In 2019, more than 500,000 individuals experienced homelessness and nearly 20 million renters spent 30 percent or more of their income on housing. These numbers are increasing as the COVID-19 pandemic exacerbates housing insecurity for people of color and low-wage workers. To improve housing stability – a critical social determinant of health (SDOH) – states are using Medicaid managed care contracts to encourage health plans to support members’ housing-related needs and promote coordination between housing providers and health plans.
Background
Housing status is a key social determinant of health. Many individuals experiencing homelessness suffer from diabetes, heart disease, and HIV/AIDS at rates that are up to six times higher than the general population, and are at increased risk for contracting COVID-19. Rates of mental illness and substance use disorders are also significantly higher among individuals experiencing homelessness.
Many individuals experiencing or at risk of homelessness qualify for Medicaid. Medicaid can be a valuable resource for helping individuals facing housing insecurity, and research shows that investing in housing can save states money and improve health. One study found that hospitalization, emergency room use, and total expenditures for individuals experiencing homelessness in Massachusetts were 3.8-times higher than for the average Medicaid recipient.
Increasingly, state Medicaid agencies are focusing on addressing housing-related needs of their enrollees through their managed care contracts.
The National Academy for State Health Policy (NASHP) recently completed its three-year Health and Housing institute. Read its final report, Five States Break Down Interagency Silos to Strengthen their Health and Housing Initiatives, to learn how Illinois, Louisiana, New York, Oregon, and Texas improved their respective health through housing initiatives.
How States Use Medicaid Managed Care Contracts to Address Housing Needs
While Medicaid managed care contract language varies significantly between states, there are some similarities in states’ approaches to addressing Medicaid enrollees’ housing needs, including these managed care organization (MCO) contractual requirements:
- Screen enrollees for housing-related needs;
- Hire designated housing coordinators; and
- Ensure the coordination of care between housing providers or agencies and Medicaid programs.
States working to address housing insecurity and homelessness among Medicaid enrollees, or states that already require plans to focus on SDOH more broadly but wish to tailor initiatives specifically towards improving housing status, can adopt some of the contractual language and initiatives described below.
Screening for Housing Insecurity
According to NASHP’s scan of states’ Medicaid managed care contracts, 16 states (of 38 with publicly available contracts or requests for proposals) require contractors to conduct routine screenings for certain SDOH. Of the 16 states, 14 require their managed care plans to screen members about their housing needs during these assessments. These screenings can occur at any interval from annually to quarterly, with some states specifying that individuals who qualify as high-needs members should be screened more frequently. In New Hampshire, community mental health programs that contract with the state’s Medicaid program are required to conduct quarterly assessments and document all members’ housing status. In Pennsylvania, providers must complete an SDOH assessment that focuses on housing security, among other things, at least annually and more often depending on the individual’s risk level.
While some states require health plans to screen all enrollees, others only require screenings for certain populations. For example, Minnesota’s Medicaid MCO requires outreach and screening for members who have been to the emergency department for services three or more times within four consecutive months. In Alabama, the maternity psychosocial assessment includes questions related to homelessness.
Screening for housing status in order to identify members experiencing housing insecurity or homelessness is an important first step in addressing housing needs. However, in the absence of mechanisms to connect individuals to community resources that can help them find appropriate housing assistance, the impact of SDOH screenings is limited.
Hiring Housing Coordinators
According to NASHP’s analysis, seven state Medicaid MCOs identify a designated, full-time employee exclusively responsible for addressing enrollees’ housing needs – Arizona, Kansas, Louisiana, New Hampshire, New Jersey, New Mexico, and North Carolina. Other states, including Delaware and Pennsylvania, require their plans to hire more broadly defined care coordinators or SDOH specialists. They work on housing as part of their jobs, but are also responsible for addressing other member needs, such as employment, transportation, and education.
Through its contract with Kansas Medicaid, United Healthcare employs a housing navigator, a position added in 2016. The housing navigator develops partnerships statewide to identify resources for providing housing supports – including vouchers, prevention services, public housing, and homeless service agencies – and to help members locate housing. United Healthcare’s housing navigator has assisted more than 200 Medicaid members with housing needs.
The Louisiana MCO contract requires the plan to hire a permanent supportive housing program liaison who works with the Louisiana Department of Health to help implement the PSH program deliverables, which include providing affordable housing and tenancy supports. While hiring housing navigators or specialists requires MCOs to invest financial resources, onboarding navigators to help connect members directly to housing services and supports has been shown to be one effective way to address Medicaid enrollees housing-related needs, especially those identified during SDOH screenings.
Partnering with Housing Providers and Agencies
State housing agencies and local housing providers are also valuable resources for improving both the health and housing needs of individuals. Rather than building new systems, managed care plans can address housing insecurity among members by partnering with existing housing services and working to eliminate siloes between health and housing agencies.
For example, in New Mexico, health plans are required to contract with a federally qualified health center that specializes in providing health care for populations experiencing homelessness. Similarly, in New York, health plans are required to coordinate care with Health Care for the Homeless providers. In Oregon, Coordinated Care Organizations – the state’s Medicaid accountable care organizations – have contracted with community-based organizations to provide housing supports and helped develop a medical respite program to house individuals experiencing homelessness following an inpatient hospital stay.
Initial data from New York’s pilot partnership project between Medicaid MCOs and housing providers to reach individuals experiencing homelessness who are high utilizers of Medicaid services showed a 46 percent reduction in emergency room (ER) visits, a 47 percent decrease in Medicaid costs, and a 99 percent reduction in ER costs for participants.
Some state Medicaid contracts also identify opportunities for MCOs to support housing initiatives run by state or federal housing agencies. In Texas, the Medicaid MCO service coordinator must work with staff from their Section 811 Project Rental Assistance program, a federal program that helps provide supportive housing for individuals with disabilities, to coordinate care for Texans receiving Section 811 services and those leaving nursing facilities. This helps integrate health and housing services for individuals previously identified as having housing needs. In Louisiana, the state housing authority and the Department of Health co-manage the permanent supportive housing (PSH) program. The Louisiana MCO contract outlines a number of ways that MCOs are required to support the PSH program, including:
- Provide outreach to members who qualify for PSH;
- Help members apply for PSH;
- Ensure timely prior authorization for PSH tenancy and pre-tenancy supports;
- Refer members approved for PSH to relevant providers; and
- Work with PSH program management to ensure an adequate and qualified network of PSH program staff and service providers.
The MCO is also required to contract directly with housing providers approved by the state to provide tenancy and pre-tenancy supports to members participating in the PSH program. One analysis of Louisiana Medicaid recipients pre- and post-PSH showed a 26 percent reduction in emergency room visits, a 12 percent reduction in hospitalizations, and an increased use of behavioral health services among participants. Through partnerships with PSH programs, MCOs can improve integration of health and housing services for members and expand the reach of housing programs by helping to identify Medicaid enrollees in need of housing and connect them directly to resources.
Creative Financing
State Medicaid managed care contracts employ creative ways to use Medicaid funding to support efforts to address housing insecurity among enrollees. Although Medicaid cannot directly fund housing, there are many other strategies to effectively invest in housing services. Oregon’s Coordinated Care Organizations (CCOs) are required to spend a portion of their profits or reserves on health-related services, and specifically on housing supports. Starting January 2021, CCOs are also required to submit annual spending plans to the state, which include the CCO’s spending priorities related to addressing SDOH and health equity, and how they align with the state’s housing-related priorities. In Kansas, the state’s MCO request for proposal calls for alternative payment strategies to incentivize warm handoff transitions for individuals moving from institutions into community-based programs and services.
In Massachusetts, the managed care contract mentions the Social Innovation Financing for Chronic Homelessness Population Program (SIF), a Pay For Success (PFS) initiative that finances PSH. Through the Community Support Program for People Experiencing Chronic Homelessness (CSPECH), Medicaid managed care entities fund support services for PSH tenants in the PFS program. As of October 2020, 860 members have enrolled in CSPECH. Together with the PFS program, CSPECH has improved housing retention, decreased emergency room stays, and saved millions in costs. While the current budget climate arising from the COVID-19 pandemic makes adopting new funding strategies difficult, investing health plan dollars in housing services can not only improve members’ housing status, but also decrease Medicaid spending down the line.
Pilot Programs
In addition to established methods, such as screening for housing needs and partnering with housing service providers, some states are using their managed care plans to launch new initiatives to address their Medicaid enrollees’ housing needs. In Florida, MCOs are participating in a voluntary pilot program to provide behavioral health services and supportive housing assistance directly to Medicaid enrollees who are homeless or at risk of homelessness and who also experiencing either serious mental illness or substance use disorder. The North Carolina managed care contract provides for an Enhanced Case Management Pilot program in up to four areas of the state. MCOs in each area work to determine the most effective, evidence-based interventions to address four priority domains, which include housing. The program also requires each program to evaluate the effect of the interventions on health care costs and outcomes. There is no “one-size-fits-all” approach to addressing housing, but piloting programs like these, or creative financing solutions like those mentioned above, can help MCOs determine which methods are best for reaching housing-insecure members in their state, while also improving health outcomes and decreasing costs.
Conclusion
As efforts to address SDOH become increasingly common among Medicaid managed care plans, many states are narrowing their focus to address housing insecurity and homelessness specifically. By working to identify enrollees’ housing needs and directly connect them to housing and supportive services, health plans can improve housing stability, which in turn improves health outcomes and decreases costs.
During the COVID-19 pandemic, states face budget challenges while their Medicaid managed care plans may experience financial gains from a decline in demand for physical health services. This leaves health plans in a unique position to invest new resources upfront in housing-related services. In 2020, many insurers reported large profits, in part due to the decline in non-COVID-19-related hospital admissions. Medical Loss Ratio rules, however, limit the amount insurers can keep for profit or overhead costs – health plans must either issue rebates or spend more on health-related services, which presents an opportunity to use these additional funds to address housing insecurity and homelessness among enrollees. And, by requiring health plans to indirectly invest in housing by hiring housing coordinators, partnering with existing housing agencies who are already immersed in the work, financing housing-related services, or by piloting new, creative solutions, states can take the lead in guiding Medicaid managed care plans’ work.
This project was supported by the Health Resources and Services Administration (HRSA) of the US Department of Health and Human Services (HHS) under grant number U2MOA394670100, National Organizations of State and Local Officials. This information or content and conclusions are those of the author and should not be construed as the official position or policy of, nor should any endorsements be inferred by HRSA, HHS or the US government.
