Medicaid Financing for Services in Supportive Housing for Chronically Homeless People: Current Practices and Opportunities. 5.3. Challenges, Obstacles, and Limitations Related to Medicaid Coverage of Substance Abuse Treatment


5.3.1. Medicaid-Reimbursed Substance Abuse Services Cannot Be Delivered On-Site in Permanent Supportive Housing

Medicaid reimbursement for substance abuse treatment services is frequently limited by state policy to services that are provided in particular types of outpatient clinics or licensed/certified treatment facilities. There is often no reimbursement mechanism designed to pay for counseling or treatment services that address substance abuse problems in the context of a home visit, a visit with a primary care provider, or care provided by a multi-disciplinary team that engages and provides community support for people with co-occurring physical and behavioral health needs.

In some PSH buildings, particularly single room occupancies (SROs) in which all tenants formerly were homeless, so many residents have substance use disorders that it can be a challenging environment for those who are in early stages of recovery and trying to stay clean-and-sober. Many PSH service-providers would like to be able to offer more services to address substance abuse and support recovery, but Medicaid reimbursement is not available to support delivering these services in a housing setting. When Medicaid reimbursement is available for substance abuse treatment services provided by organizations that also deliver services in PSH, usually the substance abuse treatment services must be provided in a separate location that has been licensed or certified as a treatment program.

5.3.2. Substance Abuse Treatment Usually Is Not Consistent with a Harm Reduction Model or with Integrated Care

PSH service-providers find it difficult to link residents to off-site treatment services that are responsive to their needs. PSH supportive services staff members make referrals to detox or other treatment services available in the community, but few of these are willing to treat people who are not ready to commit to sobriety. Medicaid-reimbursed substance abuse treatment services generally must be provided in programs that are more highly structured than the flexible, client-centered services delivered in supportive housing.

5.3.3. Licensingand Funding Mechanisms for Substance Abuse Treatment Are Not Integrated with Other Types of Treatment

State-defined policies and procedures for provider qualifications and licensing, service definitions, service plans, documentation, and billing for Medicaid-covered substance abuse treatment services are often completely different from the policies and procedures for reimbursing other Medicaid-covered services for mental health or medical conditions, despite the fact that many people have co-occurring conditions.

The situation in Illinois illustrates some of the issues that providers have in using Medicaid to pay for services that address substance abuse problems. We heard the most about Medicaid coverage for substance abuse treatment in Chicago, along with some of the challenges. Becoming a DASA-licensed provider in Illinois takes substantial time and effort, with requirements that keep most agencies serving chronically homeless persons from pursuing the license. Even after an agency has become a DASA-licensed provider, it must operate as a licensed facility for two full years before it is eligible to receive Medicaid reimbursement.

In Illinois, as in many other states, DASA and DMH have different requirements for just about everything: timeframes for treatment planning and follow-up, allowable treatment types, amounts and duration of treatment, reporting, and other aspects of care. This makes it especially difficult for a program to serve chronically homeless people with multiple disabling conditions.

DASA funding covers care delivered in DASA-licensed spaces, while DMH coverage for mental health services under the state’s Rule 132/MRO is heavily oriented toward services delivered in the community, in people’s homes or in neighborhood locations. DASA’s model of care includes coverage for outreach and early intervention services, but in reality virtually all the DASA funding goes for facility-based care. DMH, on the other hand, allows care to be delivered to Medicaid recipients in many locations, but DMH does not have any way to cover outreach and engagement unless the person is already on Medicaid. In recent years, DMH used state resources to pay for outreach and engagement to non-Medicaid recipients, but that money is no longer available.

About 10 years ago, HHO developed an integrated assessment and service planning tool for the HHO target population of homeless people with two or more chronic and disabling conditions. DASA-supported substance abuse treatment may be delivered in the same space where mental health services are delivered, as long as the space is licensed by DASA; this is what happens in HHO’s Resource Center. The agency must maintain meticulous records showing who delivers what care to whom, so the right agency can be billed and claims will not be denied. When PSH residents need and want substance use-related services, they must go to HHO’s Resource Center to get them, while staff offering mental health services may come to where the clients live.

Other agencies in Chicago’s homeless assistance network also serve people with co-occurring mental illness and substance use disorders, but very few have a DASA facility license, so they cannot offer substance abuse treatment. Thresholds, a CMHC in Chicago, provides IDDT and raises money, with increasing difficulty, from sources other than DASA or Medicaid.

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