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.

Advocates say Medicaid can shelter the homeless in Pennsylvania

Pennsylvania could use Medicaid to address its homelessness problem, according to advocates that believe the state’s Medicaid program should include additional supportive housing services. Those individuals assert that additional supportive housing services can be included in Medicaid as a “wrap-around support service”—a type of service that CMS endorses and described in a Center for Medicare & CHIP Services Informational Bulletin last year.

Housing services

CMS expressly does not provide Federal Financial Participation (FFP) for room and board as part of additional support services. However, states are permitted to assist individuals through coverage of certain housing-related activities and services. Some of the housing-related services and activities that Medicaid can cover include: (1) services designed to support an individual’s ability to prepare for and transition to housing; (2) services aimed at supporting an individual’s ability to sustain tenancy; and (3) services dedicated to assisting a state in identifying and securing housing options for individuals. Specific examples of each of those services are covered in the Informational Bulletin. The Open Door is an example of an organization that provides housing support services.


In Pennsylvania, advocates like The Housing as Health Campaign are asserting that, for many Medicaid enrollees with substance abuse problems, additional support is needed to keep beneficiaries in their homes. Advocates argue that without a consistent funding stream, Medicaid beneficiaries wind up homeless. The Corporation for Supportive Housing (CSH) created a blueprint, or “Crosswalk,” to serve as a map to assist the Pennsylvania Department of Health and Human Services with aligning Medicaid-eligible services with supportive housing services.


The Crosswalk was designed to guide the state of Pennsylvania, managed care entities, and service providers towards resources that can improve access to substance use treatment and mental health recovery, with a focus on housing. According to the report, individuals with unmet housing needs are often particularly vulnerable due to the high occurrence of low incomes, chronic health conditions, and behavioral health challenges among the population. The report proposes several methods to improve housing and care access for at-risk individuals. CSH started its analysis by considering the services that the state already provides through several Medicaid waivers. While Pennsylvania does have mechanisms to provide some housing support services for elderly individuals, beneficiaries with traumatic brain injuries, and individuals with a physical disability, CSH noted that additional individuals could benefit from supportive housing.


The report identified potential opportunities for alignment, where services that are already covered under the state plan could be aligned to better address housing support service needs. For example, the report suggested that, because the Pennsylvania state Medicaid plan covers Individualized Service Plans (ISPs) for the treatment of individuals with severe mental illness, an individual could, possibly, identify housing goals as part of his or her treatment plan, thereby including housing support services through an ISP. The report lists several other types of services with potential for alignment to reduce or eliminate gaps in housing service coverage.

Rethinking Medicaid

Advocates are not directly asking for a change as to the kind of services covered by the Pennsylvania Medicaid program. Instead, the CSH report and other efforts are asserting that housing problems can be best improved through a better application of existing services under the Medicaid state plan. Advocates hope that such a rethinking of Medicaid will improve health by putting a roof over the head of more individuals.