Medicaid Financing for Services in Supportive Housing for Chronically Homeless People: Current Practices and Opportunities. 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.

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