Increasingly, Medicaid managed care organizations (MCOs) are developing initiatives to support members’ whole person care, specifically by addressing both individual-level health-related social needs (HRSN) as well as community-level social drivers of health (SDOH). The Centers for Medicare & Medicaid Services (CMS) recently published new guidance to help states enhance efforts to address the HRSN of Medicaid enrollees, specifically allowing states to provide benefit coverage for select HRSN services including housing and nutrition supports and HRSN case management. These new coverage options add significant opportunities to integrate health and social care and promote health equity for Medicaid populations.

The Center for Health Care Strategies (CHCS) recently partnered with the Association for Community Affiliated Plans (ACAP) to publish Financing Approaches to Address Social Determinants of Health via Medicaid Managed Care: A 12-State Review, which explores how states are promoting sustainable financing efforts for Medicaid health plans to address HRSN.

The Better Care Playbook spoke with Jennifer McGuigan Babcock, ACAP’s Senior Vice President for Medicaid Policy, to learn about the opportunities and challenges outlined in the report. The conversation explored how integrating HRSN into the scope of required benefits covered by Medicaid can positively impact the health of individuals with complex care needs.

Why was it important now for ACAP to publish this report?

Back in 2018, we partnered with CHCS to publish a 50-state scan of state requirements and incentives for plans to cover HRSN services. That report made a couple of things clear: Most states and plans were engaged in this work. But at the same time, HRSN services and related payment policies weren’t well defined and were often not sustainable given the time-limited nature of most federal investments in delivery system reform.

In 2020, ACAP in partnership with Spring Street Exchange surveyed a subset of our plans and found that about half never included HRSN-related expenditures in the numerator of the medical loss ratio. This suggested a lack of clarity around how HRSN activities fit into the scope of Medicaid benefits generally, and how Medicaid providers and plans can get paid for this work. These findings prompted our most recent report, which does a deep dive into the specific payment policies related to the coverage of HRSN services, with an eye toward sustainability for these services.

What Medicaid plan activities relating to HRSN are most common, from your perspective? What barriers limit the expansion of these activities?

The fact of the matter is, this is such a new part of Medicaid ... Covering HRSN services is an evolving part of the Medicaid program that needs more refining to better meet member needs.

In the 2020 survey, we asked plans both, ‘What HRSN services are you most likely to provide?’ and ‘What services do you think are needed most by your member population?’ Interestingly the answers were not aligned. The most likely services for plans to provide included housing (55%), transportation (55%), food and nutrition (45%), employment (37%), and education (35%), while the most needed services were financial stability (75%), transportation (65%), housing (65%), and employment (50%). We can speculate as much as we want about this disconnect, but I think the answer comes down to funding, resources, and strategy — or lack thereof — for targeting HRSN services. The fact of the matter is, this is such a new part of Medicaid, comparatively. Paying for a doctor’s appointment is not new for Medicaid; it’s been around since the inception. However, covering HRSN services is an evolving part of the Medicaid program that needs more refining to better meet member needs.

How does the often time- or resource-limited nature of initiatives that address HRSN impact individuals with complex needs?

Looking again at data from that 2020 survey, we asked plans how they target screening for HRSN services. Interestingly, about a quarter of plans said they screen only members who are engaged in the plan’s care management programs, as those folks are already flagged as requiring additional support and a greater need to coordinate care across sectors.

So, on one hand, if these HRSN initiatives are restricted either in time or resources, it may have a positive impact on people with complex care needs because it clearly encourages plans to prioritize the screening and intervention of HRSN services for those folks. But on the other hand, if there is not sustainability, and specifically sustainable payment models, then we worry that the added HRSN benefits that are being provided to enrollees with complex needs would go away by nature of how a budget cycle or a grant cycle works, having a disproportionately negative impact.

So, it could go both ways. And it’s still so new. The question about sustainability is the big question for all of this work moving forward. But hopefully as clearer policy is put in place via In Lieu of Services guidance or through Section 1115 waivers, these initiatives will be longer term and more sustainable.

From the plan perspective, how can CMS’ new Section 1115 demonstration opportunity be used to support the health of individuals with complex needs, especially those experiencing care transitions (e.g., from a nursing facility, prison, out of homelessness)?

The emphasis really does seem to be on people who are in transition and could otherwise get lost and fall through the cracks. And this focus makes sense given the consensus that people experiencing care transitions have elevated physical, behavioral, and social care needs.

Again, this is all so new. But when you look at what CMS wrote about the Section 1115 demonstration flexibilities, it seems clear to me that they are trying to encourage states to target specific populations. For example, the way CMS discusses nutrition supports focuses on how this benefit would be particularly helpful to individuals who are homebound. Much of the CMS guidance on housing supports is focused on individuals who are transitioning out of institutional care or congregate settings, people who are homeless or transitioning out of emergency shelters, and youth. So the emphasis really does seem to be on people who are in transition and could otherwise get lost and fall through the cracks. And this focus makes sense given the general consensus that people experiencing care transitions have elevated physical, behavioral, and social care needs.

It’s also interesting to note how this work ties into other state and federal policy changes happening right now. For example, the 2023 Consolidated Appropriations Act gives states the option to provide Medicaid and CHIP coverage to youth transitioning out of correctional facilities, starting in January 2025. A number of states also have pending or approved Section 1115 demonstration requests focused on improving health outcomes for justice-involved populations. CMS really is taking a broad approach so that the most complex populations will have the best chance to get care.

How can plans contribute to an evidence base on the impact of interventions that address HRSN to help make the case for implementing these services long term?

There should be new and sustained partnerships between plans and researchers. Researchers can support plans to develop HRSN programs with eye toward measurement and related outcomes. And with regard to programs already in place, there are great data being generated and those need to be captured. This isn’t theory, this is practice.

Also, the Section 1115 demonstrations exist to test and demonstrate policy changes, so we should all look to and study the evaluations that will emerge from these really remarkable 1115 demonstrations. If we pay attention when these evaluations come out from states like California, Oregon, Massachusetts, and Arkansas, we’ll learn a lot about promising practices moving forward.

With all the current momentum for financing HRSN activities, where do you see the evolution of federal and state Medicaid policy and payment for HRSN services moving in the future?

We’re going to have to look at the emerging evidence base on what interventions work best for what groups ... There’s a lot of innovation and trying new things right now, and as the evidence grows, that will play into the refinement of these practices.

I can’t see Medicaid health plans or agencies ceasing this work. This programming developed as a ‘patchwork quilt,’ popping up independently everywhere before there was clear payment policy for it, so it’s very hard to see how this braided situation would become undone. Again, it happened because plans and states saw how these HRSN services can augment the health and health care of the people who are on Medicaid, and how the absence of HRSN services harms the health and health care of people who are on Medicaid.

By the same token, the innovative policy that is happening at the federal level really does help what states and plans can do, and any reversal of this policy could hamper these efforts. Differing priorities at the federal level can speed up or slow down this type of progress. Hopefully this momentum will continue, but we'll have to watch and see.  

We’re also going to have to look at the emerging evidence base on what interventions work best for what groups, and that will help us get more specific. Even on the Medicare side, CMS could potentially use integrated Dual-Eligible Special Needs Plans (D-SNPs) that enroll individuals dually eligible for Medicare and Medicaid to test opportunities to offer HRSN-related services to enrollees. There’s a lot of innovation and trying new things right now, and as the evidence grows, that will play into the refinement of these practices. Ultimately, it should come down to sustainable good programming for people who are served by Medicaid.