BILL NUMBER: AB 2821 AMENDED BILL TEXT 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 INTRODUCED BY AssemblyMemberChiuMembers Chiu and Santiago (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 on a competitive basis 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 applicant is a lead agencyisparticipating 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 requirea county or regionan applicant 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,andis 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 programis subject to an initialshall be funded, upon 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 prohibitHCDHCD and DHCS from implementing provisions developed pursuant to these provisions until necessary federal approvals have been obtained and to the extent that 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 State 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 assistedahousing 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 ofthehousing 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 documentedidentifiedpartnerships 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 (A) community-based housing and homeless service providers, (B) behavioral health providers, (C) 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 on a competitive basis to eligible grant applicants participating in a Whole Person Care pilot that includes eligibilitybasesbased 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 withapplicants andapplicants, as well as other Medi-Cal data available fromgrantees or from DHS,DHCS, 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 yearsfor every yearthereafter in which the Medi-Cal Housing Program is allocatedfunding,additional funds, 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, asidentifieddefined 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 changes in costs after each participant' s movein, pursuant to the reporting requirements of this section.into permanent housing. (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 Programis subject to an initialshall be funded, upon appropriation by the Legislature.After the initial appropriation, theThe 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)HDCHCD and DHCS shall implement the provisions developed pursuant to this chapter only after all necessary federal approvals have been obtained for the Health Home Program and to the extent that other federal financial participation is not jeopardized.