BILL ANALYSIS Ó
SB 315
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Date of Hearing: June 30, 2015
ASSEMBLY COMMITTEE ON HEALTH
Rob Bonta, Chair
SB
315 (Monning and Ed Hernandez) - As Amended June 22, 2015
SENATE VOTE: 29-10
SUBJECT: Health care access demonstration project grants.
SUMMARY: Authorizes the California Health Facilities Financing
Authority (CHFFA) to transfer up to $6.5 million from its
Hospital Equipment Loan Program Fund (Fund) for use in a second
California Health Access Model Program (CHAMP) competitive grant
selection process. Specifically, this bill:
1)Creates a California Health Access Model Program Two (CHAMP 2)
Account within the CHFFA Fund for the purpose of administering
a second competitive grant selection process, to fund one or
more projects designed to demonstrate new or enhanced
cost-effective methods of delivery of health care services to
improve access to care for vulnerable populations or
communities.
2)Requires any funds remaining in the CHAMP 2 account on January
1, 2023 to revert to the CHFFA Fund.
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3)Requires CHFFA to prepare and provide a biennial report to the
Legislature and the Governor, commencing on January 1, 2017,
on the outcomes of CHAMP and CHAMP 2.
4)Lowers from 62 to 60 the age range used in the CHFFA
definition of a residential care facility for the elderly
(RCFE) to be consistent with the age range used by the
Department of Social Services for RCFE licensing requirements.
EXISTING LAW:
1)Establishes CHFFA, consisting of nine members, including the
State Treasurer who serves as Chairman and 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 grants totaling 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 that are effective at enhancing health outcomes
and improving access to quality health care and preventive
services.
3)Permits a CHAMP grant to be made to a demonstration project
over multiple years to ensure the demonstration project can
complete its work. Requires the project administrators to
provide evidence that it has additional funds sufficient to
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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.
5)Permits CHAMP funds used in a demonstration project to
supplement existing resource commitments of the grantee or any
other member of a collaborative effort.
6)Permits CHFFA, if a CHAMP-funded demonstration project is
successful, to implement a second grant program that awards up
to $5 million, to eligible recipients to replicate the
successful model in other communities.
7)Requires CHFFA to prepare and provide a report to the
Legislature and the Governor by January 1, 2014, on the
outcomes of CHAMP.
FISCAL EFFECT: According to the Senate Appropriations
Committee, a one-time transfer of $6.5 million to fund new
grants (CHFFA Fund).
COMMENTS:
1)PURPOSE OF THIS BILL. According to the authors, this bill is
needed to provide CHFFA with the legislative authority to
utilize up to $6.5 million from CHFFA's Hospital Equipment
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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.
2)BACKGROUND.
a) California Health Facilities Financing Authority
(CHFFA). CHFFA provides 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. 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.
Savings resulting from issuance of tax-exempt bonds for
borrowers must be transferred to the public through lower
or contained costs for delivery of health services. In
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2014, more than $894 million in bonds were issued by CHFFA.
Additionally, CHFFA administers four grant programs, the
Community Clinic Grant Program, the Children's Hospital
Programs, CHAMP, and the Investment in Mental Health
Wellness Grant Program to provide funding to community
clinics, 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.
b) CHAMP Funding. The funds proposed for the CHAMP 2
awards will come from HELP II financing program fund
balance. The current fund balance for the HELP II
financing program is approximately $24 million, derived in
part from a 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 or rural health facilities and to
district hospitals in order to expand and improve health
services.
c) The first CHAMP award. According to CHFFA, in 2013 it
informed over 900 interested parties of the opportunity to
submit a letter of interest to participate in the initial
phase of CHAMP, including California's health care related
associations, foundations, colleges, clinics, and counties.
Twenty entities submitted letters of interest in
mid-April, 2013, which were reviewed for applicant and
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project eligibility based on the criteria established
through regulations. Twelve letters of interest were
deemed to be eligible. All eligible entities submitted a
full grant application in mid-August 2013. 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. 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. CHFFA will
monitor the outcomes of the Program and determine 18 months
after the first grant allocation if the implementation of
the second grant is warranted.
3)SUPPORT. According to California State Treasurer, John
Chiang, the sponsor of this bill, California's health care and
medical services systems have undergone devastating
reductions, leaving its most vulnerable and underserved
populations without the proper access to health care needed to
survive and thrive. The Treasurer states, we continue to see
limited funding for adult dental benefits and decreased access
as fewer providers accept Medi-Cal patients due to decreases
in provider payments. In 2012 the Legislature took steps to
address these issues and increase health access to those most
vulnerable by passing CHAMP as part of a Budget trailer bill.
The existing CHAMP program furthers CHFFA's mission to utilize
available funds to spur innovative and cost-effective health
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care services approaches. The Treasurer concludes, with the
same vision in mind, this bill would provide CHFFA with
another opportunity to support the creation of new models for
health care deliver to California's most vulnerable
populations and communities.
The American Federation of State, County and Municipal
Employees, AFL-CIO, the California Hospital Association, and
the National Association of Social Workers all support this
bill because they believe it will go a long way in finding and
spreading new and creative ways to meet the health care needs
of Californians.
4)PREVIOUS LEGISLATION.
a) AB 272 (Monning) of 2012 would have created CHAMP and
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.
b) AB 1437 (Committee on Budget), Chapter 23, Statutes of
2012 contained language substantially similar to that
contained in AB 272.
REGISTERED SUPPORT / OPPOSITION:
Support
John Chiang, Treasurer, State of California (sponsor)
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American Federation of State, County and Municipal Employees,
AFL-CIO
California Hospital Association
California Physical Therapy Association
National Association of Social Workers - California Chapter
Opposition
None on file.
Analysis Prepared by:Lara Flynn / HEALTH / (916)
319-2097