Medicaid Financing for Services in Supportive Housing for Chronically Homeless People: Current Practices and Opportunities. 2.1. Who is Eligible for Federally Qualified Health Center Services Covered by Medicaid?


FQHC clients include people who are low-income, uninsured, and have limited access to health care services. Many FQHC clients are not currently eligible for Medicaid or, if they are eligible, they need help enrolling in the program. FQHCs receive Medicaid reimbursement for services they deliver to Medicaid beneficiaries, and may use grants or other sources of funding to cover costs of care provided to people who are uninsured.

Chronically homeless people and those who have become PSH residents are eligible to become FQHC clients if there is an FQHC in their vicinity. Some FQHCs (HCH programs) serve only homeless people and those who have recently moved into housing. Others are CHCs; these agencies do not receive grant funding to operate HCH programs, but they have made a commitment to serving homeless and formerly homeless persons, or they serve these populations as part of a broader mission of serving people living in a low-income community. As noted below, some FQHCs are assessing how much they want to, and can afford to, become involved in serving a significant number of PSH tenants.

2.2. How Do Federally Qualified Health Centers Provide Services to Permanent Supportive Housing

In each of the three communities visited for this project, FQHCs are actively involved in delivering services to PSH residents. These Health Centers use several different models of service delivery. Most are well-established organizations that have been serving homeless people or other vulnerable populations with complex health problems for a decade or longer. In some cases, the public or non-profit organization that operates as an FQHC also develops and operates PSH, using a separate housing subsidiary that is part of the larger organization. In other cases, the FQHC delivers health care and supportive services in partnership with other organizations that develop and operate the housing or that administer rental assistance for use in the private market.

The FQHCs provide services linked to PSH through one or more of the following models:

  • Delivering on-site services in PSH through home visits or satellite clinics located in PSH buildings.

  • Operating a clinic that is easily accessible by PSH residents and designed to meet their needs.

  • Partnering with a mental/behavioral health service-provider that provides outreach to vulnerable homeless people and delivers care to residents of scattered-site PSH through a multi-disciplinary team of primary and behavioral health care providers.

  • Engaging “frequent users” of emergency room care and formerly homeless patients being discharged from hospitals and linking them to permanent housing.

Heartland Health Outreach (HHO)

HHO is a HCH FQHC that operates its own clinics and outreach and also subcontracts with several other organizations. HHO does primary care outreach to 150 residential and drop-in locations throughout the City of Chicago, as well as some in Cook County and surrounding counties. PSH tenants can often get scheduled care in their own building. If they need care between scheduled visits, they can go to the main clinic, which is within walking distance of many supportive housing buildings, or to a clinic at another housing site. PSH tenants may see the same clinician at the main clinic and in their housing and are encouraged to come into the main clinic for care as a way to extend engagement. The enhanced Medicaid payment rates provided under FQHC financing allow HHO to use other sources of funding (e.g., HRSA grants) to serve some PSH residents who have no insurance. These payment rates are significantly higher than the rates paid to non-FQHC primary care providers or psychiatrists.

Often an FQHC will deliver services through on-site staff in some PSH buildings, while also operating a clinic that serves PSH tenants from the surrounding neighborhood and partnering with other organizations to do outreach and provide services linked to scattered-site supportive housing.

FQHCs may use multiple financing mechanisms, receiving Medicaid payments for services that can be reimbursed through the FQHC mechanism and obtaining certification to provide mental health or substance abuse treatment services in programs that are reimbursed separately through state or county contracts or separate Medicaid payments for specialty mental health services. Medicaid-covered specialty mental health services, which may include services provided by programs that are not included in the costs covered by FQHC payment structure, are described in the next section of this paper.

In both San Francisco and Alameda County, California, FQHCs operate clinics that are located adjacent to or within a few blocks of PSH sites.

The San Francisco Department of Public Health (SFDPH) Housing and Urban Health (HUH) clinic delivers services to more than 1,000 PSH tenants who live in supportive housing sites citywide. More than 90 percent of medical and psychiatry services are provided at the HUH clinic, where HUH clinicians and program managers believe the care is better and the clinician more productive than if delivered in-home. The clinician may visit the housing site and persuade tenants to come see the clinician at the clinic after establishing a relationship.

Most of the staff employed by HUH are doctors (including psychiatrists) and mid-level practitioners or nurses; HUH employs relatively few case managers who are not licensed. HUH nurses work at several PSH sites, where they assess and monitor health needs of tenants and help with medication management. PSH sites that are part of the HUH Direct Access to Housing program usually also have on-site case managers employed by a partner organization, which may be a community mental health agency or a homeless service-provider. These on-site case managers are usually not supported by Medicaid reimbursement. They are funded separately, through HUD McKinney-Vento grants (Supportive Housing Program (SHP) services-only) or from county resources.

Boston Health Care for the Homeless Program (BHCHP)

BHCHP provides services by using integrated mobile teams. Most clients have multiple chronic health conditions, including medical and behavioral disorders. Treatment and supportive services are delivered by teams that include physicians, physician assistants, nurse practitioners, nurses, case managers, and behavioral health practitioners. Team members work collaboratively to deliver care to homeless people on the streets, at McInnis House medical respite, in outpatient primary care, in behavioral health and dental clinics in several locations, in shelters, or in housing. Continuity of caregiving relationships is maintained across settings for the same people. BHCHP integrates primary care, behavioral health care, dental care, vision, pharmacy, and case management services, as well as linkage to a range of non-medical supports.

To cover the range of services it offers, BHCHP:

  • Obtains FQHC Medicaid reimbursement, which covers medical and nursing care provided in-clinic and medical respite services.
  • Receives reimbursement through MassHealth’s Massachusetts Behavioral Health Partnership (MBHP) for a pilot program serving a targeted group of chronically homeless people with co-occurring SMI and substance use conditions.
  • Covers street and home-based clinical team services with its HCH grant from HRSA, and reimbursement from MassHealth for services to eligible clients.
  • Does fundraising and seeks foundation grants for capital and operating funds for selected services, particularly specialty dental and medical respite services.
  • Seeks alternative funding to cover the work of non-medical personnel (e.g., social workers, psychologists, case managers) that cannot be billed under the FQHC financing mechanism.

In Alameda County, Lifelong Medical Care received a HRSA grant to provide services as a PHPC Clinic, which allowed it to establish a clinic in a downtown Oakland neighborhood within a few blocks of several HUD-assisted PSH buildings. At the clinic, Lifelong provides comprehensive primary care and some behavioral health services for PSH tenants and residents of nearby public housing developments and other HUD-assisted housing. Some Lifelong clinic staff members also deliver services on-site in PSH buildings. In some buildings, a room is set up as a satellite clinic with an exam table so that primary care providers (usually nurse practitioners or nurses) can visit residents where they live.

Lifelong employs staff who work full-time (or several days a week) in site-based PSH buildings. They include a licensed clinical social worker (LCSW) who provides counseling for mental health and substance abuse problems and social workers or case managers who help tenants with a range of issues related to housing stabilization, access to benefits and social supports, and engagement and linkage to health and treatment services. Some PSH sites have additional on-site services provided by collaborating partner agencies.

Partnerships between FQFCs and supportive housing providers are under development in other regions. In Hartford, Connecticut, for example, a new Health Center clinic is being constructed adjacent to a PSH project. In Los Angeles, the Corporation for Supportive Housing and United Homeless Healthcare Partners recently released “Integrating FQHC Health Care Services with permanent supportive housing in Los Angeles,” a publication that describes program and financing strategies currently in use or under consideration.14

2.3. Federally Qualified Health Center Challenges, Obstacles, and Limitations

While some FQHCs have succeeded in providing comprehensive care to PSH residents, they have had to overcome challenges created by the current Medicaid system that include incomplete coverage of services, billing rules that make integrated care difficult, and ambiguity about how long HCH providers can serve people in supportive housing who no longer are homeless.

2.3.1. The Work of Essential Team Members Is Not Covered by Medicaid Reimbursement

Health Center staff interviewed for this study explained that the total costs of providing service that are used for the purpose of setting FQHC payment rates do not include the costs for some of their unlicensed social workers, case managers, peer counselors, and mental health or substance abuse specialists. These staff members work as part of interdisciplinary teams serving homeless people in clinics and on-site in PSH and are often a good part of the “glue” that helps to engage vulnerable people in integrated and coordinated care. Their exclusion from rate-setting affects the rates for the reimbursement FQHCs receive for both the direct providers of clinical care and ancillary or support staff. Care not billed directly may be reimbursed indirectly if included in the calculation of the Health Center’s FQHC payment rate for visits with licensed providers. If some of these costs are disallowed, the FQHC receives a lower payment rate for all “billable” encounters.

Some of the programs we interviewed attempted to solve this problem by co-locating staff paid by the FQHC and by another agency. They sometimes have licenses for two clinics--medical and behavioral--in adjacent spaces, to integrate their services for the client while complying with disparate licensing and reimbursement requirements. Grant funding and flexible funding from states or local governments sometimes can pay for costs that Medicaid does not cover.

2.3.2. Multiple Care Encounters on the Same Day May Not Be Billable

In many states, FQHC providers cannot receive reimbursement for more than one visit by the same patient in the same day. That makes is difficult for FQHCs to integrate medical and mental health services. Providing medical and mental health services in the same location on the same day can be an effective way to engage people with long histories of homelessness, who have often been disaffiliated from care and reluctant to seek treatment. Asking the client to come back another day to see a different practitioner may not work. Recognizing this problem, Massachusetts has eliminated the same-day billing exclusion.

2.3.3. Medicaid Reimbursement Often Does Not Cover All of the Costs of FQHC Services Provided to Permanent Supportive Housing Tenants

In all of the programs we visited, Medicaid reimbursement was an important source of funding but it did not cover the full costs of services provided by FQHCs in PSH. FQHC clinicians who work in housing settings often have lower levels of productivity compared to those who work in busy clinics, as measured by the number of “billable encounters,” because of the added time needed to engage and effectively serve people with long histories of homelessness and multiple health and behavioral health needs. This can make it challenging to sustain partnerships between Health Centers and housing providers if there is limited funding to cover the gap between Medicaid revenues and program costs, particularly as Health Centers face competing demands to deliver clinical services in other settings where staff members may be able to provide care that produces more Medicaid revenues.

2.4. Looking Ahead to 2014: How is the Situation Likely to Change for Federally Qualified Health Centers?

When nearly all homeless people gain eligibility for Medicaid under the ACA, more FQHCs will likely find it feasible to deliver health care services tailored to meet the needs of PSH residents. HCH providers and other FQHCs that are already committed to serving homeless people and other people with complex health and psycho-social challenges will be able to increase the revenues they get from Medicaid, if they can expand their staff and services.

However, the ACA, when fully implemented in 2014, will increase demand for access to primary care services among all uninsured low-income Americans. Many newly eligible people have mental health and substance use conditions and many of them have not have had routine access to primary health care or specialty behavioral health care. Given the shortages of both primary care practitioners and psychiatrists, FQHCs will be hard pressed to meet all needs. Moreover, if states do not remove same-day billing exclusions, they will continue to pose a significant barrier to offering comprehensive and integrated services. Health Centers that do not currently have the capacity to serve chronically homeless people and PSH residents may find it more compelling to respond to other priorities--for example, to focus on maintaining the loyalty of low-income families who have been relying on the Health Center for access to affordable health care, but who will have the option of getting care from other providers when they become insured under ACA.

View full report


"ChrHomls2.pdf" (pdf, 1.47Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®