A shelter that has helped over 600 community members experiencing homelessness recover from illness and injury since its inception over a decade ago—the only of its kind in the county—will be paused indefinitely starting January, local nonprofit Housing Matters announced on Oct. 30.
In a letter announcing the pause, CEO Phil Kramer cited significant changes to Medi-Cal’s reimbursement structure combined with previous financial issues as causes for its decision.
“This decision is not a reflection of the program’s importance or the dedication of the people who make it possible,” Kramer wrote. “It reflects the need to ensure that any future operating model is both financially viable and aligned with our organizational mission, capacity, and strategic priorities.”
Housing Matters, a local nonprofit serving people experiencing homelessness, has supported 643 community members at its Recuperative Care Center (RCC) since it opened in 2014. According to Chief Impact Officer Mer Stafford, the shelter typically operates at 80% capacity.
The change comes after Housing Matters moved the RCC into the Rebele Family Shelter in May to save on lease costs, which was expected to save more than $1 million annually in lease and operating costs. The move reduced the center’s capacity from 32 beds to 20.
Housing Matters receives its funding for the center through a waiver from the California Department of Health Care Services (DHCS), which expires Dec. 31. Beginning Jan. 1, recuperative care will be transferred to a new model that introduces new operational and staffing requirements and changes reimbursement pricing.
Under the new model, the reimbursement structure creates a significant gap between available funding and actual cost of providing care, Kramer wrote.
This leaves essential facility-related expenses such as maintenance, food, custodial services uncovered—and is expected to cost the nonprofit at least $600,000 annually.
There are no other recuperative care programs in the county, which Stafford said fill a gap that hospitals and traditional shelters were never designed to address.
“Our hope for the program is that it will continue in some form whether Housing Matters or another healthcare or community partner may be best positioned to lead or share responsibility for the program,” Stafford said.
The organization is using the pause to work with partners on making the program economically viable. Housing Matters has met with partners, including the county’s Housing for Health division, Dominican Hospital, Kaiser Permanente, Sutter Health and Santa Cruz Community Health, to explore alternate program implementation.
“A hospital discharge should not mean recovery happens on the street,” Stafford said.
The shelter is taking referrals until Nov. 15 and is working on safe exit plans for current residents.
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Syd Fluker is a California Local News Fellow. Visit fellowships.journalism.berkeley.edu/cafellows.
