A Primer on Using Medicaid for People Experiencing Chronic Homelessness and Tenants in Permanent Supportive Housing. 3.1. Permanent Supportive Housing for People Experiencing Chronic Homelessness


PSH is intended to provide affordable housing combined with supportive services for people with disabilities or other significant barriers to housing stability. PSH is decent, safe, affordable, community-based housing, providing tenants with the rights of tenancy through leases and similar arrangements. PSH staff help tenants link to voluntary and flexible supports and services. SAMHSA has recognized PSH as an Evidence-Based Practice for reintegrating into the community people experiencing chronic homelessness and other highly vulnerable individuals with behavioral health disorders who are experiencing or at risk of homelessness or institutional care.29

3.1.1. The Housing

Across the country, PSH has been implemented using a range of models that respond to the needs and preferences of tenants and communities. PSH is intended for people who need both subsidized rent to make housing affordable and access to supportive services to help them retain their housing. It may take any of the forms of housing described below.

Creating PSH units may involve renovating units, constructing new housing, setting aside apartments within buildings, or leasing individual apartments in locations that may be scattered throughout an area. The housing component of supportive housing takes three primary forms:

  • Single-Site Housing, in which the tenants receiving support services live in units in the same apartment building or a group of buildings that offer affordable housing.

  • Scattered-Site Housing, in which tenants live in apartments throughout the community, often leased from private owners with rental assistance provided through government subsidies; supportive services may be delivered through home visits or provided at other locations in the community.

  • Mixed Housing, in which tenants live in developments, usually affordable housing, that contain a mix of supportive housing tenants and other tenants not part of the supportive housing program; supportive services may be delivered through home visits or provided at other locations in the community.

The various supportive services needed by PSH tenants may be provided at the housing site, through home visits, or at other locations in the community. Supportive services may be delivered by staff of the housing provider or staff of health, mental health, and other providers in the community, as needed and chosen by the tenants.

3.1.2. The People Who Live in PSH

The PSH model may support a range of populations, including families or individuals who have experienced chronic homelessness, people who have been in shelters or living on the streets or in other places not meant for human habitation, individuals transitioning from institutions, or individuals with disabilities.

Over the past two decades, many state and local government agencies that have responsibility for mental health services have collaborated with housing agencies and community providers to create PSH for people with SMI who are experiencing or at risk of homelessness. Because of the sources of funding used for services or housing costs, some of these PSH programs are available only to people with a qualifying diagnosis of SMI. Other PSH programs offer housing that is designated for people experiencing chronic homelessness regardless of the specific type of disabling condition.

In communities across the country, public and private funding agencies and the organizations that create and operate supportive housing programs often collaborate to expand the availability of PSH and to prioritize access to PSH for people who have been homeless the longest. Access may be targeted to those who are most vulnerable and at risk of mortality because of their age or health conditions, or people who have most frequently used expensive crisis services such as detox, emergency rooms, hospital inpatient care, or medical care provided in jails.

3.1.3. Services in PSH

People experiencing chronic homelessness and people who live in PSH may receive care from an array of health and behavioral health care providers of their choice. These services are usually intended to help people achieve several goals:

  • Manage chronic medical conditions and preventing avoidable health crises.

  • Improve health and wellness through regular preventive and primary care.

  • Understand and manage the symptoms of mental illness and develop coping skills.

  • Provide assistance with the identification of individual strengths, preferences, hopes, and choices.

  • Restore and strengthen interpersonal, functional, and community living skills that have been impaired by behavioral health disorders.

  • Motivate changes in risky behaviors and harmful substance use, engage people in treatment for substance use disorders, and support recovery.

  • Identify risk factors for relapse and develop relapse prevention plans and strategies.

  • Get and keep housing by providing help to find and apply for housing, building skills to negotiate with landlords and get along with neighbors, and problem-solving to support stable living in the community.

  • Obtain other benefits and access to community resources.

  • Reduce frequent and avoidable hospitalizations, emergency room visits, stays in detox programs, nursing homes, or other crisis or institutional care.


The services that help to achieve these goals for people who experience chronic homelessness often begin with engagement and establishing trust. People experiencing chronic homelessness are often socially isolated and they may be distrustful of medical providers and treatment systems. Their thinking and ability to communicate may be impaired by mental illness, substance use disorders, brain injuries, or other factors. As communities work to identify and house the most vulnerable people living on the streets and those who have experienced homelessness the longest, service providers often begin with engagement and assessment while people are still homeless, and their work continues through the process of helping people find and move into housing and then providing ongoing support for housing stability and recovery. Service providers make home visits or deliver care in satellite clinics or other locations that are accessible to people living in PSH, as well as to those who are still living in shelters or on the streets.

In Washington, DC, a SAMHSA grant to integrate primary and behavioral health care supports outreach efforts by Pathways to Housing and Unity Health Care. These efforts engage some of the most vulnerable people living on the street who have resisted earlier efforts to bring them into housing and care. After the Department of Mental Health's street outreach team identifies a likely candidate, a Pathways staffer and a Unity nurse-practitioner go out to meet and engage the person. The nurse-practitioner is able to do an on-the-spot health and mental health assessment that facilitates the process of enrollment, and the outreach team works to convince the person to accept help, and eventually housing.

Need for Multi-Disciplinary Approach

Many people who experience chronic homelessness have co-occurring medical, mental health, and substance use conditions. To address these varied needs, they often receive services delivered by multidisciplinary teams. Teams include clinicians and other team members, and also often include peers who have personal experience with homelessness and recovery. These peers can help the team establish and sustain relationships with clients and prospective clients. Collectively, the team has the expertise to address a range of medical conditions and to provide or support participation in integrated treatment and recovery for mental health and substance use disorders. Teams help to educate clients about their medical and behavioral health conditions so they will better care for themselves by taking medications regularly, improving nutrition, reducing harmful substance use, and participating in activities that promote health and reduce social isolation.

Teams may be created through partnerships among organizations that provide different types of Medicaid-covered services, such as a collaboration involving a Health Center and a provider of rehabilitation services. The Integrated Mobile Health Teams supported by the Los Angeles County Department of Mental Health are examples of this approach, with each team containing primary care clinicians from a Community Health Center and behavioral health staff from mental health providers. The teams have links to housing resources, allowing them to offer participants all of the components of PSH. In other cases a single organization provides both medical and behavioral health care services. The JWCH Center for Community Health in Los Angeles operates in this manner.

Effective Help for People with Substance Use Disorders

For people experiencing chronic homelessness, and particularly for those who have frequent and avoidable hospitalizations and emergency room visits, services to address substance use disorders are critically important. But these services for PSH tenants need to differ in important ways from the treatment programs that are available in many communities. Often people who experience chronic homelessness have difficulty effectively engaging with substance use disorder treatment programs when the programs require complete abstinence.30 Meeting this requirement is usually neither attractive nor possible for many people experiencing chronic homelessness who have long histories of substance use, particularly if they have co-occurring mental health disorders. These barriers make it hard for such programs to achieve lasting results for those who are not ready for treatment and abstinence. New models and approaches are needed, and have been developed within programs serving this population.

An approach known as Housing First has gained acceptance in recent years because it offers housing immediately without requiring people to stop using substances or start taking psychiatric medications. Housing First offers permanent housing as quickly as possible for people with long histories of homelessness, who often have substance use disorders and co-occurring health challenges. Services in the Housing First approach concentrate on helping people keep their housing and avoid returning to homelessness; addressing the ways that substance use might interfere with these goals is a key component of the approach.

The Housing First approach begins with an immediate focus on helping people get housing. Participation in services is strongly encouraged, but neither sobriety nor participation in services is required as a condition of tenancy. This structure makes it more possible for many people with long histories of homelessness to accept the offer of housing. Services are flexible and individualized, and service providers do "whatever it takes" to help the person achieve goals related to housing stability. Service providers work to motivate reductions in harmful substance use and steps toward recovery, instead of requiring people to complete a substance use disorder treatment program first. Service providers may offer help with practical needs (including food, clothing, household supplies) and work to establish a trusting relationship before expecting that a person will engage in treatment or more-intensive case management services. Peer-based recovery services are often offered and may emphasize consumer empowerment and self-direction.

Case Management and Care Coordination

In addition to the services that directly focus on medical and behavioral health conditions, some of the core services that people living in PSH receive are often described as case management. These services usually begin with a focus on helping people achieve and maintain housing stability. They include coordinating access to medical and behavioral health care services by helping people get to appointments and fill prescriptions; linking people to home health services or to services that provide wheelchairs or other durable medical equipment following a medical procedure or hospitalization; helping people obtain benefits; building skills for independent living; helping to problem-solve relationships with landlords and neighbors; and connecting people to community resources.

For many people experiencing chronic homelessness or living in PSH, Medicaid can pay for some of these services, and a growing number of states and service providers are working to deliver Medicaid services in ways that are accessible and effective. With more people becoming Medicaid beneficiaries beginning in 2014, states are strengthening their health care delivery systems, developing ways to provide appropriate Medicaid benefits for beneficiaries' medical and behavioral health care needs. As states make these changes, there will be greater opportunities to deliver Medicaid-covered health care and behavioral health services for people experiencing chronic homelessness and those living in PSH.

3.1.4. PSH Compared to Residential Treatment and Institutions for Mental Disease

For purposes of understanding what services Medicaid may be able to support for people who have experienced chronic homelessness who are now living in PSH, it is important to understand the differences between PSH and two other arrangements--residential treatment programs and Institutions for Mental Disease (IMDs).

The primary purpose of PSH is housing to end a person's homelessness. Tenants have leases in their own names or other arrangements assuring the same tenancy rights as any other person with a lease. Tenancy in housing continues according to the terms of one's lease, not on the basis of participation in services. In contrast, clients of residential treatment programs have no tenancy rights, and continue in residence only as long as they participate in treatment.

PSH differs from a residential treatment program in another important way--the tenants' ability to choose the types of care and support they will receive, and from whom. Tenants who live in PSH may choose to participate in various forms of health care and treatment services for which they are eligible, and they may choose whether to receive services from providers who are connected to their housing or from other qualified Medicaid service providers in the community. In contrast, clients of residential treatment programs are there primarily for the treatment, not the housing, which is expected to be temporary until participation in the treatment program ends. Refusal to participate in treatment usually results in termination from the program, including the end of the client's residency in the program.

PSH also differs from IMDs in other important ways, and thus is not subject to some important restrictions in the Medicaid rules that apply to those institutions. The discussion of Medicaid reimbursement for services in PSH often raises questions about the Medicaid payment exclusion for IMDs. Medicaid payment does not extend to services provided to individuals who reside in an IMD, except for services furnished pursuant to the state plan benefit ("inpatient psychiatric services for individuals under 21") or pursuant to an exclusion for individuals age 65 or older who reside in institutions that are IMDs. Medicaid defines an IMD as "a hospital, nursing facility, or other institution of more than 16 beds that is primarily engaged in providing diagnosis, treatment, or care of persons with mental diseases, including medical attention, nursing care, and related services. Regulations also indicate than an institution is an IMD if its "overall character" is that of a facility established and maintained primarily for the care and treatment of individuals with mental diseases.31

Unlike institutions, including IMDs, PSH offers housing in community settings, facilitating engagement and integration into the broader community. Regardless of whether PSH units are apartments scattered throughout the community or in apartment buildings dedicated to providing PSH for people with disabilities who have been homeless, PSH offers person-centered, community-based support, generally meeting the criteria CMS has established to define a home and community-based setting in which some Medicaid services may be provided. The supportive services available to persons with mental disorders who live in PSH may include diagnosis or treatment of medical or behavioral health conditions, but the primary purpose of services in PSH is helping tenants to achieve and maintain stability in housing, not treatment of their mental disease. As already noted, continued tenancy in the housing is not contingent upon participation in supportive services offered by the PSH program or other providers who work with PSH tenants.32

View full report


"PSHprimer.pdf" (pdf, 1.43Mb)

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®