as well as for events impacting the recipients. (For example, one CBO director shared with us that his organization is facing potential financial ruin as a result of litigation over crimes committed by an individual who had previously received services from the CBO). It is worth bearing in mind that CBOs, in delivering services, are often acting as contracted agents of government entities. These government entities can (and sometimes do) choose to provide services directly, or they can choose to contract with CBOs to do so. Technically and legally, though, the CBOs are viewed as “grant recipients”, distinct from a commercial contractor. When government agencies provide services directly, they often enjoy “sovereign immunity” from litigation in connection to these services. As grant recipients, CBOs are not afforded the same protection, and in a small but growing number of cases, face catastrophic financial exposures as a result. Regulators should explore opportunities to mitigate litigation risks for human services CBOs. Possibilities might include increasing the burden to prove negligence or to otherwise hold CBOs liable; providing CBOs some degree of immunity, much like that enjoyed by governments directly providing services; capping awards and damages resulting from litigation; or creating shared risk funding pools fromwhich claims against CBOs can be paid out. We recommend that the regulatory reform initiative described above include a specific focus on litigation risk to explore solutions to this problem.

The second specific area for regulatory modernization relates to standardizing definitions around performance and returns with input from and in concert with CBOs. The proliferation

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