Linking Medicaid and Supportive Housing: Opportunities and On-the-Ground Examples

Appendix: Summary of CMS Guidance on Medicaid Coverage of Housing-Related Services and Activities

The Centers for Medicare and Medicaid Services (CMS) issued an Informational Bulletin on June 26, 2015 that identifies and discusses the Medicaid options and waiver authorities that states can use to cover housing-related services and activities, and the extent of these authorities. The opportunities for states are summarized below, drawing directly from the CMS guidance. For more detailed information, readers should consult the Informational Bulletin directly.

Section 1915(c) home and community-based services waivers

Section 1915(c) home and community-based services (HCBS) waivers permit states to provide community-based LTSS for beneficiaries who meet an institutional level of care criterion. States can cover certain housing-related services under these Medicaid program waivers. Housing transition and tenancy sustaining services can be paid for as part of case management services under 1915(c) waivers. Environmental modifications to make community-based residential settings accessible can also be covered. In addition, the CMS guidance clarifies that, subject to specified criteria, states can receive federal Medicaid matching funds for the costs of certain Community Transition Services necessary for an individual leaving an institution to establish a basic household. These costs include, among others, security deposits required to obtain a lease, set-up fees for utilities, essential household furnishings, moving expenses, and services like pest eradication or preoccupancy cleaning necessary for the beneficiary’s health and safety. Federal matching funds are available for these costs only if they are reasonable and necessary and only if the individual cannot meet the expenses and the services cannot be obtained from other sources.

Section 1915(i) HCBS state plan optional benefit

States have a regular state plan option (i.e., no waiver is required) under section 1915(i) to cover the same kinds of housing transition and tenancy sustaining services, environmental modifications, and Community Transition Services that can be covered under section 1915(c) HCBS waivers. However, because beneficiaries do not have to meet an institutional level of care to receive services under 1915(i), states can use this option to serve adults with behavioral health conditions and others who cannot qualify for services under a 1915(c) waiver. The ACA amended section 1915(i) to expand financial eligibility for services under this option, allow states to target 1915(i) services to specific populations, and expand the array of services states can cover under this state plan option. States that use this option must provide services statewide and cannot limit the number of people served.

Section 1915(k) Community First Choice (CFC) state plan optional benefit

Under this optional benefit, states can reimburse for person-centered home and community-based attendant services and supports in a home or community-based setting. Transition costs for individuals transitioning from an institution to the community and expenditures that increase an individual’s independence or substitute for human assistance that would otherwise be necessary can be covered. These costs could also include security deposits for an apartment or utilities, bedding and basic kitchen supplies, first month’s rent, and other one-time transition-related expenses.

Targeted case management (TCM) services

State plan TCM services are services furnished to “assist individuals in gaining access to needed medical, social, educational, and other services.” TCM is a specific service that is targeted to specific populations defined by the state. The Informational Bulletin clarifies that, as part of identifying a beneficiary’s total needs, TCM can include linking the person to needed housing resources, assistance with housing search, and assistance with identifying resources to support the participant in maintaining housing during a housing crisis.

Section 1915(b) managed care waivers

Most states have section 1915(b) waivers that permit them to provide and pay for state plan-covered services, including housing-related services, through managed care programs. The authority at section 1915(b)(3) permits states to use savings achieved under its 1915(b) waiver to provide additional services to beneficiaries enrolled in its managed care program. These savings may be used for housing-related services for enrollees to identify, transition to, and sustain their housing. The Informational Bulletin addresses state authorities to cover housing-related services in their managed care programs.

Money follows the person (MFP) rebalancing demonstration

The MFP grant program provides states with enhanced federal Medicaid matching funds for 12 months for each Medicaid beneficiary who transitions from an institution to the community, and states can use MFP grant dollars for offer housing-related services to support transitions. Most of the 44 states with MFP programs are providing an array of housing-related services and activities, directly or through contracts with housing specialists, transition coordinators, case managers, and other providers. These services include state-level housing-related collaborative activities as well as individual housing transition services and tenancy sustaining services. Funding for MFP is set to expire in 2016, but any unused grant funds awarded in 2016 can be used through fiscal year 2020. Reauthorization of the program is uncertain.

Section 1115 demonstration waivers

Under section 1115 demonstration waivers, which must further the objectives of the Medicaid program and be approved by the Secretary of HHS, states are permitted additional flexibility in the design and operations of their Medicaid program. Section 1115 demonstrations can, and some do, include housing-related services described in the Informational Bulletin.¹ Demonstration waivers are generally approved for a five-year period and can be renewed for three more years. Federal spending under section 1115 demonstrations must not exceed expected federal spending in the absence of the demonstration.