Medicaid and Permanent Supportive Housing for Chronically Homeless Individuals: Emerging Practices From the Field. Notes


  1. PSH is a phenomenon of the 1990s and 2000s, when homelessness assistance systems evolved and their goals shifted and changed. PSH beds available to end people's homelessness went from about zero in the late 1980s to estimates of 114,000 beds in fall 1996 (Burt et al. 1999), about 188,000 beds in January 2007, and 284,298 beds in January 2013 (HUD 2013, 54).

  2. The State of Connecticut; the District of Columbia, the State of Illinois and city of Chicago; the State of Louisiana and the greater New Orleans area; Los Angeles County, California; and the State of Minnesota and Hennepin County.

  3. The IMD payment exclusion is in Section 1905(a) of the Social Security Act (the Act) in paragraph (B) following the list of Medicaid services. The definition of an IMD is in Section 1905(i) of the Act and in 42 CFR 435.1010 of the Code of Federal Regulations. The exclusion for individuals aged 65 and older is in Section 1905(a)(14) of the Act, and 42 CFR 440.140. The exception for individuals under age 21 is in Section 1905(a)(16) of the Act and 42 CFR 440.160. Medicaid guidance can be found at Section 4390 of the State Medicaid Manual.

  4. 42 U.S.C. § 1396a(a)(10)(B).

  5. PSH is a phenomenon of the 1990s and 2000s, when homelessness assistance systems evolved and their goals shifted and changed. PSH beds available to end people's homelessness went from about zero in the late 1980s to estimates of 114,000 beds in fall 1996 (Burt et al., 1999), about 188,000 beds in January 2007, and 284,298 beds in January 2013 (HUD 2013, 54).

  6. The State of Connecticut; the District of Columbia, the State of Illinois and city of Chicago; the State of Louisiana and the greater New Orleans area; Los Angeles County, California; and the State of Minnesota and Hennepin County.

  7. Readers may find helpful background information in five papers prepared in an earlier phase of this study, which describe how Medicaid and PSH function and the terminology used (Burt, Wilkins, and Mauch 2011; Burt and Wilkins 2012, 2012a; Wilkins, Burt and Mauch 2012, Wilkins and Burt 2012). In addition, a Primer on using Medicaid to help pay for services for people eligible for or living in PSH is being published simultaneously with this report. All may be found at the end of this report or at

  8. Final Rule published December 5, 2011, Federal Register, p.7595.

  9. More information about the housing-first approach is available in the USICH Solutions Database at

  10. For more information on variation in eligibility requirements, see

  11. Some people will still be ineligible because they are undocumented or because they have not been permanent residents for a sufficient number of years.

  12. Connecticut expanded up to 56 percent of FPL in April 2010, the District of Columbia went up to 133 percent of FPL in July 2010 and to 200 percent later that year under an additional Section 1115 waiver, and Minnesota went up to 75 percent of FPL in March 2011. Three other states took some approach to early expansion: California in July 2011 for up to 200 percent of FPL varying by county; New Jersey in April 2011 for up to 23 percent of FPL; and Washington for up to 133 percent of FPL but only for people already enrolled in the state's low-income health plan (Sommers et al. 2013).

  13. The Childless Adult Medicaid plan prevailed between April 2010 and January 1, 2014, when the District of Columbia adopted an Alternative Benefit Plan equal to its Medicaid state plan.

  14. For example, Massachusetts has had an 1115 demonstration program in place since 1996 that establishes Medicaid eligibility based on low-income alone, and Maine has an 1115 program that allows it to enroll a limited number of "noncategorical" beneficiaries. In both states, people experiencing homelessness have been able to qualify and receive needed health care.

  15. Mandatory benefits include inpatient and outpatient hospital services; nursing facility, rural health clinic, FQHC, prenatal and freestanding birth center services; physician, nurse-midwife, and certified pediatric and family nurse-practitioner services; home health, family planning, tobacco cessation, laboratory, X-ray services; and early and periodic screening, diagnostic, and treatment services for children under age 21.

  16. Optional benefits include clinic services; prescription drugs; rehabilitative services; case management; home and community-based services as an alternative to institutionalization; physical, occupational, speech, hearing, and language therapy; diagnostic; screening; and a variety of other services that may be approved by CMS.

  17. Alternative Benefit Plans may be based on coverage available in the private sector from large managed care plans, federal employee health coverage, the package of health insurance coverage provided to state employees, small group coverage available in the state, or the Medicaid state plan. For more information about the issues related to Alternative Benefit Plan benefits and coverage of the range of services needed by chronically homeless people, including services to address mental health and substance use problems, see this analysis by the National Council for Community Behavioral Healthcare

  18. Rehabilitation helps people recover lost skills, while "habilitative" services help people acquire new ones. The difference is subtle but can be important. For example, rehabilitation can help people with schizophrenia improve social skills that allow them to resume participation in activities that had been a part of their lives before the onset of their mental illness. Assessment for rehabilitation services includes a focus on identifying the level of functioning people had "at baseline," before they became disabled. Habilitative services are services generally designed to assist individuals in acquiring, retaining, and improving the self-help, socialization, and adaptive skills necessary to reside successfully in home and community-based settings. Habilitative services can be covered by Medicaid through a home and community-based (HCBS) waiver or optional HCBS State Plan services. Habilitation is one of the essential health benefits that must be offered when a state adopts an Alternative Benefit Plan to provide coverage to people who have become newly eligible for Medicaid in 2014. States have some flexibility to determine how to design and implement these benefits and plans, consistent with rules established by the Federal Government. On July 15, 2013, HHS and CMS issued a Final Rule that includes several changes in the Medicaid program, including requirements to ensure that Medicaid benefit packages include essential health benefits and meet certain other minimum standards. This Final Rule can be found at

  19. During the study period, states were awaiting additional guidance from HHS regarding the implications of parity requirements for the package of Medicaid benefits that will be available to both currently and newly eligible groups of beneficiaries. In January 2013, CMS released a letter to State Medicaid Directors describing the applicability of parity requirements to Medicaid managed care organizations and benchmark plans. See Additional federal guidance is expected, and this could potentially lead to some changes in the scope of services that will be available to people experiencing chronic homelessness and formerly homeless people living in PSH.

  20. Final regulations implementing the essential health benefit provisions of the Affordable Care Act were published in the Federal Register (78 Fed. Reg. 12834-12872) on February 25, 2013. These regulations give states significant flexibility in defining some covered benefits.

  21. For more information about Express Lane Enrollment in California's Medicaid program see

  22. 2013 SOAR Outcomes Summary, available at

  23. For further information on SOAR, see

  24. The Affordable Care Act stipulates one year as the period for recertification, and states are using electronic data matching to streamline recertification and continued coverage if the beneficiary's circumstances have not changed.

  25. For more information, see

  26. According to the UCLA Center for Health Policy Research, nearly 94 percent of the state's population resides in a county with a LIHP (Lytle et al. 2013).

  27. California's 1115 waiver also allowed the county LIHPs to include a second group of enrollees with incomes between 133 percent and 200 percent of FPL. This group of enrollees became eligible for subsidized health coverage through the health insurance exchange starting in 2014. Statewide, only about 5 percent of all LIHP enrollees fell into this group, as did less than 0.1 percent of Los Angeles LIHP enrollees.

  28. Community partner clinics received reimbursement at the FQHC rate when they served people enrolled in Healthy Way LA.

  29. Healthy Way LA was first established in 2007 to serve a smaller group of people with selected chronic conditions who were enrolled through a Health Care Coverage Initiative authorized by an earlier California 1115 waiver. (That waiver also made other changes to the state's approach to Medicaid financing for hospitals.) Before Healthy Way LA, the county had a unique ten-year waiver that provided Medicaid financing to support LA Department of Health Services' contracts with Community Health Centers and free clinics to provide outpatient health care services for low-income people through the Public Private Partnership Program.

  30. In most California counties, people who enroll in Medicaid (Medi-Cal) must select or be assigned to a Medi-Cal managed care plan. In most counties Medicaid beneficiaries can choose between at least two plans, but in some counties there is only one plan. A list of Medi-Cal managed care plans in each county is available at

  31. These challenges are described in more detail in a report published by the Insure the Uninsured Project, Preparing for the Affordable Care Act: An Examination of Coverage Expansions in LA County: Outreach, Enrollment, Retention and Utilization (January 2013) available at

  32. With California's expansion of Medicaid eligibility in 2014, eligibility verifications became annual instead of every six months, and the process is being simplified considerably, relying on electronic verification of income as required by the Affordable Care Act.

  33. For more information see

  34. Under the Social Security Act, three types of organizations are eligible to participate in Medicaid and Medicare as Federally Qualified Health Centers. They are: (1) Health Centers that receive grants under Section 330 of the Public Health Service Act; (2) Health Centers that meet all the requirements to receive a Section 330 grant but do not receive such funding; and (3) outpatient facilities associated with tribal organizations and Urban Indian Health Organizations. The first two categories are overseen by the Health Resources and Services Administration (HRSA) within HHS and in this report are jointly referred to as "Health Centers." Health Care for the Homeless providers are a subset of those Health Centers who receive Section 330 grants. This publication does not directly address Native American providers that are enrolled as FQHCs. "Community Health Centers" are one of four distinct subsets of "Health Centers." Health Care for the Homeless grantees are a second subset; the two others are Health Centers targeting migrant and seasonal farmworkers and residents of public housing.

  35. See

  36. It is important to recognize that many Health Centers provide mental health services to meet the needs of their patients who have depression, anxiety, or other mental health disorders and who can be effectively treated in a primary care setting, but many of these Health Centers may not have the capacity to provide services to people with SMI.

  37. HRSA, 2011 National Homeless Data,

  38. HRSA, 2012 National Data for Homeless: Table 4--Selected Patient Characteristics,

  39. These issues are described in more detail in Medicaid Coverage and Care for the Homeless Population: Key Lessons to Consider for the 2014 Medicaid Expansion. Kaiser Commission on Medicaid and the Uninsured. September 2012.

  40. Some of these promising approaches and program models have been described in previous reports prepared as part of the first phase of this study (Burt and Wilkins 2012; Wilkins, Burt, and Mauch 2012).

  41. LA Christian Health Center became a community partner clinic during the case study period. This status entitled the center to receive payment from the county (financed through the state's Medicaid waiver) for many of the previously uninsured people it serves who gained coverage through Healthy Way LA. In 2014, most of these people are becoming enrolled in Medicaid.

  42. For more information see:

  43. For more information see Martha R. Burt, The Skid Row Collaborative 2003-2007: Process Evaluation. Washington, DC: Urban Institute, 2007.

  44. Before 2014 California's Medicaid plan (Medi-Cal) provided coverage for a limited array of substance use disorder, or "Drug Medi-Cal" services, including residential treatment for pregnant and parenting women, but not for other adults. Beginning in 2014, California is expanding these substance use disorder benefits to make them available to other Medi-Cal beneficiaries who need them.

  45. In addition to this team, described in detail here as an example, partners in the other Integrated Mobile Health Teams include Mental Health America of Los Angeles and the Children's Clinic in Long Beach; St. Joseph Center, OPCC, and Venice Family Clinic in Venice and Santa Monica; JWCH, South Central Health and Rehabilitation Program, and Behavioral Health Services in South Los Angeles; and Step Up on Second, Special Services for Groups, and Saban Free Clinic in Hollywood. Representatives from all of the teams provided valuable input for the case study.

  46. Almost half of the project's clients are in the fifth or sixth decile, where annual costs average $22,000 or $32,000. The other participants are in deciles with significantly higher average costs.

  47. For more information see "Hospital to Home: Triage Tool II for Identifying Homeless Hospital Patients in Crisis," Economic Roundtable, 2012,

  48. HRSA Policy Information Notice 2008-001 provides guidance to Health Centers regarding how to define the scope of project for purposes of defining the activities funded by federal grants and FQHC Medicaid reimbursements. This includes guidance regarding service sites, home visits, mobile teams or "portable clinic care," and other activities that are included in the scope of a project at locations that do not meet the definition of a service site or offer a limited activity from within the full complement of Health Center activities. For more information see

  49. See USICH profile of Motivational Interviewing,

  50. Visiting nurses for homebound patients are defined by federal law as covered FQHC services in areas where CMS has determined there is a shortage of Home Health Agencies, but this is not usually the case where Health Centers are involved in PSH. With respect to nurses, federal regulations consider only nurse-practitioners to be "essential medical personnel" capable of generating billable hours; nurses with other credentials cannot do so.

  51. See Chapter 7 for an example of how a Chicago collaborative effort involving five hospital systems, eight Health Centers, and numerous behavioral health care and other providers is moving in this direction.

  52. Described more fully in Burt and Wilkins 2012a.

  53. This is in theory. In reality many requirements and barriers often make the path to becoming an SSI beneficiary long and uncertain. See Burt and Wilkins 2012b.

  54. Our two other sites, Connecticut and New Orleans/Louisiana, had special arrangements to serve formerly homeless people with SMI living in PSH, but during this study's time period neither used Medicaid to help cover the cost of services in PSH projects. Louisiana's switch to Medicaid funding for supportive services for some PSH residents is described in Chapter 6. In Connecticut as well as in Louisiana, some PSH tenants are Medicaid recipients and thus are likely to receive Medicaid-reimbursed health and behavioral health services through clinics or programs in the community.

  55. In California, these are referred to as "specialty mental health services," meaning the Medicaid-covered services that are delivered through county-administered mental health systems, as distinct from the more limited interventions that might be offered by a primary care provider or managed care health plan for persons with less severe mental health disorders.

  56. See Section B.6 of Appendix B of the "Results from the 2002 National Survey on Drug Use and Health: National Findings." SAMHSA, Office of Applied Studies, National Survey on Drug Use and Health, 2002.

  57. Illinois Department of Human Services Medical Necessity Criteria and Guidance Manual available at

  58. Interviews with caseworkers in Los Angeles indicated that this happens, while some respondents reported that scores on the Vulnerability Index often reflect the same problem; people "don't tell us half of what is going on with them," with the result that their scores are too low to put them at the top of the list for getting PSH even when they really need it.

  59. A broader range of services, including both more-intensive and less-intensive types of care, are available in some public mental health systems in addition to clinic-based outpatient care. In the District of Columbia, for example, the Department of Mental Health's Mental Health Rehabilitation Services covers diagnosis/assessment, medications/somatic treatment, counseling, community support, crisis/emergency, day services, intensive day treatment, community-based intervention (a time-limited, intensive intervention to prevent out-of-home placement), and Assertive Community Treatment,

  60. Lousiana's new Medicaid behavioral health managed care plan, described in detail in Chapter 6, covers these same services with a 1915(i) home and community-based services state plan amendment.

  61. For more information about ACT, see

  62. See California Department of Mental Health, Clarification on Requirements for Full Service Partnerships (FSP) under the Mental Health Services Act (MHSA), April 10, 2009 available at

  63. See for LA County's Full Service Partnership (FSP) guidelines.

  64. The others are Field Capable Clinical Services--described in the next section of the chapter--outpatient clinic services, where clients can see a psychiatrist for medications and/or receive individual or group counseling, and peer-run wellness centers, which provide support for recovery, self-management, and living with mental illness.

  65. See

  66. For more information see

  67. 42 CFR 440.169.

  68. California's MHSA Housing Program was established in 2007 with an initial allocation of $400 million of MHSA funds dedicated to the development of PSH for people with serious mental illness who are homeless or at risk of homelessness. Funding is used for capital and operating subsidies. Through an assignment letter, participating counties assign their MHSA Housing Program funds to the California Housing Finance Agency, and that agency has jointly administered the program with the Department of Health Care Services. Statewide by the end of 2013, the program has provided funding to 163 projects that include over 8,900 affordable housing units and over 2,000 units specifically housing MHSA tenants in over 40 counties. Only about $54 million of the initial allocation of MHSA funds remains uncommitted; additional funding for units is only available when counties assign their local funds to the state housing finance agency. For county mental health departments, assigning local MHSA funds to the state agency significantly streamlines the process of investing in the creation of new PSH units for their clients.

  69. Some tenants of this organization, which offers a wide variety of mental health services, do receive their supportive services from the agency, making it an example of "one agency does both" as well as an example of "clients come with their own services."

  70. Note that this refers to the difficulty that mental health service providers have with getting reimbursed for these scenarios under the rehabilitative services option. There may be other ways to cover such services, such as through state plan personal care or through the 1915(i) state plan option.

  71. Chapter 4 describes similar structural challenges with regard to the involvement of Community Health Centers (FQHCs) in mental health care.

  72. California is expanding some Medicaid benefits for substance use disorder treatment services for adults, including residential treatment and intensive outpatient treatment services, beginning in 2014. These services must be provided in certified treatment facilities. Some providers of mental health services for people experiencing homelessness are exploring the potential for obtaining certification as providers of Medicaid substance use disorder services to better meet the needs of their clients who have co-occurring disorders.

  73. Minnesota managed care program enrollment data is available at

  74. See Chapter 5 for a description of Minnesota's use of Medicaid-reimbursed TCM services as part of the supportive services in PSH for persons with severe mental illness.

  75. California's Medicaid program is called Medi-Cal, but for consistency across all case study sites this report uses Medicaid for it and other state programs known locally by unique names.

  76. The California HealthCare Foundation published a report describing some of these challenges and lessons learned. A First Look: Mandatory Enrollment of Medi-Cal's Seniors and People with Disabilities into Managed Care. August 2012.

  77. A full discussion of risk-adjustment is beyond the scope of this report. For more information, see:

  78. LA Care directly manages care for most of its members, but also works with several partner health plans--including Anthem Blue Cross, Care 1st Health Plan, and Kaiser Permanente--that manage care for some members who are enrolled in Medicaid. In most California counties, Medicaid managed care is implemented using a "Two Plan Model" that offers Medicaid beneficiaries a choice of health plans. Health-Net Community Solutions is the other Medicaid managed care plan operating in Los Angeles County. In some California counties Medicaid managed care is implemented through a County-Operated Health System (COHS). For more information about Medicaid managed care plans in California see

  79. Adult services described in the LBHP Member Handbook (p. 3) include psychiatrist, community psychiatric support and treatment, psychosocial rehabilitation, substance use disorder treatment, crisis intervention, emergency room services, and psychiatric hospital. Additional services are also available. Case conferencing and treatment planning are covered services in several of these care components.

  80. Louisiana's Permanent Supportive Housing Program is described in some detail in a brief by the Technical Assistance Collaborative, Taking Integrated Permanent Supportive Housing (PSH) to Scale: The Louisiana PSH Program, February 2012, available at From its inception in 2008, PSHP has offered its clients flexible supportive services as well as a rent subsidy to end their homelessness, help them maintain housing, and address their health and behavioral health care needs. Community Development Block Grant funds covered the supportive services component of the program, while Shelter + Care certificates and Housing Choice Vouchers supply the rent subsidies. PSHP staff also worked with clients to establish SSI (and therefore Medicaid) eligibility, achieving SSI beneficiary status for upwards of 80 percent of their clients.

  81. See Chapter 5 for definitions of these service types.

  82. SPA LA 11-13.

  83. See Chapter 5 for description of LOCUS.

  84. Per the CMS approval letter, p. 14, dated December 19, 2011, "This particular 1915(i) was written to support the Louisiana Permanent Supported Housing (PSH) program's goals. The PSH is by nature small, scattered-site housing aimed at person-centered planning for individuals enjoying all aspects of the community. The settings that most individuals will reside in will be PSH or other similar settings. These settings are home and community-based, integrated in the community, provide meaningful access to the community and community activities, and individuals have free choice of providers, individuals with whom to interact, and daily life activities."

  85. Since the PSHP began, a private company, Quadel Consulting, has been entering into Housing Assistance Program contracts with private landlords, including set-aside units managed by nonprofit and for-profit tax credit development units. Quadel assigns these units as they come on line to PSHP local lead agencies according to an established plan, and the local lead agencies release them to PSHP service agencies as those agencies' clients qualify for them. Local lead agencies vary in type across the parts of the state participating in the PSHP, but are usually local offices of the state's Aging and Adult Services Department or local Human Services Authorities. None are housing agencies or public housing authorities.

  86. As noted earlier in this report, Minnesota is one of the states that moved to expand Medicaid eligibility before 2014. Minnesota expanded eligibility to adults with incomes below 75 percent of the federal poverty level (FPL) in 2011. It further expanded eligibility in 2014 to persons with incomes below 133 percent of FPL.

  87. While Medicaid does not have an ACO authority within statute, CMS has released guidance on integrated care models and quality considerations in Medicaid and Children's Health Insurance Program (CHIP). See for example SMDL #12-001 available at, and SMDL #12-002 available at

  88. See

  89. From Hennepin Health proposal submitted to the state; available at

  90. Hennepin Health leaders recognized that this pattern of pharmacy use was likely a sign that some members were addicted to or misusing prescription drugs, while some members were receiving multiple prescriptions from different health care providers, including providers of mental health services and specialists who were treating multiple medical conditions without adequate coordination.

  91. The Department of Healthcare and Family Services (HFS) oversees the Illinois Medicaid program. Solicitation for Care Coordination Entities and Managed Care Community Networks for Seniors and Adults with Disabilities, Innovations Project, 2013-24-002,

  92. For more information see

  93. Beginning with a pilot in the Skid Row area and expanding to other areas in Los Angeles County during late 2013 and 2014, the Coordinated Entry System is using an assessment instrument called the Vulnerability Index and Service Prioritization Decision Assistance Tool (VI-SPDAT) that has been developed by Community Solutions and the 100,000 Homes Campaign. For more information see

  94. The Corporation for Supportive Housing in Los Angeles is leading the Frequent Users System Engagement (FUSE) Program, which facilitates partnerships among hospitals and providers of housing assistance, health care and other services and supports to engage and house people experiencing chronic homelessness who are among the most costly users of public services. For more information see

  95. 28 C.F.R. pt 35 app. A (2010).

  96. U.S. v. Georgia. 10-CV-249. (N.D. GA 2010),

  97. In 2011, DOJ released a statement with a series of questions and answers on the ADA's integration mandate and Olmstead enforcement. See

  98. HUD's Supportive Housing Program Desk Guide identifies the PSH component of the program as "Supportive Housing for Persons with Disabilities" and defines it as, "the SHP component that provides long-term, community-based housing and supportive services for homeless persons with disabilities.", p. 8.

  99. Statement of the Department of Housing and Urban Development on the Role of Housing in Accomplishing the Goals of Olmstead.

  100. See This informational bulletin contains links to additional HUD and HHS guidance and resources to support Olmstead implementation.

  101. More information is available in a brief prepared by the Technical Assistance Collaborative, Taking Integrated Permanent Supportive Housing (PSH) to Scale: The Louisiana PSH Program, February 2012, available at

  102. In the District of Columbia, a lawsuit related to the need for community alternatives to St. Elizabeth's Hospital was filed before passage of the Americans with Disabilities Act or the Supreme Court's Olmstead decision. Beginning in 2000, changes were made to the District of Columbia Medicaid state plan to add optional benefits that have been used to create a system of services and supports linked to housing in the community for people coming from institutional settings as well as people experiencing homelessness.

  103. A link to the Final Rule as well as links to several fact sheets and summaries prepared by CMS are available at

  104. HUD requires persons receiving rent subsidies through its Shelter + Care program to see a case manager at least once a month.

  105. See Section 223 [42 U.S.C. 423] (d)(2)(C).

  106. For more information about some of these issues and opportunities, see the Integrated Care Resource Center at

  107. More information about California's Coordinated Care Initiative is available at

  108. For more information about Medicaid's Health Home benefit see

  109. The National Alliance to End Homelessness describes some of these opportunities in the 2012 brief Medicaid Health Homes: Emerging Models and Implications for Solutions to Chronic Homelessness, available at

  110. More information about this initiative is available at and in the Annual Report on Implementation available at

  111. State law also requires all private health plans to reimburse certified health care homes using an approach that is consistent with the state's approach to paying for public programs.

  112. At the end of the study period, in response to questions from CMS, the State of Minnesota decided to withdraw some components of this Medicaid waiver proposal.

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