BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 2821|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
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                                   THIRD READING 


          Bill No:  AB 2821
          Author:   Chiu (D) and Santiago (D), et al.
          Amended:  8/19/16 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:    Housing for a Healthy California Program


          SOURCE:    Corporation for Supportive Housing
                     Housing California


          DIGEST:   This bill requires the Department of Housing and  
          Community Development to establish the Housing for a Healthy  
          California Program, which would fund competitive grants to pay  
          for interim and long-term rental assistance for homeless  
          Medi-Cal beneficiaries who meet specified criteria, including  
          who are eligible for Supplemental Security Income. Establishes  
          criteria for an applicant to be eligible for a grant, including  








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          having identified a source of funding for housing transition  
          services and tenancy sustaining services and which agrees to  
          contribute funding for interim and long-term rental assistance.  
          Requires the Housing for a Healthy California Program to be  
          funded, upon appropriation by the Legislature.


          Senate Floor Amendments of 8/19/16 rename the Medi-Cal Housing  
          Program as the Housing for a Healthy California Program, expand  
          the definition of "long-term rental assistance," delay  
          implementation dates in this bill, and delete references to and  
          obligations of the Department of Health Care Services under this  
          bill.


          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 to establish the Housing for a Healthy  
             California Program on or before October 1, 2017, which would  
             fund competitive grants to pay for interim and long-term  
             rental assistance. Requires the Housing for a Healthy  
             California 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 April 1, 2018, and every year  







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             thereafter, subject to legislative appropriation, to award  
             grants on a competitive basis to eligible grant applicants.  
             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  
             Housing for a Healthy California Program grant, including  
             requiring an applicant to identify 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. Permits funding  
             for these services to include, but not be limited to, one or  
             more of the following:

              a)    County general funds;
              b)    Whole Person Care pilot program funds;
              c)    The Health Home Program; or, 
              d)    Other county-controlled funding to provide these  
                services to eligible participants.

           4) Requires an applicant, in order to be eligible for a Housing  
             for a Healthy California Program grant, to agree to  
             contribute funding for interim and long-term rental  
             assistance through an identified source. 

           5) Requires an applicant, in order to be eligible for a Housing  
             for a Healthy California 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.

           6) 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:

              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  







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                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.

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

           8) Defines eligibility to receive assistance under a grant  
             awarded under the Housing for a Healthy California 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, or a locally controlled  
                services program funding or providing services in  
                supportive housing; and


              e)    Is likely to improve his or her health conditions with  
                supportive housing.

           9) Requires HCD to coordinate with DHCS to match Program  
             participant data to Medi-Cal data to identify outcomes among  
             participants as well as changes in health care costs  
             associated with housing and services provided under the  
             Housing for a Healthy California 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  







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             housing.

           10)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  
                and outcomes of the Program;


              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.


           11)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.

           12)Requires HCD to reimburse DHCS for the costs of  
             collaborating in matching and providing relevant data. Caps  
             HCD administrative costs for program administration at no  
             more than 5% of the funds appropriated for the Housing for a  
             Healthy California Program.

           13)Requires HCD, on or before October 1, 2017, to draft  
             guidelines for stakeholder comment to fund competitive grants  
             to pay for interim and long-term rental assistance under the  
             Housing for a Healthy California Program. Requires the  
             guidelines to detail competitive scoring criteria that  
             includes, but is not limited to, scoring that awards points  
             based upon specified criteria.

           14)Requires HCD to collect data midyear and annually from the  
             Housing for a Healthy California Program grantees.

           15)Requires HCD to contract with an independent evaluator, or  
             work with an evaluator contracted with DHCS, to analyze data  
             to determine changes in health care costs associated with  
             services provided under the Housing for a Healthy California  







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             Program by no later than April 1, 2018. Requires HCD to  
             provide data collected to the evaluator on a regular basis as  
             needed.

           16)Requires HCD to report data collected to specified  
             legislative budget and policy committees, by October 1, 2019,  
             for grants awarded in 2018, and in subsequent years  
             thereafter in which the Housing for a Healthy California  
             Program is allocated additional funds.

           17)Permits HCD or DHCS to enter into exclusive or nonexclusive  
             contracts on a bid or negotiated basis to implement this  
             bill.
            
           18)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.


          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  
            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 analysis of the  
          previous version of this bill: 








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          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  
            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  







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            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:   (Verified8/22/16)


          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
          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 








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          OPPOSITION:   (Verified8/22/16)


          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,  
            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
          8/23/16 9:59:37


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