Addressing Social Factors That Affect Health: Emerging Trends and Leading Edge Practices in Medicaid

Insights Results

Overview of article

• In this issue brief, the authors explore the “next generation” practices that states are deploying to address social factors using Medicaid 1115 waivers and managed care contracts, as well as the specific steps states can take to implement these practices. The issue brief is based on an in-depth review of the Medicaid managed care contracts in 17 states and Medicaid 1115 provisions in six states

Key takeaways/implications

• The next generation practices discussed in the analysis include 6 strategies to address social factors in Medicaid among leading edge states. The following strategies are outlined in more detail below: 1) Moving beyond screenings to systematic efforts to connect enrollees to social supports; 2) Expanding the scope of SDOH interventions to more populations and social issues; 3) Building a stronger network of community-based organizations and collaboration with providers; 4) Creating opportunities for affordable housing; 5) Aligning financial incentives to support SDOH interventions; and 6) Systematic evaluation and greater use of SDOH data
• Moving beyond screenings to systematic efforts to connect enrollees to social supports: Nearly all states that operate managed care programs, 35 out of 39 states, now require or encourage MCOs to screen enrollees for social issues, and provide referrals to community services. While almost all states now expect MCOs to play at least some role in addressing SDOH, it also is increasingly apparent that a simple “screen and refer” without follow up may prove ineffective for many people. An individual with significant social needs, combined with complex health needs, may not have the ability or resources to follow up on a referral. Even if they do, it is possible that the agency or organization to which they have been referred to cannot help as anticipated. Recognizing that screenings and referrals can become a “check-the-box” exercise, a number of states are establishing more robust MCO requirements to connect people to social supports. For example, States such as New Hampshire, Virginia and Washington are specifically defining the social domains that need to be addressed in screenings and assessments. North Carolina has established a standardized screening tool for food, housing, transportation, and interpersonal violence issues that will be used by all MCOs
• Expanding the scope of social determinants of health interventions to more populations and social issues: In the past, state efforts to tackle SDOH have been primarily focused on enrollees with complex health conditions. A number of states now are requiring MCOs to consider the social and economic factors that affect health outcomes for all enrollees, not just those identified as having special needs. For example, Michigan MCOs are required to contract with local community based organizations to address the socioeconomic, environmental, and policy factors that can impact health outcomes and costs for all enrollees, including children and healthy low-income adults
• Building a stronger network of community-based organizations and collaboration with providers: Increasingly, state Medicaid agencies are recognizing that addressing social factors via Medicaid requires stronger coordination with, and support for, community-based social service organizations. In particular, many community based organizations have little or no experience working directly with health care providers and plans, and have historically been funded through grants, rather than billing for services. They may need new information technology (IT) and billing systems, as well as technical assistance with contracting and claim submissions before they can work effectively in partnership with the health care system. Moreover, if they are expected to scale up their resources to provide services to more people or to expand their scope of services, they may need infrastructure investments. States are using Medicaid managed care contracts and Medicaid 1115 waivers to strengthen community-based organizations and their capacity to engage with MCOs and health care providers
• Creating opportunities for affordable housing: A significant body of research indicates that stable housing can reduce health expenditures, particularly for homeless enrollees with complex health conditions who cycle through hospitals, jails and being housing insecure. Housing remains one of the most difficult SDOH issues for states to address. Not only is housing a costly service, but many areas of the country face an acute shortage of affordable housing options. Moreover, Medicaid rules do not allow states to use Medicaid dollars to pay for housing. In light of this history, states increasingly are deploying creative strategies to tackle the issue, even if they are not directly covering rent or other housing expenses. For example, Massachusetts has launched a “housing first” model for homeless individuals with serious mental illness and a history of frequent behavioral health hospitalizations, known as the “Social Innovation Financing for Chronic Homelessness Program,” or “SIF Program.” The MCOs in Massachusetts are expected to support the SIF Program and enter into good faith negotiations with its providers to pay for housing services on behalf of their eligible homeless members
• Aligning financial incentives to support social determinants of health interventions: The question of how to finance SDOH interventions not covered by Medicaid underpins all of the trends discussed in this analysis. In the context of managed care, it might seem that MCOs have a “natural” incentive to finance social interventions if they do, in fact, lower medical costs. In practice, however, plans must contend with the reality that an enrollee may switch to another plan or move to another source of coverage before an SDOH investment pays off. In light of this issue, states are exploring ways to ensure that health plans have the right financial incentive to invest in cost-effective SDOH interventions. For example, a number of states, including Arizona, Michigan and Virginia, link withhold and/or incentive payments to reductions in avoidable readmissions after a hospitalization, an outcome that can be impacted by ensuring that someone has a safe place to live, access to food, and is not socially isolated after a hospitalization
• Systematic evaluation of social determinants of health interventions and use of data: Since sustained efforts to encourage cost-effective SDOH interventions are relatively new, states are keenly interested in evaluating and assessing the impact of their efforts. A number of states are establishing specific evaluation requirements and reporting of data, reflecting a strong commitment to ensuring that Medicaid’s role in addressing SDOH remains cost-effective and efficient. Some of the strategies in Medicaid managed care contracts and 1115 waivers include evaluating pilot projects and expanding data reporting on SDOH measures. For example, Through its 1115 waiver, North Carolina has secured approval for pilots that will systematically test, on a population level, the extent to which evidence-based interventions in each of 4 key domains, including housing, food, transportation, and interpersonal safety, have been successful in improving health outcomes and lowering health care costs in selected regions of the state
• The following state implementation strategies were outline in this brief: 1) Review background research and analysis from other state agencies or local universities on the magnitude of unmet social and economic needs among Medicaid beneficiaries; 2) Convene stakeholders and build partnerships with social service organizations; 3) Work with managed care plans to gather information on existing SDOH practices; 4) Revise Medicaid managed care contracts to include sections related to care management requirements, quality provisions and reporting requirements, provider network requirements, value-based payment language, incentive and withhold procedures, medical loss ration requirements, and training requirements on SDOH-related material for providers; 5) Review rates and supplemental Medicaid managed care materials; and 6) Modify or seek an 1115 waiver; and 7) Review and address implications for data strategy/sharing between Medicaid and community-based organizations