BILL ANALYSIS Ó AB 2821 Page 1 Date of Hearing: April 19, 2016 ASSEMBLY COMMITTEE ON HEALTH Jim Wood, Chair AB 2821 (Chiu) - As Amended March 29, 2016 SUBJECT: Medi-Cal Housing Program. SUMMARY: Requires the Department of Housing and Community Development (HCD), in coordination with the Department of Health Care Services (DHCS) to establish the Medi-Cal Housing Program (MCHP). Specifically, this bill: 1)Requires HCD, in coordination with DHCS, to do all of the following: a) On or before July 1, 2017, design and create the MCHP; b) On or before July 1, 2017, draft guidelines for stakeholder comment to fund grants to pay for long-term housing costs under the MCHP; c) On or before January 1, 2018, and every year thereafter, subject to appropriation by the Legislature, award grants to eligible counties and regions participating in a Whole Person Care (WPC) pilot program; d) Collect data midyear and annually from counties and regions receiving grants awarded pursuant to this bill; and, AB 2821 Page 2 e) By March 31, 2019, and every year thereafter in which the MCHP receives funding, report data collected to the Assembly Committee on Budget, the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Housing and Community Development, and the Senate Committee on Transportation and Housing. 2)Makes a county or a region that includes more than one county eligible for a MCHP grant if the county or region's lead entity meets all of the following requirements: a) One of the following descriptions: i) Is a lead entity participating in a WPC pilot program under the Medi-Cal 2020 Waiver (Waiver); ii) Is a lead entity that had previously participated in a WPC pilot program that has expired; or, iii) Is a county with Medi-Cal managed care plans participating in the Health Home Program and demonstrates collaboration, as specified. b) Has formed collaborative relationships with at least one health plan, county health and behavioral health agencies, at least one housing authority, and established relevant continuums of care, as described in the Waiver's Special Terms and Conditions (STCs), along with nonprofit housing and homeless service providers, to enable the county or region to carry out the provisions of this program; c) For residents participating in the MCHP, has identified a source of funding for care management and other services identified in the Centers for Medicare and Medicaid Services Informational Bulletin regarding Housing-Related Activities and Services for People with Disabilities, issued June 2015, and identified in Waive STCs. Requires funding to include one or more of the following: AB 2821 Page 3 i) County general funds; ii) WPC pilot housing pool and care management programs; and/or, iii) The Health Home Program. d) Has designated a process for administering grant funds through agencies administering housing programs; and, e) Agrees to collect and report data to HCD and DHCS, as specified. 3)Requires a county or region awarded grant funds under this bill to form agreements with health plans to collect Medi-Cal data regarding members' overall health costs. 4)Requires a county or region awarded grant funds to, at annual and midyear intervals, report all of the following data to HCD and DHCS: a) A comparison of health care costs of residents receiving long-term rental assistance under the MCHP to health care costs of homeless residents not receiving long-term rental assistance; b) The number of participants and the type of interventions offered through grant funds; and, c) The number of participants receiving long-term rental assistance living in supportive housing or other housing that does not limit length of stay. 5)Requires a county or region to use grants awards for one or more of the following, which may be administered through a housing pool, as defined in the Waiver STCs: a) Long-term rental assistance for periods up to five AB 2821 Page 4 years, as determined by the eligible county; b) Interim housing; and, c) A county's administrative costs for up to 5% of the total grant awarded. 6)Makes a county resident eligible to receive assistance pursuant to a grant awarded under the MCHP if he or she meets all of the following requirements: a) Is homeless upon initial eligibility; b) Is a Medi-Cal beneficiary; and, c) Is eligible for the services program identified by participating counties or regions. 7)Subjects the MCHP to an initial appropriation by the Legislature. After the initial appropriation, the funding of grants under the MCHP is subject to annual appropriations by the Legislature based on decreased costs of care, as reported by participating counties, of moving eligible participants into supportive housing. 8)Requires HCD to use no more than 5% of the funds appropriated for the MCHP for purposes of administering the program. 9)Finds and declares the importance of addressing chronic homelessness and costs incurred by the Medi-Cal program in addressing the needs of people who cycle from homelessness, emergency departments (EDs), inpatient care, and nursing home stays. 10)Defines various terms including the following: a) "Interim housing" as a safe place for a participant to live temporarily while the participant is waiting to move into an apartment affordable to the participant. Interim AB 2821 Page 5 housing may include recuperative or respite care and shall not be funded for longer that a period of nine months; b) "Long-term rental assistance" as a rental subsidy provided to a housing provider to assist a tenant to pay the difference between 30% of the tenant's income and the costs of operating the assisted apartment. EXISTING LAW: 1)Establishes Medi-Cal, administered by DHCS, to provide comprehensive health care services and long-term care to pregnant women, children, and people who are aged, blind, and disabled. 2)Establishes HCD, to among other functions, implement policies and programs to preserve and expand affordable housing in California. 3)Defines "supportive housing" as housing with no limit on length of stay, that is occupied by a target population, as defined, and that is linked to onsite or offsite services that assist the supportive housing resident in retaining the housing, improving his or her health status, and maximizing his or her ability to live and, when possible, work in the community. FISCAL EFFECT: This bill has not yet been analyzed by a fiscal committee. COMMENTS: 1)PURPOSE OF THIS BILL. According to the author, California is AB 2821 Page 6 home to 20% of the country's homeless population. Homelessness often creates an institutional circuit, where those experiencing it long enough cycle through living on the streets, ED visits, inpatient admissions, incarceration, and often nursing home stays. In addition to the moral cost to society, this circuit is expensive to our public systems: homeless individuals cost our public systems an average of $2,897 per month, two-thirds of that incurred through the health system. This bill attempts to coordinate delivery of services between the health and housing systems to further our goal of eliminating homelessness. 2)BACKGROUND. According to the Substance Abuse and Mental Health Services Administration, stable housing provides the foundation upon which people build their lives. Without a safe, affordable place to live, it is almost impossible to achieve good health or to achieve one's full potential. But, according to the Department of Housing and Urban Development (HUD), on a single night in 2014, more than 578,000 people, including 136,000 children, experienced homelessness. Of those people, more than 177,000 were unsheltered. While the number of people experiencing homelessness has declined since 2007, much work remains to be done to reach the goal of ending homelessness in the United States. According to HUD's 2013 Annual Homelessness Assessment Report, of those who experience homelessness, approximately 257,300 people have a severe mental illness or a chronic substance use disorder. a) Homelessness and Health Care. According to the National Coalition for the Homeless (Coalition), homelessness and health care are intimately interwoven. Inadequate health insurance is itself a cause for homelessness. Many people without health insurance have low incomes and do not have the resources to pay for health services on their own. A serious injury or illness in the family could result in insurmountable expenses for hospitalizations, tests, and treatment. For many, this forces a choice between hospital AB 2821 Page 7 bills or rent. Homeless people are three to six times more likely to become ill than housed people. Homelessness precludes good nutrition, good personal hygiene, and basic first aid, adding to the complex health needs of homeless people. Additionally, conditions which require regular, uninterrupted treatment, such as tuberculosis and HIV/AIDS, are extremely difficult to treat or control among those without adequate housing. Diseases that are common among the homeless population include heart disease, cancer, liver disease, kidney disease, skin infections, HIV/AIDS, pneumonia, and tuberculosis. People who live on the streets or spend most of their time outside are at high risk for frostbite, immersion foot, and hypothermia, especially during the winter or rainy periods. Although not many homeless deaths are specifically attributed to exposure-related causes, the risk of death from other causes is increased eightfold in people who have experienced those conditions in the past The Coalition further notes that many homeless people who are ill and need treatment do not ever receive medical care. Barriers to health care include lack of knowledge about where to get treated, lack of access to transportation, and lack of identification. Psychological barriers also exist, such as embarrassment, nervousness about filling out the forms and answering questions properly, and self-consciousness about appearance and hygiene when living on the streets. The most common obstacle to health care is the cost, without health coverage, many homeless people simply cannot pay for health care services. As a result, many homeless people utilize hospital EDs as their primary source of health care. Not only is this the least effective form of care for them, since it provides little continuity, it is also very expensive for hospitals and the government. As a result of these factors, homeless people are three to four times more likely to die than the general population. This increased risk is especially significant AB 2821 Page 8 in people between the ages of 18 and 54. Although women normally have higher life expectancies than men, even in impoverished areas, homeless men and women have similar risks of premature mortality. In fact, young homeless women are ip to 31 times as likely to die early as housed young women. The average life expectancy in the homeless population is estimated between 42 and 52 years, compared to 78 years in the general population. b) Waiver. On December 30, 2015, DHCS received federal approval from the Centers for Medicare and Medicaid Services (CMS) for a renewal of its Medicaid Section 1115 Waiver. The new waiver "Waiver 2020" builds upon the Bridge to Reform Waiver (BTR) that was approved in 2010. In addition to preserving many of the existing elements of the BTR, the new Waiver includes several new, ambitious initiatives aimed at continuing the delivery system improvements that began five years ago. The Waiver provides opportunities for innovation through WPC pilots, expanded care opportunities for California's remaining uninsured and a Dental Transformation Initiative. The new Waiver will provide California with at least $6.2 billion in ongoing federal funding over the next five years. The Waiver represents a shared commitment between California and CMS to provide 13 million Medi-Cal beneficiaries with efficient, high quality care that will ultimately improve health outcomes and reduce costs. c) WPC Pilot. One of the most innovative aspects of the Waiver is a new opportunity for counties to leverage resources more effectively by coordinating physician health, behavioral health, and social services in a patient-centered manner with the goal of improving the health and well-being of beneficiaries. The new WPC pilots will enable counties and their partners to target these high users, share data between systems, coordinate care in real time, and evaluate progress in improving individual and population health. The WPC pilots provide extensive local flexibility, enabling a county, city and county, a AB 2821 Page 9 health or hospital authority, or a consortium of entities to design approaches that address the specific needs of their most vulnerable Medi-Cal beneficiaries. While there must be one "Lead Entity," the WPC pilot applications will identify the comprehensive set of participating entities that will work together to provide beneficiaries with more integrated, person-centered care. The WPC pilots also permit applicants to choose target populations, identify strategies for meeting the needs of the populations, and develop payment methodologies. The formal allocation of WPC funding is under development, but in order to participate, WPCs will need to meet the following conditions: i) The WPC must have an established infrastructure to integrate services among local entities that serve the target population; ii) Services provided must not be otherwise covered or directly reimbursed by Medi-Cal; and, iii) The WPC must employ strategies to improve integration, reduce unnecessary utilization of health care services, and improve health outcomes. One of the likely target populations for the WPC pilots is individuals at risk of or experiencing homelessness who have a demonstrated medical need for housing or supportive services. Permissible housing interventions included in the WPC pilot are: i) Tenancy-based care management services. Services such as individual housing transition services, AB 2821 Page 10 individual tenancy sustaining services, and housing-related collaborative activities designed to assist the target population in locating and maintaining medically necessary housing. ii) County housing pools. These pools, which may include contributions from county entities, will directly support medically necessary housing services with the goal of improving access to housing and reducing churn in Medi-Cal. Services can include respite care or interim housing arrangements and services to enable timely discharge from inpatient stays or nursing facilities while permanent housing is being arranged. While federal funds cannot be used to support long-term housing arrangements, state or local contributions can be used for rental subsidies. 3)SUPPORT. Western Center on Law and Poverty states that Californians experiencing homelessness incur disproportionate costs to local and state programs, many of which are Medi-Cal costs. Despite these high health costs, people experiencing homelessness have poor health outcomes, and are at significant risk for early mortality. This bill is a one-time investment that would decrease Medi-Cal costs resulting from dramatic improvements in clinical outcomes. The League of California Cities states that providing wrap-around services for homeless men, women, and children has not only proven to be the most effective way to end chronic homelessness but is a smart use of tax dollars. 4)RELATED LEGISLATION. AB 1568 (Bonta and Atkins) and SB 815 (Hernandez and De Leon) are identical bills dealing with the implementation of the Waiver. AB 1568 is pending in Assembly Health Committee and SB 815 is pending in Senate Health Committee. AB 2821 Page 11 5)TECHNICAL AMENDMENT. Since the Assembly and Senate Health Committees have jurisdiction over the Medi-Cal program, the Committee recommends that the report relating to the MCHP should also be submitted to these committees. REGISTERED SUPPORT / OPPOSITION: Support Western Center on Law and Poverty League of California Cities Opposition None on file. Analysis Prepared by:Rosielyn Pulmano / HEALTH / (916) 319-2097 AB 2821 Page 12