How MA Special Needs Plans Could Reinvent Homeless Healthcare

Researchers from both coasts of the US collaborated to recommend a special needs plan under Medicare Advantage that would improve the nation’s homeless healthcare strategy.

Individuals facing unstable housing often struggle with mental and behavioral healthcare issues for which local municipalities and agencies have no answer. Few cities know this reality better than Los Angeles, which is home to 19 percent of the nation’s homeless population, the White House State of Homelessness in America report found.

The lack of access to mental and behavioral healthcare is an aggravating factor in the number of homeless. Twenty percent of homeless individuals in the US have a severe mental illness, according to the White House report, and 16 percent suffer from chronic substance abuse.

LA Care, a health plan based in Los Angeles, partnered with SNP Alliance, Massachusetts General Hospital, and other academic, professional, and nonprofit healthcare organizations to come up a homelessness-focused special needs plan under Medicare Advantage.

CMS and Medicaid programs would facilitate these plans in concert with Medicaid managed care organizations. These special needs plans for individuals facing housing instability would offer fully capitated, risk-adjusted monthly payments to Medicare Advantage organizations per member. Payments would go towards Parts A, B, and D benefits

These plans could be administered through Medicare, Medicaid managed care partners, or a model that coordinates both programs. Stakeholders would include clinicians, homeless healthcare centers, governmental agencies, and community organizations.

The special needs plans might serve homeless individuals by providing

• Mobile, community, and street healthcare delivery
• Addiction treatment
• Chronic disease management and mental and behavioral healthcare management
• Healthcare-related transportation
• Assistance in maintaining a stable housing environment
• Respite care

To implement a special needs plan for the homeless, the researchers said, CMS would have to begin with a pilot. 

The researchers noted three outcomes that would serve as metrics for the pilot’s success. The special needs plan would need to reduce homeless patients’ healthcare spending, improve patient outcomes, and decrease homelessness, particularly for patients with mental and behavioral healthcare conditions.

The researchers acknowledged certain obstacles to the hypothetical special needs plans for the homeless. 

Currently, there is no formula for projected healthcare spending that satisfactorily represents the complexities of a homeless individual’s condition leading to healthcare costs. A team of actuaries would have to innovate a new way of calculating a homeless individual’s potential healthcare costs that incorporates social determinants of health.

Furthermore, the healthcare industry lacks the vocabulary to express “homelessness” in a way that fully encapsulates the diverse situations to which the term is applied. The researchers suggest defining homelessness as an individual lacking stable housing for over six months. Determining when a person should be eligible for and loses eligibility for these plans would also require clear language and specific indicators.

Verification of unstable housing can also be challenging. Shelter records or eviction notices would likely be the best way to prove that someone had been without stable housing for more than six months.

Setting model of care requirements is also key. The researchers did not recommend specific requirements but rather suggested that CMS initiate multiple pilot programs with varying requirements to discern the most effective approach.

Finally, the researchers noted that, while Medicare Advantage’s flexibilities have assisted in combatting social determinants of health in many respects, the flexibilities have not included benefit design related to housing status. Enhancing plans in this way would be critical to establishing a special needs plan for homeless individuals under Medicare Advantage.

Individual payers, like UnitedHealthcare and the University of Pittsburgh Medical Center (UPMC) Health Plan, have made efforts to reduce unstable housing through hefty investments in social determinants of health.

“The Center for Medicare and Medicaid Innovation (CMMI) should test homeless special needs plan models to determine the extent to which alternative models of health care delivery and financing could help alleviate the growing national challenge of older adults experiencing homelessness and its associated health conditions. This collaborative, multisector approach could hold significant promise to reducing the number of homeless individuals and increasing access to health care and related services through levels of coordination that are otherwise impossible to achieve,” the report concluded.