BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 315|
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THIRD READING
Bill No: SB 315
Author: Monning (D) and Hernandez (D), et al.
AmendedAmended:5/5/15
Vote: 21
SENATE HEALTH COMMITTEE: 8-1, 4/29/15
AYES: Hernandez, Nguyen, Hall, Mitchell, Monning, Pan, Roth,
Wolk
NOES: Nielsen
SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NOES: Bates, Nielsen
SUBJECT: Health care access demonstration project grants
SOURCE: State Treasurer John Chiang
DIGEST: This bill creates the California Health Access Model
Program (CHAMP) Two Account for purposes of administering a
second competitive grant selection process, in accordance with
the CHAMP authorizing statute, to fund one or more projects
designed to demonstrate specified new or enhanced cost-effective
methods of delivering quality health care services to improve
access to care for vulnerable populations or communities, or
both.
ANALYSIS:
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Existing law:
1)Establishes the California Health Facilities Financing
Authority (CHFFA), consisting of nine members, including the
State Treasurer who serves as chairman. Permits CHFFA to make
loans from the continuously appropriated CHFFA Fund to public
or nonprofit health institutions for financing or refinancing
the acquisition, construction, or remodeling of health
facilities.
2)Creates CHAMP, and permits CHFFA, following the completion of
a competitive selection process, to award one or more grants
that total up to $1.5 million, to one or more projects
designed to demonstrate specified new or enhanced
cost-effective methods of delivering quality health care
services to improve access to quality health care for
vulnerable populations or communities, or both, that are
effective at enhancing health outcomes and improving access to
quality health care and preventive services, as specified.
3)Permits a CHAMP grant to be allocated in increments to a
demonstration project over multiple years to ensure the
demonstration project's ability to complete its work, as
determined by CHFFA and as specified. Requires, prior to the
initial allocation of funds, the project administrators to
provide evidence that it has or will have additional funds
sufficient to ensure its completion.
4)Prohibits a health facility that has received CHFFA funding,
except for a facility that qualifies as a "small and rural
hospital," from being eligible to receive CHAMP funds for a
demonstration project, as specified.
5)Permits CHAMP funds provided to a demonstration project to be
used to supplement, but not to supplant, existing financial
and resource commitments of the grantee or grantees or any
other member of a collaborative effort that has been awarded a
demonstration project grant.
6)Permits CHFFA, if a demonstration project that receives a
CHAMP grant is successful at developing a new method of
delivering high-quality and cost-effective health care
services in community settings that result in increased access
to quality health care and preventive services or improved
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health care outcomes for vulnerable populations or
communities, or both, to implement a second grant program that
awards up to $5 million, as specified, to eligible recipients.
7)Requires CHFFA to prepare and provide a report to the
Legislature and the Governor by January 1, 2014, on the
outcomes of CHAMP, as specified.
This bill:
1)Creates the CHAMP Two Account within the CHFFA Fund for
purposes of administering a second competitive grant selection
process, in accordance with the CHAMP authorizing statute, to
fund one or more projects designed to demonstrate specified
new or enhanced cost-effective methods of delivery quality
health care services to improve access to quality health care
for vulnerable populations or communities, or both.
2)Transfers an amount of up to $6.5 million from funds in the
CHFFA Hospital Equipment Loan Program Fund that are not
impressed with a trust for other purposes into the CHAMP Two
Account for the purpose of administering a second competitive
grant selection process. Requires any moneys remaining in the
CHAMP Two Account on January 1, 2023, to revert as of that
date to the CHFFA Hospital Equipment Loan Program Fund.
3)Requires CHFFA to prepare and provide the report specified in
7) above every two years, commencing on January 1, 2017.
Background
CHFFA was created to be the state's vehicle for providing
financial assistance to public and nonprofit health care
providers through loans funded by the issuance of tax-exempt
bonds. To this end, CHFFA administers the Bond Financing
Program and the Tax-Exempt Equipment Financing Program. CHFFA
also provides direct loans to small and rural health facilities
through the Healthcare Expansion Loan Program (HELP) II
Financing Program and the Medi-Cal Bridge Loan Program.
Additionally, CHFFA administers four grant programs - the
Community Clinic Grant Program, the Children's Hospital
Programs, the CHAMP, and the Investment in Mental Health
Wellness Grant Program - to provide funding to community
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clinics, 13 of the state's children's hospitals, a demonstration
project that seeks to fund innovative models of health care
delivery, and counties to improve access to mental health crisis
services.
By borrowing through CHFFA, health facilities can likely obtain
lower interest rates than they would through conventional bonds.
Generally, non-profit, licensed health facilities in
California, including adult day health centers, community
clinics, skilled nursing facilities, developmentally disabled
centers, hospitals, and drug and alcohol rehabilitation centers
are eligible for CHFFA financing. Proceeds from CHFFA
financings may be used for project-related costs, including:
construction; remodeling and renovation; land acquisition (as
part of the proposed project); acquisition of existing health
facilities; purchase or lease of equipment; refinancing or
refunding of prior debt; working capital for start-up
facilities; costs of bond issuance; feasibility studies; and
reimbursement of prior expenses. Under statute, savings
resulting from issuance of tax-exempt bonds for borrowers must
be transferred to the consuming public through lower or
contained costs for delivery of health services. In 2014,
$894,100,000 in bonds was issued by CHFFA. In 2010,
$712,845,000 in bonds was issued by CHFFA.
1)CHAMP funding. According to CHFFA, the original CHAMP program
used excess funds largely derived from the annual and initial
administrative fees paid by CHFFA bond borrowers. CHFFA bond
fees are set competitively with those charged by competing
lenders and generally cover CHFFA's overhead expenses, such as
personnel costs, travel, legal services, financial advisors
and other operational expenses. Borrowers are not charged an
application fee but they do pay initial fees and annual fees,
determined by the size of their issuances, of $500 and other
fees at various times, which differ depending on the type of
borrower and type of fee. According to CHFFA, at the time of
the creation of the initial CHAMP grant program, the fund
balance was approximately $14 million, which had been
accumulated over the past 30 years.
The fees proposed for the CHAMP Two awards come from the HELP
II financing program fund balance. The current fund balance
for the HELP II financing program Hospital Equipment Loan
Program is approximately $24 million, derived in part from a
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1999-2000 General Fund contribution of $5 million, a matching
contribution from CHFFA's main fund balance, and principal and
interest payments made by CHFFA HELP II borrowers since the
start of the HELP II Loan Program. These sums have been used
to provide capital financing for small (defined by their
revenue stream) or rural health facilities and to district
hospitals in order to expand and improve health services.
2)First CHAMP award. According to CHFFA, in 2013 it informed
over 900 possible interested parties via email of the
opportunity to submit a letter of interest to participate in
the initial phase of CHAMP. Recipients included California's
health care related associations, foundations, colleges,
clinics, counties and the CHFFA's electronic distribution
list. Several associations passed along the notice to their
members in newsletters and emails. California Healthline, a
widely read publication of the California Healthcare
Foundation, published it as well. Twenty entities submitted
letters of interest in mid-April, 2013, which were reviewed
for applicant and project eligibility based on the criteria in
relevant regulations. Twelve letters of interest were deemed
to be from eligible entities and for eligible projects. All
eligible entities submitted a full grant application in
mid-August 2013. Two of twelve that had similar projects
teamed up together to submit a single collaborative project.
Applications were submitted by a number of organizations,
including health facilities, community based organizations,
health plans, and two universities.
A single CHAMP grant of $1.4 million was awarded to the San
Francisco Health Plan (SFHP) for its Community-Based Care
Management pilot program. According to a letter from State
Treasurer John Chiang, this program operates from a holistic,
patient-centered approach and functions to bridge the gap
between the existing health and social care systems for
high-risk and high-cost members. The program, known as
"CareSupport," serves vulnerable SFHP members who are high
utilizers of hospital inpatient and emergency departments and
who are at extremely high risk for mortality and mobility due
to housing instability, mental illness, and addiction. SFHP's
partners in the project are the San Francisco Department of
Public Health (SFDPH) and San Francisco General Hospital and
Trauma Center. In order to complete the project, SFHP will
leverage about $2 million from its own operating funds,
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including a $560,000 supportive housing grant from the SFDPH.
Comments
Author's statement. According to the author, SB 315 is needed
to provide CHFFA with the legislative authority to utilize up to
$6.5 million from CHFFA's Hospital Equipment Loan Program Fund
to support a second round of CHAMP grants for demonstration
projects designed to improve health outcomes and advance the
innovative delivery of health care to underserved and vulnerable
populations throughout California. The CHAMP grants have the
potential to increase health access, improve clinical outcomes,
and achieve cost savings in the health care system.
Prior Legislation
AB 272 (Monning, 2012) would have created CHAMP and would have
allowed CHFFA to award grants to one or more demonstration
projects up to a combined total of $1.5 million. AB 272 died on
the Senate inactive file.
AB 1437 (Committee on Budget, Chapter 23, Statutes of 2012)
contained language substantially similar to that contained in AB
272.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, one-time
transfer of $6.5 million to fund new grants (CHFFA Fund).
SUPPORT: (Verified5/28/15)
State Treasurer John Chiang (source)
American Federation of State, County, and Municipal Employees
California Chapter of the National Association of Social Workers
California Hospital Association
California Physical Therapy Association
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OPPOSITION: (Verified5/28/15)
None received
Prepared by:Melanie Moreno / HEALTH /
5/30/15 17:26:56
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