States can leverage a variety of Medicaid authorities to address the housing needs of Medicaid beneficiaries. As states begin to implement those programs, key operational decisions are needed, including reimbursement approaches. This brief describes how states have structured their payment policy for housing support services under Medicaid.
Background on Medicaid Payment Approaches
According to the Medicaid and CHIP Payment and Access Commission (MACPAC), payment approaches should be assessed to identify the approach that is most efficient and economical while promoting access to quality services and appropriate utilization. In addition, states often consider the following when determining a payment approach:
- Administrative simplicity for the Medicaid program, providers, and beneficiaries
- Defending against fraud, waste, and abuse
- Predictable budgeting
- Access to intended service (workforce development, provider capacity and network)
- Alignment with other payers
There are a variety of payment approaches that Medicaid programs use, including:
- Fee for service (FFS): Each individual service has an associated payment based on a fee schedule
- Daily, per visit, or per encounter: Includes all services rendered during the relevant period (daily, 15-minute, per visit, etc.)
- Per episode or bundled payment: Includes all services associated with a specific procedure or diagnosis, usually over a specific period of time
- Capitation or per member per month (PMPM): Includes coverage for a defined set of services, whether or not they are used, for a specific period of time (typically one month)
- Supplemental or incentive payments: Additional payment for a specific provider characteristic or a desired outcome
Considerations for Housing Support Services Payment Approaches
From the states that NASHP has reviewed, most common payment approaches were 15-minute rates and PMPM, followed by daily rates (see Table 1 for select state examples and reimbursement rates). Most states separated pre-tenancy and tenancy sustaining services into two different payments, but the required service definitions for each include multiple activities (see NASHP’s crosswalk of service definitions and reimbursement approaches for more information). In addition, it is becoming more common that states are implementing supplemental payments to reward providers for certain outcomes (e.g., securing a lease within a specific time frame, housing maintained for a certain amount of time, etc.).
Table 1. Select State Medicaid Pre-tenancy and Tenancy Support Service Reimbursement Approaches
| California Advancing and Innovating Medi-Cal (CalAIM) | 1915(b) In Lieu of Services and Section 1115 Demonstration | $444 PMPM |
| Connecticut Housing Engagement and Support Services (CHESS) | 1915(i) State Plan Option | $11.06 per 15-minutes Performance add-on payments for timeliness of “lease up” and successful tenancy sustaining supports |
| D.C. Housing Support Services | 1915(i) State Plan Option | $755.21 PMPM $400 supplemental monthly payment for clients with minor children in the household |
| Georgia Housing Supplements | State Plan | Between $15.13 and $24.36 per 15-minutes[1] |
| Hawaii | Section 1115 Demonstration | $350 PMPM |
| Louisiana | State plan and 1915(c) Home- and Community-Based waiver | $15.11 per 15-minutes |
| Massachusetts Community Support Programs[2] | Section 1115 Demonstration | $17 daily |
| Minnesota Housing Stabilization Services | 1915(i) State Plan Option | $17.17 per 15-minutes |
| North Carolina Health Opportunity Pilots | Section 1115 Demonstration | $400.26 PMPM |
| North Dakota | 1915(i) State Plan Option | $10.73 per 15-minutes |
| Rhode Island Home Stabilization Services | Section 1115 Demonstration | $331 PMPM |
| Washington Foundational Community Supports [2] | Section 1115 Demonstration | $112 daily |
[1] Georgia’s reimbursement approach is dependent on the rendering provider and specific service offered.
[2] Massachusetts’ and Washington’s newly approved Section 1115 Demonstration Waivers may change the reimbursement approach.
Specific to housing support services, there are additional considerations in designing a payment approach. First, many providers of housing support services may be new to participating in the Medicaid program. States often consider complexity of the payment approaches relative to the need to recruit and train new providers. Anecdotally, NASHP and the Corporation for Supportive Housing (CSH) have heard that providers may find a 15-minute billing increment to be administratively burdensome, especially for providers that have traditionally been funded through grants and are new to the Medicaid system (i.e., some behavioral health and housing service providers). However, several states use a 15-minute billing increment for housing support services and have successful programs, aided by minimizing clinical documentation and reporting burdens.
Additionally, states consider whether one individual will receive the bulk of the services from one provider (or that provider will contract with others for additional services) or whether the individual will receive housing support services from a variety of sources. A bundled or PMPM approach is often most effective when an individual can be attributed to one provider and could be challenging if an individual is receiving portions of the service from multiple providers.
In addition, states engaged in health and housing programs are considering how payment approaches will relate to their data collection efforts. For states that rely on Medicaid claims as a major source of data, using a fee for service, daily, or encounter-based payment approach allows them more insight into utilization. For states that choose to use a bundled or PMPM payment approach, additional data are often collected to supplement the claims information.
In all, states that have successful health and housing programs use different approaches to payment of pre-tenancy and tenancy sustaining services, taking into account the goals, priorities, and needs of the specific state, target population, and provider network.
NASHP is thankful for support of this project by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under the National Organizations of State and Local Officials co-operative agreement.
