Amended in Senate June 13, 2016

Amended in Assembly May 31, 2016

Amended in Assembly April 26, 2016

Amended in Assembly March 29, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2821

Introduced by Assembly Member Chiu

(Principal coauthor: Assembly Member Atkins)

February 19, 2016

An act to add Chapter 6.9 (commencing with Section 50678) to Part 2 of Division 31 of the Health and Safety Code, relating to housing.

LEGISLATIVE COUNSEL’S DIGEST

AB 2821, as amended, Chiu. Medi-Cal Housing Program.

Existing law establishes various housing programs directed by the Department of Housing and Community Development (HCD), including special housing programs to provide housing assistance for persons with developmental and physical disabilities and persons with mental health disorders. Existing law provides for the Medi-Cal program, which is administered by the State Department of Health Care Services (DHCS), under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

This bill would require HCD, in coordination with DHCS, to, on or before July 1, 2017, begin delete design and create end delete begin insert establish end insert the Medi-Cal Housing Program and on or before begin delete September end delete begin insert December end insert 1, 2017, and every year thereafter, subject to appropriation by the Legislature, award grants begin delete on a competitive basis end delete to eligible begin delete counties and regions end delete begin insert grant applicants end insert participating in a Whole Person Care pilot program, a program under the Medi-Cal program that provides specified entities with the option to receive support to integrate care for a particularly vulnerable group of Medi-Cal beneficiaries, including individuals who are experiencing or are at risk of homelessness, begin insert that includes eligibility based on homelessness, end insert or begin delete counties and regions end delete with Medi-Cal managed care plans administering the Health Home Program. The bill would provide that begin delete a county or a region end delete begin insert an applicant end insert is eligible for a grant under the program if the begin delete county or region’s lead agency end delete begin insert applicant end insert meets specified requirements, including that the lead agency is participating in a Whole Person Care pilot or has previously participated in a Whole Person Care begin delete pilot, end delete begin insert pilot designed to provide services to people experiencing homelessness end insert or is begin insert located in end insert a county with Medi-Cal managed care plan or plans participating in the Health Home Program.

The bill would require a county or region awarded a grant to use the funds for specified purposes, including long-term rental assistance and interim housing. The bill would provide that a county resident is eligible to receive assistance pursuant to a grant awarded under the Medi-Cal Housing Program if he or she meets specified requirements, including that the person is homeless, is a Medi-Cal beneficiary, and is eligible for Supplemental Security Income, and is eligible to receive services under the Whole Person Care pilot or the Health Home Program. The bill would provide that the program is subject to an initial appropriation by the Legislature, and that thereafter grants under the program are subject to annual appropriations by the Legislature, as specified. begin insert The bill would also authorize HCD and DHCS, for purposes of implementing these provisions, to enter into exclusive or nonexclusive contracts on a bid or negotiated basis, exempt from specified small business procurement, personal service, and public contracting provisions, and exempt from the review or approval of any division of the Department of General Services. The bill would also prohibit HCD and DHCS from implementing provisions developed pursuant to these provisions until necessary federal approvals have been obtained and other federal financial participation is not jeopardized. end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) Homeless beneficiaries incur disproportionate Medi-Cal
costs, particularly people experiencing chronic homelessness and
people who cycle between homelessness, emergency departments,
inpatient care, and nursing home stays. Supportive housing, which
is affordable housing with intensive services, allows people
experiencing significant barriers to housing stability to improve
their health and decrease their Medicaid costs. National studies
comparing formerly homeless Medicaid beneficiaries living in
supportive housing with homeless beneficiaries receiving usual
care demonstrate Medicaid cost savings of almost $9,000 per year
after the costs of services.

(b) In the proposal to renew California’s Section 1115 Medicaid
Waiver, “Medi-Cal 2020: Key Concepts for Renewal,” the State
Department of Health Care Services (DHCS) stated, “Research
suggests that individuals experiencing homelessness, particularly
those individuals with multiple chronic conditions, often struggle
to receive appropriate health care services and are
disproportionately likely to be high utilizers of the health care
safety net.” DHCS proposed using Medi-Cal to fund the tools
communities need to help homeless beneficiaries gain access to
and maintain housing stability, including the costs of interim
housing, recuperative/respite care, and long-term rental subsidies.

(c) The final Medi-Cal 2020 Waiver allows participating entities,
including counties, to create Whole Person Care pilots to address
the health, behavioral health, and social services needs of high
users of multiple systems. Participating entities will be able to use
Whole Person Care pilots to offer housing-related services to
homeless residents, form collaborations between local agencies
and health plans to address service needs of homeless beneficiaries,
pool waiver and other sources of financing to pay for services
promoting housing stability, and collect data on residents’
outcomes.

(d) Though the federal Centers for Medicare and Medicaid
Services disallowed federal financial participation in the costs of
housing interventions, the final Section 1115 Medicaid Waiver
special terms and conditions, referred to as the “Medi-Cal 2020
Waiver,” allow for state contributions to Whole Person Care
“county housing pools” to fund long-term costs of housing to
achieve the goals of the Waiver proposal. The final Waiver special
terms and conditions also permit begin delete tracking costs saved by moving
beneficiaries from homelessness to housing and then using these
costs savings to pay for some costs of housing and providing
services to additional participants. end delete begin insert leveraging local resources to
increase access to subsidized housing units. They may also
incorporate a financing component to reallocate or reinvest a
portion of the savings from the reduced utilization of health care
services into the housing pool. end insert

(e) In most communities in California, a lack of housing
affordable to people experiencing homelessness is one of the
greatest barriers to exiting homelessness. Housing resources would
equip Whole Person Care counties choosing to target homeless
people with the resources to achieve the goals of the Whole Person
Care Waiver provisions, during the course of the pilot and after
the pilot ends.

SEC. 2.  

Chapter 6.9 (commencing with Section 50678) is added
to Part 2 of Division 31 of the Health and Safety Code, to read:

 

Chapter  6.9. Medi-Cal Housing Program

 

50678.  

For purposes of this chapter, all of the following
definitions shall apply:

begin insert

(a) “DHCS” means the Department of Health Care Services.

end insert begin insert

(b) “HCD” means the Department of Housing and Community
Development.

end insert begin delete

(a)

end delete

begin insert (c) end insert  “Homeless” has the same meaning as in Section 578.3 of
Title 24 of the Code of Federal Regulations. begin insert “Homeless” also
includes a person who would become homeless upon exiting a
publicly-funded institution or system of care, including a hospital,
skilled nursing facility, mental health facility, or incarceration.
“Homeless” also includes Whole Person Care pilot program
homeless populations, as approved by DHCS in the Whole Person
Care pilot program application and Medi-Cal beneficiaries served
under California’s Health Home Program under Section 2703 of
the federal Patient Protection and Affordable Care Act (Public
Law 111-148). end insert

begin delete

(b)

end delete

begin insert (d) end insert  “Interim housing” means a safe place for a participant to
live temporarily while the participant is waiting to move into a
permanent apartment affordable to the participant with rental
assistance, and where the participant is not required to pay more
than 30 percent of his or her income toward the cost of the interim
housing. “Interim housing” may include recuperative or respite
care and shall not be funded for longer than a period of nine
months.

begin delete

(c)

end delete

begin insert (e) end insert  “Long-term rental assistance” means a rental subsidy
provided to a housing provider, including a landlord renting in the
private market begin delete or developers end delete or a developer begin delete creating end delete begin insert leasing end insert
affordable housing, to assist a tenant to pay the difference between
30 percent of the tenant’s income and the costs of operating the
assisted begin delete apartment. end delete begin insert a housing unit. end insert

begin delete

(d)

end delete

begin insert (f) end insert  “Permanent housing” means begin delete an apartment end delete begin insert a housing unit end insert
where the landlord does not limit length of stay in the begin delete apartment, end delete
begin insert housing unit, end insert the landlord does not restrict the movements of the
tenant, and the tenant has a lease and is subject to the rights and
responsibilities of tenancy, pursuant to Chapter 2 (commencing
with Section 1940) of Title 5 of Part 4 of Division 3 of the Civil
Code.

begin delete

(e)

end delete

begin insert (g) end insert  “Supportive housing” has the same meaning as in Section
50675.14.

begin delete

(f)

end delete

begin insert (h) end insert  “Whole Person Care pilot” has the same meaning as
described in begin delete Sections 110-126 of end delete the Medi-Cal 2020 Waiver
Special Terms and begin delete Conditions, finalized end delete begin insert Conditions (STCs),
Sections 110-126, as approved by the federal Centers for Medicare
and Medicaid Services, end insert on December 30, begin delete 2015. end delete begin insert 2015, or in any
subsequent amendment to the STCs. end insert

50678.1.  

begin delete The Department of Housing and Community
Development (HCD), end delete begin insert HCD end insert in coordination with begin delete the State
Department of Health Care Services (DHCS), end delete begin insert DHCS, end insert shall do all
of the following:

(a) On or before July 1, 2017, begin delete design and create end delete begin insert establish end insert the
Medi-Cal Housing Program.

(b) On or before July 1, 2017, draft guidelines for stakeholder
comment to fund competitive grants to pay for interim and
long-term rental assistance under the Medi-Cal Housing Program.
The guidelines shall detail competitive scoring criteria that
includes, but is not limited to, scoring that awards points based
upon all of the following:

begin insert

(1) Need, which includes consideration of the number of
individuals experiencing homelessness and the impact of the
housing costs in the applicant’s geographic area.

end insert begin delete

(1) Capacity

end delete

begin insert (2) end insert begin insert   end insert begin insert Ability of the applicant end insert to administer begin insert a program offering end insert
interim and long-term rental begin delete assistance. end delete begin insert assistance to people
experiencing homelessness. end insert

begin delete

(2) Identified

end delete

begin insert (3) end insert begin insert   end insert begin insert The applicant’s documented identified end insert partnerships with
affordable and supportive housing begin delete providers. end delete begin insert providers in the
applicant’s geographic area. end insert

begin delete

(3) Partnerships

end delete

begin insert (4) end insert begin insert   end insert begin insert The applicant’s partnerships end insert with Medi-Cal managed care
plans begin insert in the applicant’s geographic area end insert and the percentage of
begin delete county end delete Medi-Cal beneficiaries begin delete that end delete begin insert assigned to end insert those partnering
begin insert Medi-Cal managed end insert health begin delete plans cover. end delete begin insert plans. end insert

begin delete

(4) Comprehensive plans that connect housing

end delete

begin insert (5) end insert begin insert   end insert begin insert A comprehensive plan to connect interim housing, long-term
rental assistance, and project-based supportive housing end insert resources
made available under the begin delete program end delete begin insert Medi-Cal Housing Program end insert
with services made available through the Whole Person Care pilot
begin delete or end delete begin insert and end insert the Health Home Program.

begin delete

(5) Quality of services provided through the Whole Person Care
pilot or the Health Home Program in the applying county.

end delete begin insert

(6) Coordination with community-based housing and homeless
service providers, behavioral health providers, and safety net
providers, including community health centers.

end insert

(c) On or before begin delete September end delete begin insert December end insert 1, 2017, and every year
thereafter, subject to appropriation by the Legislature, award grants
begin delete on a competitive basis end delete to eligible begin delete counties and regions end delete begin insert grant
applicants end insert participating in a Whole Person Care pilot begin delete or counties
and regions end delete begin insert that includes eligibility bases on homelessness or a
partnership end insert with Medi-Cal managed care plans administering the
Health Home begin delete Program under Section 2703 of the federal Patient
Protection and Affordable Care Act. end delete begin insert Program. If appropriations
are made available in future years, counties shall compete for
each round of five-year grants. end insert

(d)  begin delete Collect data midyear and annually end delete begin insert Midyear and annually,
collect data end insert from the begin insert Medi-Cal Housing Program grantees or from
the end insert Medi-Cal managed care plan partnering with begin delete participating
counties and regions receiving grants awarded pursuant to this
chapter. end delete begin insert applicants and other Medi-Cal data available from
grantees or from DHS, as appropriate. end insert

(e) No later than begin delete July 1, 2017, end delete begin insert January 1, 2018, end insert contract with
an independent evaluator to analyze data collected pursuant to
Section begin delete 50678.4 end delete begin insert 50678.3 end insert to determine begin delete potential costs avoided or
saved due to end delete begin insert changes in health care costs associated with services
provided under end insert the Medi-Cal Housing Program. begin insert HCD shall
provide, on a regular basis as needed, end insert begin insert collected data end insert begin insert to the
evaluator. end insert

(f) (1) By March 31, 2019, begin insert for grants awarded in 2017, end insert and begin insert in
subsequent years for end insert every year thereafter in which the Medi-Cal
Housing Program begin delete receives end delete begin insert is allocated end insert funding, report data
collected to the Assembly Committee on Budget, the Senate
Committee on Budget and Fiscal Review, the Assembly and Senate
committees on health, the Assembly Committee on Housing and
Community Development, and the Senate Committee on
Transportation and Housing.

(2) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government
Code.

50678.2.  

begin delete A county or a region that includes more than one
county end delete begin insert An applicant end insert shall be eligible for a Medi-Cal Housing
Program grant if the begin delete county or regional agency applying for grant
funds end delete begin insert applicant end insert meets the requirements of this section. Eligibility
does not create an entitlement to grant funds and is subject to
availability of funds. The begin delete county or regional agency applying end delete
begin insert applicant end insert shall meet all of the following requirements:

(a)  begin delete The agency satisfies one of end delete begin insert Satisfies one or more end insert the
following:

(1) Is a lead agency participating in a Whole Person Care begin delete pilot. end delete

begin insert pilot designed to provide services to people experiencing
homelessness. end insert

(2) Is a lead agency that begin delete had end delete previously participated in a Whole
Person Care pilot that has begin delete expired. end delete begin insert expired and the applicant has
decided to continue to provide services to homeless people under
the structures developed in the Whole Person Care pilot. end insert

(3) Is begin insert located in end insert a county with begin insert a end insert Medi-Cal managed care plan
or plans participating in the Health Home Program.

begin delete

(b) As described under Section 115 of the Medi-Cal 2020
Special Waiver Terms and Conditions, the agency has formed
collaborative relationships with at least one health plan whose
members will participate in the program, county health and
behavioral health agencies, at least one housing authority, and
relevant continuums of care.

(c) For residents participating in the Medi-Cal Housing Program,
has

end delete

begin insert (b) end insert begin insert   end insert begin insert Has end insert identified a source of funding for Housing Transition
Services and Tenancy Sustaining Services, as identified in the
Centers for Medicare and Medicaid Services’ Informational
Bulletin regarding Housing-Related Activities and Services for
People with Disabilities, issued June 26, 2015. Funding for these
services shall include one or more of the following:

(1) County general funds.

(2) Whole Person Care pilot begin delete housing pool and care management
programs. end delete begin insert program funds. end insert

(3) The Health Home Program.

begin delete

(d)

end delete

begin insert (c) end insert  Agrees to contribute funding for interim and long-term rental
assistance through one or more of the following sources:

(1) County general funds.

(2)  begin delete Housing end delete begin insert Flexible housing end insert pools created through a Whole
Person Care pilot.

(3) A county or partnering housing authority’s set-aside of at
least 15 percent turn-over federal Housing Choice Vouchers to
residents experiencing homelessness and who are eligible to receive
Whole Person Care pilot or Health Home Program services.

begin delete

(e)

end delete

begin insert (d) end insert  Has designated a process for administering grant funds
through agencies administering housing programs.

begin delete

(f)

end delete

begin insert (e) end insert  Agrees to collect and report data, as described in Section
50678.3, to begin delete the Department of Housing and Community
Development and the State Department of Health Care Services. end delete

begin insert HCD and DHCS. end insert

begin delete

50678.3.  

(a) A county or region awarded grant funds under
this chapter shall form agreements with partnering health plans to
collect Medi-Cal data regarding members’ medical costs,

end delete

begin insert

begin insert 50678.3. end insert   

end insert

begin insert (a) end insert begin insert   end insert begin insert HCD shall coordinate with DHCS to identify a
process for collecting and providing Medi-Cal data regarding
changes in health care costs associated with services provided
under the Medi-Cal Housing Program end insert to the extent that
information is available, up to 12 months prior to each participant’s
move into permanent housing, as well as begin delete medical end delete costs after each
participant’s move in, pursuant to the reporting requirements of
this section.

(b)  begin delete A county or region end delete begin insert An applicant end insert awarded grant funds begin delete or the
county’s or region’s partnering Medi-Cal managed care plan end delete shall,
at annual and midyear intervals, report all of the following data to
HCD and DHCS:

begin delete

(1) A comparison of medical costs of participants receiving
long-term rental assistance under the Medi-Cal Housing Program
to medical costs of the same participants 12 months prior to move
in to permanent housing, or for participants with less than 12
months of available data prior to move in, any data available prior
to move in.

end delete begin insert

(1) Data specified by HCD necessary to measure the costs
described in subdivision (a).

end insert

(2) The number of participants and the type of interventions
offered through grant funds.

(3) The number of participants living in supportive housing or
other permanent housing.

begin insert

(c) HCD shall collaborate with DHCS to provide available
fee-for-service data to the evaluator.

end insert

50678.4.  

begin delete A county or region end delete begin insert An applicant end insert shall use grants
awarded pursuant to this chapter for one or more of the following,
which may be administered through a housing pool, as defined in
the Whole Person Care pilot:

(a) Long-term rental assistance for periods up to five years.

(b) A capitalized operating reserve for up to 15 years to pay for
operating costs of an apartment or apartments within a development
receiving public funding to provide supportive housing to people
experiencing homelessness.

(c) Interim housing.

(d) A county’s administrative costs for up to 3 percent of the
total grant awarded.

50678.5.  

A county resident is eligible to receive assistance
pursuant to a grant awarded under the Medi-Cal Housing Program
if he or she meets all of the following requirements:

(a) Is homeless upon initial eligibility.

(b) Is a Medi-Cal beneficiary.

(c) Is eligible for Supplemental Security Income.

(d) Is eligible to receive services under either the Whole Person
Care pilot or the Health Home Program, whichever is operative
in the participating county or region.

(e) Is begin delete assessed to be end delete likely to improve his or her health
conditions with supportive housing.

50678.6.  

The Medi-Cal Housing Program is subject to an initial
appropriation by the Legislature. After the initial appropriation,
the funding of grants under the program is subject to annual
appropriations by the begin delete Legislature based on decreased costs of care, end delete
begin insert Legislature. The Legislature shall consider the impact that housing
and supportive services have had in changing utilization and health
care costs, end insert as identified in the evaluation described in Section
50678.1, of moving eligible participants into supportive housing.

50678.7.  

HCD shall reimburse DHCS for the costs of begin delete collecting
data and end delete collaborating in the design begin insert and implementation end insert of the
program. HDC shall use no more than 5 percent of the funds
appropriated for the Medi-Cal Housing Program for purposes of
administering the program.

begin insert

begin insert 50678.8. end insert   

(a) For purposes of implementing this chapter, HCD
or DHCS may enter into exclusive or nonexclusive contracts on a
bid or negotiated basis. Contracts entered into or amended
pursuant to this subdivision shall be exempt from Chapter 6
(commencing with Section 14825) of Part 5.5 of Division 3 of Title
2 of the Government Code, Section 19130 of the Government Code,
and Part 2 (commencing with Section 10100) of Division 2 of the
Public Contract Code and shall be exempt from the review or
approval of any division of the Department of General Services.

(b) HDC and DHCS shall implement the provisions developed
pursuant to this chapter only after all necessary federal approvals
have been obtained and other federal financial participation is
not jeopardized.

end insert