BILL ANALYSIS Ó SENATE COMMITTEE ON HEALTH Senator Ed Hernandez, O.D., Chair BILL NO: AB 2821 --------------------------------------------------------------- |AUTHOR: |Chiu | |---------------+-----------------------------------------------| |VERSION: |June 16, 2016 | --------------------------------------------------------------- --------------------------------------------------------------- |HEARING DATE: |June 22, 2016 | | | --------------------------------------------------------------- --------------------------------------------------------------- |CONSULTANT: |Scott Bain | --------------------------------------------------------------- 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 AB 2821 (Chiu) Page 2 of ? 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. AB 2821 (Chiu) Page 3 of ? 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; AB 2821 (Chiu) Page 4 of ? 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 AB 2821 (Chiu) Page 5 of ? 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, AB 2821 (Chiu) Page 6 of ? 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 : ----------------------------------------------------------------- |Assembly Floor: |63 - 13 | |------------------------------------+----------------------------| |Assembly Appropriations Committee: |15 - 5 | |------------------------------------+----------------------------| |Assembly Housing and Community | 6 - 1 | |Development Committee: | | ----------------------------------------------------------------- COMMENTS : 1)Author's statement. According to the author, California is home to 20% of the country's homeless population. Homelessness AB 2821 (Chiu) Page 7 of ? 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 AB 2821 (Chiu) Page 8 of ? 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 AB 2821 (Chiu) Page 9 of ? 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 AB 2821 (Chiu) Page 10 of ? 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 -- END --