An experimental housing program that paired permanent shelter with social services in an effort to keep some of the state’s most medically fragile adults from becoming unhoused and out of hospitals would expand if a budget commitment from Maryland’s governor becomes law.

The spending plan, set to take effect July 1 if approved by lawmakers, includes $5.4 million for the Assistance in Community Integration Services, or ACIS — a little-known housing program that supports some 900 households statewide, including more than 200 in Baltimore.

Those eligible to participate must be enrolled in Medicaid, experiencing homelessness, and have at least four hospital visits in a year or two or more chronic conditions. Caseworkers help participants get identification cards and bank accounts, find doctors, and access medications, among other supports that can help them stay housed and out of hospitals.

ACIS has been enrolling clients for years under an agreement with U.S. health officials overseeing Medicaid, the federal-state health program for people with low incomes. In 2021, the program ramped up, and the four jurisdictions where it operates — Montgomery, Prince George’s and Cecil counties, and Baltimore City — were asked to shoulder half the expense.

In Montgomery, Prince George’s and Cecil counties, local governments have been providing the federal “match” funds while the city government asked 10 hospitals to contribute toward the cost. The city argued that the hospitals could save money in the long run with an up-front commitment, with preliminary data showing significant drops in emergency room visits and better management of chronic conditions among program participants.

Despite its effectiveness, the program’s future became uncertain last year.

By 2023, the Baltimore hospitals began to question whether a more permanent funding source, such as Medicaid or the state, could step in and cover the costs. They pledged to keep funding the match through June, or until fiscal year 2024, but at least half the hospitals involved would not say if they would keep contributing past that date.

Kevin Lindamood, CEO of Health Care for the Homeless, said the $5.4 million commitment from Gov. Wes Moore’s administration is enough to cover the current match obligations of all four jurisdictions and expand the program to other areas of the state. He said all Baltimore hospitals stayed engaged throughout the current fiscal year to keep ACIS going awhile longer.

“We’re thrilled that inclusion in the Governor’s budget will allow for state coverage of the federal ‘match’ and statewide expansion of a proven initiative,” Lindamood said in a Friday email. He added that an additional study from The Hilltop Institute at the University of Maryland, Baltimore County found statistically significant reductions in emergency room visits and hospitalizations among those enrolled.

The renewed investment in the program comes in the midst of a statewide housing shortfall and affordability crisis. More than half of all renters in Maryland are cost burdened, or paying more than 30% of their income on rent, according to state estimates. And more people are experiencing homelessness now compared to this time a year ago, according to federal estimates.

It also lands as Maryland hospitals continue to deal with tight budgets, inflation and labor shortages following the initial years of the COVID-19 pandemic, which strained the state’s health care system. Maryland hospitals have the longest emergency room wait times in the country, according to data from the Centers for Medicare and Medicaid Services, and have experienced surging rates of patients with complex mental health needs and substance use disorders that they are not equipped to manage.

In 2020 statewide data collected by Hilltop, 84% of program participants had no inpatient hospital admissions, 55% did not have any visits to the emergency department, and 97% did not have any inpatient admissions for mental health disorders. And preliminary data pulled from the state’s hospital reporting system also showed large declines in participants’ health care costs, hospital visits and hospitalizations for chronic obstructive pulmonary disease, alcohol use disorders, COVID-19 and depression after entering the program.

In budget documents, the governor’s administration said the program pilot showed strong evaluation results and warranted expansion.

Additional proposed budget funding was allocated toward a slew of other housing priorities, including tens of millions of dollars for affordable rental housing, appraisal gaps, homeownership loans and strategic demolitions; $345,000 for the establishment of a new office dedicated to renters’ rights; and $16 million for affordable student housing.