Medicaid Financing for Interventions that Address Social Determinants of Health

Publication Year: 2019
Patient Need Addressed: Financial insecurity, Food insecurity, Homelessness/housing, Transportation
Population Focus: Medicaid beneficiaries
Type of Literature: Grey

Hospitals are increasingly focused on ways to address the social and economic factors that can affect health and
health outcomes for their patients and communities. These factors, often referred to as “social determinants of
health,” include unsafe and unstable housing, poor nutrition, unemployment, and violence and trauma. Research
shows that these factors contribute significantly to overall health and the cost of healthcare. Across the country,
hospitals — many building off their experience with providing community benefits — are developing ways to
address these factors with new initiatives, care management protocols and community partnerships informed by a
growing body of evidence on the interventions and partnerships that most effectively address critical needs across
different populations. This remains, however, very much an evolving field, perhaps, most notably, with respect to
approaches for securing sustainable financing.

Insights Results

Overview of article

  • Medicaid programs and the hospitals, health plans and other health providers who serve Medicaid enrollees have been central to addressing SDOH. This paper is intended to inform hospitals and health systems about these opportunities as they work with state Medicaid agencies, policymakers and health plans on ways to make financial support available for promising interventions. Medicaid financing can be an important source of support, though it is only one part of the puzzle. This brief describes services and supports across four areas of social determinants of health: 1) Housing; 2) Employment; 3) Food access; and 4) Transportation
  • For example, Massachusetts requires in the care coordination requirements of its managed care contracts that Medicaid managed care organizations (MCOs) evaluate the health-related social needs of all enrollees within 90 days of their effective date of enrollment; MCOs must determine whether an enrollee would benefit from linkages to community services to address these needs, including but not limited to, housing search, placement, and stabilization service
  • In addition, Oregon’s Coordinated Care Organizations provide a range of non-medical, social services, including referrals to job training
  • Michigan requires in its managed care contracts that MCOs refer all enrollees to the appropriate resources to reduce socioeconomic barriers, including access to healthy food options, among others
  • All states (unless they have a 1115 waiver to exclude these services) are required to provide non-emergency medical transportation (NEMT) to allow enrollees to get to and from care. Some hospitals and health systems are supplementing the state-sponsored system with their own transportation arrangements

Key takeaways/implications

  • Hospitals are increasingly focused on ways to address the social and economic factors that can affect health and health outcomes for their patients and communities. There are types of health-related services – such as help with housing, food insecurity or transportation – that hospitals are offering, or may like to offer, that could potentially be financed through Medicaid
  • There are 3 ways financing can be authorized in Medicaid: through 1) A state plan amendment; 2) A waiver; or 3) Managed care. The State Plan is a formal, public document where a state describes the parameters of its Medicaid program on matters such as populations and services covered, provider payment rates (FFS) and administration, consistent with permissible options and flexibility available under federal law. States can modify, correct, or update their State Plan by submitting a State Plan Amendment. Section 1115 waivers, which can be comprehensive or targeted, permit states to vary from federal rules and still receive federal Medicaid funding. Not all federal rules can be “waived” and federal approval of waivers is discretionary. Lastly, states that deliver services through managed care must assure that managed care plans provide care coordination services to enrollees, either directly or through another organization