Innovative ways for Medicaid to promote supportive housing

Federal law prohibits federal matching of state Medicaid room-and-board spending, aside from nursing facility services. However, there are a variety of ways in which Medicaid can contribute to “integrated strategies” to bolster “supportive housing,” or affordable housing combined with support services to encourage health and recovery following living transitions resulting from homelessness, hospitalization, incarceration, or aging out of foster care. A Kaiser Family Foundation (KFF) report analyzed three innovative programs in action today.

A 2015 Center for Medicaid and CHIP Services (CMCS) informational bulleting outlined three housing-related activities covered by Medicaid: individual housing transition services from institutions to community-based housing; individual housing and tenancy sustaining services; and state-level housing services that aid in identifying and securing housing resources, as well as services available via section 1915(b) and (c) waivers, section 1115 demonstration waivers, targeted case management services, and demonstrations established through the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) (see Federal funding available for some Medicaid housing related activities, Health Law Daily, June 29, 2015). KFF suggested that managed care plan initiatives, health homes established by the ACA, State Innovation Models, and accountable care organizations (ACOs) are other vehicles linking Medicaid with supportive housing.

The report analyzed three models of integration. The City of Philadelphia, also a county, established a single-payer system for public behavioral health care of as permitted by law; 85 percent of the population served is Medicaid-eligible. Medicaid provides a source of payment for health services received by eligible individuals house under the Permanent Supportive Housing (PSH) initiative through three separate programs that offer: services to those experiencing chronic homelessness and severe psychiatric disorders; residential substance use disorder treatment to individuals with a history of chronic homelessness and long-term addiction; and temporary shelter during inclement weather while addressing substance use problems. Louisiana used its Medicaid state plan authority to cover tenancy support services to support PSH, which targets low-income, disabled individuals, most of whom are Medicaid beneficiaries. Mercy Maricopa Integrated Care, a Phoenix, Arizona managed care organization (MCO), provides permanent supportive housing services to adults with serious mental illness (SMI), most of whom are Medicaid beneficiaries.

The KFF authors determined that the three models demonstrate that efforts to integrate Medicaid with supportive housing “can be tailored to align with specific policy goals,” such as the reduction of chronic homelessness or the reduction of unnecessary institutionalization of the mentally ill. Integration efforts can improve patterns of health care use and reduce Medicaid costs. However, they face “operational challenges,” such as differing housing administration and Medicaid structures, complexity and fragmentation within systems, and multiple funding streams. Success can only be achieved through strong leaders entering into committed partnerships.