AHCCCS continues working with CMS to strengthen housing services for Medicaid members


Hannah Saunders


The Arizona Health Care Cost Containment System (AHCCCS) is awaiting approval of an 1115 waiver extension for its Housing and Health Opportunities (H2O) demonstration, which would appropriate federal funds to provide Medicaid members experiencing housing insecurity, enhanced shelters, and rental assistance vouchers. AHCCCS has been working with the Centers for Medicare and Medicaid Services (CMS) on this waiver extension for several years.

AHCCCS has a state appropriation of general funds that they currently use to provide rental assistance to members. AHCCCS looked at outcomes from this, according to Elizabeth Da Costa, housing administrator at AHCCCS. She spoke to State of Reform about the H2O initiative.

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“We saw reduction in ED [emergency department] visits [and] reduction in behavioral health residential facility admissions, and so through that, we wanted to identify some additional resources we could bring into the state that could cover things like rental assistance or outreach in order to meet the needs of our members.” 

— Da Costa

While waiting for formal approval from CMS, AHCCCS is working on their protocol for assessment in care planning, as well as an implementation plan. Da Costa said these deliverables are due to CMS prior to implementation, and if the full initiative is approved following the demonstration period, AHCCCS will go live on Oct. 1st, 2024. 

Da Costa explained how AHCCCS is currently in a demonstration period with CMS, where the agency must demonstrate the effectiveness of covering rental assistance as a Medicaid service. CMS approved of the demonstration period last October. During this demonstration period, AHCCCS is focusing on a subpopulation of individuals living with serious mental illness, those currently experiencing or at risk of experiencing homelessness, and those living with chronic health conditions—which are still being defined by AHCCCS and clinical staff.

“We were approved to cover up to six months of transitional housing. With that, we really tried to address current gaps in our system, which is a lack of shelter, or shelter capacity for members to be able to move off the streets into a stable location, while they work on accessing permanent housing. So we built out a plan for creating a provider type called an ‘enhanced shelter,’” Da Costa said. 

Da Costa said providers across the state have acquired shelter settings or are running shelters, and AHCCCS has designed provider qualifications in order to enhance these services. If the H2O initiative is fully approved, providers would go through specialized training, including motivational interviewing and trauma-informed care.

“Those enhanced shelter providers will be able to bill a per-diem rate for the members’ stay in those settings,” Da Costa said. 

She expects to see additional growth of enhanced shelters in the future if additional resources are brought into communities to cover these supports. When it comes to rental assistance, AHCCCS was approved to cover up to six months of rental assistance during the demonstration period.

AHCCCS members eligible for rental assistance will receive a voucher and can lease a unit on their own in the community. Da Costa said friendly landlords and private owners mostly rent out to voucher holders. She added that if an eligible member has zero income, the voucher will cover 100 percent of rent. If an eligible member has income, they will be responsible for putting 30 percent of their income towards rent, then the voucher would cover the remaining 70 percent. 

“We’re hopeful that with them [members] having access to this rental assistance, that will help address that [housing unaffordability],” Da Costa said. 

Eligibility criteria for rental assistance vouchers include having a serious mental illness, being at risk for or experiencing homelessness, and being on an approved community housing waitlist. 

AHCCCS was also approved for pre-tenancy and tenancy supports, which include placing a case manager in the community to engage with members, identify neighborhoods members wish to live in, and assist with finding available units. 

AHCCCS’ efforts to provide members with affordable housing options comes with its caveats. 

“We had asked CMS for 18 months, but it looks like they’re doing kind of a standard six months across the board for all states,” Da Costa said. 

She explained how the typical lease lasts for 12 months, and six months of rental assistance can create challenges with finding leases if members are unable to pay after the six-month use of rental assistance vouchers. 

“We really will take whatever we can get right now in federal dollars to be able to support members with rental assistance, because of our severe housing crisis.”

— Da Costa

AHCCCS has further housing initiatives coming down the pipeline, and is hoping to receive a response from CMS about the H20 waiver initiative within 90 days. In addition to working with individuals experiencing homelessness and those with serious mental illness diagnoses, AHCCCS is working on a correctional health facility housing initiative for incarcerated individuals who have scheduled release dates, according to Da Costa. 

“That way, we can really work on expanding reentry services, so persons who are incarcerated will have access to housing interventions upon release,” Da Costa said. 

Da Costa will be a panelist on the 10:45-11:45 am “Efforts to Promote Sustainable Housing through Policy” panel at the 2023 Arizona State of Reform Health Policy Conference on Oct. 24th. You can register to attend the conference here!