Medicaid is a Game-Changer for Ending Chronic Homelessness, But to Win, We Have to Play

It has been proven time and time again that for people experiencing chronic homelessness and suffering from chronic health conditions, the path to improved health begins with stable housing, namely through supportive housing. Supportive housing (also known as ‘permanent supportive housing’) has been shown to improve physical and behavioral health outcomes for people experiencing chronic homelessness, while simultaneously lowering health care costs by decreasing emergency room visits and hospitalizations. In most communities today however, the services that make supportive housing so effective are still funded by a patchwork of public and private sources, or in some cases, are severely under-funded. Fortunately, thanks to the Affordable Care Act we now have the potential to create a more systematic and sustainable way to finance services in supportive housing—through Medicaid.

The truth is, this isn’t all new. Medicaid has covered these types of supportive housing services for a long time. After all, one of Medicaid’s first authorities allowed states to cover primary care case management. What is new is the Affordable Care Act, which by increasing the coverage of people experiencing homelessness under Medicaid and by shifting the focus of health care on value rather than volume, creates new opportunities to increase the role of Medicaid in covering services in supportive housing. At the same time, Medicaid is a Federal and state program and the decision to cover these services under Medicaid rests with the states. Whether states do so will depend on the degree to which they are made aware of the cost-benefit of helping people access and obtain housing as opposed to cycle in and out of emergency rooms, inpatient hospital beds, shelters, and the streets.

We all have the responsibility of educating states about the cost-effectiveness of supportive housing and the opportunity to cover services in supportive housing under Medicaid. Here are four things you can do to ensure your state includes these services:

1. Make the case to your state’s Medicaid agency about supportive housing 

Many Medicaid departments may have never heard of supportive housing, let alone read the literature on its impact on health outcomes and health care costs. Educate them about what supportive housing is, who is served by it, and how it works. Take them on a tour of supportive housing. Share with them this paper. Or suggest that they match Homeless Management Information System (HMIS) data with Medicaid data to determine what the cost of chronic homelessness is to Medicaid. It is impossible to overeducate Medicaid departments about supportive housing. Trust that whatever inspires us about supportive housing’s potential for transforming lives will also inspire them.

2. Define what you want Medicaid to cover and how (and don’t make it rent or capital)

It is absolutely critical to be clear about what you want Medicaid to cover and under what terms.  Medicaid really cannot cover rent and capital costs for housing, but you can and should ask for Medicaid to cover most if not all of the services in supportive housing. In doing so it’s important to be clear about what those services are and to describe them in easily understandable terms. For example, Medicaid officials might not understand what you mean when you say, “We do whatever it takes to keep people stably housed and help them achieve whatever service goals they set for themselves.” But they will understand that you “provide an average of two face-to-face in-home visits per month and another three to five office visits where we focus on goal setting, help with activities of daily living, money management, as well as helping people coordinate their medical appointments.”

Listing the specific categories of services that you provide in supportive housing can help bolster your argument. CSH has helped bridge the understanding between supportive housing providers and Medicaid departments through services crosswalks, which translate the services in supportive housing to terms Medicaid can understand.

It is also important to indicate that the services in supportive housing work because they are not necessarily planned and scheduled and therefore do not lend themselves well to a fee-for-service reimbursement model. It may be more appropriate to consider and ask for bundled payment or ‘per member per month’ (PMPM) rates. Most Medicaid departments already have the ability to structure payment models in this way, and through new Federal initiatives at the Center for Medicare and Medicaid Services (CMS), these types of flexible payment models will likely be in greater use.

3. Build capacity and partnerships among providers

Most supportive housing services providers may not know how to provide services in a Medicaid context, let alone be certified to provide these services (which Medicaid will require). If a fee-for-services payment model is used, providers will have to know how to track the delivery of services so that they can bill for reimbursement. Even if a bundled payment or PMPM rate is used, providers will still have to track services in a certain way. Medicaid covered services may also have other stipulations such as requiring that services plans are approved, that certain services can only be provided by people with certain credentials, etc. 

More than likely, the providers of supportive housing services will need some capacity building to learn how to provide services in a Medicaid environment. A good way to build capacity is to partner providers that do have Medicaid experience with those that do not. A structured, capacity-building initiative may be something to explore.

4. Collaborate with the state on designing a Medicaid supportive housing services benefit

Offer your time and expertise to help your state define the set of services to be covered, define the population eligible to receive this benefit (it might be narrower than all people experiencing chronic homelessness, as Medicaid may have to limit the benefit based on certain diagnoses or to people with certain types of chronic conditions), and to estimate the cost per person. Help them consult HHS’ Primer to determine which Medicaid authorities states can adopt to cover these services. 

As with any big opportunity, there is no reward without significant effort. The potential here is not only to tap a new source of funding for services, but to create greater ownership and responsibility over the problem of chronic homelessness by your state’s government and Medicaid agency. Creating that system-level ownership is the real game changer that will help us achieve an end to chronic homelessness.

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Richard Cho is the Senior Policy Director for USICH, where he coordinates USICH's Federal policy efforts and the implementation of Opening Doors.