Industry Leaders Propose Model for Financing, Organizing Homeless Healthcare
Acknowledging that homelessness is both a recognized cause and a result of health problems, three healthcare leaders have proposed the creation of a homelessness-focused special needs plan—a type of Medicare Advantage insurance plan aimed at meeting the unique care needs of specific high-need populations.
Published recently in JAMA Network, the authors of the viewpoint article—led by Sachin Jain, M.D., president and CEO of CareMore Health System, and adjunct professor of medicine at the Stanford University School of Medicine—noted there has been a movement over the past several years to include housing as a healthcare intervention by several key cities and municipalities. But while these programs have had some success with small populations of patients, their reliance on city budgets raises questions about scalability, the authors wrote.
Jain, who previously held leadership positions in the Center for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health IT (ONC), and his colleagues wrote that while special needs plan aren’t commonly known, they’re a form of Medicare Advantage plans “that have quietly increased in popularity and now include almost 3.2 million patients who are enrolled in Medicare in 734 different plans. Individuals are eligible if they are eligible for Medicare and meet criteria for inclusion in a plan type. CMS, sometimes in coordination with state Medicaid agencies, administers these plans in partnership with managed care organizations.”
The article was published at around the same time CVS Health officials announced that the organization invested $67 million in affordable housing in 2019. The investments helped to create more than 2,200 affordable homes with supportive services for individuals and families across 24 cities in six states.
The piece went on to explain that special needs plans enable specialized benefit designs for particular chronic conditions, such as end-stage kidney disease, diabetes, heart disease, or COPD, or for groups of people with specialized healthcare need, such as patients eligible for both Medicare and Medicaid. These types of plans are regulated by CMS to ensure patients receive care consistent with predesigned standards. For example, diabetes special needs plans offer specialized benefits, physician choices, and drug formularies to optimize care for individuals with diabetes, the authors offered.
When it comes to the homeless population—inclusive of many individuals who qualify for Medicare because of age or disability or Medicaid because of low income—these patients enrolled in traditional fee-for-service Medicare and Medicaid “are often underserved by a delivery system that is not designed to address their wide range of complex social and behavioral needs,” the authors stated. “Fee-for-service payments result in a focus on addressing the effects of homelessness, not the related underlying mental health, substance use, or economic or social conditions; this care is expensive and suboptimal,” they added.
Getting into the details of the special needs plan for this patient population, the authors noted, “Medicare Advantage organizations offering homeless special needs plans would need to receive adequately risk-adjusted payments per member per month that reflect the total true cost of caring for patients. Those payments could be used to fund all Medicare Part A, B, and D benefits, including professional services, institutional care expense, and pharmacy benefits. Depending on the design selected, plans could be administered through the Medicare program, Medicaid through Medicaid managed care partners, or through a coordinated model leveraging the infrastructure of both programs.”
What’s more, provider organizations that provide homeless special needs plans would include traditional clinicians and centers that provide care for homeless individuals, such as federally qualified health centers; local, state, and federal agencies; and community organizations with experience addressing the needs of homeless individuals, they said.
The Center for Medicare and Medicaid Innovation (CMMI) should be the department that tests and pilots the homeless special needs plan, according to the authors. If the initial results reveal that the program leads to lower costs for the homeless patients included, better clinical outcomes, and in the end, a lower rate of homelessness, then it could be expanded to the entire Medicare Advantage Program, the authors propose.
Several operational challenges are presented, however, the researchers said. For one, actuaries would need to establish payment adjustments that would adequately account for costs of appropriately providing the range of healthcare and other services needed by enrollees in a homeless special needs plan. Secondly, CMMI would have to derive a definition of homelessness that could easily and effectively be applied.
What’s more, CMS would have to develop model-of-care requirements that could be consistently applied across the variety of rural and urban geographies in which individuals experiencing homelessness live, but also enable the flexibility to meet local and context-specific needs. And finally, there will need to be flexibility for real experimentation on benefit design regulatory flexibility around issues, such as the medical-loss ratio, to optimally serve this diverse population.
Ultimately, the authors concluded, “This collaborative, multisector approach could hold significant promise to reducing the number of homeless individuals and increasing access to healthcare and related services through levels of coordination that are otherwise impossible to achieve.”
