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arlier this year, a homeless woman in her 40s who was living in her car went to the emergency department of a hospital in Orange County, California. She was found to have stage 2 ovarian cancer. Since she had no home to return to upon discharge, the hospital referred her to the Illumination Foundation, a not-for-profit housing organization.

The foundation staff evaluated the woman’s needs and admitted her into its 150-bed recuperative care center for homeless people in Fullerton, Orange County. The woman’s Medicaid health plan covered the cost. The staff connected her with a primary care physician and an oncologist to arrange chemotherapy. She’s now receiving treatment and in stable condition. She’ll remain in recuperative care while the staff works on finding her permanent housing, according to Pooja Bhalla, D.N.P., the foundation’s co-CEO.

On any given night in the United States, an estimated 580,000 people are unhoused. If they are injured or recovering from surgery or serious illness, they have no safe place to recuperate. As a stopgap measure, hospitals and clinics sometimes give recuperating patients a public transit pass to use all day or tell them to rest at a public library. Patients without housing often return to the hospital emergency department or are readmitted to the hospital. The health outcomes are worse than for patients who have housing and the medical expenditures are higher.

In response, community health centers, homeless shelters, hospitals and other organizations have launched 133 medical respite programs, such as the one used by the woman in Orange County, for homeless people in 35 states and the District of Columbia, and more are starting up, according to Barbara DiPietro, Ph.D., senior policy director at the National Health Care for the Homeless Council.

There’s no one way to operate a respite program. Some programs, particularly those affiliated with hospitals and clinics, are staffed by licensed medical professionals. Others use nonlicensed staff and bring in physicians, nurses and therapists to provide care. Many accept only patients who can perform the activities of daily living on their own and don’t have serious mental illness.

“We believe the value is really obvious, from the perspective of avoiding readmissions, providing better care and giving people the opportunity to recover,” says Leanne Berge, CEO of Community Health Plan of Washington in Seattle, a not-for-profit insurer that operates Medicaid managed care and Medicare Advantage plans.

But there are far too few of these programs to serve all homeless people across the country who need housing and support during recuperation. A number of factors are limiting their growth, experts say. It’s a cumbersome process for Medicaid plans to win state approval for covering these services, and many plans still don’t pay for it. Starting a medical respite program requires cooperation from a variety of community stakeholders, including neighborhood residents, and that can be challenging. Plus, there aren’t yet robust national data showing that these programs produce overall cost savings and improved outcomes. A 2021 literature review published by the National Institute for Medical Respite Care, however, found that without respite care, homeless patients have longer hospitalizations and suboptimal outcomes, and that respite care resulted in cost savings for hospitals.

“It’s complex, takes time and requires broad thinking about how to work with partners,” says Karen Dale, CEO of AmeriHealth Caritas District of Columbia, whose plan helped launch a medical respite program called Hope Has a Home in Washington, D.C., in 2019. Another hurdle, she says, is that Medicaid plans “worry that if they invest and do all this work and the person is no longer a member, someone else benefits.”

On top of that, 12 states have yet to expand Medicaid under the Affordable Care Act, making it much harder for respite programs for the homeless in those states to fund their services because Medicaid is the main source of coverage for people without housing.

Because Tennessee hasn’t expanded Medicaid, “people in our unhoused community are using the emergency room as their primary care provider, raising costs,” says Julia Sutherland, executive director of The Village at Glencliff, a medical respite program for homeless people near Nashville. “That means we spend hours sitting with our folks in the ER when we could be helping them find housing, benefits and a job or taking them to the eye doctor.”

Lacking Medicaid reimbursement, her program relies on support from a sponsoring church and contracts with local hospitals to serve their discharged patients in 12 individual homes in the church’s former parking lot. But having no coverage makes it very difficult to get participants into substance use treatment. “It’s a tough thing to tell someone who wants help that they’ll have to wait,” Sutherland said.

Illumination started its medical respite program for homeless people 12 years ago when local hospital leaders in Orange County realized they needed a safe place to discharge people without housing, explains Bhalla. They asked Illumination to start a program.

The foundation built a 150-bed facility in Fullerton with an affiliated medical practice upstairs staffed by physicians, including psychiatrists, and nurses. It also established a 50-bed stand-alone facility in Riverside County and supports recuperative care in motels in Los Angeles County.

Incentivized by the California Advancing and Innovating Medi-Cal program, a number of Medicaid plans have agreed to reimburse the foundation for the housing, case management and behavioral health and substance use treatment it provides. They see evidence that the program improves enrollee outcomes and reduces costs.

For instance, annual emergency department visits by homeless people enrolled in the CalOptima health plan dropped by 22% and inpatient admissions declined by 26% one year after completion of services at Illumination, according to a study that Illumination conducted in partnership with CalOptima. Total per member per month costs declined 23%.

While some Medicaid plans such as CalOptima are promptly approving enrollees for coverage in the foundation’s respite program, others are stingy about approvals, particularly in Los Angeles County, says Bhalla. “Our beds are staying empty because those plans aren’t referring patients,” she said. “So hospitals have patients showing up at the ER who don’t need to be admitted.”

At least seven medical respite programs in five states currently are receiving payment from Medicaid plans, and at least three states — California, Utah and Washington — are moving to have their Medicaid programs cover it as a standard benefit, says DiPietro.

Medicaid plans reimburse respite programs in different ways. Yakima Neighborhood Health Services, a federally qualified health center in Washington, which launched a respite program in 2010, receives a per-diem rate with an annual cap per patient from one plan, says CEO Rhonda Hauff. Two other plans pay a case rate with either an annual cap or a two-year cap per patient, she says.

The average cost for respite services at the Yakima program’s two five-bed facilities is $140 to $160 per day, not including the primary care and behavioral care provided at the clinics. Add those and the total is $350 to $400 a day. Three of the four Medicaid plans serving the Yakima area in central Washington have voluntarily agreed to cover the services. “The state is pushing (Medicaid plans) to move people out of hospitals,” notes Berge. “It makes so much sense to develop these alternative settings.”

Hauff has found that medical respite can serve as an entry point for homeless people who previously refused medical and behavioral care, shelter and other services. “It’s often the most vulnerable time in their lives, when they’re feeling particularly fragile,” she says. “As they start feeling better, they look to our staff to help them find stable housing, employment, clothes and benefits like disability. That’s the road to recovery.” A major problem for her program and others, however, is that permanent housing spots are in short supply and many clients return to the streets or to a shelter. “If we kept everyone until housing was available, we wouldn’t have enough capacity in respite to help people recuperate from their acute condition,” Hauff says.

AmeriHealth Caritas DC embraced the medical respite approach after the Medicaid agency for Washington, D.C., shifted in 2016 to pay-for-performance contracts that penalize plans for excessive hospital readmissions and emergency department visits. But Dale says the effort was primarily driven by a desire to improve healthcare and reduce disparities for poor people in D.C.

Since it opened, Hope Has a Home has served 161 male patients referred by local hospitals in its two eight-bed facilities, Dale says, including enrollees from all three Medicaid plans in D.C. A preliminary study found that AmeriHealth Caritas reaped a 19% return on investment through reductions in preventable hospital admissions, 30-day all-cause readmissions and low-acuity emergency department visits. Dale says her goal now is to open additional facilities for women, including pregnant women.

“Medical respite is a great solution to address social determinants of health,” she comments. “It should be explored by more insurers to build out the healthcare delivery system in many places.”

Harris Meyer is a freelance journalist in Chicago who covers healthcare.

Articles

Various groups, clinics and organizations have set up places for people without housing to recover from an injury, surgery and serious illness.  

Medicaid Programs Start to Embrace Respite Care for Unhoused  

Mark Rakowski says he strongly believes in the health value of preventive services like cancer screenings, HIV prevention drugs, vaccines, alcohol abuse counseling, and tobacco cessation treatment. He likes that the Affordable Care Act (ACA) makes these services more affordable to 

 to cover them without charging deductibles or copayments.

But the president of the nonprofit Chorus Community Health Plans in Milwaukee says that a federal lawsuit filed by conservative groups in Texas to eliminate that ACA preventive services requirement for more than 100 services may force him to do something he doesn’t want to do – make enrollees pay deductibles or copayments for these services.

Today, U.S. District Judge Reed O’Connor struck down some of those coverage requirements. He found that members of one of the agencies making coverage recommendations, the 

 (USPSTF), were not lawfully appointed under the Constitution. In addition, he held that requiring the plaintiffs to pay for HIV prevention violates their religious freedom. He postponed ruling on the remedies he will order.

So payers will have to decide whether to keep first-dollar coverage for HIV prevention and for the 52 preventive services recommended by the USPSTF, or else impose deductibles and copays for at least some of those services. Services recommended by that agency include screening tests for breast cancer, colorectal cancer and lung cancer, sexually transmitted infections, diabetes, and depression.

O’Connor upheld the constitutionality of two other agencies that recommend preventive services — the 

Health Resources and Services Administration

Advisory Committee on Immunization Practices

. So first-dollar coverage for the services they recommend for women and children and for immunizations is not in jeopardy.

 claim that the ACA’s Section 2713 mandating first-dollar coverage for recommended preventive services 

is unconstitutional and also violates the Religious Freedom Restoration Act of 1993.

 O’Connor, a George W. Bush nominee who in 2018 held the entire ACA unconstitutional, could order an immediate end to the mandate or stay his ruling pending a Biden administration appeal. The case eventually could reach the Supreme Court. If the case gets that far, it would be the 

 the country’s highest court has heard a case challenging the ACA. The three other court challenges have failed.

Rakowski says he may have to add cost sharing to some of his plans so they would remain competitive on Wisconsin’s ACA marketplace, while continuing to offer plans with no-cost preventive coverage at a somewhat higher price. That’s because he expects his competitors to establish deductibles and copays for preventive services, so they can reduce their premiums on bronze plans by 2% — enough to prompt many exchange buyers to switch plans.

“I think our competitors will add cost sharing,” he said. “I hate to admit that we’d have to strongly consider following suit.”

Many health plans and self-insured employers around the country would face this same dilemma. The result could be a patchwork of different health plan designs and preventive services coverage in various industry sectors and different parts of the country. People who shop for healthcare insurance may find it difficult to find that fully covers preventive services.

The ACA’s first-dollar coverage rule for preventive services applies to private plans in the individual and group markets 

. It’s one of the most popular provisions of the ACA, favored by 62% of Americans, according to 

Insurance experts and leaders of business groups focusing on healthcare purchasing predict that many health plans and self-insured employers will consider adding cost-sharing for at least some preventive services. They will make those decisions based on evaluations of costs and expectations about how employees and enrollees will react. The personal views of company executives may also be part of the equation.

The most likely services to be targeted for cost sharing are HIV prevention and contraception, due to the religious and moral judgments of the decisionmakers, some experts predict. Employers that feel most financially strapped and have workers who earn less money and stay with the company for shorter periods will be the most likely to impose out-of-pocket costs, they add.

Spending on ACA-mandated preventive services comprises 2% to 3.5% of total annual spending by private employer health plans, or about $100 to $200 per person, according to the 

“Many employers are likely to take a fresh look at the list of preventive services and decide item by item what they can make subject to cost sharing in the future,” says 

, CEO of the National Alliance of Healthcare Purchasing Coalitions. “Health plans will move faster because they’ll do anything to keep their premiums competitive.”

, executive director of Pennie, the ACA marketplace in Pennsylvania, unhappily agrees. “We’d push insurers to continue offering no-cost preventive services, but I can see some plans wanting to put up cost sharing to make sure their premiums are more competitive,” he says. “That would erode the progress we’ve made in making sure people have ready access to immunizations and other key preventive services.”

It also could complicate the ACA’s risk-adjustment program, which transfers funds from plans with lower-risk enrollees to those with higher-risk members. That’s because plans that keep a zero-cost policy for preventive services such as HIV prevention, diabetes screening, and lung cancer screening for smokers may gain a higher-risk population, forcing them to eventually add cost sharing to survive financially.

Several large commercial insurers and health plan trade groups either did not respond to requests for comment or declined to comment until they have a chance to study O’Connor’s ruling and see the remedies he ultimately orders.

Because many Americans are now enrolled in high-deductible health plans, cost sharing for preventive services could mean hundreds or thousands of dollars in additional out-of-pocket expenditures for healthcare. In 2020, the average annual deductible in the individual insurance market was $4,364 for single coverage and $8,439 for family coverage, 

. For employer plans, it was $1,945 for an individual and $3,722 for families, according to the 

 that removing cost-sharing boosts the use of preventive services and saves lives. Following the ACA’s requirement that Medicare cover colorectal cancer screening without cost sharing, diagnosis of early-stage colorectal cancer increased by 8% per year, according to a 

 last year found that women in high-deductible plans sharply increased their use of long-acting contraceptives due to the ACA’s no-cost-sharing mandate.

Still, some experts say employers will be cautious about increasing out-of-pocket costs for employees, who already face high medical spending. That’s a particular concern for employers because they want to encourage their workers to get screening tests to prevent expensive diseases like colon and breast cancer, says Jim Winkler, MBA, chief strategy officer for the Business Group on Health.

Imposing cost sharing for preventive services would reverse a growing movement among employers in recent years to expand coverage of clinically effective care without deductibles or copays. It also could hamper intensifying efforts to reduce health disparities for lower-income Americans, people of color, and the LGBTQ population.

“Black and brown communities and people who are financially challenged will be disproportionally harmed by the return of cost sharing,” says 

, M.D., director of the University of Michigan Center for Value-Based Insurance Design, who helped draft the ACA’s preventive services coverage section.

That’s especially true for no-cost coverage of pre-exposure prophylaxis for HIV, a highly effective daily drug regimen that prevents high-risk individuals from acquiring HIV. The plaintiffs in the Kelley lawsuit singled out PrEP, arguing that the ACA mandate forces them to subsidize “homosexual behavior” to which they have religious objections, in violation of the Religious Freedom Restoration Act of 1993.

Since 2020, health plans must fully cover PrEP drugs and associated lab tests and doctor visits, which otherwise can cost several thousand dollars a year. Of the 1.1 million people who could benefit from PrEP, 

, according to the CDC. Many also are low-income. Before the PrEP coverage rule took effect, less than 15% of eligible Black and Hispanic people started PrEP treatment due to its high cost.

“This disproportionately impacts Black and Latino people,” comments Carl Schmid, executive director of the HIV + Hepatitis Policy Institute, who also noted the importance of the ACA’s no-cost coverage of tests for hepatitis and sexually transmitted infections. “If first-dollar coverage went away, people won’t pick up the drug. That would be extremely damaging for our efforts to end HIV and hepatitis.”

, M.D., MBA, population health leader, WTW, who advises employers on health plans, says it’s unfortunate that some employers and plans probably will opt not to provide first-dollar coverage for PrEP if the courts strike down the ACA mandate. It’s far better to prevent HIV than to pay for a lifetime of HIV treatment, he added.

A broader issue, experts say, is that eliminating the no-cost requirement for preventive services and leaving coverage decisions to health plans and employers will destabilize the health insurance markets, one of the big problems the ACA was intended to fix, experts say.

Plans will compete by designing their benefits to attract the least-expensive enrollees so they can offer the lowest premiums, saddling sicker and older people with skimpier coverage and higher costs, Levin-Scherz says.

“You end up with a race to the bottom,” he warns.

A federal district court ruling today could jeopardize coverage of preventive services recommended by the U.S. Preventive Services Task Force. Some payers may be cautious about pulling back on full coverage of preventive services, but if the ruling stands, experts fear the undoing of a key provision of the Affordable Care Act will result in a patchwork of coverage — and a worsening of healthcare disparities.

Harris Meyer

Articles

Medicaid Programs Start to Embrace Respite Care for Unhoused

What Will Payers Do If Courts Strike Down the ACA’s No-Cost Requirement for Preventive Services?