Healthcare and Minnesota’s Housing Stability Budget

During the most recent Minnesota legislative session, Governor Walz signed the historic Minnesota Housing Stability Budget, which increases resources to address affordable housing by more than 10 times compared to any previous year. Amidst a worsening housing crisis in Minnesota, this is a win for housing advocates, built on at least 10 years of consistent educating and advocacy.

While housing advocates, developers, and communities celebrate and prepare for biggest distribution of new resources, healthcare organizations and other sectors experienced targeted industry wins for housing opportunities and expanded services.

Greater Minnesota Housing Fund (GMHF) and a coalition of hospitals and healthcare systems from across the state advocated for a Recuperative Care bill which was passed. Recuperative care provides housing and short-term care for people who are unhoused and not ill enough to remain in a hospital, yet too ill to recuperate on the streets. The new program will support the availability of recuperative care housing, and hopefully the creation of more beds that serve this critical need. GMFH’s Housing & Health Equity Fellows, representing six of the healthcare systems across the state, have expressed a need for more recuperative care beds to meet their hospital and emergency room needs.
The most exciting part is the use of Medicaid resources to pay for services, and state-only funds to align with the room and board rate to pay for recuperative housing. This is another critical connection indicating the powerful synergy between housing & healthcare. Department of Human Services (DHS) and stakeholders are now embarking to implement details by the January 1, 2024, effective date.

Research shows that people who are unhoused and participate in recuperative care programs are 50% less likely to be readmitted to a hospital at three months and twelve months post-hospital discharge. Centers for Medicare & Medicaid Services (CMS) supported research, including Hennepin County, found the total Medicaid payment per enrollee/month decreased by 24% post recuperative care.
A critical part of the legislation calls for a bundled payment system to set defined services for hospitalization prevention. Continued advocacy remains important for promoting a simple and reliable regulatory framework which expands a network of additional recuperative care beds. In addition to incentivizing the creation of new units, the reimbursement process must be reliable to the point that its availability can be used to underwrite property for financing.

In the case of Housing Stabilization Services, the other Medicaid waiver program, this was not the case. Housing organizations that develop and/or provide services which are eligible for reimbursement have not been able to take advantage of the program, given the complicated process to bill, including billing in 15 minutes time increments. There are other states that have used bundled billing or stipend like monthly or quarterly payments that allow for much greater utilization.
Building a Medicaid reimbursement model for the Recuperative Care Program, that meets the simple and reliable standard, would lead the way for much needed further reform in the Housing Stabilization Services program.

Increased transformative change and innovation in Medicaid resources use, to support more housing & health connected opportunities, will be more efficient and offer cost savings to communities and healthcare providers – setting up a win-win-win scenario for people, providers, and community.

For more information on the Recuperative Care Program contact: Diogo Reis, Minnesota Department of Human Services at or 651-431-2106

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