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Joint Budget Committee reviews bill to use federal 1115 waiver for health-related social needs and reentry services
Summary
The committee reviewed a draft authorizing the state to draw federal matching funds under an 1115 waiver for housing-related health services and reentry supports, create two cash funds, and reinvest savings; members pressed HCPF vs. DOLA implementation, peer-support FTEs, and administrative costs; no introduction vote was taken.
The Joint Budget Committee on Monday examined a draft bill that would let the state draw federal matching funds under a federal 1115 waiver for health-related social needs (HRSN) — primarily housing supports — and reentry services for people leaving correctional facilities. Committee staff said the change would create two new cash funds to capture federal-match savings and reinvest them in expanding services.
Mister Kurtz, presenting the memo, said the waiver submission covers multiple components but that “for this stage of the implementation of the waiver, we're focused really on the housing.” He said the first-year projected impact is roughly $15,000,000 in savings as the state replaces some general-fund spending with federal matching dollars and reappropriates that general fund into the new HCPF cash fund.
Why it matters: Supporters said the change would stretch existing housing and transition resources by tapping federal match and would allow the state to expand short-term medication supplies and medication-assisted treatment around release from incarceration to improve continuity of care.
Committee members pressed implementation details. Sarah Mobley asked whether medication-assisted treatment could continue after release; Mister Kurtz replied that people are typically Medicaid-eligible upon release and that this measure allows treatment to begin earlier while incarcerated to improve transitions. Members also probed whether the bill requires facilities to assist people with Medicaid enrollment; Kurtz said the cash-fund bill itself does not include a Medicaid-enrollment requirement and that such requirements were addressed elsewhere in authorizing legislation.
Members debated who should receive and administer billing and payments. Some raised concerns about providers billing Health Care Policy and Financing (HCPF) directly rather than the Department of Local Affairs (DOLA), noting DOLA already manages many housing vendors and Prop 123 funds. Mister Kurtz said HCPF is the Medicaid payer and that funds must flow to HCPF to draw federal match but acknowledged the department could structure reimbursements to go back through DOLA or directly to providers.
On administration, committee staff detailed several proposed FTEs and contract positions (medical billing, accounting, pharmacy procurement, credentialing and a planning coordinator). Mister Kurtz said HCPF requested a workforce-development position for credentialing and a program planning coordinator, but he flagged that some positions appear optional and that administrative costs would be paid from the cash fund savings rather than increasing general-fund spending.
Outcome and next steps: The committee considered a motion to introduce the bill but the mover withdrew it, and members asked staff to return with additional information. Mister Kurtz said someone will need to run the bill this year if not the Budget Committee and staff will follow up with answers about provider billing flows, FTE justification and how counties and county jails might be phased in. The committee did not vote to introduce the measure at this meeting.
The committee flagged patient-continuity questions, the scope for including county jails in later phases, and the administrative trade-offs between investing savings in program expansion versus running additional HCPF staffing.
