NYAPRS Note: In this excerpt from the NYS Department of Health'srationale for our Medicaid Waiver proposal to reinvest anticipated federal savings into a number of key initiatives, DOH makes a powerful case for the critical value of increased supportive housing beds towards realizing improved healthcare system outcomes and savings.
DOH is proposing to reinvest $750 million over the next 5 years to create housing and supports for 3000 'high cost high needs' Medicaid beneficiaries in need of stable housing.
Many NYAPRS members have sent letters of support to DOH/CMS in support of the waiver's emphasis on expanding housing, peer support, workforce retraining and advancing cultural competence.
Medicaid Supportive Housing Expansion
Question #1: What are the core problems in health care delivery this program plans to address? As part of this answer please describe the "current state" the program will attempt to transform/improve.
New York State is plagued by a lack of supportive housing and as a result Medicaid is wasting money. There is compelling evidence that for people coping with chronic illness or disability and behavioral health challenges, the lack of stable housing often results in avoidable health care utilization and, in turn, avoidable Medicaid expenses. Moreover, the lack of affordable housing, in combination with accessible health care, continues to be an obstacle to serving individuals in the most integrated setting. This includes individuals in nursing homes and other long term care settings, who cannot be discharged because they lack a place to live, as well as homeless individuals and those in shelters whose chronic health and behavioral health conditions lead to overuse of emergency departments and hospital inpatient care. Transitioning individuals into supportive housing dramatically reduces immediate and long-term spending for Medicaid reimbursable expenses, as well as spending on other public programs. By increasing the availability of supportive housing for high-need Medicaid beneficiaries, there is significant opportunity to reduce Medicaid costs and improve the quality of care for these individuals.
Question #2: How will this program help achieve the Triple Aim in New York? Access to supportive housing services is of paramount importance to achieve the Triple Aim of better health, better care, and lower costs for traditionally underserved populations.
Better Health, Better Care
There is a growing national recognition that addressing the social determinants of health is critical for improving health while reducing health care costs. This is most evident in the matter of housing. People who are homeless or lack stable housing face multiple health risks, die younger, have less access to primary care, and are frequent users of expensive hospital services. Among those New York City Medicaid patients at highest risk for future costly hospital admissions, as predicted by a validated algorithm, a full 60 percent were homeless or precariously housed.
Additional supportive housing services will also reduce health disparities by focusing on a diverse population of low-income New Yorkers. Racial minorities, including African-Americans, Hispanics, and Native Americans are overrepresented among those who are homeless and marginally housed, and stand to benefit the most from supportive housing services. In addition, focusing on the Health Home eligible population will have the ancillary benefit of contributing to reducing health disparities among the minority community.
For example, of the Health Home eligible population, over 20 percent are African-American and over 26 percent are Hispanic. Increased funding for supportive housing services for the racial and ethnic minority population will contribute to the state's efforts at reducing health care disparities.
The lack of appropriate supportive housing, especially in New York's urban areas, is a major driver of unnecessary Medicaid spending. For every individual served under this program, it is estimated to save Medicaid costs by approximately $16,281 - $31,291 annually per person14, with savings ranging by the types of populations and disabilities served and intensity of targeting. Preliminary estimates suggest that Medicaid savings would total between $142 million - $273 million annually, totaling between $711 million - $1.3 billion over a five-year period.
Over a decade of independent research has shown that transitioning individuals into supportive housing dramatically reduces immediate and long-term spending for Medicaid reimbursable expenses, as well as spending on other public programs. This is a fundamental premise of the U.S. Department of Justice's vigorous enforcement activities to assure the availability of community living options for people with disabilities. In New York, supportive housing costs $47 per day while it costs $437 a day in a psychiatric hospital, $755 in an inpatient hospital, $68 in a homeless shelter, and $129 for jail.2 By increasing the availability of supportive housing for high-need Medicaid beneficiaries, there is a significant opportunity to reduce Medicaid costs and improve the quality of care for these individuals.
A preliminary analysis of 28,724 recipients in need of supportive housing found a total of over $1 billion in annual Medicaid expenditures, including $212 million on inpatient hospital care, $5 million on emergency department services and $266 million on long term care services.3 Supportive housing services have the potential to decrease these costs dramatically - producing millions in Medicaid savings.
For example, multiple national studies have found reductions in emergency department (ED) and inpatient costs averaging 60 percent, potentially saving New York's Medicaid program over $650 million over five years in ED and inpatient costs alone. Clearly, expanding the availability of supportive needs is an integral component to attaining Medicaid cost containment.
Question #3: What will the state's health care delivery system look like after this program is implemented (post waiver period)? Provide the vision for the future with specific examples (i.e. Brooklyn will have a stable health care delivery system which provides high quality service for the first time in decades).
After the completion of this project, New York will have a more secure foundation to house its high cost Medicaid populations. Specifically, individuals that receive supportive housing services through this program will receive comprehensive "support services", and a permanent place to live. By increasing the availability of supportive housing for high-need Medicaid beneficiaries, New York will experience a significant reduction in Medicaid costs and vast improvement in the quality of care for these individuals.
Question #4: How will the state ensure that the goals of the program are achieved? Specifically, what consequences will exist for providers that receive funds and fail to achieve agreed upon benchmarks/metrics?
New York's Supportive Housing program will monitor placement to assure that only eligible individuals, as outlined on page 60 of our MRT document, receive supportive housing services through this program. New York State and New York City have extensive experience in managing a gate keeping function to assure that priority populations are placed in supported housing units. The State and City, going back to 1990, have implemented a series of New York/New York agreements targeted to the shelter and street homeless population. The NYC Human Resource Administration reviews each request for housing and certifies that the individual meets the target population criteria prior to placement. In 2005, under the NY/NY III agreement, this gate keeping function was strengthened to target long stay shelter and street homeless. The NYS waiver proposal will use a similar gate keeping function; in this case the admission criteria would be high cost Medicaid users. Medicaid claims and encounter data would be used to review the referral. For NYC, the state would work cooperatively with NYC government, Health Homes and managed care plans to manage this function.
Outside of NYC the state could manage the gate keeping directly in cooperation with Health Homes and managed care plans. Local government could choose to participate in the process. The initial target group for health home enrollment is high Medicaid users, so this will be a natural pool to generate referrals. The health home will be responsible for developing and overseeing the integrated plan of care for treatment and support.
Question #5: How will funds "flow" to approved projects? Describe the application process as well as what plans currently exist for how funds will be distributed throughout the waiver period. New York seeks to dedicate $150 million annually, totaling $750 million over five years, to expand access to supportive housing services. Under this proposal, two programs would be created - the Supportive Housing Capital Expansion Program, totaling $75 million annually, to fund capital projects, and the Supportive Housing Services Program, totaling $75 million annually, to provide supportive housing services.
Funds must target high cost, high need Medicaid members who require supportive services to live independently. Funds would be distributed through a variety of state and local housing agencies via a competitive request for proposal approach. Funds would be distributed to eligible applicants on a competitive Request for Proposal (RFP) process. Sustainable projects, with the greatest Medicaid return-on-investment (ROI), would be prioritized over other projects. Eligible applicants may include, but are not limited to, for profit and non-profit housing developers, and private nonprofit organizations. New York State agency partners may include: the Office of Mental Health (OMH), the Office of Temporary and Disability Assistance (OTDA), the AIDS Institute within the Department of Health, the New York State Office of Alcoholism and Substance Abuse Services (OASAS), and New York State Homes and Community Renewal (HCR).
Question #6: Why are these funds necessary? Why can't the state fund these efforts with other state or federal funds? Describe how waiver funds for this program will relate to other federal funding opportunities.
This proposal is one component of New York's greater commitment to support Supportive Housing. Currently, multiple agencies throughout the state fund supportive housing programs. New York State has invested more than $350 million annually in these efforts because the program works - it improves quality care and lowers health care costs. Despite New York's commitment, we continue to experience need whereby thousands of New Yorkers lack housing and supportive services. As a result, these individuals continue to be homeless or live in institutions or other inappropriate settings because of the lack of affordable, accessible housing options in the community.