Solving for Services: New Medicaid Opportunities to Pay for the “Support” in Permanent Supportive Housing

Solving for Services: New Medicaid Opportunities to Pay for the “Support” in Permanent Supportive Housing

Solving for Services: New Medicaid Opportunities to Pay for the “Support” in Permanent Supportive Housing

As much as a flexible “do whatever it takes” approach to case management and supportive services is essential to permanent supportive housing’s success for people experiencing chronic homelessness, it are also very difficult to finance. Providers have often had to patch together multiple streams of public and private funds—each with different eligibility and coverage rules—in order to provide the “support” in supportive housing. Funding these services often feels like solving a complex mathematical equation, where providers have to solve for multiple variables at once. 

Through changes under the Affordable Care Act, providers may finally have found a solution to that equation: Medicaid.  With states having the choice to expand Medicaid eligibility, more people experiencing chronic homelessness may be eligible for Medicaid. At the same time, the Affordable Care Act is shifting the focus of Medicaid to “whole person” health needs rather than just medical and physical health needs. This means that states will have incentives to pay for things like case management and behavioral health services under Medicaid, alongside hospital stays, doctor’s visits, and prescription drugs. 

So what can providers of permanent supportive housing do to tap Medicaid as a way to pay for the services in permanent supportive housing?  Four emerging and exciting trends offer some ideas:

  • Permanent supportive housing is becoming a part of new health care delivery models for people with chronic conditions Chances are that efforts are already underway in your state to develop innovative health care delivery models for people with chronic conditions like serious mental illness.  Through innovations like Accountable Care Organizations (ACOs) and Health Homes, partnerships are forming between health care and social services providers to provide wrap-around care to improve overall health and wellness, rather than focus just on medical procedures and visits.  In places like Oregon and Illinois, permanent supportive housing are being made a part of the package of care provided as part of ACO and Health Homes.
  • Medicaid managed care benefits covering supportive housing services – More and more states are moving towards enrolling Medicaid beneficiaries in managed care, in which states contract with selected managed care organizations (MCOs) and provide them with a fixed or “capitated” amount of funds to address enrollees’ health needs. In places like Massachusetts, Minneapolis, and Pittsburgh, managed care organizations have realized that for their enrollees experiencing chronic homelessness, housing is a key to success. These MCOs are partnering with permanent supportive housing providers to provide housing for these enrollees, and in exchange, paying for some or all of their supportive services. (See the blog by Mike Nardone on supportive housing and managed care partnerships.)
  • States are adopting and covering supportive housing services in their Medicaid plans – States like Louisiana and New York are making permanent supportive housing for people experiencing chronic homelessness a central part of their state Medicaid policies and health reform efforts. Health policymakers and Medicaid officials in both states recognize the value of permanent supportive housing in improving health and lowering costs. 
  • Efforts focused on Medicaid “super-utilizers” are seeing the importance of linking care management to housing- More and more states and counties are looking to permanent supportive housing as part of their strategies to address the health and social needs of “super-utilizers”—the small subset of Medicaid enrollees whose frequent use of hospitals and emergency rooms drive up overall health care spending.  Housing’s role in reducing health care costs was included in the Center for Medicare and Medicaid Services’ (CMS) recent information bulletin on “super-utilizers” and is being discussed as part of the National Governors Association’s Developing State-Level Capacity to Support Super-Utilizers policy academy.
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