By Erica C. Barnett

Last week, the King County Regional Homelessness Authority’s implementation and governing boards approved a 2024 budget proposal that assumes the agency will receive significant future funding from Medicaid to keep the Partnership for Zero program, which aims to end unsheltered homelessness in downtown Seattle, going. Currently, the program is funded by corporate and philanthropic donations through a public-private partnership called We Are In.

The federal funding would come through a statewide program for Medicaid clients called Foundational Community Supports that funds “pre-tenancy” services for chronically homeless people—everything from getting an ID to negotiating an apartment lease.

“Based on current research, we estimate that Medicaid will reimburse 85% of Partnership for Zero (PfZ) costs,” or about $5.2 million, the KCRHA’s 2024 budget says. In 2022, a group of corporate and philanthropic donors pledged $10 million to fund the initial downtown Seattle “demonstration project,” which pays case managers known as system advocates to connect people living downtown to services, shelter and housing. Over the next five years, KCRHA plans to expand Partnership for Zero countywide.

Several members of both boards, including Auburn Mayor Nancy Backus, expressed reservations about relying on a federal program that the KCRHA has never used before to fund one of the agency’s marquee initiatives. “I’m just concerned about approving [a budget] where you don’t have the money,” Backus said. “As someone who provides our budget to the council every two years, we never put anything in the budget … that’s aspirational.”

“I would love not to spend more money than we have,” KCRHA CEO Marc Dones responded. “So what we’re doing is a number of dry runs with Medicaid billing while we’re still entirely grant- funded”—essentially, submitting invoices for real services to see what gets rejected and approved.

“Our current conservative estimate [is] an 85 percent reimbursement,” Dones added. “I think that there were some estimates that were like, ‘this will make it rain money,’ and then there were other estimates that were like, ‘this will get you two nickels.’ We feel confident that this is a capturable amount of revenue.”

But providers and advocates familiar with Foundational Community Supports, speaking to PubliCola on background, said that although the concept behind FCS is extremely forward-thinking—the six-year-old program treats housing as a form of health care, which is new for Medicaid—relying so heavily on FCS to fund a costly, high-profile effort like Partnership for Zero is a significant risk.

To understand why, it’s helpful to understand a bit about how nonprofits use the program to fund services for unsheltered people in King County.

Foundational Community Supports is a fee-for-service program; it pays $112 for every documented “encounter” between a service provider and a client, up to a maximum of six encounters a month. (In the case of KCRHA, the government itself, rather than a nonprofit, will be the service provider). If a case manager has a dozen clients and manages to document six encounters with each of them every month for a year, that adds up to about $95,000. The starting salary for KCRHA’s system advocates—formerly homeless peers who serve as case managers and outreach specialists for Partnership for Zero—is $75,000, so a $95,000 reimbursement would more than pay for both’ salaries and benefits, with some to spare for administration and other costs.

So far so good. Except, service providers say, that it’s almost impossible to “max out” on providing services to unsheltered people this way. Case managers must document each encounter with an unsheltered person in detail, with case notes that demonstrate what service they provided and how that encounter got the person closer to their housing goal.

Opportunities for “wasted” time abound. If a case worker goes out looking for a client and doesn’t find them—a common situation when trying to find unsheltered people, especially in a city that sweeps encampments—that time doesn’t count. If a case manager is new and still in training, or in the process of convincing someone to sign up for the program, that time doesn’t count. And if everything goes perfectly but the case notes are too short, or too long, or don’t include the right kind of details to convince the third-party administrator reviewing a person’s forms, that time doesn’t count either.

Because Foundational Community Supports isn’t a reliable source of funding, service providers don’t typically rely on it to fund entire programs; instead, they “braid” FCS with other funding sources to create a stable foundation for ongoing programs. The constant documentation and pressure to monetize every interaction with unsheltered clients can make it harder to build relationships with unsheltered people. According to one experienced homeless service provider, FCS is “just not really how rapport-based type outreach services relationships work, or how they’re usually delivered.”

Multiple people with Medicaid billing experience mentioned the concept of the “golden thread”–  a consistent narrative through every piece of documentation that explains why the person needs specific services and how each of those services are helping them achieve their self-determined goals. Failure to convincingly document that “thread” is “why a lot of claims get denied,” one former service provider said.

Facing pushback from board members last week, Dones pointed that the agency still has money left over from We Are In’s original $10 million commitment to pay for the program through 2023 and potentially beyond, if getting funds through Medicaid proves more challenging than the agency anticipates. And, KCRHA Chief Administrative Officer Meg Barclay noted, the KCRHA is consulting with the Corporation for Supportive Housing, which trains service providers to do Medicaid billing, to learn how to maximize their reimbursements.

Even so, Barclay added, Medicaid is “kind of a black box—sort of strange. So we are comfortable that that’s a good number, but we’re not going to know until we start doing it and we’ll build a better and better understanding of what a successful reimbursement package is.”

Debbie Thiele, CSH’s managing director for the western United States, told PubliCola last year that FCS is “designed to be as user-friendly as possible to a group of providers who are not health care providers.”

One implementation board member, Simha Reddy, said he saw the KCRHA’s effort to fund Partnership for Zero through Medicaid as an experiment that could be helpful to other nonprofit providers who could “jump on the bandwagon” and “learn alongside us.”

And Dones pointed out that the KCRHA won’t be the only government entity to rely on Medicaid funding to run a homelessness program—Spokane, they said, “funds a huge portion of their system” with Foundational Community Supports.

“I do think that the discussion around the difficulty of these dollars is not actually borne out by even our neighbors in Washington,” Dones told the implementation board last week. However, service providers who spoke with PubliCola said Spokane is both smaller (with a homeless population of around 1,800) and more affordable than King County, making it easier to house people in private-market housing and help them stay there.

The budget both boards approved last week isn’t a final spending plan. The KCRHA will send it to its two primary funders, King County and the city of Seattle, later this year, and adopt a finalized budget in December. What the votes represent is a bet on Dones’ plan to fund Partnership for Zero, which will otherwise run out of funding next year.

Editor’s note: Due to a transcription error by the author, the original version of this story incorrectly attributed Backus’ quote to Seattle Deputy Mayor Tiffany Washington.