Addressing the Social Determinants of Health Through Medicaid Managed Care

Machledt D
Publication Year: 2017
Patient Need Addressed: Care Coordination/Management, Long-term services and supports
Population Focus: Medicaid beneficiaries
Intervention Type: Service redesign
Type of Literature: Grey

With its emphasis on coordinated care and prevention, managed care should be tailor-made to tackle social determinants of health. But various challenges discourage Medicaid health plans and providers from assisting beneficiaries with nonmedical concerns such as housing insecurity or parenting skills that are integral to improving health outcomes and lowering costs. To better address these social factors, the Centers for Medicare and Medicaid Services (CMS) updated its Medicaid managed care rule in early 2016.

To explore the impact of several provisions of the new regulation that influence states’ ability to address social determinants of health through managed care.

FINDINGS AND CONCLUSIONS: Several provisions in the new Medicaid managed care rule signal CMS’s intent to increase access to high-value nonmedical interventions. For instance, the regulation financially incentivizes health plans to address these needs by allowing certain nonclinical services to be included as covered services when calculating the capitated rate and medical loss ratios. In addition, the regulation encourages states to improve care coordination, adopt alternative payment models, and provide long-term services and supports in the home and community for beneficiaries with functional limitations.

Insights Results

Overview of article

  • For the past 3 decades, Medicaid has led the shift to providing long-term services and supports (LTSS) in the home and community, when possible, rather than in institutions. Home-Based Community Services (HCBS) programs help people complete basic tasks of daily living, such as bathing, eating, and getting around the community. As managed care increasingly expands into HCBS delivery, plans have been challenged to adapt and incorporate HCBS’ more holistic vision of health. HHS’s updated regulations attempt to preserve and reinforce this inclusive focus
  • In 2016, CMS updated regulations to require states that integrate LTSS into Medicaid managed care services to assess the health plan’s performance on improving quality of life, community integration activities, and the relative share of LTSS provided at home. These metrics should help hold plans accountable for a scope of care sensitive to social determinants of health
  • Medicaid managed care regulations outline mechanisms that states can use to reduce administrative barriers to population health investment such as: 1) States may encourage or require specific APMs, including models that drive investments in practices that connect health with nonmedical factors, such as screening for domestic abuse, environmental hazards, food security, and housing stability; 2) States can incentivize plans to invest in SDOH by establishing performance metrics related to social and structural determinants of health; 3) Managed care plans can pay for nontraditional services outside their contractual obligations that provide considerable flexibility for plans to go beyond services defined in the Medicaid state plan to address social needs; and 4) Apply a medical loss ratio (MLR) to all capitated Medicaid managed care plans to set a threshold for the minimum proportion of expenditures that health plans should dedicate to enrollee services. For instance, several states counted care management as administrative services when implementing a Medicaid MLR, which meant that health plan investments in care management negatively impacted the plans’ MLRs

Key takeaways/implications

  • In order to overcome emerging challenges and to align incentives, more needs to be done to structure population-based programs so resulting benefits can be shared or reinvested in ways that do not undermine the incentive to invest in social determinants of health
  • Overall, Medicaid cannot shoulder the whole burden of our social infrastructure, but it can bridge the divide between health care and health more broadly defined. This means connecting Medicaid to other safety-net systems and looking within Medicaid to facilitate more effective care delivery. In addition, Medicaid must promote preventive care and population health, not just treating disease and disorder. If states leverage their new regulatory authority to pursue these activities, and even raise the bar, Medicaid will significantly improve health in America