Medicaid Managed Care Accelerates Work on Social Drivers of Health

At the beginning of 2020, many state Medicaid agencies were beginning to explore ways to address social drivers of health through managed care contracts. Almost three years later, driven by the impact of the pandemic, even more states have decided that the key to improving health outcomes and limiting cost growth is to use healthcare dollars to address issues such as housing, transportation, interpersonal violence and food insecurity.

Manatt Health surveyed state Medicaid programs about their efforts to address social drivers through managed health both in 2020 and again in 2022. “What we found is that the pandemic has really been a catalyst of sorts to caring for the whole person,” says Mandy Ferguson, M.P.H, a senior manager in Manatt Health’s Washington, D.C., office. “We saw this movement in 2020, but the progress was really slow,” she adds. “States were doing one or two things, and some states were doing nothing. And in the refresh of the survey in 2022, we found all kinds of trends — the most notable one is that addressing drivers of health is really commonplace now. The overwhelming majority of states are focused on integrating requirements to address drivers of health into existing care management obligations — things like screening for social needs, referring members to social services, and connecting members to other federal and state programs like SNAP and WIC.”

Of the 15 states that Manatt Health looked at in its 2022 survey, every single one had housing-related requirements in their managed care contracts. “Housing and food always tend to be at the top of the list. There's a lot of good evidence that they can actually help improve health outcomes and reduce healthcare utilization and costs,” Ferguson adds. “We're seeing that in the contracts now: partnerships with housing organizations have become really commonplace.”

States also are beginning to gather data on these efforts in order to make the case for more funding and flexibility in terms of what Medicaid is allowed to pay for. Jami Snyder, who oversees Medicaid and CHIP as director of the Arizona Health Care Cost Containment System, says the state has seen improved health outcomes among patients who have received supportive housing funding. In its 1115 Medicaid waiver renewal request to the Centers for Medicare & Medicaid Services (CMS), Arizona is asking for federal matching funds to extend that type of housing support.

For the past several years, the Arizona Legislature has allocated about $3 million per year for rental assistance, which is combined with wrap-around services paid for by Medicaid. Snyder says the results are impressive. “For 2020, when we looked at that population of individuals, which was just under 2,500 members, we saw a 31 percent reduction in emergency department visits, a 44 percent reduction in inpatient admits, and a savings of just over $5,500 per member per month. We've had a lot of productive conversations with state policymakers, once we're able to show them that data. The data about ED visits and inpatient stays points to better health outcomes as well as a reduction in cost.”

She said the state’s Medicaid managed care program “can be more impactful when we stabilize someone’s housing with those wraparound supports than we can with any clinical intervention.”

It its current 1115 waiver renewal request to CMS, Arizona is seeking to extend its work in the housing space to include supports that historically have only been offered to members who qualify for long-term care, such as home modifications and community transition services that pay for things like first and last month's rent, and basic furnishings to get someone set up in an apartment. “Under our Housing and Healthcare Opportunities (H2O) demonstration requests,” Snyder adds, “we're also asking for the ability to reimburse for transitional services, so we can better coordinate care when individuals are leaving our correctional settings as they transition back out into the community.”

Arizona also is asking CMS for the ability to pay for outreach services — in particular outreach to homeless populations. “Providers have found that outreach is really instrumental to engaging folks and getting them into care, and then ultimately transitioning them into permanent supportive housing,” Snyder says.

 Paying for non-medical services in North Carolina

CMS has authorized up to $650 million in Medicaid funding for pilot projects in North Carolina, which will cover the cost of delivering non-medical services and, in the first two years, support capacity building for human service organizations needed to effectively deliver non-medical services in a healthcare context.

In 2022 North Carolina has begun rolling out what it calls its “Healthy Opportunities” pilots in phases, with food services going live in March, housing and transportation services in May, and toxic stress services in June, says Amanda Van Vleet, associate director for innovation for North Carolina Medicaid.

Through Healthy Opportunities, organizations that provide services related to nutrition and food assistance, transportation, housing and interpersonal safety can receive payments for services they provide to Medicaid patients.

The Healthy Opportunities program is being co-managed by the state-contracted managed care organizations and regional network lead organizations. “They play different roles in that the health plans are responsible for making sure that members that receive pilot services are eligible for them, authorizing the services that they receive, to make sure that they're appropriate, and managing the pilot budget,” Van Vleet explains. The health plans are also ultimately accountable for care management for pilot enrollees, whether they do that in house or through a local advanced medical home. The network leads form the networks of human service organizations, provide technical assistance to them, and help them with invoicing. They're responsible for monitoring and program integrity and ensuring quality services are delivered.

It can be difficult to assess the impact of the interventions just because the services being provided address some issues far upstream, Van Vleet noted. For instance, services that address adverse childhood experiences for young children may take a longer period of time to show an impact. “But there is a good amount of evidence out there that food, housing and transportation impact health outcomes and cost, so we're hoping to improve on that evidence base.”

Van Vleet says the rollout has seen both successes and challenges. It's a new pilot program, so all of the stakeholders — health plans and network leads, the clinical providers, the human service organizations, the state government — are taking on new work and responsibility for the program. “The primary feedback we've heard is extremely positive,” she stresses. “It is truly an ecosystem model we have, with five health plans, five clinically integrated networks, three network leads, and around 100 human service organizations. The health and social sectors historically haven't really worked together and communicated with one another. We're really seeing collaboration and partnerships that are growing. We've created this technology system to link the medical and non-medical sectors, and we have established an additional and predictable funding source to invest in local human service organizations. We're getting data that we'll be able to evaluate. Over 1,700 members have been served so far, and over 800 services have been delivered.”

Washington’s Accountable Communities of Health

In the State of Washington’s Medicaid transformation, which began in 2017, regional Accountable Communities of Health partner with managed care organizations. The MCOs have membership on each of the ACH boards. “I think that the Accountable Communities of Health really have a critical role on the ground in the communities, connecting with those community partners and other social service providers to help with actual client needs. That role is different than the medical care that they're receiving from the MCOs,” says Mich’l Needham, chief policy officer with the state’s Health Care Authority.

Going forward, the state is proposing to continue building the partnerships between ACHs and MCOs. “We are going to rely on ACHs to support the community capacity building, and that includes supporting the community-based workforce,” says Chase Napier, Medicaid transformation manager. “On the managed care side, we will promote payment for non-traditional supports, like transportation, housing, and medically tailored meals. It is about both building the community capacity and addressing the payment mechanisms.”

In seeking an extension of its 1115 waiver from CMS, the state plans to create 10 “Community Hubs” to further invest in multi-sector, community-based partnerships and approaches to better support individuals and families. Washington is requesting expenditure authority for the development and operation of nine Community Hubs and one Native Hub. These hubs are centers for community-based care coordination that focus on health-related social needs. They will provide screening for and referral to community-based services for enrollees in Apple Health, the name for the state’s Medicaid program. Hubs will collaborate with other existing care coordination entities. Nine of the Community Hubs will be overseen by existing ACHs—and a Native Hub will be developed and overseen by a to-be-determined entity.

Napier says the state realizes it needs a closed loop referral and resource directory and the ability to track successful or unsuccessful referrals. “We have some examples of that today. We want to continue to build on that, and there is pursuit of the legislative authority for a broader community information exchange solution,” he adds. “That would be our long-term strategy to pull together these disparate systems that are all working on something related to closed-loop referral. We want to address any of the gaps that remain because not every partner, especially community organizations, have a solution.”

“We also need a system that connects those ACH hubs and the MCOs, and that's a major task in addition to the closed-loop referral system,” explains Jason McGill, assistant director for Medicaid program operations and integrity. “There are lots of questions and complexity to this. To some extent, the MCOs already do at least a bit of this work in terms of community care coordination, but it is not nearly as systematic population-wise as we'd like. We envision this as a pretty significant transformation. I think the MCOs understand that, so they're at the table, and we're working hard together.”

Ideally, the state would eventually like to gather more data on the closed-loop referral process, Napier adds. “Is it working and who are we screening? Who are we referring? Are we getting successful referrals? Why or why not? And then beyond that, what are the outcomes? We want to look at the impact on healthcare utilization measures. I think making that connection would be important.”

Progress in Pennsylvania

Over the past several years, the Commonwealth of Pennsylvania’s managed care programs have begun to focus more on social determinants of health, says Sally Kozak, deputy secretary for the Department of Human Services' Office of Medical Assistance Programs. “The long-term care program has more specific requirements, but in physical health and behavioral health programs, we have requirements that all of our managed care plans screen and assess all of their enrollees for issues related to social needs,” she adds. “In the physical health programs, we do not require that they provide services like housing or food supplements or assistance with utilities, because those are not medical services, per se. But they can provide assistance with targeted case management to help people find housing, maintain housing, and develop skills, and they provide food as nutrition support. Some of our plans are voluntarily investing in initiatives such as housing rental assistance, and assistance with utilities.”

Jamie Buchenauer, deputy secretary for DHS' Office of Long-Term Living, says the three managed care plans in the long-term care program called Community Health Choices, meet the whole-person care needs of individuals in different ways. For instance, UPMC has a pilot program where if an individual has a diagnosis of something like diabetes, they work to provide medically tailored meals to that individual, and the member also meets with the dietician periodically.

For the long-term care program, addressing social drivers often aligns the goals of the patient, family and MCO, says Buchenauer. “Because we provide the long-term services and supports, the goal of the program is to keep people in their homes, where individuals want to be, but it's also cheaper. Usually someone going into a nursing home is not the ideal situation for the family, for the participant, or for the managed care organization. If somebody needs short-term rental assistance until they can get a housing voucher, it's in the best interest of the managed care organization to assist in those ways. For our Community Health Choices MCOs, this is what they need to do to be successful.”

The upcoming procurement of a new closed-loop resource and referral tool in Pennsylvania is going to make it easier for the state to gather additional data that will give it a more complete picture of what is happening at the community level, Kozak says. “We've done a lot of work with our community-based organizations to help guide them as they enter into this realm of value-based purchasing and social determinants of health. We're looking forward to that moving forward a little bit faster. We continue to have internal conversations about care management bundles. We did one around maternity care management that included incentives for the care management team to address social determinants of health. We're looking to add some additional care management bundles like that in our value-based purchasing requirements.”

Conclusion on value-based care

Like their counterparts in other states, Medicaid managed care organizations in North Carolina are moving into value-based payment arrangements to promote accountability and focus on total cost of care. That involves all Medicaid enrollees, whether they're in the Healthy Opportunities pilots or not. Through the state’s transition from fee for service to managed care, the expenditures that health plans make that are tied to value-based payments must increase over five years, so that by year five, essentially half of their payments should be flowing through value-based arrangements. “Those value-based payments also promote investing in prevention and non-medical services,” Van Vleet says.

“We're seeing states requiring their managed care organizations to do things like reinvest a portion of their profits into the communities being served. They also are integrating drivers of health into value-based payment arrangements,” says Manatt Health’s Ferguson. “They are risk-adjusting capitation payments to managed care plans for social factors. There are truly exciting innovations happening across the nation, which I think is a good sign of things to come.”