States Begin Adding Medical Respite Care to Medicaid Waiver Programs

Medical respite care is defined by the National Institute for Medical Respite Care as “acute and post-acute care for people experiencing homelessness who are not ill enough to remain in a hospital but are too ill to recover on the streets.” Essentially, medical respite care aims to address the difficulty for people experiencing homelessness in finding a safe place to recuperate and receive follow-up care when there is no longer a need for acute care in a hospital setting. The lack of a safe space is often an explanation for why people experiencing homelessness have more significant health care needs, use hospitals at higher rates and for longer periods of time, and have repeat visits.

While there are a number of medical respite care programs throughout the country, offered in various settings such as apartments, assisted living facilities, motels, or as standalone facilities, much of the funding has historically come from the not-for-profit sector. However, government funding has recently started to increase. Much of the growth and interest can be tied to the January 7, 2021, guidance issued by the Centers for Medicare and Medicaid Services (CMS) for the purpose of driving states to adopt strategies to address social determinants of health, such as access to housing. The guidance outlines existing authorities under Medicaid that states can use to address social determinants of health, including section 1115 demonstrations, which allow states to test innovative care delivery models, subject to CMS approval. To address social determinants of health, which are shown to lead to poor health outcomes, states have flexibility in crafting programs designed to lead to better health outcomes and overall lower health care costs for Medicaid. And states have answered the call.

California became the first state to add medical respite care to its Medicaid 1115 waiver. In December 2021, CMS approved California’s request to extend its “California Advancing and Innovating Medi-Cal (CalAIM)” for five additional years. The requests included “Community Supports,” which are new services provided by California Medicaid managed care plans as cost effective alternatives to traditional medical settings. Medical respite care is one of the 14 pre-approved Community Supports. Most managed care plans have elected to include medical respite care to their California Medicaid members.

In September 2022, North Carolina joined California as the only two states to currently have medical respite care included in their Medicaid 1115 waivers. North Carolina’s program, titled “Healthy Opportunity Pilots,” has been authorized up to $650 million in Medicaid funding.

In addition, New Mexico, Utah, and Washington have also submitted requests to CMS for approval. In Utah, the Department of Health was directed to apply for a medical respite care waiver pursuant to state legislation. Utah submitted its request on December 30, 2021, and is currently awaiting approval from CMS. The Washington state legislature similarly directed its Health Care Authority to develop a plan to incorporate medical and psychiatric respite care as statewide Medicaid benefits via state budget legislation. Washington included medical respite care in its July 15, 2022, request to extend the state’s 1115 program. Finally, New Mexico submitted its request to CMS on December 15, 2022. New Mexico’s plan is unique in that it intends to transform part of a former hospital into a medical respite care unit with 24 beds.

Additional states are developing medical respite waiver requests, including New York and Illinois. In an August 2021 conceptual framework, New York stated that it will include medical respite care when it submits its waiver request as part of its expanded home and community-based services. Illinois has stated it plans to add medical respite benefits to its Medicaid state program as part of its larger initiative to end homelessness in the state. Colorado and Minnesota have also indicated they will develop plans to add medical respite to their 1115 waiver programs.

The medical respite care model certainly should be of interest to organizations focused on delivering services to homeless or marginally housed individuals. In addition, acute care providers, such as hospitals, may find opportunities to collaborate with medical respite care providers to facilitate timely hospital discharges to appropriate post-hospital settings. Finally, there may be opportunities for underutilized or empty health care facilities to initiate medical respite care programs in states that are implementing this delivery model.

ArentFox Schiff is tracking the latest developments impacting medical respite care and is prepared to assist clients in the space.