Supporting the Implementation of CalAIM within Permanent Supportive Housing

In 2022, California embarked on an ambitious effort to improve its Medi-Cal system—the state’s Medicaid program that insures nearly 15 million people, or 40 percent of California’s residents. It joined other states implementing Medicaid waivers to expand innovative care models. Known as CalAIM (California Advancing and Innovating Medi-Cal), the five-year initiative (2022–2026) aims to provide cost-effective services to Medi-Cal members with the most complex needs by improving health outcomes and reducing reliance on expensive medical services.

A key component of CalAIM is expanding the ability of local service providers to be more responsive to the needs of people experiencing homelessness, including providing housing navigation and security deposits to help move people into housing, expanding access to case management to holistically address a person’s health needs, and ensuring that those who are housed don’t return to homelessness. For organizations that develop and operate permanent supportive housing (PSH), CalAIM provides a unique opportunity to access Medi-Cal dollars to pay for services for residents living in their PSH properties. This funding is especially crucial for serving individuals who have experienced the trauma of long-term homelessness, often accompanied by significant unmet mental and physical health needs.

Specifically, housing providers can use Medi-Cal funding to provide the “housing trio” of CalAIM Community Supports: Housing Transition Navigation Services (HTNS), Housing Deposits, and Housing Tenancy and Sustaining Services (HTSS). They can also use Medi-Cal to become an Enhanced Care Management (ECM) provider, which offers care coordination to address clinical and non-clinical needs for residents with complex needs.^[1] Accessing these CalAIM resources through contracts with Medi-Cal managed care plans can allow housing providers to expand supportive services, which in turn can fill critical gaps in project operating budgets and ensure that individuals experiencing homelessness receive the stability and care they need to maintain housing. The long-term promise is that these funds could become a sustainable revenue source, giving developers not only the ability to provide person-centered care, but also allowing them to include these funds in the financing structure of future PSH developments.

That said, there are significant barriers to integrating these resources into PSH. Many of these barriers are shared across all community-based organizations (CBOs), not just housing developers. For example, navigating the complexity of CalAIM—understanding eligibility criteria, service definitions, and the differing requirements of managed care plans—is a challenge for any provider. Issues such as delayed reimbursements, insufficient funding to cover the full cost of services, and the administrative burden of billing and data reporting also affect all service providers.

However, housing developers face a distinct set of challenges. Unlike CBOs that are primarily service-oriented, developers are focused on financing, constructing, and maintaining long-term housing assets—often using complex funding stacks that have their own regulatory compliance requirements tied to long-term affordability and building performance. This creates a different level of financial risk, as disruptions in tenancy or unplanned service costs can jeopardize a property’s financial stability. Many developers own and operate properties in multiple counties, further adding to the complexity of partnering with many different managed care plans. Additionally, developers may lack the clinical or case management background and may be hesitant to assume new responsibilities that fall outside their expertise.

In 2024–2025, the Terner Center brought together a group of housing developers across the state to explore issues related to CalAIM implementation. Through this process, we identified several organizations who have successfully used CalAIM to improve and expand their services in PSH, yielding valuable lessons for other organizations seeking to do the same. In the spring/summer of 2025, we will be publishing four case studies of these organizations in order to share their models and lessons learned with the broader affordable housing community.

Case Study 1 | Innovative Strategies in CalAIM Implementation: MidPen Housing Corporation

Read the case study

This case study of MidPen Housing Corporation offers valuable insights for other organizations seeking to integrate housing and health care services. It offers practical guidance on issues such as addressing staffing and workforce challenges, meeting complex legal and HIPAA compliance requirements, streamlining claims management and standardizing processes, and optimizing partnerships with the managed care plans that pay for services.

Resources for Understanding CalAIM

CalAIM is a broad, complex undertaking to improve California’s Medi-Cal system, with too many program elements and regulations to cover in the case studies. Here are resources for more background information:

• The Corporation for Supportive Housing has created an online Medi-Cal Academy to provide training for housing and homeless service agencies interested in contracting with managed care plans to provide housing-related Community Supports.
• The California Health Care Foundation publishes articles and newsletters updating the field on issues related to CalAIM implementation.
• The California Department of Health Care Services (DHCS) maintains a website that provides policy guidance and resources related to CalAIM as well as a Housing for Health page that provides updates on various DHCS-led housing-focused initiatives both within and outside Medi-Cal.

Endnote

^[1] ECM is a benefit for all eligible managed care plan members. “Housing trio” services are three key Community Supports—of a total of 15—designed to assist individuals experiencing or at risk of homelessness in securing and maintaining stable housing. While Community Supports are an optional benefit, they have been widely implemented in response to state incentives and encouragement. Learn more:  https://www.dhcs.ca.gov/CalAIM/ECM/Pages/Home.aspx

Acknowledgments

We gratefully acknowledge the support of the California Health Care Foundation for funding the Terner Center’s research on CalAIM.