Medicaid Financing for Services in Supportive Housing for Chronically Homeless People: Current Practices and Opportunities. 5.2. How is Substance Abuse Treatment Provided to Permanent Supportive Housing Residents?


Service-providers working in PSH help tenants with problems related to substance use, but they rarely receive Medicaid reimbursement for these services. PSH case managers work to motivate tenants to recognize and seek help for substance use problems and to achieve recovery goals. They connect tenants to other programs that offer treatment services.

Most PSH service-providers offer individual counseling and plenty of encouragement for residents to pursue treatment, and they provide ongoing coaching and support to help tenants achieve recovery goals, but they have limited capacity to provide substance abuse treatment services directly as part of the on-site services they deliver. We did not find any examples during site visits of Medicaid reimbursement for services delivered on-site in PSH that explicitly focus on problems related to substance use disorders. Alcoholics Anonymous/Narcotics Anonymous or recovery support groups are often available, but they are not supported by Medicaid reimbursement.

Residents of PSH who are FQHC clients may receive some Medicaid-reimbursable services through their FQHC that address substance abuse problems. Services may include motivational interviewing and counseling from clinical social workers or psychiatrists.

Mental health providers that are not FQHCs often try to offer services that integrate treatment for co-occurring mental health and substance abuse disorders, but find themselves hard pressed to cover the cost. Agencies that are primarily substance abuse treatment providers may find it difficult to serve people with more severe mental health issues, while some agencies that are primarily mental health providers may limit themselves to people with “light” substance abuse if they are not licensed to provide substance abuse treatment for which they can get reimbursed. Thus some mental health providers are willing to help people who are already clean-and-sober to maintain their sobriety, but they may have a harder time working with active users.

Illinois. The state’s Medicaid program provides support for substance abuse treatment through the Department of Human Services’ Division of Alcoholism and Substance Abuse (DASA). DASA administers funding from federal block grant and state programs, under which it issues contracts for treatment for substance use disorders. DASA also certifies providers who may then receive Medicaid reimbursement for covered treatment services. DASA is supportive of the harm reduction approach used by many PSH providers, and people housed in settings that follow a harm reduction model may receive substance abuse treatment in DASA-licensed facilities without a requirement for abstinence. All services paid for with DASA’s state funding or Medicaid reimbursement must be delivered by a provider with a DASA contract, in a physical space licensed by DASA. For a number of years, DASA has used state funding to give grants to licensed providers to serve people with substance use disorders who do not have Medicaid. However, in March 2011 the Illinois governor announced a proposal to cut these funds from the state budget.

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