Brave New World: The Housing with Services Model

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1 Brave New World: The Housing with Services Model PRESENTED BY: N AREN D H A M O D H A R A N B I L L I E C O L L I N S N D A C O N S U L TA N T S, L L C & & F O W L E R C H R I S T I A N A PA R T M E N T S H A M P D E N P A R K C A P I TA L, LLC Texas LeadingAge Conference May 18, 2015

2 What is the Housing with Services Model? The Housing with Services model affords seniors the ability to age in place with dignity and avoids pre-mature and unnecessary institutionalization. It results in an increased quality of life for residents and significant savings to Medicaid.

3 Housing With Services: By The Numbers By 2030 the number of people over 65 is projected to increase from 40 million to 88 million. Aging in Place: Facilitating Choice and Independence published in HUD s Evidence Matters newsletter

4 Housing With Services: By The Numbers 92% of respondents over age 65 wanted to remain in their communities for as long as possible. At the federal level, the portion of the budget devoted to social security, Medicare, Medicaid and interest payments on the federal debt will increase from 44.4% in 2010 to a projected 61.8% in Helping seniors delay or avoid institutionalization by facilitating aging in place has the potential to significantly reduce spending on long-term care. Aging in Place: Facilitating Choice and Independence published in HUD s Evidence Matters newsletter

5 Housing With Services: By The Numbers The national average annual rate for semiprivate rooms at a nursing home in 2012 was $81,030, indicating that states can realize considerable savings by delaying or avoiding institutionalization. Noninstitutionalized long-term care was $928/month in 2009 as compared to $5,243/month for nursing homes. There is a potential savings of $2.6 billion by having in home and community based services available to nursing home residents. Patients enrolled in HWS programs had better outcomes than ones in nursing homes Enrolling just 10% of Americans that are ready for long-term care in HWS programs or similar, could save $9 billion. Aging in Place: Facilitating Choice and Independence published in HUD s Evidence Matters newsletter

6 Case Study: Bernadine Apartments Currently, 70 individuals reside in units that are licensed under New York State s Enriched Housing program. In addition, 22 residents participate in the Program of All-Inclusive Care for the Elderly (PACE). These residents are aging in place and experiencing a higher quality of life in the comfort of their homes, surrounded by an experienced and caring staff, and the services they need to continue to live independently. All 92 of these residents are nursing home eligible. There are significant cost savings to Medicaid when these residents live at the Bernardine as opposed to a nursing home: On average, individuals live at the Bernardine for approximately 3 years. The cost to Medicaid for an individual to live at the Bernardine is approximately $65 a day, compared to a nursing home rate of approximately $130. This 50% savings translates to over $70,000 in Medicaid savings over 3 years per person. To care for these 92 residents for 3 years at the Bernardine, there is over $6.5 million in savings compared to caring for these individuals at the nursing home level. This is a direct result of the Housing with Services model.

7 Overview of the Assisted Living Conversion Program (ALCP) Provided private, nonprofit owners of eligible developments with grants to convert some or all of the dwelling units in the project into an Assisted Living Facility (ALF) or Service-Enriched Housing (SEH) to help elderly residents age in place. Typical funding covered basic physical conversion of existing project units, as well as related common and service space. Applicants had to provide supportive services for their residents either directly or through a third party. Properties applying for an ALCP grant had to have a service coordinator on-site, or request that one be funded as an operating expense of the property.

8 Challenges Associated with HWS Model Lack of ALCP funding for building renovations to support frailer residents Lack of funding for HWS demonstration programs

9 Housing With Services Model However, owners can still institute the Housing With Services model at their projects

10 Supportive Services Plan (SSP) Helps to make residents aware of the services available to them, the right to choose services, and all appropriate relevant information about service agencies Identify availability, contact information, and role of the service coordinator. Indicates efforts on how to ensure that residents are adequately informed of the services options and wellness programing available to promote resident independence and quality of life.

11 Memorandums of Understanding (MOUs) Under the Housing with Services model, non-profit owners will have Memorandums of Understanding (MOUs) with various vendors to provide supportive services on-site. These include, but are not limited to, such service services as: Personal care assistance Meals Shuttle service Adult day care Outpatient physical and occupational therapy

12 HUD Demonstration Program: Enhanced Service Coordinator The purpose of the program is to enable residents who are elderly or have disabilities to live as independently as possible in their own homes. A service coordinator is responsible for assuring that residents, especially those who are frail or at risk, are linked to the specific supportive services they need to continue living independently and age in place. An estimated 38% of all residents currently living in Section 202 properties could be considered frail or near-frail. With service coordinators assistance, many of these residents are able to access community-based services, stay longer in their housing, and avoid more expensive institutional settings. Going forward, the Section 202 program intends to increasingly target housing assistance towards exactly this subset of the elderly population, given the tremendous cost-savings associated with independent living versus nursing homes or assisted living facilities. This is still in flux, but in the meantime nonprofits are working to figure out ways to accomplish this. An example is Phoenix, Arizona.

13 Refinancing to Address Property Needs

14 HUD Section 223(f) Program Overview The HUD Section 223(f) Program provides for the refinance of existing properties that are at least 3 years old from the date of initial occupancy. Moderate repairs are permitted. The loan terms are up to 35 years, fully amortizing, and loans are non recourse. Repair Program may not exceed the greater of 15% of the property value after repairs, or $6,500 plus applicable high cost percentage per unit. No more than one major building system can be replaced. Davis Bacon prevailing wages do not apply. Proposed MAP Guideline Revisions allow for even more building repairs.

15 HUD Section 223(f)/202 Program Overview The HUD Section 223(f) Program has special rules to facilitate the refinancing of HUD 202 properties. The intent of the program is to: Lower the project's debt service Allow the property to finance the completion of repairs, and recapitalize the project's replacement reserve account The program also provides a Non-Profit Developer's Fee Debt Service savings can typically be used to increase services and for other uses that benefit the property and its residents.

16 Case Study: M.I. Residential FHA 223(f) & Debt Service Savings for Supportive Services Prepayment approval included the approval to use debt service savings toward supportive services for project residents. Following a FHA 223(f) refinance, the Owner used 15% of annual debt service savings to fund their meals program, case management and housekeeping. The remaining debt service savings are placed in residual receipts. As reflected in HUD Notice H , Residual Receipts in excess of $500 per unit and Reserve for Replacement funds in excess of $1,000 per unit may be used to increase the availability or provision of supportive services.

17 Case Study: State of Connecticut Grants for construction of new affordable housing and rehabilitation of existing affordable housing (up to $5 million per project) Nursing Facility Diversification-State s Strategic Rebalancing Plan: A Plan to Rebalance Long Term Services and Supports Creation of Continuum of Care Campus Money Follows the Person Program

18 CT Money Follows the Person (MFP) 5 Major Goals of MFP: Increase dollars spent on home and community based services Increase the number of people living in community Increase hospital discharges to community Increase the probability of returning to the community Transition people from institutions to the community 60% of those transitioned will be younger persons with disabilities, 40% will be people over the age of

19 Texas Money Follows The Person Program Texas is one of 30 states chosen to receive federal funding to help persons who are elderly or who have disabilities move from institutional settings back into their communities. Since 2001, when Texas first pioneered MFP as a state initiative, more than 40,000 Texans have returned to the community. The Pilot began in Bexar County (San Antonio) and expanded to adjacent counties and to Travis County (Austin). The MFP initiative helps people who are receiving longterm services and supports in a nursing facility return to the community to receive their services without having to be placed on a community services interest list. The Pilot will continue until December 2016 and, if successful, Texas may consider statewide implementation through its Medicaid-funded long-term services and supports system. Over 70% of those who left nursing facilities under the Pilot have successfully maintained independence in the community.

20 What You Can Do Lobby Texas legislators State grant funds for affordable multifamily housing State subsidy for low income residents Money Follows The Person Program Complete LeadingAge s survey for 202s with Project Rental Assistance Contracts (PRAC)

21 House THUD Bill FY16 Section 202 Supportive Housing for the Elderly Program FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 President s FY16 Budget House FY16 Bill Total Section 202 Program (All amounts are in millions) Section 202 Capital Advance Section 202 Demonstration $735 $765 $825 $400 $ $629 $ $582 $ $ $ $420 $455 $20 approx. (this also includes funds from recaptures) $10 (this will also include fund from residual receipts sweep) -- $414 Including 202 Predevelopment $20 $20 $ Grants PRAC renewals Incl. in Incl. in $ $ $258.6 $258.6 Cap Adv Cap Adv est. est. $290 $350 $365 $321 SPRAC $16 Service Coordinators/CHSP $60 $90 $90 $90 $91 $91 $72 $70 $77 $77 Assisted Living Conversion $24.80 $25 $40 0 $25 $ Total Units Awarded 3,260 3,131 2,

22 Fowler Christian Apartments ALCP Phase I, 2001: Converted 24 apartments into assisted living units Office Space for caregivers Commercial Kitchen Assisted Living Licensure Assisted Living Services ALCP Phase II, 2012: Converted 24 units into Service Enriched Housing Units Emergency Generator Common Areas renovation Energy Star Service Enriched Housing

23 Fowler Christian Apartments Fowler Christian Apartments now is able to offer a tiered structure and can serve: Independent Residents Residents with 1-2 ADL needs (Service Enriched Housing) Residents with 3 or more ADL needs (Licensed Assisted Living) AL/SEH Operations Service Delivery under the STARPlus Medicaid reimbursement program

24 Contact Us Naren Dhamodharan NDA Consultants, LLC & Hampden Park Capital, LLC Billie Collins Executive Director, Fowler Christian Apartments, Dallas, TX Phone: (413) Phone: (214)