BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2821|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2821
Author: Chiu (D) and Santiago (D), et al.
Amended: 8/15/16 in Senate
Vote: 21
SENATE HEALTH COMMITTEE: 9-0, 6/22/16
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Nielsen,
Pan, Roth, Wolk
SENATE TRANS. & HOUSING COMMITTEE: 10-1, 6/28/16
AYES: Beall, Cannella, Allen, Bates, Galgiani, Leyva, McGuire,
Mendoza, Roth, Wieckowski
NOES: Gaines
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 63-13, 6/2/16 - See last page for vote
SUBJECT: Medi-Cal Housing Program
SOURCE: Corporation for Supportive Housing
Housing California
DIGEST: This bill 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
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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.
ANALYSIS:
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. Authorizes 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
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.
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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' Informational Bulletin regarding
Housing-Related Activities and Services for People with
Disabilities, that includes one or more of the following:
a) County general funds;
b) WPC pilot program funds; or,
c) The Health Home Program.
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:
a) County general funds;
b) Flexible housing pools created through a WPC pilot;
or,
c) 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
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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;
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
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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 HCD 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 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
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criteria.
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.
19)Permits HCD or DHCS to enter into exclusive or nonexclusive
contracts on a bid or negotiated basis to implement this
bill, 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.
20)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.
Comments
1)Author's statement. According to the author, California is
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, 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
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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.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
1)Unknown annual costs to provide grants to support rental
assistance for homeless Medi-Cal beneficiaries (General
Fund/GF). The bill does not appropriate any funding for the
program nor does it specify a projected level of funding for
future years. Staff notes that the author and other members of
the Assembly had proposed to include $60 million in the
current year budget to fund this bill (as part of a larger
program for affordable housing). That funding was not included
in the enacted Budget Act.
2)One-time costs of about $500,000 to develop program
requirements, consult with stakeholders, and adopt program
guidelines by the HCD (GF). This bill requires HCD to develop
the program immediately, whereas actually funding grants under
the program would be subject to an appropriation by the
Legislature. Therefore, HCD would incur the upfront
administrative costs, regardless of whether the Legislature
appropriated money in future years for the program.
3)Ongoing costs of about $300,000 per year to administer the
grant program by HCD (GF). Based on the initial proposal for
$60 million in initial funding, the Department anticipated
needing about $300,000 per year to administer the grant
program.
4)Ongoing costs, likely in the low hundreds of thousands per
year, to contract with an independent evaluator to analyze
program data, including health care spending data for program
participants (GF). The bill requires HCD to contract for an
independent evaluation. The bill does not place an end date on
the evaluation of the program, therefore staff assumes that
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program evaluation will be an ongoing cost.
5)Ongoing costs, likely in the low hundreds of thousands, for
DHCS to coordinate with HCD and to collect and report on
Medi-Cal expenditures for participating Medi-Cal beneficiaries
(GF and federal funds). The bill requires the independent
evaluator to determine changes in health care costs for
participating Medi-Cal beneficiaries. DHCS will likely incur
staff costs to compile both fee-for-service and managed care
expenditure data.
6)Unknown, but significant future public savings are likely due
to reduced health care costs for participating individuals, to
the extent the program is funded (GF, local funds, federal
funds). There are numerous published studies that have shown
significant reductions in public spending when homeless
individuals who are high-utilizers of public services are
provided housing as well as physical and mental health
services. Those studies have shown a strong cost-benefit ratio
to "housing first" pilot projects. To the extent that this
program is funded and funding is targeted towards
high-utilizers of health care services, the program is likely
to generate future cost savings in avoided health care costs
(as well as potential savings due to decreased costs in the
criminal justice system). Cost savings could accrue to the
state due to reductions in hospitalizations at private
hospitals, to local governments due to reductions in
hospitalizations at public hospitals or psychiatric hospitals,
and to the federal government which provides matching funds
for Medi-Cal services. Because of the complexity of financing
for Medi-Cal services, cost savings to the state may or not
fully offset state expenditures.
SUPPORT: (Verified8/12/16)
Corporation for Supportive Housing (co-source)
Housing California (co-source)
California Association of Public Hospitals and Health Systems
California Chapter of the American College of Emergency
Physicians
California Commission on Aging
California Council of Community Behavioral Health Agencies
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Casa Major, Inc.
Community Housing Partnership
County Behavioral Health Directors Association
County of San Bernardino
Disability Rights California
Episcopal Community Services of San Francisco
League of California Cities
Mental Health America of California
PATH Ventures
Southern California Association of Nonprofit Housing
United Way of Greater Los Angeles
Western Center on Law and Poverty
OPPOSITION: (Verified8/12/16)
Department of Finance
ARGUMENTS IN SUPPORT: The Corporation for Supportive Housing
and Housing California argue Californians experiencing
homelessness incur disproportionate Medi-Cal costs, are frequent
users of hospitals and corrections systems, and have poor health
outcomes. Supporters argue that evidence shows significant
decreased health costs from moving people off the streets and
into stable housing, and this bill will fund rental assistance
tied to services.
ARGUMENTS IN OPPOSITION:The Department of Finance opposes this
bill because it may result in significant GF costs without
generating any additional federal funding in the Medi-Cal
program for housing initiatives.
ASSEMBLY FLOOR: 63-13, 6/2/16
AYES: Achadjian, Alejo, Arambula, Atkins, Baker, Bloom,
Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,
Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández,
Holden, Irwin, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, McCarty, Medina, Mullin, Nazarian,
O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
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Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Wilk,
Williams, Wood, Rendon
NOES: Travis Allen, Brough, Dahle, Beth Gaines, Gallagher,
Grove, Hadley, Harper, Jones, Mathis, Obernolte, Olsen, Wagner
NO VOTE RECORDED: Bigelow, Mayes, Melendez, Patterson
Prepared by:Scott Bain / HEALTH / (916) 651-4111
8/15/16 20:33:33
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