BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 315  


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          Date of Hearing:  July 15, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          SB 315  
          (Monning) - As Amended June 22, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill authorizes the California Health Facilities Financing  
          Authority (CHFFA) to transfer up to $6.5 million from its  
          Hospital Equipment Loan Program for use in a second California  
          Health Access Model Program (CHAMP) competitive grant selection  








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          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.


          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 existing statute governing RCFE  
            licenses.


          


          FISCAL EFFECT:





          $6.5 million from the CHFFA Fund will be redirected to fund the  
          CHAMP 2 effort as specified, to be allocated to eligible  
          projects, as defined.  The timing of actual expenditures is  








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          unclear.


          


          COMMENTS:





          1)Purpose. According to the author, this bill is needed to  
            provide CHFFA with the legislative authority to use up to $6.5  
            million from CHFFA's HELP Fund to support a second round of  
            CHAMP grants.  Grants will be available for demonstration  
            projects designed to improve health outcomes and advance the  
            innovative delivery of health care to underserved and  
            vulnerable populations throughout California.  The author  
            notes CHAMP grants have the potential to increase health  
            access, improve clinical outcomes, and achieve cost savings in  
            the health care system. This bill is sponsored by California  
            State Treasurer John Chiang. 



          2)Background. CHFFA provides financial assistance to public and  
            nonprofit health care providers through loans funded by the  
            issuance of tax-exempt 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 for project-related costs, including construction  
            and renovation costs.  One CHFFA bond financing program, the  
            Healthcare Expansion Loan Program (HELP) II Financing Program,  
            makes direct loans to small and rural health facilities. HELP  
            II loans are offered at 3% interest, 3-15 year financing, and  
            in amounts up to $1 million.  








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            AB 1437 (Committee on Budget), Chapter 23, Statutes of 2012  
            created the original CHAMP program, and allowed CHFFA to award  
            up to $6.5 million in grants to one or more demonstration  
            projects up to a combined total of $1.5 million for a single  
            grantee. $5 million of this amount is contingent on  
            demonstrating successful outcomes. 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 serves vulnerable SFHP members who are high  
            utilizers of health care services and high risk for mortality.  
             


          
          3)Why CHAMP 2? A variety of factors have contributed to a  
            significant fund balance in the self-sustaining HELP II Fund.   
            Given this significant balance is likely to be maintained  
            without action to reduce it, CHFFA has examined ways to  
            responsibly use this balance.  CHFFA recently commissioned a  
            financial analysis of potential options to spend down the fund  
            balance in order to improve access to financing.  They modeled  
            the effect of expanding the loan length beyond the current 15  
            years, extending loans to borrowers with higher credit risk,  
            and increasing the size of loans, and also considered  
            strategies to increase the number of loans.  The CHFFA board  
            approved extending the loan length and increasing loan  
            amounts.  In addition, another round of CHAMP grant programs  
            was considered, which this bill implements.  The financial  
            modeling projects the fund can absorb all the proposed changes  
            and maintain a robust balance of at least $6 million, which  
            was adopted as the minimum floor for the program's fund  
            balance.



          Analysis Prepared by:Lisa Murawski / APPR. / (916)  








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          319-2081