DDS ARFPSHN Vacancy Funding Starts November 1 2026
California DDS has established a vacancy funding process for Adult Residential Facilities for Persons with Special Health Care Needs. Beginning November 1 2026, Regional Centers must use contract line authorizations to support required staffing when an eligible ARFPSHN facility operates below licensed capacity.
The policy responds to a fixed operating requirement. ARFPSHN facilities must maintain licensed nursing staff 24 hours a day, seven days a week, even when a bed is vacant. DDS Directive D 2026 Rates 001 allows a Regional Center to reimburse a higher per person rate for current residents during a limited vacancy period so the facility can maintain required staffing.
Who the policy covers
The directive applies specifically to ARFPSHN facilities, which are licensed to serve up to five adults with developmental disabilities who need 24 hour health care and intensive support. It is not a statewide vacancy payment rule for every adult residential facility, group home or other Regional Center vendor.
How the authorization and payment process works
Regional Centers must establish contract line authorizations that align with the vendor contract term. The authorization must state the total monthly reimbursement and total contractual amount the facility may bill. During an approved reduced census period, the Regional Center may reimburse a higher per person rate for residents who continue to receive services.
DDS explains that this method is not a bed hold payment. Payment is made on behalf of individuals who are receiving services, with the adjusted per person amount supporting the facility's required staffing costs.
The standard ninety day vacancy period
A Regional Center may pay the full facility reimbursement at a reduced census for up to 90 calendar days after an extended reduced census is identified. The facility must maintain all required staffing, and the Regional Center must actively seek to fill the vacancy while continuing communication with DDS.
A home under a current sanction cannot receive full facility reimbursement through this process. During a sanction, the vendor receives only the individual client rate for current residents.
Vacancies beyond ninety days or below half capacity
In rare circumstances, a Regional Center may request DDS approval for vacancy funding beyond 90 days. Prior DDS approval is also required when the facility census falls below 50 percent of licensed capacity, meaning two or fewer residents in a five bed facility.
The request must show that placement was delayed by events outside the control of the Regional Center or provider. DDS examples include:
- Medical or behavioral complexity requiring specialized matching.
- Medical procedures or stabilization required before an identified individual can move into the facility.
The Regional Center request must document active placement efforts, barriers to admission, an expected placement timeline and continued compliance with the staffing requirement.
Information facilities should maintain
The formal monthly report is a Regional Center obligation, but an ARFPSHN provider will likely need to supply timely and consistent data. DDS requires the Regional Center tracker to include the following information for facilities receiving full funding below census capacity.
- Facility name, address and vendor number.
- Date each bed became vacant and the reason for vacancy.
- Current census, licensed capacity and vacancy type.
- Original rate, adjusted vacancy rate and total monthly funding.
- Placement efforts, referrals received and the transition status of an identified person.
- Number of vacancy days, the 90 day expiration date and any DDS approval conditions for extended funding.
Provider action plan before November 1
- Identify current and expected vacancies and confirm when the 90 day period begins.
- Ask the Regional Center for the contract line authorization and confirm the monthly and total authorized amounts in writing.
- Maintain schedules, payroll or other records showing continuous licensed nursing coverage.
- Keep a placement activity log with referrals, matching barriers, follow up dates and expected admission timing.
- Reconcile the adjusted rate, authorization and invoice before billing.
- Escalate early when a vacancy may exceed 90 days or the facility may fall below half capacity, because extended funding requires prior DDS approval.
- Retain all communications and approval conditions with the billing record.
Special transition for three Regional Centers
Golden Gate Regional Center, Regional Center of the East Bay and San Andreas Regional Center must bring existing ARFPSHN reimbursement processes into alignment with the directive. DDS will review and update contract terms specific to those Regional Centers. Facilities working with them should confirm how and when their existing arrangements will move to the required contract line authorization process.
Evidence boundary
The directive creates a process that Regional Centers must implement, but it does not guarantee extended funding for every vacancy. Funding beyond 90 days or at a census below 50 percent requires prior DDS approval. Providers should rely on the written authorization and contract terms issued by their Regional Center.
Frequently asked questions
Does the policy apply to every adult residential facility
No. The directive applies to Adult Residential Facilities for Persons with Special Health Care Needs.
Is the payment a bed hold
No. DDS states that payment must be made on behalf of individuals receiving services. The mechanism uses a time limited higher per person rate for current residents to support required staffing.
Can a sanctioned home receive full vacancy funding
No. A home under a current sanction receives the individual client rate only for current residents.
Who submits the monthly report to DDS
The directive assigns monthly reporting to Regional Centers. Providers should still maintain and supply the underlying vacancy, staffing, placement and rate information requested by their Regional Center.
How CareAutomate can help
CareAutomate supports configurable residential service authorizations, staffing and visit documentation, task reminders, document storage and billing preparation. These workflows can help an ARFPSHN provider track vacancy dates, authorization periods, placement activity, supporting documents and the 90 day funding window. CareAutomate does not approve vacancy funding or replace DDS and Regional Center contract requirements. Book a demo using your current residential workflow, and we will confirm what is available today and what requires configuration or development.
Official sources
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