Amended in Senate June 16, 2016

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 begin delete Member end delete begin insert Members end insert Chiu begin insert and Santiago end insert

(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, establish the Medi-Cal Housing Program and on or before December 1, 2017, and every year thereafter, subject to appropriation by the Legislature, award grants begin insert on a competitive basis end insert to eligible grant applicants 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, that includes eligibility based on homelessness, or with Medi-Cal managed care plans administering the Health Home Program. The bill would provide that an applicant is eligible for a grant under the program if the applicant meets specified requirements, including that the begin insert applicant is a end insert lead agency begin delete is end delete participating in a Whole Person Care pilot or has previously participated in a Whole Person Care pilot designed to provide services to people experiencing homelessness or is located in a county with Medi-Cal managed care plan or plans participating in the Health Home Program.

The bill would require begin delete a county or region end delete begin insert an applicant end insert 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, begin delete and end delete 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 begin delete is subject to an initial end delete begin insert shall be funded, upon end insert appropriation by the Legislature, and that thereafter grants under the program are subject to annual appropriations by the Legislature, as specified. 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 begin delete HCD end delete begin insert HCD end insert and DHCS from implementing provisions developed pursuant to these provisions until necessary federal approvals have been obtained and begin insert to the extent that end insert other federal financial participation is not jeopardized.

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 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.

(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:

(a) “DHCS” means the begin insert State end insert Department of Health Care
Services.

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

(c) “Homeless” has the same meaning as in Section 578.3 of
Title 24 of the Code of Federal Regulations. “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).

(d) “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.

(e) “Long-term rental assistance” means a rental subsidy
provided to a housing provider, including a landlord renting in the
private market or a developer leasing 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 a end delete housing unit.

(f) “Permanent housing” means a housing unit where the
landlord does not limit length of stay in the housing unit, 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.

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

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

50678.1.  

HCD in coordination with DHCS, shall do all of the
following:

(a) On or before July 1, 2017, establish 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:

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

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

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

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

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

(6) Coordination with begin insert (A) end insert community-based housing and
homeless service providers, begin insert (B) end insert behavioral health providers, begin insert (C) end insert
and safety net providers, including community health centers.

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

(d) Midyear and annually, collect data from the Medi-Cal
Housing Program grantees or from the Medi-Cal managed care
plan partnering with begin delete applicants and end delete begin insert applicants, as well as end insert other
Medi-Cal data available from begin delete grantees or from DHS, end delete begin insert DHCS, end insert as
appropriate.

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

(f) (1) By March 31, 2019, for grants awarded in 2017, and in
subsequent years begin delete for every year end delete thereafter in which the Medi-Cal
Housing Program is allocated begin delete funding, end delete begin insert additional funds, end insert 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.  

An applicant shall be eligible for a Medi-Cal Housing
Program grant if the applicant meets the requirements of this
section. Eligibility does not create an entitlement to grant funds
and is subject to availability of funds. The applicant shall meet all
of the following requirements:

(a) Satisfies one or more the following:

(1) Is a lead agency participating in a Whole Person Care pilot
designed to provide services to people experiencing homelessness.

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

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

(b) Has identified a source of funding for Housing Transition
Services and Tenancy Sustaining Services, as begin delete identified end delete begin insert defined end insert
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 program funds.

(3) The Health Home Program.

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

(1) County general funds.

(2) Flexible housing 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.

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

(e) Agrees to collect and report data, as described in Section
50678.3, to HCD and DHCS.

50678.3.  

(a) 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 to the extent that information
is available, up to 12 months prior to each participant’s move into
permanent housing, as well as begin insert changes in end insert costs after each
participant’s move begin delete in, pursuant to the reporting requirements of
this section. end delete begin insert into permanent housing. end insert

(b) An applicant awarded grant funds shall, at annual and
midyear intervals, report all of the following data to HCD and
DHCS:

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

(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.

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

50678.4.  

An applicant 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 likely to improve his or her health conditions with
supportive housing.

50678.6.  

The Medi-Cal Housing Program begin delete is subject to an initial end delete
begin insert shall be funded, upon end insert appropriation by the Legislature. begin delete After the
initial appropriation, the end delete begin insert The end insert funding of grants under the program
is subject to annual appropriations by the Legislature. The
Legislature shall consider the impact that housing and supportive
services have had in changing utilization and health care costs, 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
collaborating in the design and implementation 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.

50678.8.  

(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)  begin delete HDC end delete begin insert HCD end insert and DHCS shall implement the provisions
developed pursuant to this chapter only after all necessary federal
approvals have been obtained begin insert for the Health Home Program end insert and
begin insert to the extent that end insert other federal financial participation is not
jeopardized.