BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON HEALTH
                          Senator Ed Hernandez, O.D., Chair

          BILL NO:                    AB 2821             
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          |AUTHOR:        |Chiu                                           |
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          |VERSION:       |June 16, 2016                                  |
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          |HEARING DATE:  |June 22, 2016  |               |               |
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          |CONSULTANT:    |Scott Bain                                     |
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           SUBJECT  :  Medi-Cal Housing Program

           SUMMARY  :  Requires the Department of Housing and Community Development  
          to establish the Medi-Cal Housing Program, which would fund  
          competitive grants to pay for interim and long-term rental  
          assistance for homeless Medi-Cal beneficiaries who are eligible  
          for Supplemental Security Income. Establishes criteria for an  
          applicant to be eligible for a Medi-Cal Housing Program grant,  
          including having identified a source of funding for housing  
          transition services and tenancy sustaining services and which  
          agree to contribute funding for interim and long-term rental  
          assistance. Requires the Medi-Cal Housing Program to be funded,  
          subject to a legislative appropriation.

          Existing law:
          1)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. 

          2)Establishes the Medi-Cal program, which is administered by the  
            Department of Health Care Services (DHCS), under which  
            qualified low-income individuals receive health care services.  


          3)Authorize DHCS, subject to federal approval, to create a  
            Medi-Cal Health Home Program for enrollees with chronic  
            conditions, as prescribed, as authorized under federal  
            Medicaid law.
          
          This bill:
          1)Requires HCD, in coordination with DHCS, to establish the  







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            Medi-Cal Housing Program on or before July 1, 2017, which  
            would fund competitive grants to pay for interim and long-term  
            rental assistance. Requires the Medi-Cal Housing Program to be  
            funded, subject to a legislative appropriation, and makes the  
            funding of grants subject to annual legislative  
            appropriations. 

          2)Requires HCD, on or before December 1, 2017, and every year  
            thereafter, subject to legislative appropriation, to award  
            grants on a competitive basis to eligible grant applicants  
            participating in a Whole Person Care (WPC) pilot that include  
            eligibility based on homelessness or a partnership with  
            Medi-Cal managed care plans administering the Health Homes  
            Program. Requires, if appropriations are made available in  
            future years, counties to compete for each round of five-year  
            grants.

          3)Establishes criteria for an applicant to be eligible for a  
            Medi-Cal Housing Program grant, including requiring an  
            applicant to satisfy one or more of the following:

                    a)          Is a lead agency participating in a WPC  
                      pilot designed to provide services to people  
                      experiencing homelessness;
                    b)          Is a lead agency that previously  
                      participated in a WPC pilot that has expired and the  
                      applicant has decided to continue to provide  
                      services to homeless people under the structures  
                      developed in the WPC pilot; or, 
                    c)          Is located in a county with a Medi-Cal  
                      managed care plan or plans participating in the  
                      Health Home Program.

          4)Requires an applicant, in order to be eligible for a Medi-Cal  
            Housing Program grant, to have identified a source of funding  
            for Housing Transition Services and Tenancy Sustaining  
            Services, as defined in the Centers for Medicare and Medicaid  
            Services' (CMS) Informational Bulletin regarding  
            Housing-Related Activities and Services for People with  
            Disabilities, that includes one or more of the following:

                    d)          County general funds;
                    e)          WPC pilot program funds; or,
                    f)          The Health Home Program.









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          5)Requires an applicant, in order to be eligible for a Medi-Cal  
            Housing Program grant, to agree to contribute funding for  
            interim and long-term rental assistance through one or more of  
            the following sources:

                    g)          County general funds;
                    h)          Flexible housing pools created through a  
                      WPC pilot; or,
                    i)          A county or partnering housing authority's  
                      set-aside of at least 15% turn-over federal Housing  
                      Choice Vouchers to residents experiencing  
                      homelessness and who are eligible to receive WPC  
                      pilot or Health Home Program services. 

          6)Requires an applicant, in order to be eligible for a Medi-Cal  
            Housing Program grant, to designate a process for  
            administering grant funds through agencies administering  
            housing programs, and to agree to collect and report data  
            under this bill to HCD and DHCS.

          7)Requires an applicant to use grants awarded under this bill  
            for one or more of the following, which may be administered  
            through a housing pool, as defined in the WPC 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; and,
                  d)        A county's administrative costs for up to 3%  
                    of the total grant awarded.

          8)Prohibits eligibility for a grant award from creating an  
            entitlement to grant funds, and makes eligibility subject to  
            the availability of funds.

          9)Defines eligibility to receive assistance under a grant  
            awarded under the Medi-Cal Housing Program as a county  
            resident who meets all of the following requirements:

                    a)          Is homeless upon initial eligibility;
                    b)          Is a Medi-Cal beneficiary;








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                    c)          Is eligible for Supplemental Security  
                      Income;
                    d)          Is eligible to receive services under  
                      either the WPC pilot or the Health Home Program,  
                      whichever is operative in the participating county  
                      or region; and,
                    e)          Is likely to improve his or her health  
                      conditions with supportive housing.

          10)  Requires HCD to 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 move in to permanent housing.

          11)  Requires an applicant awarded grant funds to report all of  
            the following data to HCD and DHCS at annual and midyear  
            intervals:

                    a)          Data specified by HCD necessary to measure  
                      the costs;
                   b)         The number of participants and the type of  
                     interventions offered through grant funds; and,
                   c)         The number of participants living in  
                     supportive housing or other permanent housing.

          12)  Requires HCD to collaborate with DHCS to provide available  
            fee-for-service data to the evaluator.

          13)  Requires the Legislature to consider the impact that  
            housing and supportive services have had in changing  
            utilization and health care costs, as identified in the  
            evaluation, of moving eligible participants into supportive  
            housing.

          14)  Requires HCD to reimburse DHCS for the costs of  
            collaborating in the design and implementation of the program.  
            Caps HDC administrative costs for program administration at no  
            more than 5% of the funds appropriated for the Medi-Cal  
            Housing Program.

          15)  Requires HCD, on or before July 1, 2017, to draft  
            guidelines for stakeholder comment to fund competitive grants  








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            to pay for interim and long-term rental assistance under the  
            Medi-Cal Housing Program. Requires the guidelines to detail  
            competitive scoring criteria that includes, but is not limited  
            to, scoring that awards points based upon specified criteria,  
            including:

                    a)          Need; 
                   b)         Ability to administer a program offering  
                     interim and long-term rental assistance to people  
                     experiencing homelessness;
                   c)         Partnerships with affordable and supportive  
                     housing providers and Medi-Cal managed care plans;
                   d)         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 WPC pilot and the  
                     Health Home Program; and,
                   e)         Coordination with community-based housing  
                     and homeless service providers, behavioral health  
                     providers, and safety net providers, including  
                     community health centers.

          16)  Requires HCD to collect data midyear and annually from the  
            Medi-Cal Housing Program grantees or from the Medi-Cal managed  
            care plan partnering with applicants, as well as other  
            Medi-Cal data available from DHCS.

          17)  Requires HCD to contract with an independent evaluator to  
            analyze data to determine changes in health care costs  
            associated with services provided under the Medi-Cal Housing  
            Program by no later than January 1, 2018. Requires HCD to  
            provide data collected to the evaluator on a regular basis as  
            needed.

          18)  Requires HCD to report date collected to specified  
            legislative budget and policy committees, by March 31, 2019,  
            for grants awarded in 2017, and in subsequent years thereafter  
            in which the Medi-Cal Housing Program is allocated additional  
            funds.



          1)Permits HCD or DHCS to enter into exclusive or nonexclusive  
            contracts on a bid or negotiated basis to implement this bill,  








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            and exempts contracts entered into or amended under this bill  
            from specified provisions of the Government and Public  
            Contract Codes, and from the review or approval of the  
            Department of General Services.


          19)  Requires HDC and DHCS to implement the provisions developed  
            under this bill only after all necessary federal approvals for  
            the Health Homes Program have been obtained and to the extent  
            other federal financial participation is not jeopardized.

           FISCAL  
          EFFECT  :  According to the Assembly Appropriations Committee,  
          this bill does not make an appropriation, but codifying the  
          program results in cost pressure to fund the program. A group of  
          Assembly members, which includes the author, proposed a $650  
          million package of proposals for affordable housing, including  
          $30 million to fund the Medi-Cal Housing Program (MCHP). 

          1)Assuming a one-time $30 million General Fund (GF)  
            appropriation for the grant program, $500,000 to HCD to  
            develop the grant program criteria, and $335,000 annually  
            ongoing for the life of the program. 

          2)Costs to DHCS to consult on program design are expected to be  
            absorbable within existing resources. To the extent it is  
            helpful to the program design to have more involvement from  
            DHCS staff in the program design, some of the one-time program  
            development costs could be shifted to DHCS (GF). 

           PRIOR  
          VOTES  :  
          
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          |Assembly Floor:                     |63 - 13                     |
          |------------------------------------+----------------------------|
          |Assembly Appropriations Committee:  |15 - 5                      |
          |------------------------------------+----------------------------|
          |Assembly Housing and Community      |  6 - 1                     |
          |Development Committee:              |                            |
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          COMMENTS  :
          1)Author's statement. According to the author, California is  
            home to 20% of the country's homeless population. Homelessness  








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            often creates an institutional circuit, where those  
            experiencing it long enough cycle through living on the  
            streets, emergency department 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)Medi-Cal 2020, Whole Person Care and Health Homes Programs. In  
            order to be eligible for a Medi-Cal Housing Program grant, an  
            applicant must be a lead agency participating in a WPC pilot  
            designed to provide services to people experiencing  
            homelessness, a lead agency that previously participated in a  
            WPC pilot that continues to provide services to homeless  
            people, or be located in a county with a Medi-Cal managed care  
            plan/plans participating in the Health Home Program.

            The state's most recent Section 1115 Medicaid waiver (known as  
            "Medi-Cal 2020") included the WPC program as a new feature  
            that was not in previous Section 1115 waivers. WPC is  
            essentially a grant program over the five years of the waiver,  
            the goal of which is the coordination of health, behavioral  
            health, and social services, as applicable, in a  
            patient-centered manner with the goals of improved beneficiary  
            health and well-being through more efficient and effective use  
            of resources. WPC pilots will provide an option for  
            participating entities to receive support to integrate care  
            for beneficiaries who are high-risk and high-utilizers of  
            multiple systems and continue to have poor health outcomes.  
            The lead entity for WPC programs can be a county, a city and  
            county, a health or hospital authority, a county or University  
            of California hospital, a district and municipal public  
            hospital, or an agency or department, a federally recognized  
            tribe, or a tribal health program. WPC pilots will include  
            collaboration between two or more public entities (e.g. county  
            mental health plans and local housing authorities), at least  
            one Medi-Cal managed care health plan, and other community  
            entities with the goal of improving health outcomes for the  
            WPC population.

            Up to $300 million in federal funding is available annually  
            for WPC over the five years of Medi-Cal 2020. No single WPC  








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            pilot will be awarded more than 30% of total available funding  
            unless additional funds are available after all initial awards  
            are made. The non-federal share of funds used to draw down  
            federal Medicaid funding is through intergovernmental  
            transfers from governmental entities, such as counties or  
            public Medi-Cal managed care plans.

            The federal Affordable Care Act allows states to elect the  
            Health Home option in their Medicaid program and receive a 90%  
            federal Medicaid matching rate for two years for these  
            services. Federal law defines the individuals eligible for  
            health home services as individuals meeting one of the  
            following: (a) having at least two chronic conditions; (b)  
            having one chronic condition and are at risk of having a  
            second chronic condition; or (c) having one serious and  
            persistent mental health condition. AB 361 (Mitchell), Chapter  
            642, Statutes of 2013 authorized DHCS to implement the Health  
            Homes for Enrollees with Chronic Conditions option.


          3)Medicaid coverage of housing-related activities and services  
            for individuals with disabilities. This bill requires an  
            applicant, in order to be eligible for a Medi-Cal Housing  
            Program grant, to have identified a source of funding for  
            Housing Transition Services and Tenancy Sustaining Services,  
            as defined in the CMS Informational Bulletin regarding  
            Housing-Related Activities and Services for People with  
            Disabilities. The identified funding must include one or more  
            of the following fund sources: (a) county general funds; (b)  
            WPC pilot program funds, or (c) the Health Home Program.

            Under the referenced CMS guidance, federal financial  
            participation in Medicaid is not available for room and board,  
            but Medicaid will provide reimbursement for certain  
            housing-related activities, with the goal of promoting  
            community integration for individuals with disabilities, older  
            adults needed long-term services and supports and those  
            experiencing chronic homelessness. 

            Housing-related activities and services are defined in the  
            bulletin as: (a) individual housing transition services,  
            defined as services that support an individual's ability to  
            prepare for and transition to housing; (b) individual housing  
            and  tenancy sustaining services, defined as services that  
            support the individual in being a successful tenant in his/her  








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            housing arrangement and thus able to sustain tenancy; and (c)  
            state-level housing related collaborative activities, defined  
            as services that support collaborative efforts across public  
            agencies and the private sector that assist a state in  
            identifying and securing housing options for individuals with  
            disabilities, older adults needing long-term services and  
            supports, and those experiencing chronic homelessness. 

          4)Double referral. This bill is double referred. Should it pass  
            out of this committee, this bill will be referred to the  
            Governance and Finance Committee.

          5)Related legislation. AB 1618 (Committee on Budget), a budget  
            trailer bill, establishes the "No Place Like Home Program"  
            administered by the HCD, in consultation with an Advisory  
            Committee, and specifies the membership to distribute $2  
            billion among the counties to finance capital costs, including  
            acquisition, design, construction, rehabilitation or  
            preservation and capitalized operating costs of permanent  
            supportive housing for persons who are eligible for services  
            under Proposition 63 (Mental Health Services Act) and are  
            homeless, chronically homeless, or at risk of chronic  
            homelessness. Funds for the program would be through the  
            issuance of bonds by the State Treasurer that are secured by  
            Proposition 63 revenues. AB 1618, as of June 17, 2016, is on  
            the Senate Floor.

            A proposal for additional $400 million for housing was not  
            included in the budget bill. Instead, the Legislature and the  
            Brown Administration agreed to continue discussions about the  
            Governor's May Revise legislative proposal to require  
            ministerial "by right" land use entitlements for multifamily  
            infill housing developments that include affordable housing.  
            The Governor's May Revise states local land use decisions  
            surrounding housing production have contributed to low  
            inventories, even though demand has steadily increased, and  
            local land use permitting and review processes have lengthened  
            the approval process and increased production costs. The  
            Governor's May Revise proposal is aimed at improving housing  
            affordability by increasing the supply and reducing its costs.  
            The May Revise states the proposal would help constrain  
            development costs, improve the pace of housing production, and  
            encourage an increase in housing supply, and that it is  
            counterproductive to continue providing funding for affordable  
            housing under a system that slows down approvals in areas  








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            already vetted and zoned for housing.

          6)Support. This bill is jointly sponsored by the Corporation for  
            Supportive Housing and Housing California, which argue  
            Californians experiencing homelessness incur disproportionate  
            Medi-Cal costs, are frequent users of hospitals and  
            corrections systems, and have poor health outcomes. The  
            co-sponsors argue that evidence shows significant decreased  
            health costs from moving people off the streets and into  
            stable housing. The co-sponsors conclude this bill would  
            complete the WPC and the Health Home Program by creating a  
            Medi-Cal Housing Program which would fund rental assistance to  
            fund rental assistance tied to services. 

           SUPPORT AND OPPOSITION  :
          Support:  Corporation for Supportive Housing (co-sponsor) 
                    Housing California (co-sponsor)
                    California Chapter of the American College of  
                    Emergency Physicians
                    California Commission on Aging
                    California Council of Community Behavioral Health  
                    Agencies
                    Casa Major, Inc.
                    Community Housing Partnership
                    County Behavioral Health Directors Association
                    Episcopal Community Services of San Francisco
                    League of California Cities
                    Mental Health America of California
                    PATH Ventures
                                                                                         United Way of Greater Los Angeles
                    Western Center on Law and Poverty 
          
          Oppose:   None on file


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