Medicaid Financing for Services in Supportive Housing for Chronically Homeless People: Current Practices and Opportunities. 3.2. Howare Mental Health Services Provided to Permanent Supportive Housing Residents?


All three of the states we visited use the MRO to provide Medicaid reimbursement for a range of services delivered in community settings, including PSH.18

3.2.1. Massachusetts

Massachusetts has long had a MRO carve-out, with most MRO services administered by MBHP as a managed care plan.19 MBHP receives a capitated premium from the commonwealth and in turn contracts with providers, who are reimbursed for a broad array of therapeutic interventions using unit rates, daily rates, and bundled rates. Programs operating under bundled rates include ACT teams (using a unit rate for each 15-minute encounter). A special Massachusetts pilot program, the Community Support Program to End Chronic Homelessness (CSPECH, described later in this paper), provides a daily rate for community support services that were previously reimbursed under a unit rate for each 15 minute encounter; the daily rate is provided for each day a person is in the program. Daily or bundled rates cover many of the “glue” services that allow multi-service teams to work flexibly and effectively with clients who have complex needs, including people who have been chronically homeless.

Vinfen (Massachusetts)

Vinfen is a large non-profit human services organization providing a range of clinical, housing, rehabilitative, and support services to children, youth, and adults with mental illness, developmental disabilities, and behavioral health disabilities. Homeless clients come to Vinfen only through Massachusetts Department of Mental Health (DMH) referrals. Vinfen serves them under several contracts, including the contract for Medicaid-reimbursed mental health services administered by MBHP.

Vinfen offers a diverse array of community-based and site-based housing and residential support services. Rehabilitative day services include a recovery learning center, a clubhouse (Webster House) offering arts-based rehabilitation, peer support, and education services. Clinical and rehabilitative treatment may be delivered in an office setting or through a mobile team. Vinfen provides assertive community treatment (ACT) programs, including the Program for Assertive Community Treatment (PACT) and Community-Based Flexible Supports, both of which have funding that covers outreach and coordination with clients and treatment team members. Vinfen operates a Safe Haven and uses a housing first model, providing housing subsidies to rapidly engage individuals who have been disaffiliated from care systems. These clinical and rehabilitative programs work with clients on acquiring skills and resources to support independent living, following a plan of care that client and team develop together.

If clients are not Medicaid recipients at the time of referral, Vinfen case managers work with them to gain eligibility for MassHealth either because of poverty or because of disability-based qualification for SSI or Social Security Disability Insurance. Vinfen’s homeless clients are then covered for primary and specialty health care services under the MassHealth Medicaid program. Using a combination of unit rates, daily rates, and bundled rates, MBHP reimburses providers for a broad array of therapeutic interventions delivered in hospitals, clinics, and day and residential treatment settings, including team-based services like PACT and daily community support program (CSP) payments for case management services targeted to homeless persons.

Vinfen, described in the text box, is an example of the many providers with whom the MBHP contracts to administer carve-out services.

3.2.2. California

California uses the MRO to provide Medicaid reimbursement for some of the services in PSH that support chronically homeless people who are seriously mentally ill. Voter-approved state funding through California’s Mental Health Services Act (MHSA) provides very flexible, client-centered services through “Full Service Partnerships” (FSPs) that incorporate elements of Evidence-Based Practice (EBP) such as ACT teams, Integrated Dual Disorder Treatment (IDDT), and Motivational Interviewing. In California, the counties are responsible for the non-federal share of Medicaid-covered mental health services, and providers of mental health services must be under contract with the county in order to obtain Medicaid reimbursement. Some California counties have been able to use MHSA funding to leverage Medicaid funding of mental health services under the MRO.

Conard House (San Francisco, California)

Conard House became a Medicaid provider of mental health services more than a decade ago. Medicaid reimbursements cover only about a third of the costs of the supportive services that Conrad House delivers on-site in supportive housing, even when all or most tenants are seriously mentally ill. Conard House provides a robust array of program elements, including treatment and recovery supports, vocational and supported employment, and representative payee services that help tenants pay their rent and manage their limited incomes.

PSH support services staff help tenants access primary care from neighborhood clinics and build skills for wellness and self-management. Conard House, along with similar agencies, finds that histories of trauma are almost universal among chronically homeless and vulnerable people who are in PSH or are candidates for it. Establishing their trust often means learning about the interests and goals of the person and not focusing immediately on mental illness or substance use disorders. Staff members work with tenants to support their efforts to become “emancipated” from the system of care. Conard has begun training tenants and case managers in a Chronic Disease Self-Management Program developed by Stanford University. With training, staff can develop service plans that focus on client goals and priorities and that also meet requirements for Medicaid reimbursement, but this can be challenging, and not all of the time devoted to establishing relationships and starting engagement will necessarily be reimbursed.

MHSA funding must be used to serve persons with SMI who were previously not served (or poorly served) by the mental health system and homeless or in jail. Many were living on the streets or in encampments and often they were not high-cost consumers in the county’s mental health system prior to enrollment in MHSA services. Although they may have long been disabled by mental health conditions, many have also been disaffiliated from care systems. To serve them, county mental health systems have had to modify their usual centralized “gatekeeper” system that relies heavily on records of prior mental health treatment and psychiatric hospitalization to determine eligibility for services. Two examples from the San Francisco Bay Area (see text box 5 and text box 6) illustrate how Medicaid reimbursement and MHSA funding have been used to serve the chronically homeless population.

Bonita House (Alameda County, California)

Bonita House, a mental health services provider, is home to a FSP team known as Homeless Outreach and Stabilization Team (HOST). HOST’s staff do “whatever it takes” to engage adults with SMI and support their recovery. The FSP model that HOST uses incorporates many elements of ACT. The team includes case managers, a peer counselor, a psychiatric nurse practitioner, a physician’s assistant from an FQHC, an employment specialist, housing staff, and a supervising social worker plus administrative support. The staff to client ratio is 1:10. The team meets for 90 minutes every day and staff spend 80 percent of their time in the field. A team member is on call around-the-clock for crisis intervention, coaching in relapse prevention, or responding to landlords.

Staff do home visits and accompany clients to appointments and on shopping trips. They offer help in getting access to neighborhood resources and building community-living skills. Some clients are lonely and need or want a safe place to socialize; the HOST office provides some groups, as well as computers that can be used for web-based skills training, through a partnership with Manpower that also offers help finding jobs or internships.

Clinical staff outreach is often done in partnership with other community outreach workers who have built a trusting relationship with the homeless person over a long time. Staff use screening tools and complete assessments in the field, after which they call the county access team to review and get approval to enroll. Because resources are scarce, there is a lot of pressure to ensure that only those with SMI are served in programs funded through county mental health (including MHSA), but Medicaid eligibility is not a criterion used to determine eligibility for services or housing.

Alameda County provides training to support efforts to obtain Medicaid reimbursement for covered services delivered by the HOST team and by other service-providers. The training focuses on ensuring that service-providers understand the definitions of Medicaid-reimbursable community mental health services and the medical necessity (or service necessity) criteria associated with each service. In California, all Medicaid-covered mental health service contacts must be documented with progress notes that include date and duration (number of minutes), location, and a clear explanation of how the service meets the client’s mental health needs. For team consultations, only the minutes spent discussing a particular client are billable, and notes must describe the unique contribution of each staff member involved in the discussion.

3.2.3. Illinois

Illinois covers a fairly broad range of services for persons with mental illness under its Rehabilitation Option, usually referred to as “Rule 132.” Two Community Mental Health Centers (CMHCs), Thresholds and Trilogy, provide supportive services and coordinate care for their formerly homeless clients with SMI who now live in PSH. HHO also includes a CMHC and offers PSH.

Most clients of Thresholds and Trilogy live in scattered-site housing throughout the community, but these CMHCs also operate some site-based PSH.20 While Thresholds and Trilogy have a long history of serving homeless people with SMI and helping them secure and retain housing, recent cuts in state funding, and new limits on Medicaid reimbursement have made it hard to pay for some services. In addition, the mental health-related care they give is not usually integrated with primary health care, although they may be treating the clients’ co-occurring substance use disorders. Trilogy recently received a HHS Substance Abuse and Mental Health Services Administration (SAMHSA) grant to integrate its mental health services with primary care and plans to work with Heartland International Health Center to add a primary care provider to one of Trilogy’s mental health service sites.

These agencies use a Medicaid-reimbursed CST benefit, under MRO, to serve homeless people and those living in PSH. The CST is made up of at least three full-time equivalent staff, including at least one qualified mental health professional, and, if possible, one person in recovery. The teams have a client to staff ratio of no more than 18:1. Services are available 24 hours a day, 7 days a week as needed, and at least 60 percent of services are provided in a client’s home or other community setting, rather than in a clinic or office. Services facilitate illness self-management, development of interpersonal and community-living skills, identification and use of natural supports for treatment and recovery, and plans and strategies for crisis management and relapse prevention.21

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