Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would delete the requirement for the department to complete that analysis, and instead would make housing support services for specified populations a covered Medi-Cal benefit when the department has begun a specified evaluation required under the CalAIM Waiver Special Terms and Conditions, and the Legislature has made an appropriation for purposes of the housing support services. The bill would require the department to seek federal approval for the housing support services benefit, as specified. Under the bill, subject to an appropriation by the Legislature, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

The bill would authorize the department to implement, interpret, or make specific this section, in whole or in part, by means of all-county letters, plan letters, provider bulletins, information notices, or similar instruction, and to enter into exclusive or nonexclusive contracts, or amend existing contracts for its purposes, as specified. The bill would authorize these provisions to be modified by the department to the extent necessary to meet the requirements of federal law or regulations, to obtain federal approval, or to enhance the probability that federal approval can be obtained, as specified.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would require the department, if the independent analysis finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within 6 months of the completion of the analysis. The bill would require the department to report the outcomes of the analysis to the Legislature by July 1, 2024. delete the requirement for the department to complete that analysis, and instead would make housing support services for specified populations a covered Medi-Cal benefit when the department has begun a specified evaluation required under the CalAIM Waiver Special Terms and Conditions, and the Legislature has made an appropriation for purposes of the housing support services. The bill would require the department to seek federal approval for the housing support services benefit, as specified. Under the bill, subject to receipt of those federal approvals, and subject to an appropriation by the Legislature, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness, as specified. homelessness. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would require the department, if the independent analysis finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within 6 months of the completion of the analysis. The bill would require the department to report the outcomes of the analysis to the Legislature by July 1, 2024. Under the bill, subject to receipt of those federal approvals, and subject to an appropriation by the Legislature, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness, as specified. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

If the evaluation finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, the bill would require the department to provide recommendations for building capacity and a timeline for implementation consistent with the analysis findings.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would require the department department, if the independent analysis finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within 6 months of the completion of the above-described analysis. The bill would require the department to report the outcomes of the analysis to the Legislature by July 1, 2024. Under the bill, subject to receipt of those federal approvals, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness, as specified. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

If the evaluation finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, the bill would require the department to provide recommendations for building capacity and a timeline for implementation consistent with the analysis findings.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would require the department to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within 6 months of the completion of the above-described analysis. Under the bill, subject to receipt of those federal approvals, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness, as specified. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

If the evaluation finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, the bill would require the department to provide recommendations for building capacity and the a timeline for creating sufficient capacity implementation consistent with the analysis findings.

Existing law establishes the Medi-Cal program, which is administered by the State Department of Health Care Services and under which qualified low-income individuals receive health care services. The Medi-Cal program is, in part, governed and funded by federal Medicaid program provisions.

Existing law, subject to implementation of the California Advancing and Innovating Medi-Cal (CalAIM) initiative, authorizes a Medi-Cal managed care plan to elect to cover community supports approved by the department as cost effective and medically appropriate in a comprehensive risk contract that are in lieu of applicable Medi-Cal state plan services. Under existing law, community supports that the department is authorized to approve include, among other things, housing transition navigation services, housing deposits, and housing tenancy and sustaining services.

Existing law, subject to an appropriation, requires the department to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Existing law requires that the analysis take into consideration specified information, including the number of providers in relation to each regions or countys number of people experiencing homelessness. Existing law requires the department to report the outcomes of the analysis to the Legislature by January 1, 2024.

This bill would require the department to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within 6 months of the completion of the above-described analysis. Under the bill, subject to receipt of those federal approvals, a Medi-Cal beneficiary would be eligible for those services if they either experience homelessness or are at risk of homelessness, as specified. Under the bill, the services would include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, as defined.

If the evaluation finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, the bill would require the department to provide recommendations for building capacity and the timeline for creating sufficient capacity consistent with the analysis findings.

GOVERNOR'S VETO

GV Bill Id:AB 1085

Author:(Maienschein)

As Enrolled Ver:September 18, 2023

2/3 vote

SUMMARY

Requires the Department of Health Care Services (DHCS) to add housing support services as a Medi-Cal benefit, contingent on federal approval and federal financial participation, legislative appropriation for the purpose, and the commencement of a specified evaluation.

Senate Amendments

1. Delete the requirement for DHCS to complete an analysis of network capacity for housing support services.
2. Make housing support services for specified populations a covered Medi-Cal benefit, contingent on federal approval and federal financial participation, legislative appropriation for the purpose, and the commencement of a specified evaluation.
3. Require DHCS to seek federal approval of a covered Medi-Cal benefit for housing support services no earlier than January 1, 2025 and no later than July 1, 2026.
4. Authorize DHCS to implement the bill through bulletin or other sub-regulatory guidance and exempts DHCS from several public contracting requirements.
5. Authorize DHCS to modify any provision of the operative section establishing the housing support service benefit, to the extent necessary to meet the requirements of federal law or regulations, to obtain federal approval, or to enhance the probability that federal approval can be obtained, provided the modifications do not violate the spirit and intent of the section.
6. Require DHCS to consult with stakeholders to the extent practical and notify the Legislature of expected modifications.

Governor's Veto Message

This bill would require the Department of Health Care Services (DHCS) to establish a Medi-Cal benefit to cover housing support services for individuals experiencing or at risk of homelessness, subject to an appropriation and federal approval.

My Administration has made significant investments to combat homelessness and provide housing supports. While I appreciate and share the author's goal to support those who are experiencing homelessness, new Medi-Cal benefits must be considered as part of the annual budget process. For example, the 2023 Budget Act establishes coverage for CalAIM transitional rent, beginning in 2024- 25, allowing for up to six months of rent or temporary housing for vulnerable Californians, including those who are or are at risk of becoming homeless.

DHCS estimates additional annual costs to the Medi-Cal program in the range $18.3 million to $40.4 million General Fund to implement this bill. These costs must be considered alongside other budgetary priorities.

In partnership with the Legislature, we enacted a budget that closed a shortfall of more than $30 billion through balanced solutions that avoided deep program cuts and protected education, health care, climate, public safety, and social service programs that are relied on by millions of Californians. This year, however, the Legislature sent me bills outside of this budget process that, if all enacted, would add nearly $19 billion of unaccounted costs in the budget, of which $11 billion would be ongoing.

With our state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications, such as this measure.

COMMENTS

1. California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by the DHCS that align with the administration's program improvement goals, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver" – both named for the sections of the Social Security Act that authorize state and federal flexibility with Medicaid program rules to implement specific initiatives. DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026.
2. Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations. For instance, home modifications, adaptations, and remediation can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays. Similarly, housing support services, including transition and navigation services, housing deposits, and housing tenancy and sustaining services can potentially provide similar health improvements and avoidance of expensive, high-intensity health care services.

Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. Community Supports, as defined through CalAIM, are alternative services to those covered under the Medi-Cal State Plan, but are delivered by a different provider or in a different setting than is described in the State Plan. Community Supports can only be covered if the state determines they are medically-appropriate and cost-effective substitutes or settings for a State Plan service.

1. DHCS Housing Initiatives. In an effort to address health-related social needs, DHCS currently administers several housing-related initiatives.
   1. Housing Support Services as Community Supports. Housing support services, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, are currently being provided under CalAIM as "Community Supports." Although Medi-Cal managed care plans can choose whether to provide these services, all plans have elected to provide these three services as Community Supports.

As noted above, Community Supports can be provided as a cost-effective substitute for other covered services. According to the January 2023 Community Supports Program Guide issued by DHCS, housing support services can potentially substitute for a number of high-cost and high-intensity State Plan covered services such as emergency and inpatient services, rehabilitation services, and skilled nursing facility services.

• 1. Transitional Rent Community Support Proposal. According to a DHCS proposal in the 2023-24 Governor's Budget, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for use by Medi-Cal managed care plans to improve the well-being and health outcomes of Medi-Cal members during critical transitions. This "Transitional Rent" Community Support is envisioned to allow the provision of up to six months of rent or temporary housing to eligible individuals who meet all of the following criteria:
     1. Experiencing homelessness or at risk of homelessness;
     2. Transitioning out of institutional levels of care, a correctional facility, or the foster care system; and,
     3. At risk of incurring other Medicaid state plan services, such as inpatient hospitalizations or emergency department visits.
  2. Behavioral Health Bridge Housing (BHBH). The BHBH program was authorized through June 30, 2027 under AB 179 (Ting), Chapter 249, Statutes of 2022. Through the BHBH program, DHCS will award funds to county behavioral health agencies and tribal entities to address the immediate housing needs of people experiencing homelessness who have serious behavioral health conditions, including a serious mental illness and/or substance use disorder. A total of $907 million will be provided to counties in the initial round of funding, with requests for application due from counties on April 28, 2023. The BHBH program will provide support through various "bridge" housing settings, including tiny homes, interim housing, rental assistance models, and assisted living settings. All bridge housing settings must include voluntary supportive services to help program participants obtain and maintain housing, manage symptoms of serious behavioral health conditions, and support recovery and wellness.

According to the DHCS 2023-24 Governor's Budget proposal, the 2022 Budget Act provided $1 billion General Fund for the BHBH in fiscal year 2022-23, with another $500 million General Fund planned for fiscal year 2023-24.

The Governor's 2023-24 Budget proposed to delay half ($250 million) of the fiscal year 2023-24 funding for the BHBH until fiscal year 2024-25 given the state's projected General Fund revenue decline. However, the Governor's May Revision proposal effectively eliminates the proposed delay of $250 million in the BHBH program from fiscal year 2023-24 to 2024-25 and includes $500 million one-time Mental Health Services Fund in 2023-24, in lieu of the $500 million General Fund.

• 1. Housing and Homelessness Incentive Program (HHIP). Established as a component of the Home and Community Based Services Spending Plan authorized by the federal 2021 American Rescue Plan Act, the HHIP is a voluntary incentive program that enables Medi-Cal managed care plans to earn incentive funds for addressing homelessness and housing insecurity. DHCS established HHIP to improve health outcomes and access to "whole person care" services by addressing housing insecurity and instability as a social determinant of health for the Medi-Cal population. Plans earn financial incentives based on a point system for meeting a number of benchmarks related to local homelessness and investment plans, partnerships, and corresponding actions to connect their members to needed housing services. Managed care plan partner organizations include local homeless Continuum of Care organizations created by the U.S. Department of Housing and Urban Development, local public health jurisdictions, county behavioral health, public hospitals, county social services, local housing departments and others. DHCS will make available up to approximately $1.3 billion for this incentive program.

1. Joint Oversight Hearing. On February 15, 2023, Assembly Committees on Housing and Community Development, Accountability and Administrative Review, Health, and Human Services held a joint informational hearing titled "Coordinating California's Homelessness Services: 2023 Landscape," with the goal of understanding the full scope of the state's investments in homelessness across various policy areas. The associated background paper notes the number of people falling into homelessness poses a major challenge that leads to persistently high rates of homelessness despite recent state and local investments, but strategies such as rental assistance and housing navigation can also help keep individuals at risk of homelessness housed.
2. Considerations for adding Housing Support Services as a Medi-Cal Benefit. According to a fact sheet provided by DHCS, provision of housing support services as Community Supports is intended to serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS indicates that by providing financial resources and robust training and technical assistance to plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly.

As noted above, Community Supports are currently authorized through a demonstration program and the offer of Community Supports is subject to specific rules. Specifically, because Community Supports must overall be medically appropriate and cost-effective substitutes or settings for the State Plan service, this imposes a cost-benefit calculation on the provision of Community Supports that the sponsors of this bill point out may result in inequitable access to services. For instance, while a housing-related Community Support may be considered cost-effective for someone with high health care needs because it prevents an emergency department visit or inpatient stay, it may not be cost-effective to provide this same housing support service to a young mother and child who are otherwise healthy. The author and sponsor indicate that making housing support services a benefit, versus a Community Support offered through a temporary demonstration project, will result in more equitable delivery of services based on need.

According to the Author

Housing support services help people access housing, remain stably housed, and are essential for beneficiaries experiencing homelessness to meaningfully access health care. Accordingly, this bill would require DHCS to seek federal approval for a Medi-Cal housing support services benefit. The author notes that two years ago, DHCS shared an intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness by 2024, but DHCS leadership expressed concern that California faced an inadequate statewide network of providers to meet state or federal requirements. Since that time, the author explains, DHCS has worked to build a statewide network of providers of housing support services with the capacity to participate in and bill Medi-Cal.

Arguments in Support

This bill is supported by a large number of homeless and consumer advocates, including Disability Rights California and National Alliance to End Homelessness. Supporters point out that homelessness drives high health care costs and that housing support services help people access housing and health stability and meaningful care. Supporters assert that DHCS has already expressed an intent to make housing supports a permanent benefit, and that establishing a deadline will drive plans to develop their capacity and providers to participate, improve health outcomes among Californians experiencing homelessness, reduce homelessness, standardize eligibility, and draw down millions of federal dollars.

Arguments in Opposition

The Department of Finance (DOF) is opposed to this measure, citing ongoing General Fund costs within the Medi-Cal program and its assessment that this proposal should be considered as part of the annual budget process. In addition, DOF notes, DHCS has various significant efforts under way addressing housing supports. DOF notes that DHCS estimates additional annual costs to the Medi-Cal program in the range of approximately $36.6 million to $80.9 million ($18.3 million to $40.4 million General Fund), subject to utilization and benefit structure.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
2. Unknown potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federsl funds)

VOTES

ASM HEALTH: 11-0-4

YES: Wood, Waldron, Aguiar-Curry, Arambula, Boerner Horvath, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Wendy Carrillo, Flora, Vince Fong, Joe Patterson

ASM APPROPRIATIONS: 11-3-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

NO: Megan Dahle, Dixon, Mathis

ABS, ABST OR NV: Robert Rivas, Sanchez

ASSEMBLY FLOOR: 63-12-5

YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NO: Alanis, Megan Dahle, Davies, Dixon, Essayli, Flora, Gallagher, Hoover, Mathis, Joe Patterson, Ta, Wallis

ABS, ABST OR NV: Chen, Vince Fong, Lackey, Jim Patterson, Sanchez

SENATE FLOOR: 30-7-3

YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Cortese, Dodd, Durazo, Eggman, Glazer, Gonzalez, Laird, Limón, McGuire, Menjivar, Min, Newman, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener

NO: Dahle, Jones, Nguyen, Niello, Ochoa Bogh, Seyarto, Wilk

ABS, ABST OR NV: Caballero, Grove, Hurtado

ASSEMBLY FLOOR: 63-13-4

YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Rendon, Reyes, Luz Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Robert Rivas

NO: Alanis, Megan Dahle, Davies, Dixon, Essayli, Flora, Gallagher, Hoover, Mathis, Jim Patterson, Joe Patterson, Ta, Wallis

ABS, ABST OR NV: Chen, Vince Fong, Lackey, Sanchez

UPDATED

VERSION: September 18, 2023

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0002542

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1085

Author:(Maienschein)

As Amended Ver:September 8, 2023

Majority vote

SUMMARY

Requires the Department of Health Care Services (DHCS) to add housing support services as a Medi-Cal benefit, contingent on federal approval and federal financial participation, legislative appropriation for the purpose, and the commencement of a specified evaluation.

Senate Amendments

1. Delete the requirement for DHCS to complete an analysis of network capacity for housing support services.
2. Make housing support services for specified populations a covered Medi-Cal benefit, contingent on federal approval and federal financial participation, legislative appropriation for the purpose, and the commencement of a specified evaluation.
3. Require DHCS to seek federal approval of a covered Medi-Cal benefit for housing support services no earlier than January 1, 2025 and no later than July 1, 2026.
4. Authorize DHCS to implement the bill through bulletin or other sub-regulatory guidance and exempts DHCS from several public contracting requirements.
5. Authorize DHCS to modify any provision of the operative section establishing the housing support service benefit, to the extent necessary to meet the requirements of federal law or regulations, to obtain federal approval, or to enhance the probability that federal approval can be obtained, provided the modifications do not violate the spirit and intent of the section.
6. Require DHCS to consult with stakeholders to the extent practical and notify the Legislature of expected modifications.

COMMENTS

1. California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by the DHCS that align with the administration's program improvement goals, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver" – both named for the sections of the Social Security Act that authorize state and federal flexibility with Medicaid program rules to implement specific initiatives. DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026.
2. Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations. For instance, home modifications, adaptations, and remediation can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays. Similarly, housing support services, including transition and navigation services, housing deposits, and housing tenancy and sustaining services can potentially provide similar health improvements and avoidance of expensive, high-intensity health care services.

Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. Community Supports, as defined through CalAIM, are alternative services to those covered under the Medi-Cal State Plan, but are delivered by a different provider or in a different setting than is described in the State Plan. Community Supports can only be covered if the state determines they are medically-appropriate and cost-effective substitutes or settings for a State Plan service.

1. DHCS Housing Initiatives. In an effort to address health-related social needs, DHCS currently administers several housing-related initiatives.
   1. Housing Support Services as Community Supports. Housing support services, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, are currently being provided under CalAIM as "Community Supports." Although Medi-Cal managed care plans can choose whether to provide these services, all plans have elected to provide these three services as Community Supports.

As noted above, Community Supports can be provided as a cost-effective substitute for other covered services. According to the January 2023 Community Supports Program Guide issued by DHCS, housing support services can potentially substitute for a number of high-cost and high-intensity State Plan covered services such as emergency and inpatient services, rehabilitation services, and skilled nursing facility services.

• 1. Transitional Rent Community Support Proposal. According to a DHCS proposal in the 2023-24 Governor’s Budget, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for use by Medi-Cal managed care plans to improve the well-being and health outcomes of Medi-Cal members during critical transitions. This "Transitional Rent" Community Support is envisioned to allow the provision of up to six months of rent or temporary housing to eligible individuals who meet all of the following criteria:
     1. Experiencing homelessness or at risk of homelessness;
     2. Transitioning out of institutional levels of care, a correctional facility, or the foster care system; and,
     3. At risk of incurring other Medicaid state plan services, such as inpatient hospitalizations or emergency department visits.
  2. Behavioral Health Bridge Housing (BHBH). The BHBH program was authorized through June 30, 2027 under AB 179 (Ting), Chapter 249, Statutes of 2022. Through the BHBH program, DHCS will award funds to county behavioral health agencies and tribal entities to address the immediate housing needs of people experiencing homelessness who have serious behavioral health conditions, including a serious mental illness and/or substance use disorder. A total of $907 million will be provided to counties in the initial round of funding, with requests for application due from counties on April 28, 2023. The BHBH program will provide support through various "bridge" housing settings, including tiny homes, interim housing, rental assistance models, and assisted living settings. All bridge housing settings must include voluntary supportive services to help program participants obtain and maintain housing, manage symptoms of serious behavioral health conditions, and support recovery and wellness.

According to the DHCS 2023-24 Governor’s Budget proposal, the 2022 Budget Act provided $1 billion General Fund for the BHBH in fiscal year 2022-23, with another $500 million General Fund planned for fiscal year 2023-24.

The Governor's 2023-24 Budget proposed to delay half ($250 million) of the fiscal year 2023-24 funding for the BHBH until fiscal year 2024-25 given the state’s projected General Fund revenue decline. However, the Governor's May Revision proposal effectively eliminates the proposed delay of $250 million in the BHBH program from fiscal year 2023-24 to 2024-25 and includes $500 million one-time Mental Health Services Fund in 2023-24, in lieu of the $500 million General Fund.

• 1. Housing and Homelessness Incentive Program (HHIP). Established as a component of the Home and Community Based Services Spending Plan authorized by the federal 2021 American Rescue Plan Act, the HHIP is a voluntary incentive program that enables Medi-Cal managed care plans to earn incentive funds for addressing homelessness and housing insecurity. DHCS established HHIP to improve health outcomes and access to "whole person care" services by addressing housing insecurity and instability as a social determinant of health for the Medi-Cal population. Plans earn financial incentives based on a point system for meeting a number of benchmarks related to local homelessness and investment plans, partnerships, and corresponding actions to connect their members to needed housing services. Managed care plan partner organizations include local homeless Continuum of Care organizations created by the U.S. Department of Housing and Urban Development, local public health jurisdictions, county behavioral health, public hospitals, county social services, local housing departments and others. DHCS will make available up to approximately $1.3 billion for this incentive program.

1. Joint Oversight Hearing. On February 15, 2023, Assembly Committees on Housing and Community Development, Accountability and Administrative Review, Health, and Human Services held a joint informational hearing titled "Coordinating California's Homelessness Services: 2023 Landscape," with the goal of understanding the full scope of the state's investments in homelessness across various policy areas. The associated background paper notes the number of people falling into homelessness poses a major challenge that leads to persistently high rates of homelessness despite recent state and local investments, but strategies such as rental assistance and housing navigation can also help keep individuals at risk of homelessness housed.
2. Considerations for adding Housing Support Services as a Medi-Cal Benefit. According to a fact sheet provided by DHCS, provision of housing support services as Community Supports is intended to serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS indicates that by providing financial resources and robust training and technical assistance to plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly.

As noted above, Community Supports are currently authorized through a demonstration program and the offer of Community Supports is subject to specific rules. Specifically, because Community Supports must overall be medically appropriate and cost-effective substitutes or settings for the State Plan service, this imposes a cost-benefit calculation on the provision of Community Supports that the sponsors of this bill point out may result in inequitable access to services. For instance, while a housing-related Community Support may be considered cost-effective for someone with high health care needs because it prevents an emergency department visit or inpatient stay, it may not be cost-effective to provide this same housing support service to a young mother and child who are otherwise healthy. The author and sponsor indicate that making housing support services a benefit, versus a Community Support offered through a temporary demonstration project, will result in more equitable delivery of services based on need.

According to the Author

Housing support services help people access housing, remain stably housed, and are essential for beneficiaries experiencing homelessness to meaningfully access health care. Accordingly, this bill would require DHCS to seek federal approval for a Medi-Cal housing support services benefit. The author notes that two years ago, DHCS shared an intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness by 2024, but DHCS leadership expressed concern that California faced an inadequate statewide network of providers to meet state or federal requirements. Since that time, the author explains, DHCS has worked to build a statewide network of providers of housing support services with the capacity to participate in and bill Medi-Cal.

Arguments in Support

This bill is supported by a large number of homeless and consumer advocates, including Disability Rights California and National Alliance to End Homelessness. Supporters point out that homelessness drives high health care costs and that housing support services help people access housing and health stability and meaningful care. Supporters assert that DHCS has already expressed an intent to make housing supports a permanent benefit, and that establishing a deadline will drive plans to develop their capacity and providers to participate, improve health outcomes among Californians experiencing homelessness, reduce homelessness, standardize eligibility, and draw down millions of federal dollars.

Arguments in Opposition

The Department of Finance (DOF) is opposed to this measure, citing ongoing General Fund costs within the Medi-Cal program and its assessment that this proposal should be considered as part of the annual budget process. In addition, DOF notes, DHCS has various significant efforts under way addressing housing supports. DOF notes that DHCS estimates additional annual costs to the Medi-Cal program in the range of approximately $36.6 million to $80.9 million ($18.3 million to $40.4 million General Fund), subject to utilization and benefit structure.

FISCAL COMMENTS

According to the Senate Appropriations Committee:

1. Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
2. Unknown, potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federal funds).

VOTES:

ASM HEALTH: 11-0-4

YES: Wood, Waldron, Aguiar-Curry, Arambula, Boerner Horvath, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Wendy Carrillo, Flora, Vince Fong, Joe Patterson

ASM APPROPRIATIONS: 11-3-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

NO: Click here to enter text.

ABS, ABST OR NV: Robert Rivas, Sanchez

ASSEMBLY FLOOR: 63-12-5

YES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NO: Alanis, Megan Dahle, Davies, Dixon, Essayli, Flora, Gallagher, Hoover, Mathis, Joe Patterson, Ta, Wallis

ABS, ABST OR NV: Chen, Vince Fong, Lackey, Jim Patterson, Sanchez

UPDATED

VERSION: September 8, 2023

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0002254

 THIRD READING  

Bill No: AB 1085

Author: Maienschein (D)

Amended: 9/8/23 in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 6/14/23

AYES: Eggman, Glazer, Gonzalez, Hurtado, Limón, Menjivar, Roth, Rubio, Wahab, Wiener

NO VOTE RECORDED: Nguyen, Grove

SENATE APPROPRIATIONS COMMITTEE: 5-2, 9/1/23

AYES: Portantino, Ashby, Bradford, Wahab, Wiener

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 63-12, 5/30/23 - See last page for vote

SUBJECT: Medi-Cal: housing support services

SOURCE: Corporation for Supportive Housing

Western Center on Law and Poverty

DIGEST:

This bill requires the Department of Health Care Services (DHCS) to create a Medi-Cal benefit to cover housing support services, including housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, for individuals experiencing or at risk of homelessness once DHCS has begun a specified evaluation of the current California Advancing & Innovating Medi-Cal (CalAIM) program and the Legislature has appropriated money for this purpose.

Senate Floor Amendments of 9/8/23:

1. Delete the requirement in existing law that DHCS conduct an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services and report the outcomes of that analysis to the Legislature.
2. Instead, condition the provision of a Medi-Cal housing support services benefit on the following:
   1. DHCS has begun the evaluation required by the Centers for Medicare and Medicaid Services under the California Advancing & Innovating Medi-Cal (CalAIM) Waiver Special Terms and Conditions.
   2. An appropriation has been made by the Legislature for these housing support services.
3. Delay the implementation of the Medi-Cal housing support services benefit from no later than January 1, 2025, to no sooner than January 1, 2025, to no later than July 1, 2026.
4. Delete the existing CalAIM housing support services benefit that plans may elect to cover upon implementation of this housing support services benefit.
5. Add a definitions for “at risk of homelessness” that references existing federal law and “community supports” that references existing state law, and make other similar technical changes.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, and under which qualified low-income individuals receive health care services. [WIC §14000 et seq.]
2. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022, until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
3. Includes in the CalAIM initiative the authority for a Medi-Cal managed care (MCMC) plan to elect to cover those community supports approved by DHCS as cost effective and medically appropriate including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, and for DHCS to take into account the utilization and actual cost of community supports in developing capitation rates. [WIC §14184.206]
4. Requires DHCS to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services, upon an appropriation by the Legislature for this purpose. Requires DHCS to report outcomes of the independent analysis to the Legislature by January 1, 2024. [WIC §14124.16]

This bill:

1. Requires DHCS to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services for specified populations.
2. Establishes eligibility for housing support services for Medi-Cal beneficiaries who are currently experiencing homelessness or are at risk of homelessness.
3. Defines “housing support services” to include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services. Defines “housing transition and navigation services” as evidence-based and best practices that provide outreach to, and engage with, people experiencing homelessness in order to facilitate participation in the program and assist with transitioning to housing, and includes a list of specified services. Defines “housing deposits” as one-time expenses for move-in, such as security deposits, payment of utility arrears and startup, and necessary furniture costs. Defines “housing tenancy and sustaining services” as services that preserve and maintain a person’s housing within their community, and includes a list of specified services.
4. Defines “homeless” to have the same meaning as in federal Housing and Urban Development regulations, namely, as an individual who lacks a fixed, regular, and adequate nighttime residence, or will imminently lose their primary nighttime residence, and certain specified unaccompanied youth or individuals or families fleeing domestic violence or other dangerous conditions.
5. Conditions implementation of this bill upon an appropriation by the Legislature for the purposes of this bill.

Comments

1. Author’s statement. According to the author, 30 percent of all Americans experiencing homelessness are Californians. Californians are also homeless far longer than national averages. Californians experiencing chronic homelessness die 20 to 30 years younger than their housed counterparts with similar conditions. Stark racial disparities exist within California’s homeless population: although about 6% of Californians are Black, 32% of Californians experiencing homelessness are Black. Studies over the last 30 years prove housing support services allow Californians experiencing homelessness to exit homelessness for good, to improve their health conditions, and to decrease hospital admissions, emergency department use, and nursing home referrals. Access to these services reduces spending on acute care, avoiding future costs of over $46,000 per person per year. This bill will build on existing state efforts and investments. As an entitlement, a benefit would require the state to set standard eligibility criteria applied statewide based on need, serving more people and serving people better. Promising results in other states make this an obvious solution for California. Twenty states, including Arizona, North Dakota, and Washington, have found this stable federal/state investment in supportive services helps bring people home faster. Further, standardization of a benefit, based on need, has proven extremely effective at achieving improved health.
2. CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022, after passage of AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021, and after the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. These waivers, named for the section of the Social Security Act authorizing each, allow DHCS to waive certain federal Medicaid and Children’s Health Insurance Program requirements to test innovating program improvements or change how services are delivered. DHCS received approval on December 29, 2021, for both waivers, effective through December 31, 2026.
3. CalAIM’s efforts to address homelessness. CalAIM contains provisions to address homelessness primarily through its enhanced care management (ECM) benefit, a required plan benefit to offer intensive coordination of health and health-related services to “populations of focus” including persons experiencing homelessness, and a plan option to provide community supports, which are services designed to address social drivers of health as cost-effective alternatives to traditional medical services or settings. DHCS also made available several incentive programs to support the implementation of these services: the Providing Access and Transforming Health (PATH) initiative to make available funding for community-based organizations to expand capacity to provide ECM and community support services, the CalAIM Incentive Payment Program (IPP) to provide incentives to MCMC plans to support the implementation and expansion or ECM and community supports, and the Housing and Homelessness Incentive Program (HHIP) to allow MCMC plans to earn incentive funds for making investments and progress in addressing homelessness and keeping people housed through a homelessness plan developed with local county, social, and health services.
4. CalAIM housing support benefits. Among the community support included in CalAIM are housing transition navigation services, housing deposits, and housing tenancy and sustaining services. These services are designed to avoid additional medical costs that occur when individuals experience homelessness by stabilizing their housing. Although these housing supports are optional for MCMC plans to offer, DHCS prioritized and highly encouraged the adoption of these particular community supports and offered the abovementioned incentive programs. San Francisco Health Plan is the only MCMC plan that does not currently offer all three housing supports, but will by July of 2023. Kaiser and CenCal began offering all three in January.

During the design of these housing support benefits, stakeholder concerns were raised that the services are at the discretion of the MCMC plans and would not be the same as other Medi-Cal services that are an entitlement to those who are eligible. DHCS responded in a letter and fact sheet stating that ECM and community supports will serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS further explained that currently, many areas of the state lack the capacity to offer housing support services. By providing financial resources and robust training and technical assistance to MCMC plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly. MCMC plans will be required to contract and collaborate with new provider types, such as housing providers, that have not historically worked with Medi-Cal. ECM and community supports will set the stage for MCMC plans to be prepared to have housing supports treated as covered Medi-Cal benefits in future years. By 2024, managed care plans bidding to participate as a MCMC plan will be expected to have a robust network of housing providers responsible for coordinating access to and sustainability of housing for their members.

Given this stated plan to eventually incorporate the housing supports community supports as a full Medi-Cal benefit, AB 133, the health trailer bill language enacting the CalAIM initiative, also contained a requirement that DHCS complete an independent analysis as to whether there is sufficient network adequacy of housing supports to obtain federal approval for a full Medi-Cal housing supports benefit by January 1, 2024. This requirement was conditioned upon an appropriation by the Legislature. There is currently some disagreement as to whether that appropriation was made and it does not appear that DHCS has begun such an analysis. Last year the Legislature did approve an approximately $108 million budget request from DHCS for a variety of CalAIM implementation needs, including external assessments and evaluations, although this requirement was not specifically called out.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
• Unknown, potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federal funds).

SUPPORT: (Verified 9/8/23)

Corporation for Supportive Housing (co-source)

Western Center on Law and Poverty (co-source)

AARP California

Alameda County Board of Supervisors

All Home

Association of Bay Area Governments

Bet Tzedek Legal Services

Bridge Housing

Brilliant Corners

Burbank Housing

California Advocates for Nursing Home Reform

California Health+ Advocates

California Hospital Association

California Housing Partnership Corporation

California State Association of Psychiatrists

City and County of San Francisco

City of San José

City of West Hollywood

Coalition of California Welfare Rights Organizations

Community Economics, Inc.

Community Legal Aid SoCal

Corporation for Supportive Housing

CTY Housing, Inc.

Delivering Innovation in Supportive Housing

Disability Rights California

Disability Rights Education and Defense Fund

Downtown Women's Center

East Bay for Everyone

East Bay Housing Organizations

Eden Housing

Enterprise Community Partners

Episcopal Community Services

HomeRise

Hope Solutions

HOPICS

Housing California

Housing Leadership Council of San Mateo County

Justice in Aging

Legal Aid Society of San Mateo County

Linc Housing

Los Angeles Continuum of Care

Los Angeles Homeless Services Authority

Maternal and Child Health Access

Mercy Housing California

Merritt Community Capital

Metropolitan Transportation Commission

MidPen Housing Corporation

National Alliance to End Homelessness

National Health Law Program

Non-Profit Housing Association of Northern California

PATH

PRC

Resources for Community Development

San Diego Housing Commission

Satellite Affordable Housing Associates

Self-Help Enterprises

Sisters of St. Joseph of Orange Healthcare Foundation

Southern California Association of NonProfit Housing

St. Joseph Center

Steinberg Institute

Tenderloin Neighborhood Development Corporation

The John Stewart Company

The People Concern

The San Francisco Housing Accelerator Fund

The San Joaquin Valley Housing Collaborative

The Unity Council

Wakeland Housing and Development Corporation

Western Center on Law & Poverty

OPPOSITION: (Verified 9/8/23)

Department of Finance

ARGUMENTS IN SUPPORT: Co-sponsors Corporation for Supportive Housing and Western Center on Law and Poverty state that while the current CalAIM housing support benefits have helped many Californians, they remain challenging for people experiencing homelessness as the MCMC plans have differing eligibility requirements and standards, even within the same county. Further, because MCMC plans must determine eligibility based on return on investment, they often limit eligibility to members who incur high costs, assessments that disfavor members of color, who are often underserved. A statewide Medi-Cal benefit would be more equitable and available to all Medi-Cal enrollees experiencing homelessness. This benefit would also allow California to take advantage of the 90% federal match for the adult expansion population. Finally, they note that DHCS already shared its intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness. This bill is also supporting by a number of housing providers, antipoverty organizations, providers of services to unhoused people, community clinics, Alameda County, the City of San Jose, and Los Angeles Homeless Services Authority, among others.

ARGUMENTS IN OPPOSITION: The Department of Finance (DOF) is opposed to this bill because it results in ongoing General Fund costs within the Medi-Cal program and should be considered as part of the annual budget process. In addition, the Department of Health Care Services has various significant efforts under way addressing housing supports, including the CalAIM community supports this bill seeks to make permanent and a county opt-in benefit for transitional rent and temporary housing through the Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) demonstration waiver currently in development. With regards to the CalAIM community supports benefit, DOF states that DHCS will evaluate the effectiveness of these benefits at the conclusion of the CalAIM waiver period and determine, subject to future legislation and funding, whether to continue these efforts beyond the CalAIM waiver period.

ASSEMBLY FLOOR: 63-12, 5/30/23

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NOES: Alanis, Megan Dahle, Davies, Dixon, Essayli, Flora, Gallagher, Hoover, Mathis, Joe Patterson, Ta, Wallis

NO VOTE RECORDED: Chen, Vince Fong, Lackey, Jim Patterson, Sanchez

Prepared by: Jen Flory / HEALTH / (916) 651-4111

9/11/23 12:00:20

**** END ****

 THIRD READING  

Bill No: AB 1085

Author: Maienschein (D)

Amended: 9/1/23in Senate

Vote: 21

SENATE HEALTH COMMITTEE: 10-0, 6/14/23

AYES: Eggman, Glazer, Gonzalez, Hurtado, Limón, Menjivar, Roth, Rubio, Wahab, Wiener

NO VOTE RECORDED: Nguyen, Grove

SENATE APPROPRIATIONS COMMITTEE: 5-2, 9/1/23

AYES: Portantino, Ashby, Bradford, Wahab, Wiener

NOES: Jones, Seyarto

ASSEMBLY FLOOR: 63-12, 5/30/23 - See last page for vote

SUBJECT: Medi-Cal: housing support services

SOURCE: Corporation for Supportive Housing (co-sponsor)
Western Center on Law and Poverty (co-sponsor)

DIGEST:

This bill requires the Department of Health Care Services (DHCS) to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services, including housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, within six months of the completion of an independent analysis to determine whether network adequacy exists for a covered Medi-Cal benefit that provides such housing support services. If the independent analysis finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support benefit, this bill requires DHCS to provide recommendations for building capacity and a timeline for implementation consistent with the analysis findings.

ANALYSIS:

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, and under which qualified low-income individuals receive health care services. [WIC §14000 et seq.]
2. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022, until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
3. Includes in the CalAIM initiative the authority for a Medi-Cal managed care (MCMC) plan to elect to cover those community supports approved by DHCS as cost effective and medically appropriate including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, and for DHCS to take into account the utilization and actual cost of community supports in developing capitation rates. [WIC §14184.206]
4. Requires DHCS to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services, upon an appropriation by the Legislature for this purpose. Requires DHCS to report outcomes of the independent analysis to the Legislature by January 1, 2024. [WIC §14124.16]

This bill:

1. Requires DHCS to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services for specified populations within six months of the completion of the independent analysis required in existing law to determine the network capacity for providing housing support services if the analysis finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support benefit.
2. Requires DHCS to provide recommendations for building that capacity and a timeline for implementation that is consistent with the findings of the independent analysis if the independent analysis finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit.
3. Establishes eligibility for housing support services for Medi-Cal beneficiaries who are currently experiencing homelessness or are at risk of homelessness due to previous experiences with homelessness and require housing support services to maintain stable housing.
4. Defines “housing support services” to include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services. Defines “housing transition and navigation services” as evidence-based and best practices that provide outreach to, and engage with, people experiencing homelessness in order to facilitate participation in the program and assist with transitioning to housing, and includes a list of specified services. Defines “housing deposits” as one-time expenses for move-in, such as security deposits, payment of utility arrears and startup, and necessary furniture costs. Defines “housing tenancy and sustaining services” as services that preserve and maintain a person’s housing within their community, and includes a list of specified services.
5. Defines “homeless” to have the same meaning as in federal Housing and Urban Development regulations, namely, as an individual who lacks a fixed, regular, and adequate nighttime residence, or will imminently lose their primary nighttime residence, and certain specified unaccompanied youth or individuals or families fleeing domestic violence or other dangerous conditions.
6. Conditions implementation of this bill upon an appropriation by the Legislature for the purposes of this bill.

Comments

1. Author’s statement. According to the author, 30 percent of all Americans experiencing homelessness are Californians. Californians are also homeless far longer than national averages. Californians experiencing chronic homelessness die 20 to 30 years younger than their housed counterparts with similar conditions. Stark racial disparities exist within California’s homeless population: although about 6% of Californians are Black, 32% of Californians experiencing homelessness are Black. Studies over the last 30 years prove housing support services allow Californians experiencing homelessness to exit homelessness for good, to improve their health conditions, and to decrease hospital admissions, emergency department use, and nursing home referrals. Access to these services reduces spending on acute care, avoiding future costs of over $46,000 per person per year. This bill will build on existing state efforts and investments. As an entitlement, a benefit would require the state to set standard eligibility criteria applied statewide based on need, serving more people and serving people better. Promising results in other states make this an obvious solution for California. Twenty states, including Arizona, North Dakota, and Washington, have found this stable federal/state investment in supportive services helps bring people home faster. Further, standardization of a benefit, based on need, has proven extremely effective at achieving improved health.
2. CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022, after passage of AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021, and after the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. These waivers, named for the section of the Social Security Act authorizing each, allow DHCS to waive certain federal Medicaid and Children’s Health Insurance Program requirements to test innovating program improvements or change how services are delivered. DHCS received approval on December 29, 2021, for both waivers, effective through December 31, 2026.
3. CalAIM’s efforts to address homelessness. CalAIM contains provisions to address homelessness primarily through its enhanced care management (ECM) benefit, a required plan benefit to offer intensive coordination of health and health-related services to “populations of focus” including persons experiencing homelessness, and a plan option to provide community supports, which are services designed to address social drivers of health as cost-effective alternatives to traditional medical services or settings. DHCS also made available several incentive programs to support the implementation of these services: the Providing Access and Transforming Health (PATH) initiative to make available funding for community-based organizations to expand capacity to provide ECM and community support services, the CalAIM Incentive Payment Program (IPP) to provide incentives to MCMC plans to support the implementation and expansion or ECM and community supports, and the Housing and Homelessness Incentive Program (HHIP) to allow MCMC plans to earn incentive funds for making investments and progress in addressing homelessness and keeping people housed through a homelessness plan developed with local county, social, and health services.
4. CalAIM housing support benefits. Among the community support included in CalAIM are housing transition navigation services, housing deposits, and housing tenancy and sustaining services. These services are designed to avoid additional medical costs that occur when individuals experience homelessness by stabilizing their housing. Although these housing supports are optional for MCMC plans to offer, DHCS prioritized and highly encouraged the adoption of these particular community supports and offered the abovementioned incentive programs. San Francisco Health Plan is the only MCMC plan that does not currently offer all three housing supports, but will by July of 2023. Kaiser and CenCal began offering all three in January.

During the design of these housing support benefits, stakeholder concerns were raised that the services are at the discretion of the MCMC plans and would not be the same as other Medi-Cal services that are an entitlement to those who are eligible. DHCS responded in a letter and fact sheet stating that ECM and community supports will serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS further explained that currently, many areas of the state lack the capacity to offer housing support services. By providing financial resources and robust training and technical assistance to MCMC plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly. MCMC plans will be required to contract and collaborate with new provider types, such as housing providers, that have not historically worked with Medi-Cal. ECM and community supports will set the stage for MCMC plans to be prepared to have housing supports treated as covered Medi-Cal benefits in future years. By 2024, managed care plans bidding to participate as a MCMC plan will be expected to have a robust network of housing providers responsible for coordinating access to and sustainability of housing for their members.

Given this stated plan to eventually incorporate the housing supports community supports as a full Medi-Cal benefit, AB 133, the health trailer bill language enacting the CalAIM initiative, also contained a requirement that DHCS complete an independent analysis as to whether there is sufficient network adequacy of housing supports to obtain federal approval for a full Medi-Cal housing supports benefit by January 1, 2024. This requirement was conditioned upon an appropriation by the Legislature. There is currently some disagreement as to whether that appropriation was made and it does not appear that DHCS has begun such an analysis. Last year the Legislature did approve an approximately $108 million budget request from DHCS for a variety of CalAIM implementation needs, including external assessments and evaluations, although this requirement was not specifically called out.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to the Senate Appropriations Committee:

• Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
• Unknown, potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federal funds).

SUPPORT: (Verified 9/1/23)

Corporation for Supportive Housing (co-source)
Western Center on Law and Poverty (co-source)

AARP California

Alameda County Board of Supervisors

All Home

Bet Tzedek Legal Services
Bridge Housing

Brilliant Corners
Burbank Housing

California Advocates for Nursing Home Reform
California Health+ Advocates

California Hospital Association

California Housing Partnership Corporation

California State Association of Psychiatrists

City and County of San Francisco

City of San José

City of West Hollywood

Coalition of California Welfare Rights Organizations

Community Economics, Inc.

Community Legal Aid SoCal

Corporation for Supportive Housing

CTY Housing, Inc.

Delivering Innovation in Supportive Housing
Disability Rights California
Disability Rights Education and Defense Fund

Downtown Women's Center

East Bay for Everyone

East Bay Housing Organizations

Eden Housing

Enterprise Community Partners

Episcopal Community Services

HomeRise

Hope Solutions

HOPICS
Housing California
Housing Leadership Council of San Mateo County

Justice in Aging

Legal Aid Society of San Mateo County

Linc Housing

Los Angeles Continuum of Care

Los Angeles Homeless Services Authority

Maternal and Child Health Access
Mercy Housing California

Merritt Community Capital

MidPen Housing Corporation
National Alliance to End Homelessness
National Health Law Program

Non-Profit Housing Association of Northern California

PATH

PRC

Resources for Community Development

San Diego Housing Commission

Satellite Affordable Housing Associates

Self-Help Enterprises

Sisters of St. Joseph of Orange Healthcare Foundation
Southern California Association of NonProfit Housing

St. Joseph Center

Steinberg Institute

Tenderloin Neighborhood Development Corporation

The John Stewart Company

The People Concern

The San Francisco Housing Accelerator Fund

The San Joaquin Valley Housing Collaborative

The Unity Council

Wakeland Housing and Development Corporation

Western Center on Law & Poverty

OPPOSITION: (Verified 9/1/23)

Department of Finance

ARGUMENTS IN SUPPORT: Co-sponsors Corporation for Supportive Housing and Western Center on Law and Poverty state that while the current CalAIM housing support benefits have helped many Californians, they remain challenging for people experiencing homelessness as the MCMC plans have differing eligibility requirements and standards, even within the same county. Further, because MCMC plans must determine eligibility based on return on investment, they often limit eligibility to members who incur high costs, assessments that disfavor members of color, who are often underserved. A statewide Medi-Cal benefit would be more equitable and available to all Medi-Cal enrollees experiencing homelessness. This benefit would also allow California to take advantage of the 90% federal match for the adult expansion population. Finally, they note that DHCS already shared its intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness. This bill is also supporting by a number of housing providers, antipoverty organizations, providers of services to unhoused people, community clinics, Alameda County, the City of San Jose, and Los Angeles Homeless Services Authority, among others.

ARGUMENTS IN OPPOSITION: The Department of Finance (DOF) is opposed to this bill because it results in ongoing General Fund costs within the Medi-Cal program and should be considered as part of the annual budget process. In addition, the Department of Health Care Services has various significant efforts under way addressing housing supports, including the CalAIM community supports this bill seeks to make permanent and a county opt-in benefit for transitional rent and temporary housing through the Behavioral Health Community-Based Organized Networks of Equitable Care and Treatment (BH-CONNECT) demonstration waiver currently in development. With regards to the CalAIM community supports benefit, DOF states that DHCS will evaluate the effectiveness of these benefits at the conclusion of the CalAIM waiver period and determine, subject to future legislation and funding, whether to continue these efforts beyond the CalAIM waiver period.

ASSEMBLY FLOOR: 63-12, 5/30/23

AYES: Addis, Aguiar-Curry, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Connolly, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Papan, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Santiago, Schiavo, Soria, Ting, Valencia, Villapudua, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon

NOES: Alanis, Megan Dahle, Davies, Dixon, Essayli, Flora, Gallagher, Hoover, Mathis, Joe Patterson, Ta, Wallis

NO VOTE RECORDED: Chen, Vince Fong, Lackey, Jim Patterson, Sanchez

Prepared by: Jen Flory / HEALTH / (916) 651-4111

9/2/23 16:58:21

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 1085 (Maienschein) - Medi-Cal: housing support services

Bill Summary:

AB 1085 would require the Department of Health Care Services (DHCS) to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services, under specified conditions.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on September 1, 2023

Fiscal Impact:

• Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
• Unknown, potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federal funds).

Committee Amendments:

Committee amendments make the addition of housing support services contingent on appropriation by the Legislature.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2023 - 2024 Regular Session

AB 1085 (Maienschein) - Medi-Cal: housing support services

Bill Summary:

AB 1085 would require the Department of Health Care Services (DHCS) to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services, under specified conditions.

Fiscal Impact:

• Unknown costs, likely hundreds of thousands, for DHCS for state resources to provide the independent analysis, seek federal approvals, and administer the new benefit (General Fund and federal funds).
• Unknown, potentially significant costs, to provide housing support services as a Medi-Cal benefit (General Fund and federal funds).

Background:

The California Advancing and Innovating Medi-Cal (CalAIM) initiative is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. Among the community support included in CalAIM are housing transition navigation services, housing deposits, and housing tenancy and sustaining services. These services are designed to avoid additional medical costs that occur when individuals experience homelessness by stabilizing their housing. These housing supports are currently optional for Medi-Cal managed care plans to offer.

Current law requires DHCS, upon appropriation, to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services and requires DHCS to report outcomes of the independent analysis to the Legislature by January 1, 2024.

Proposed Law:

Specific provisions of the bill would:

• Delete the requirement that makes the independent analysis contingent upon appropriation and extend the due date to July 1, 2024.
• Require that if the independent analysis finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, DHCS must seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services, as specified.

-- END --

SENATE COMMITTEE ON HEALTH

Senator Dr. Susan Talamantes Eggman, Chair

BILL NO: AB 1085

SUBJECT: Medi-Cal: housing support services

SUMMARY:

Requires the Department of Health Care Services (DHCS) to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services, including housing transition and navigation services, housing deposits, and housing tenancy and sustaining services, within six months of the completion of an independent analysis to determine whether network adequacy exists for a covered Medi-Cal benefit that provides such housing support services. If the independent analysis finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support benefit, this bill requires DHCS to provide recommendations for building capacity and a timeline for implementation consistent with the analysis findings.

Existing law:

1. Establishes the Medi-Cal program, administered by DHCS, and under which qualified low-income individuals receive health care services. [WIC §14000 et seq.]
2. Establishes California Advancing and Innovating Medi-Cal (CalAIM) initiative effective from January 1, 2022 until December 31, 2026. The goals of CalAIM are to identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health; transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [WIC §14184.100]
3. Includes in the CalAIM initiative the authority for a Medi-Cal managed care (MCMC) plan to elect to cover those community supports approved by DHCS as cost effective and medically appropriate including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, and for DHCS to take into account the utilization and actual cost of community supports in developing capitation rates. [WIC §14184.206]
4. Requires DHCS to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services, upon an appropriation by the Legislature for this purpose. Requires DHCS to report outcomes of the independent analysis to the Legislature by January 1, 2024. [WIC §14124.16]

This bill:

1. Requires DHCS to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services for specified populations within six months of the completion of the independent analysis required in existing law to determine the network capacity for providing housing support services.
2. Requires DHCS to provide recommendations for building that capacity and a timeline for implementation that is consistent with the findings of the independent analysis if the independent analysis finds that the state has insufficient network capacity to meet state and federal guidelines to create a new housing support services benefit.
3. Establishes eligibility for housing support services for Medi-Cal beneficiaries who are currently experiencing homelessness or are at risk of homelessness due to previous experiences with homelessness and require housing support services to maintain stable housing.
4. Defines “housing support services” to include housing transition and navigation services, housing deposits, and housing tenancy and sustaining services. Defines “housing transition and navigation services” as evidence-based and best practices that provide outreach to, and engage with, people experiencing homelessness in order to facilitate participation in the program and assist with transitioning to housing, and includes a list of specified services. Defines “housing deposits” as one-time expenses for move-in, such as security deposits, payment of utility arrears and startup, and necessary furniture costs. Defines “housing tenancy and sustaining services” as services that preserve and maintain a person’s housing within their community, and includes a list of specified services.
5. Defines “homeless” to have the same meaning as in federal Housing and Urban Development regulations, namely, as an individual who lacks a fixed, regular, and adequate nighttime residence, or will imminently lose their primary nighttime residence, and certain specified unaccompanied youth or individuals or families fleeing domestic violence or other dangerous conditions.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, this bill has unknown costs to DHCS to complete the analysis and to begin providing housing support services. The author has requested a $3 million budget augmentation to begin implementing this bill. The author states this initial funding would help California take critical next steps in scaling up the provision of services to Californians experiencing homelessness, while also bringing federal dollars to California.

COMMENTS:

1. Author’s statement. According to the author, thirty percent of all Americans experiencing homelessness are Californians. Californians are also homeless far longer than national averages. Californians experiencing chronic homelessness die 20 to 30 years younger than their housed counterparts with similar conditions. Stark racial disparities exist within California’s homeless population: although about 6% of Californians are Black, 32% of Californians experiencing homelessness are Black. Studies over the last 30 years prove housing support services allow Californians experiencing homelessness to exit homelessness for good, to improve their health conditions, and to decrease hospital admissions, emergency department use, and nursing home referrals. Access to these services reduces spending on acute care, avoiding future costs of over $46,000 per person per year. This bill will build on existing state efforts and investments. As an entitlement, a benefit would require the state to set standard eligibility criteria applied statewide based on need, serving more people and serving people better. Promising results in other states make this an obvious solution for California. Twenty states, including Arizona, North Dakota, and Washington, have found this stable federal/state investment in supportive services helps bring people home faster. Further, standardization of a benefit, based on need, has proven extremely effective at achieving improved health.
2. CalAIM. CalAIM is a collection of Medi-Cal initiatives aimed at addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The CalAIM proposals were originally intended to start in 2021, but given the COVID-19 public health emergency and considerable stakeholder input, CalAIM did not start until January 1, 2022, after passage of AB 133 (Committee on Budget, Chapter 143, Statutes of 2021), which incorporated two policy bills introduced in 2021, and after the approval of a federal Section 1115 demonstration waiver and a Section 1915(b) waiver. These waivers, named for the section of the Social Security Act authorizing each, allow DHCS to waive certain federal Medicaid and Children’s Health Insurance Program requirements to test innovating program improvements or change how services are delivered. DHCS received approval on December 29, 2021 for both waivers, effective through December 31, 2026.
3. CalAIM’s efforts to address homelessness. CalAIM contains provisions to address homelessness primarily through its enhanced care management (ECM) benefit, a required plan benefit to offer intensive coordination of health and health-related services to “populations of focus” including persons experiencing homelessness, and a plan option to provide community supports, which are services designed to address social drivers of health as cost-effective alternatives to traditional medical services or settings. DHCS also made available several incentive programs to support the implementation of these services: the Providing Access and Transforming Health (PATH) initiative to make available funding for community-based organizations to expand capacity to provide ECM and community support services, the CalAIM Incentive Payment Program (IPP) to provide incentives to MCMC plans to support the implementation and expansion or ECM and community supports, and the Housing and Homelessness Incentive Program (HHIP) to allow MCMC plans to earn incentive funds for making investments and progress in addressing homelessness and keeping people housed through a homelessness plan developed with local county, social, and health services.
4. CalAIM housing support benefits. Among the community support included in CalAIM are housing transition navigation services, housing deposits, and housing tenancy and sustaining services. These services are designed to avoid additional medical costs that occur when individuals experience homelessness by stabilizing their housing. Although these housing supports are optional for MCMC plans to offer, DHCS prioritized and highly encouraged the adoption of these particular community supports and offered the abovementioned incentive programs. San Francisco Health Plan is the only MCMC plan that does not currently offer all three housing supports, but will by July of 2023. Kaiser and CenCal began offering all three in January.

During the design of these housing support benefits, stakeholder concerns were raised that the services are at the discretion of the MCMC plans and would not be the same as other Medi-Cal services that are an entitlement to those who are eligible. DHCS responded in a letter and fact sheet stating that ECM and community supports will serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS further explained that currently, many areas of the state lack the capacity to offer housing support services. By providing financial resources and robust training and technical assistance to MCMC plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly. MCMC plans will be required to contract and collaborate with new provider types, such as housing providers, that have not historically worked with Medi-Cal. ECM and community supports will set the stage for MCMC plans to be prepared to have housing supports treated as covered Medi-Cal benefits in future years. By 2024, managed care plans bidding to participate as a MCMC plan will be expected to have a robust network of housing providers responsible for coordinating access to and sustainability of housing for their members.

Given this stated plan to eventually incorporate the housing supports community supports as a full Medi-Cal benefit, AB 133, the health trailer bill language enacting the CalAIM initiative, also contained a requirement that DHCS complete an independent analysis as to whether there is sufficient network adequacy of housing supports to obtain federal approval for a full Medi-Cal housing supports benefit by January 1, 2024. This requirement was conditioned upon an appropriation by the Legislature. There is currently some disagreement as to whether that appropriation was made and it does not appear that DHCS has begun such an analysis. Last year the Legislature did approve an approximately $108 million budget request from DHCS for a variety of CalAIM implementation needs, including external assessments and evaluations, although this requirement was not specifically called out.

1. Related legislation. A number of bills this session add additional Medi-Cal benefits:
   1. SB 694 (Eggman) adds self-measured blood pressure (SMBP) devices and SMBP services, as defined, as covered benefits under the Medi-Cal program for the treatment of high blood pressure. SB 694 is pending in Assembly Health.
   2. AB 365 (Aguiar Curry) adds continuous glucose monitors to the Medi-Cal schedule of benefits. AB 365 is pending in Senate Rules.
   3. AB 425 (Alvarez) adds pharmacogenomic testing as a covered benefit under Medi-Cal. AB 365 is pending in Senate Rules.
   4. AB 847 (L. Rivas) extends the Medi-Cal pediatric palliative care benefit to individuals over age 21 for those who were determined eligible for the benefit prior to age 21. AB 847 is pending in this committee.
   5. AB 1644 (Bonta) adds medically supportive food and nutrition intervention plans to the Medi-Cal schedule of benefits. AB 1644 was held on the Assembly Appropriations suspense file.
2. Prior legislation. AB 133 (Committee on Budget, Chapter 143, Statutes of 2021) establishes the CalAIM initiative and the CalAIM community supports benefit (referred to as “in lieu of services”), among other things.
3. Support. Co-sponsors Corporation for Supportive Housing and Western Center on Law & Poverty state that while the current CalAIM housing support benefits have helped many Californians, they remain challenging for people experiencing homelessness as the MCMC plans have differing eligibility requirements and standards, even within the same county. Further, because MCMC plans must determine eligibility based on return on investment, they often limit eligibility to members who incur high costs, assessments that disfavor members of color, who are often underserved. A statewide Medi-Cal benefit would be more equitable and available to all Medi-Cal enrollees experiencing homelessness. This benefit would also allow California to take advantage of the 90% federal match for the adult expansion population. Finally, they note that DHCS already shared its intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness. This bill is also supporting by a number of housing providers, antipoverty organizations, providers of services to unhoused people, community clinics, Alameda County, the City of San Jose, and Los Angeles Homeless Services Authority, among others.
4. Amendments. The Committee and the author have agreed to strike the language that hinges the independent analysis upon an appropriation and push back the due date of the analysis six months, to July 1, 2024. Given that the entirety of the bill rests on the DHCS analysis, this will give certainty moving forward. This should also ensure that the analysis better captures the true network as one plan is not set to begin some of the housing support benefits until July 1, 2023, and two plans just recently started offering all of the benefits.

The Committee and the author have also agreed to the following amendment to clarify DHCS’s duty:

(c) (1) If the independent analysis described in subdivision (a) finds that the state has sufficient network capacity to meet state and federal guidelines to create a new housing support services benefit, the department shall seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services for the populations identified in paragraph (3) within six months of the completion of the independent analysis described in subdivision (a).

Finally, the Committee and the author have agreed to one minor, technical amendment changing the word “behaviors” to “actions” to maintain a neutral tone:

(e)(4)(A) Early identification and intervention of behaviors actions that may jeopardize housing security.

SUPPORT AND OPPOSITION:

Support: Corporation for Supportive Housing (co-sponsor)
Western Center on Law and Poverty (co-sponsor)

Alameda County

All Home

Bet Tzedek Legal Services
Bridge Housing

Brilliant Corners
Burbank Housing

California Advocates for Nursing Home Reform
California Health+ Advocates

California Housing Partnership Corporation

California State Association of Psychiatrists

City of San José

Coalition of California Welfare Rights Organizations

Community Economics, Inc.

CTY Housing, Inc.

Delivering Innovation in Supportive Housing
Disability Rights California
Disability Rights Education and Defense Fund

Downtown Women's Center

East Bay Housing Organizations

Eden Housing

HomeRise

Hope Solutions

HOPICS
Housing California
Justice in Aging

Legal Aid Society of San Mateo County

Linc Housing

Los Angeles Continuum of Care

Los Angeles Homeless Services Authority

Maternal and Child Health Access
Mercy Housing California

Merritt Community Capital

MidPen Housing Corporation
National Alliance to End Homelessness
National Health Law Program

Non-Profit Housing Association of Northern California

PATH

PRC

Resources for Community Development

Satellite Affordable Housing Associates

Self-Help Enterprises

Sisters of St. Joseph of Orange Healthcare Foundation
St. Joseph Center

Tenderloin Neighborhood Development Corporation

The John Stewart Company

The People Concern

The San Francisco Housing Accelerator Fund

The San Joaquin Valley Housing Collaborative

The Unity Council

Wakeland Housing and Development Corporation

Oppose: None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1085

Author:(Maienschein)

As Amended Ver:March 27, 2023

Majority vote

SUMMARY

Requires the Department of Health Care Services (DHCS) to seek federal approval to add housing support services as a Medi-Cal benefit.

Major Provisions

COMMENTS

1. California Advancing and Innovating Medi-Cal (CalAIM). CalAIM is a collection of major initiatives spearheaded by the DHCS that align with the administration’s program improvement goals, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a "Section 1115 demonstration" and "Section 1915(b) waiver" – both named for the sections of the Social Security Act that authorize state and federal flexibility with Medicaid program rules to implement specific initiatives. DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026.
2. Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by Medi-Cal managed care plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations. For instance, home modifications, adaptations, and remediation can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays. Similarly, housing support services, including transition and navigation services, housing deposits, and housing tenancy and sustaining services can potentially provide similar health improvements and avoidance of expensive, high-intensity health care services.

Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. Community Supports, as defined through CalAIM, are alternative services to those covered under the Medi-Cal State Plan, but are delivered by a different provider or in a different setting than is described in the State Plan. Community Supports can only be covered if the state determines they are medically-appropriate and cost-effective substitutes or settings for a State Plan service.

1. DHCS Housing Initiatives. In an effort to address health-related social needs, DHCS currently administers several housing-related initiatives.
   1. Housing Support Services as Community Supports. Housing support services, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, are currently being provided under CalAIM as "Community Supports." Although Medi-Cal managed care plans can choose whether to provide these services, all plans have elected to provide these three services as Community Supports.

As noted above, Community Supports can be provided as a cost-effective substitute for other covered services. According to the January 2023 Community Supports Program Guide issued by DHCS, housing support services can potentially substitute for a number of high-cost and high-intensity State Plan covered services such as emergency and inpatient services, rehabilitation services, and skilled nursing facility services.

• 1. Transitional Rent Community Support Proposal. According to a DHCS proposal in the 2023-24 Governor’s Budget, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for use by Medi-Cal managed care plans to improve the well-being and health outcomes of Medi-Cal members during critical transitions. This "Transitional Rent" Community Support is envisioned to allow the provision of up to six months of rent or temporary housing to eligible individuals who meet all of the following criteria:
     1. Experiencing homelessness or at risk of homelessness;
     2. Transitioning out of institutional levels of care, a correctional facility, or the foster care system; and,
     3. At risk of incurring other Medicaid state plan services, such as inpatient hospitalizations or emergency department visits.
  2. Behavioral Health Bridge Housing (BHBH). The BHBH program was authorized through June 30, 2027 under AB 179 (Ting), Chapter 249, Statutes of 2022. Through the BHBH program, DHCS will award funds to county behavioral health agencies and tribal entities to address the immediate housing needs of people experiencing homelessness who have serious behavioral health conditions, including a serious mental illness and/or substance use disorder. A total of $907 million will be provided to counties in the initial round of funding, with requests for application due from counties on April 28, 2023. The BHBH program will provide support through various "bridge" housing settings, including tiny homes, interim housing, rental assistance models, and assisted living settings. All bridge housing settings must include voluntary supportive services to help program participants obtain and maintain housing, manage symptoms of serious behavioral health conditions, and support recovery and wellness.

According to the DHCS 2023-24 Governor’s Budget proposal, the 2022 Budget Act provided $1 billion General Fund for the BHBH in fiscal year 2022-23, with another $500 million General Fund planned for fiscal year 2023-24.

The Governor’s 2023-24 Budget proposed to delay half ($250 million) of the fiscal year 2023-24 funding for the BHBH until fiscal year 2024-25 given the state’s projected General Fund revenue decline. However, the Governor’s May Revision proposal effectively eliminates the proposed delay of $250 million in the BHBH program from fiscal year 2023-24 to 2024-25 and includes $500 million one-time Mental Health Services Fund in 2023-24, in lieu of the $500 million General Fund.

• 1. Housing and Homelessness Incentive Program (HHIP). Established as a component of the Home and Community Based Services Spending Plan authorized by the federal 2021 American Rescue Plan Act, the HHIP is a voluntary incentive program that enables Medi-Cal managed care plans to earn incentive funds for addressing homelessness and housing insecurity. DHCS established HHIP to improve health outcomes and access to "whole person care" services by addressing housing insecurity and instability as a social determinant of health for the Medi-Cal population. Plans earn financial incentives based on a point system for meeting a number of benchmarks related to local homelessness and investment plans, partnerships, and corresponding actions to connect their members to needed housing services. Managed care plan partner organizations include local homeless Continuum of Care organizations created by the U.S. Department of Housing and Urban Development, local public health jurisdictions, county behavioral health, public hospitals, county social services, local housing departments and others. DHCS will make available up to approximately $1.3 billion for this incentive program.

1. Joint Oversight Hearing. On February 15, 2023, Assembly Committees on Housing and Community Development, Accountability and Administrative Review, Health, and Human Services held a joint informational hearing titled "Coordinating California's Homelessness Services: 2023 Landscape," with the goal of understanding the full scope of the state’s investments in homelessness across various policy areas. The associated background paper notes the number of people falling into homelessness poses a major challenge that leads to persistently high rates of homelessness despite recent state and local investments, but strategies such as rental assistance and housing navigation can also help keep individuals at risk of homelessness housed.
2. Considerations for adding Housing Support Services as a Medi-Cal Benefit. According to a fact sheet provided by DHCS, provision of housing support services as Community Supports is intended to serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS indicates that by providing financial resources and robust training and technical assistance to plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly.

As noted above, Community Supports are currently authorized through a demonstration program and the offer of Community Supports is subject to specific rules. Specifically, because Community Supports must overall be medically appropriate and cost-effective substitutes or settings for the State Plan service, this imposes a cost-benefit calculation on the provision of Community Supports that the sponsors of this bill point out may result in inequitable access to services. For instance, while a housing-related Community Support may be considered cost-effective for someone with high health care needs because it prevents an emergency department visit or inpatient stay, it may not be cost-effective to provide this same housing support service to a young mother and child who are otherwise healthy. The author and sponsor indicate that making housing support services a benefit, versus a Community Support offered through a temporary demonstration project, will result in more equitable delivery of services based on need.

According to the Author

Housing support services help people access housing, remain stably housed, and are essential for beneficiaries experiencing homelessness to meaningfully access health care. Accordingly, this bill would require DHCS to seek federal approval for a Medi-Cal housing support services benefit. The author notes that two years ago, DHCS shared an intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness by 2024, but DHCS leadership expressed concern that California faced an inadequate statewide network of providers to meet state or federal requirements. Since that time, the author explains, DHCS has worked to build a statewide network of providers of housing support services with the capacity to participate in and bill Medi-Cal.

Arguments in Support

This bill is supported by a large number of homeless and consumer advocates, including Disability Rights California and National Alliance to End Homelessness. Supporters point out that homelessness drives high health care costs and that housing support services help people access housing and health stability and meaningful care. Supporters assert that DHCS has already expressed an intent to make housing supports a permanent benefit, and that establishing a deadline will drive plans to develop their capacity and providers to participate, improve health outcomes among Californians experiencing homelessness, reduce homelessness, standardize eligibility, and draw down millions of federal dollars.

Arguments in Opposition

There is no known opposition.

FISCAL COMMENTS

According to the Assembly Appropriations Committee:

1. Unknown costs to DHCS to complete the analysis and to begin providing housing support services.
2. The author has requested a $3 million budget augmentation to begin implementing this bill. The author states this initial funding would help California take critical next steps in scaling up the provision of services to Californians experiencing homelessness, while also bringing federal dollars to California.

VOTES

ASM HEALTH: 11-0-4

YES: Wood, Waldron, Aguiar-Curry, Arambula, Boerner Horvath, Maienschein, McCarty, Rodriguez, Santiago, Villapudua, Weber

ABS, ABST OR NV: Wendy Carrillo, Flora, Vince Fong, Joe Patterson

ASM APPROPRIATIONS: 11-3-2

YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Papan, Pellerin, Weber, Ortega

NO: Megan Dahle, Dixon, Mathis

ABS, ABST OR NV: Robert Rivas, Sanchez

UPDATED

VERSION: March 27, 2023

CONSULTANT: Lisa Murawski / HEALTH / (916) 319-2097 FN: 0000770

Date of Hearing: April 19, 2023

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 1085

Author:(Maienschein) – As Amended Ver:March 27, 2023

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires the Department of Health Care Services (DHCS) to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within six months of the completion of an analysis on statewide provider capacity to provide these services, and makes a Medi-Cal beneficiary eligible for housing support services if they are either experiencing homelessness or are at risk of homelessness, as defined.

FISCAL EFFECT:

Unknown costs to DHCS to complete the analysis and to begin providing housing support services.

The author has requested a $3 million budget augmentation to begin implementing AB 1085. The author states this initial funding would help California take critical next steps in scaling up the provision of services to Californians experiencing homelessness, while also bringing federal dollars to California.

COMMENTS:

1. Purpose. This bill is sponsored by Western Center on Law and Poverty and the Corporation for Supportive Housing. According to the author:

Housing support services help people access housing, remain stably housed, and are essential for beneficiaries experiencing homelessness to access meaningful care. [This bill requires DHCS to seek federal support] for a Medi-Cal housing support services benefit. These services include: housing transition and navigation services, one-time “housing deposits”, and housing tenancy and sustaining services.

The author notes that two years ago, DHCS shared an intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness by 2024, but expressed concern that California had an inadequate statewide network of providers to meet state or federal requirements. Since that time, the author explains, DHCS has worked to build a statewide network of providers of housing support services with the capacity to participate in and bill Medi-Cal.

1. Background.
   1. The California Advancing and Innovating Medi-Cal (CalAIM) Act. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, established statutory authority for various aspects of the CalAIM initiative, including authority to provide “In Lieu of Services”, later renamed “Community Supports.” CalAIM is a collection of major initiatives spearheaded by DHCS that align with the Newsom Administration’s program improvement goals, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government. DHCS received approval for the proposals on December 29, 2021, effective through December 31, 2026.
   2. Community Supports. Community Supports are services that can be provided by Medi-Cal Managed Care plans as cost-effective alternatives to traditional medical services or settings. DHCS approved a list of 14 Community Supports to provide flexibility to address specific needs of complex populations, based on experience in prior demonstration programs to address health-related social needs. For instance, home modifications, adaptations, and remediation can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays. Similarly, housing support services, including transition and navigation services, housing deposits, and housing tenancy and sustaining services can provide similar health improvements and avoidance of expensive, high-intensity health care services.
      Community Supports can be covered only if the state determines they are medically-appropriate and cost-effective substitutes or settings for a Medi-Cal service or setting.
   3. DHCS Housing Initiatives. In an effort to address health-related social needs, DHCS currently administers several housing-related initiatives.
      1. Housing Support Services as Community Supports. Housing support services, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, are currently provided under CalAIM as “Community Supports.” Although Medi-Cal managed care plans can choose whether to provide these services, all plans have elected to provide these three services as Community Supports.
         
      2. Transitional Rent Community Support Proposal. According to a DHCS proposal in the 2023-24 Governor’s Budget, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for Medi-Cal managed care Plans to improve the well-being and health outcomes of Medi-Cal members during critical transitions. This “Transitional Rent” Community Support is envisioned to allow provision of up to six months of rent or temporary housing to eligible individuals who are homeless or at risk of homelessness; transitioning out of institutional levels of care, a correctional facility, or foster care; or at risk of incurring other Medi-Cal services, such as hospitalization or emergency department visits.
      3. Behavioral Health Bridge Housing (BHBH). The BHBH program was authorized through June 30, 2027 under the Budget Act of 2022. Through the BHBH program, DHCS will fund county behavioral health agencies and tribal entities to address the immediate housing needs of people who are homeless and have serious behavioral health conditions through various “bridge” housing settings, including tiny homes, interim housing, rental assistance models, and assisted living settings. DHCS will provide a total of $907 million to counties in the initial round of funding. All bridge housing settings must include voluntary supportive services to help program participants obtain and maintain housing, manage symptoms of serious behavioral health conditions, and support recovery and wellness.
         
         According to the 2023-24 Governor’s Budget proposal, the Budget Act of 2022 provided $1 billion General Fund for the BHBH in fiscal year (FY) 2022-23, with another $500 million General Fund planned for FY 2023-24. The Governor’s Budget delays half ($250 million) of the FY 2023-24 funding for the BHBH until FY 2024-25 due to the state’s projected General Fund revenue decline.
      4. Housing and Homelessness Incentive Program (HHIP). Established as a component of the Home and Community Based Services Spending Plan authorized by the federal 2021 American Rescue Plan Act (ARPA), the HHIP is a voluntary incentive program that enables Medi-Cal managed care plans to earn incentive funds for addressing homelessness and housing insecurity. DHCS established HHIP to improve health outcomes and access to “whole person care” services by addressing housing insecurity and instability as a social determinant of health for the Medi-Cal population. DHCS will make available up to approximately $1.3 billion for this incentive program.
   4. Adding Housing Support Services as a Medi-Cal Benefit. According to a fact sheet provided by DHCS, provision of housing support services as Community Supports is intended to serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS indicates that by providing financial resources and robust training and technical assistance to plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly.
      
      Community Supports are subject to specific rules. For example, Community Supports must overall be medically appropriate and cost-effective substitutes or settings. For this reason, the sponsors of this bill argue that the cost-benefit calculation may result in inequitable access to services. For instance, while a housing-related Community Support may be cost-effective for someone with high health care needs because it prevents an emergency department visit or inpatient stay, it may not be cost-effective to provide this same housing support service to a young mother and child who are otherwise healthy. The author and sponsor indicate that making housing support services a benefit, versus a Community Support offered through a temporary demonstration project, will result in more equitable delivery of services based on need.
   5. Support. This bill is supported by a large number of homeless and consumer advocates, including Disability Rights California and National Alliance to End Homelessness. Supporters argue that homelessness drives high health care costs, and housing support services help people access housing, health stability, and meaningful care.

Analysis Prepared by: Allegra Kim / APPR. / (916) 319-2081

Date of Hearing: March 21, 2023

ASSEMBLY COMMITTEE ON HEALTH

Jim Wood, Chair

ABPCA Bill Id:AB 1085

Author:(Maienschein) – As Introduced Ver:February 15, 2023

SUBJECT: Medi-Cal: housing support services.

SUMMARY: Requires the Department of Health Care Services (DHCS) to seek federal approval to add housing support services as a Medi-Cal benefit. Specifically, this bill:

1. Requires DHCS to seek any necessary federal approvals for a Medi-Cal benefit to cover housing support services within six months of the completion of an analysis on statewide provider capacity to provide these services.
2. Makes a Medi-Cal beneficiary eligible for housing support services if they meet either of the following criteria:
   1. The beneficiary is experiencing homelessness; or,
   2. The beneficiary is at risk of homelessness having previously experienced homelessness and is now residing in housing and needs housing support services.
3. Defines housing support services as including all of the following:
   1. Housing transition and navigation services, defined as outreach and engagement to help people experiencing homelessness participate in the program and transition to housing;
   2. Housing deposits, defined as one-time expenses for move-in, such as security deposits, payment of utility arrears and startup, and necessary furniture costs; and,
   3. Housing tenancy and sustaining services, defined as a variety of services including resolving landlord-tenant issues, coaching, education and advocacy, employment services, and any other service that supports individuals and families to promote housing stability, foster community integration and inclusion, and develop natural support networks and that are offered through a trauma-informed, culturally competent approach.

EXISTING LAW:

1. Establishes the California Advancing and Innovating Medi-Cal (CalAIM) Act, and requires the implementation of CalAIM to support the following goals:
   1. Identify and manage the risk and needs of Medi-Cal beneficiaries through whole-person-care approaches and addressing social determinants of health;
   2. Transition and transform the Medi-Cal program to a more consistent and seamless system by reducing complexity and increasing flexibility; and,
   3. Improve quality outcomes, reduce health disparities, and drive delivery system transformation and innovation through value-based initiatives, modernization of systems, and payment reform. [Welfare and Institutions Code (WIC) §14184.100]
2. Establishes a CalAIM term of January 1, 2022, to December 31, 2026, inclusive, and any extensions. [WIC §14184.101]
3. Requires DHCS to seek federal approval for specific CalAIM components, including those related to Medi-Cal managed care, specialty mental health, behavioral health payment reform, Drug Medi-Cal, pre-release services for justice-involved individuals, county administration of Medi-Cal, the Providing Access and Transforming Health (PATH) program to build CalAIM implementation capacity, and other components. [WIC §14184.102]
4. Authorizes housing supports, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, under CalAIM as “Community Supports” that a Medi-Cal managed care plan may elect to cover. Specifies Community Supports are provided “in lieu of” typical Medi-Cal covered services, in accordance with the federally approved CalAIM Terms and Conditions. [WIC §14184.206]
5. Requires DHCS, upon appropriation by the Legislature for this purpose, to complete an independent analysis to determine whether network adequacy exists to obtain federal approval for a covered Medi-Cal benefit that provides housing support services. Requires DHCS to report outcomes of the independent analysis to the Legislature by January 1, 2024. [WIC §14124.16]

FISCAL EFFECT: Unknown. This bill has not yet been analyzed by a fiscal committee.

COMMENTS:

1. PURPOSE OF THIS BILL. This bill is sponsored by Western Center on Law and Poverty and Corporation for Supportive Housing to expand housing support services to people experiencing or at risk of homelessness. According to the author, housing support services help people access housing, remain stably housed, and are essential for beneficiaries experiencing homelessness to meaningfully access health care. Accordingly, this bill would require DHCS to seek federal approval for a Medi-Cal housing support services benefit. The author notes that two years ago, DHCS shared an intent to make housing support services a Medi-Cal benefit for Californians experiencing homelessness by 2024, but DHCS leadership expressed concern that California faced an inadequate statewide network of providers to meet state or federal requirements. Since that time, the author explains, DHCS has worked to build a statewide network of providers of housing support services with the capacity to participate in and bill Medi-Cal.
2. BACKGROUND.
   1. CalAIM. CalAIM is a collection of major initiatives spearheaded by the DHCS that align with the administration’s program improvement goals, including addressing social drivers of health, reducing program complexity and increasing flexibility, and modernizing payment structures to promote better outcomes. The majority of CalAIM proposals were put forward in 2021 through two comprehensive applications to the federal government for a “Section 1115 demonstration” and “Section 1915(b) waiver”—both named for the sections of the Social Security Act that authorize state and federal flexibility with Medicaid program rules to implement specific initiatives. DHCS received approval on December 29, 2021, for both the demonstration and waiver, effective through December 31, 2026.
   2. Community Supports. One component of CalAIM that addresses social drivers of health is called Community Supports. Community Supports are services that can be provided by MEDI-CAL MANAGED CARE plans as cost-effective alternatives to traditional medical services or settings. DHCS has a pre-approved list of 14 Community Supports, based on experience in prior demonstration programs to address health-related social needs. These supports are designed to provide flexibility to address specific needs of complex populations. For instance, home modifications, adaptations, and remediation can support individuals in maintaining or improving their health and reduce emergency department visits and inpatient stays. Similarly, housing support services, including transition and navigation services, housing deposits, and housing tenancy and sustaining services can potentially provide similar health improvements and avoidance of expensive, high-intensity health care services.
      
      Every Medicaid program has a Medicaid State Plan that specifies the benefits and services covered by that program. Community Supports, as defined through CalAIM, are alternative services to those covered under the Medi-Cal State Plan, but are delivered by a different provider or in a different setting than is described in the State Plan. Community Supports can only be covered if the state determines they are medically-appropriate and cost-effective substitutes or settings for a State Plan service.
   3. DHCS Housing Initiatives. In an effort to address health-related social needs, DHCS currently administers several housing-related initiatives.
      1. Housing Support Services as Community Supports. Housing support services, including housing transition navigation services, housing deposits, and housing tenancy and sustaining services, are currently being provided under CalAIM as “Community Supports.” Although Medi-Cal managed care plans can choose whether to provide these services, all plans have elected to provide these three services as Community Supports.
         
         As noted above, Community Supports can be provided as a cost-effective substitute for other covered services. According to the January 2023 Community Supports Program Guide issued by DHCS, housing support services can potentially substitute for a number of high-cost and high-intensity State Plan covered services such as emergency and inpatient services, rehabilitation services, and skilled nursing facility services.
      2. Transitional Rent Community Support Proposal. According to a DHCS proposal in the 2023-24 Governor’s Budget, DHCS will seek an amendment to the CalAIM waiver to authorize an additional Community Support for use by Medi-Cal managed care Plans to improve the well-being and health outcomes of Medi-Cal members during critical transitions. This “Transitional Rent” Community Support is envisioned to allow the provision of up to six months of rent or temporary housing to eligible individuals who meet all of the following criteria:
         1. Experiencing homelessness or at risk of homelessness;
         2. Transitioning out of institutional levels of care, a correctional facility, or the foster care system; and,
         3. At risk of incurring other Medicaid state plan services, such as inpatient hospitalizations or emergency department visits.
      3. Behavioral Health Bridge Housing (BHBH). The BHBH program was authorized through June 30, 2027 under AB 179 (Ting), Chapter 249, Statutes of 2022. Through the BHBH program, DHCS will award funds to county behavioral health agencies and tribal entities to address the immediate housing needs of people experiencing homelessness who have serious behavioral health conditions, including a serious mental illness and/or substance use disorder. A total of $907 million will be provided to counties in the initial round of funding, with requests for application due from counties on April 28, 2023. The BHBH program will provide support through various “bridge” housing settings, including tiny homes, interim housing, rental assistance models, and assisted living settings. All bridge housing settings must include voluntary supportive services to help program participants obtain and maintain housing, manage symptoms of serious behavioral health conditions, and support recovery and wellness.
         
         According to the DHCS 2023-24 Governor’s Budget proposal, the 2022 Budget Act provided $1 billion General Fund for the BHBH in fiscal year 2022-23, with another $500 million General Fund planned for fiscal year 2023-24. The Governor’s Budget delays half ($250 million) of the fiscal year 2023-24 funding for the BHBH until fiscal year 2024-25 given the state’s projected General Fund revenue decline.
      4. Housing and Homelessness Incentive Program (HHIP). Established as a component of the Home and Community Based Services Spending Plan authorized by the federal 2021 American Rescue Plan Act (ARPA), the HHIP is a voluntary incentive program that enables Medi-Cal managed care plans to earn incentive funds for addressing homelessness and housing insecurity. DHCS established HHIP to improve health outcomes and access to “whole person care” services by addressing housing insecurity and instability as a social determinant of health for the Medi-Cal population. Plans earn financial incentives based on a point system for meeting a number of benchmarks related to local homelessness and investment plans, partnerships, and corresponding actions to connect their members to needed housing services. Managed care plan partner organizations include local homeless Continuum of Care organizations created by the U.S. Department of Housing and Urban Development (HUD), local public health jurisdictions, county behavioral health, public hospitals, county social services, local housing departments and others. DHCS will make available up to approximately $1.3 billion for this incentive program.
   4. Joint Oversight Hearing. On February 15, 2023, Assembly Committees on Housing and Community Development, Accountability and Administrative Review, Health, and Human Services held a joint informational hearing titled “Coordinating California's Homelessness Services: 2023 Landscape,” with the goal of understanding the full scope of the state’s investments in homelessness across various policy areas. The associated background paper notes the number of people falling into homelessness poses a major challenge that leads to persistently high rates of homelessness despite recent state and local investments, but strategies such as rental assistance and housing navigation can also help with those individuals who need prevention tools to avoid homelessness.
   5. Considerations for adding Housing Support Services as a Medi-Cal Benefit. According to a fact sheet provided by DHCS, provision of housing support services as Community Supports is intended to serve as a bridge to statewide implementation of housing supports as benefits in the longer term. DHCS indicates that by providing financial resources and robust training and technical assistance to plans and providers to offer such services and to build related capacity, CalAIM will facilitate the integration of housing into Medi-Cal more broadly.
      
      As noted above, Community Supports are currently authorized through a demonstration program and the offer of Community Supports is subject to specific rules. Specifically, because Community Supports must overall be medically appropriate and cost-effective substitutes or settings for the State Plan service, this imposes a cost-benefit calculation on the provision of Community Supports that the sponsors of this bill point out may result in inequitable access to services. For instance, while a housing-related Community Support may be considered cost-effective for someone with high health care needs because it prevents an emergency department visit or inpatient stay, it may not be cost-effective to provide this same housing support service to a young mother and child who are otherwise healthy. The author and sponsor indicates that making housing support services a benefit, versus a Community Support offered through a temporary demonstration project, will result in more equitable delivery of services based on need.
3. SUPPORT. This bill is supported by a large number of homeless and consumer advocates, including Disability Rights California and National Alliance to End Homelessness. Supporters point out that homelessness drives high health care costs and that housing support services help people access housing and health stability and meaningful care. Supporters assert that DHCS has already expressed an intent to make housing supports a permanent benefit, and that establishing a deadline will drive plans to develop their capacity and providers to participate, improve health outcomes among Californians experiencing homelessness, reduce homelessness, standardize eligibility, and draw down millions of federal dollars.
4. RELATED LEGISLATION.
   1. AB 1338 (Petrie-Norris) adds fitness, physical activity, recreational sports, and mental wellness memberships as a Community Support under the Medi-Cal CalAIM initiative. AB 1338 is pending in the Assembly Health Committee.
   2. AB 586 (Calderon) adds “Climate change remediation,” as specified, as a Community Support under the Medi-Cal CalAIM initiative. AB 586 is pending in the Assembly Health Committee.
   3. AB 365 (Aguiar-Curry) specifies continuous glucose monitors and related supplies required for use with those monitors are covered benefits for the treatment of diabetes under Medi-Cal. AB 365 is pending in the Assembly Health Committee.
   4. AB 425 (Alvarez) adds pharmacogenomic testing as a covered Medi-Cal benefit, without prior authorization or treatment authorization request. AB 425 is pending in the Assembly Health Committee.
   5. AB 847 (Luz Rivas) declares the intent of the Legislature to make specified pediatric palliative care services a Medi-Cal benefit. AB 847 is pending referral in the Assembly.
   6. AB 1644 (Bonta) declares the intent of the Legislature to make medically supportive food and nutrition services a covered Medi-Cal benefit for all eligible Medi-Cal beneficiaries. AB 1644 is pending referral in the Assembly.
5. PREVIOUS LEGISLATION. AB 133 (Committee on Budget), Chapter 143, Statutes of 2021, established statutory authority for various aspects of the CalAIM initiative, including authority to provide “In Lieu of Services”, which was later renamed as “Community Supports.”
6. AMENDMENTS. In this bill’s definition of housing tenancy and sustaining services, some components are defined in an open-ended manner. For instance, this bill would cover both “evidence-based employment services” and “any other service that supports individuals and families to promote housing stability, foster community integration and inclusion, and develop natural support networks and that are offered through a trauma-informed, culturally competent approach.” Although these definitions may be appropriate in the context of Community Supports, which are voluntary for plans to offer and which are cost-constrained because they are required to substitute for a State Plan covered service, this language may prove too broad in the context of a State Plan benefit that becomes an entitlement. This is particularly true given the overlapping role of other organizations and programs in providing these services and the wide range of services that might conform to one of these definitions.

To address these concerns, the author has agreed to amendments that clarify, narrow, and further specify the definitions of “housing transition and navigation services” and “housing tenancy and sustaining services.”

Finally, this bill requires DHCS to seek federal approval to add housing support services as a Medi-Cal benefit. In order to provide additional technical clarity, the author may also wish to consider specifying the addition of housing support services as a Medi-Cal benefit by adding it to the Medi-Cal schedule of benefits, subject to utilization controls.

REGISTERED SUPPORT / OPPOSITION:

Support

Corporation for Supportive Housing (CSH) (cosponsor)
Western Center on Law and Poverty (cosponsor)

Bet Tzedek Legal Services
Brilliant Corners
California Advocates for Nursing Home Reform
Delivering Innovation in Supportive Housing
Disability Rights California
Downtown Women's Center

HOPICS
Housing California
Justice in Aging

Legal Aid Society of San Mateo County

Maternal and Child Health Access
Mercy Housing California
National Alliance to End Homelessness
PRC
St. Joseph Center

Opposition

None on file.

Analysis Prepared by: Lisa Murawski / HEALTH / (916) 319-2097