The Intersection of Health and Housing: CMS’s Potential Medicaid Investments

December 06, 2018 | ASTHO Staff

Emerging evidence indicates that affordable, safe, and stable housing directly impacts an individual’s health and well-being, including the ability to manage chronic diseases and mental conditions, maintain personal hygiene, access education and employment, and build healthy relationships. Individuals experiencing homelessness face illness at three to six times the rate of housed individuals and are three to four times more likely to prematurely die than the general population. Furthermore, conditions like asthma can be exacerbated by poorly maintained housing conditions, and neighborhood conditions can inhibit an individual’s ability to support a healthy lifestyle.

Ensuring that patients have stable housing can also reduce healthcare costs. For example, an analysis of Oregon Medicaid claims data found individuals who were placed in stable and affordable housing reduced their Medicaid expenditures by 12 percent. Housing placement also correlated with a 20 percent increase in primary care visits and an 18 percent decrease in emergency department visitations among Oregon Medicaid beneficiaries. Hospitals and health systems are increasingly interested in supporting access to stable and quality housing as a method of reducing downstream healthcare spending, especially as they move toward value-based payment models that reward upstream prevention.

Federal policymakers are also fostering connections between housing and health. CMS released an informational bulletin in June 2015 emphasizing the importance of designing Medicaid benefits packages that incorporate the social determinants of health. The bulletin outlined allowable coverage of housing-related activities and services for individuals with disabilities and older adults requiring long-term services and supports, such as conducting individual tenant housing assessments, assisting with the housing search and application process, or offering tenancy sustaining services. The guidance also clarified that federal CMS funds cannot be spent on room and board.

However, in a Nov. 14 speech, HHS Secretary Alex Azar indicated that CMS may soon introduce a payment model that would allow hospitals to directly pay for housing and other social services using federal Medicaid dollars. Azar's statement suggests that this shift stems from a broader interest in better alignment between health and human services and that such a model would be tested by the Center for Medicare and Medicaid Innovation (CMMI).

While direct spending on room and board is not permitted under the Medicaid statute, several state Medicaid programs are already pursuing demonstrations that allow for innovations or flexibilities in Medicaid-managed care programs that address beneficiaries’ housing needs or other social determinants of health. North Carolina, for example, recently received approval of its amended Section 1115 waiver, which transitions the state’s Medicaid program to managed care. The managed care plans will also implement a new Healthy Opportunities pilot program, which allows Medicaid managed care to cover evidence-based, non-medical interventions that have a direct impact on enrollees’ health outcomes and costs. The pilots will be implemented regionally to address the social determinants of health, including housing, food security, transportation, employment, and interpersonal safety. North Carolina is the first state to receive this type of flexibility and will serve as a national pilot.

CMMI is currently exploring the impact of health systems screening and referrals for health-related social needs (including housing and beyond) of Medicaid and Medicare dual beneficiaries. The Accountable Health Communities model will test whether screenings and referrals to community-based organizations and social services can generate improvements to health outcomes and reduce healthcare spending. The model is being piloted through 31 organizations in 23 states (AZ, CO, CT, GA, IL, IN, KY, MD, MI, MN, MS, NJ, NM, NY, OH, OK, OR, PA, RI, TN, TX, VA, and WV). In Maryland, the Baltimore City health agency serves as the model grantee and is conducting the screening and referrals. Other public health leaders in various states are working to convene coalitions and institutionalize linkages between public health, healthcare, social services, and the community so that those relationships can last beyond the duration of the grant period.

As the evidence for addressing the social determinants of health mounts and CMS weighs moving forward with testing direct investments in housing, state and local public health agencies will be well-positioned to inform investments. This can be done by using public health data or by convening various sectors that have expertise in housing needs and resources.