How can states build better relationships between Health Care Organizations and Community Based Organizations?

Healthcare providers, organizations, and payers recognize the connection between social needs and health outcomes. These social needs are often described as the social determinants of health (SDOH). SDOHs are the environmental and social factors that influence health outcomes. Research indicates that improving social conditions— such as adequate food, secure housing and income, access to healthcare, and dependable transportation — is crucial to addressing health inequalities and outcomes. With the increasing recognition of the importance of addressing SDOH on health outcomes, community-based organizations (CBO) have become critical to improving a population’s health. CBOs work toward addressing health-related social needs (HRSN), such as organizations dedicated to providing food and housing services. These CBOs provide resources to enable individuals to receive the support needed to lead healthier lives and connect people to health care services. With these emerging partnerships with healthcare organizations (HCO) and community-based organizations, there has been a greater emphasis on integrating social care into healthcare models to improve well-being and lower healthcare costs. Despite the role of CBOs in addressing HRSN, there is little evidence about the carrying capacity of organizations to coordinate referrals with CBOS adequately. This misalignment occurs when health systems refer patients to CBOs without understanding available community resources or CBO operations. In addition, if there is an increase in referral and screening, CBOs do not have sufficient funding or resources to respond and adequately provide quality services.

As trusted members of their communities, CBOs can utilize their relationships with community services, typically ones that address social needs. Many of these community services healthcare providers and organizations usually do not provide. These alliances between HCOs and CMOs help connect the dots for communities to receive the adequate support needed to address SDOH.

Medicaid and Children’s Health Insurance Program (CHIP) covers 76 low-income Americans. Many beneficiaries experience hardship related to SDOH. Unmet hardships have been shown to impact healthcare utilization costs and amplify health disparities, especially for underserved communities. States have created incentives or have made it required for Medicaid agencies and HCO to develop different initiatives to address the needs of communities. Medicaid programs vary by state to address the specific needs of communities. State Medicaid agencies are utilizing three primary policies to address SDOH. The three critical policies used by Medicaid agencies include:

  1. Demonstration projects under Social Security Act 1115 (also commonly referred to as “Section 1115 demonstrations”)
  2. Managed Care Contracts
  3. “In Lieu of” Services (ILOS)

1115 Demonstration

The Centers for Medicare & Medicaid Services (CMS) encourages states to use section 1115(a) of the Social Security Act, which allows states to test various plans to meet the Medicaid and CHIP programs’ objectives and typically modify eligibility, benefits, and care delivery. With approval from CMS for section 1115 demonstrations, states can cover services designed to alleviate the health impacts of unmet HRSN. With this demonstration authority, states have more flexibility to address beneficiaries’ unmet HRSN effectively. Through section 1115 demonstrations, states can explore a more nuanced approach to addressing SDOH. As states encourage HCOs and CBOs to forge partnerships and deliver services, state and federal agencies are creating strategies to assess the effectiveness of these new relationships. With section 1115 demonstrations, CMS requires states to detail how they will manage HRSN provider shortages and obstacles to accessibility. In addition, CMS has developed detailed criteria to enhance CBO’s practices and services that are held quality grade and maximize utilization for HRSN efforts.

Managed Care Contacts

Managed care contracts include federal regulations and require managed care organizations to conduct care coordination activities that address SDOH. Many states require managed care organizations to screen for social needs and connect members of communities to SDOH-related services. However, these states do not establish specific standards for providing those services to address those needs. Managed care contracts provide requirements and financial incentives to encourage SDOH-related services. These incentives and requirements include cooperation with the community and social support providers. States have additionally used these contracts to establish incentives or create requirements to address SDOH. These include requiring screening for unmet social needs and connecting individuals to SDOH-related services.

In Lieu of Service (ILOS)

ILOS was established in 2016 to allow Medicaid-managed care plans to pay for alternative services instead of standard Medicaid benefits. States and CMS use 1115 waiver authority to pursue “in lieu of” services and other HRSN-related services and supports. This recent CMS guidance provides an innovative approach states may consider when employing Medicaid-managed care to address HRSN. States and managed care plans can improve access to healthcare by expanding settings options and addressing certain Medicaid enrollees’ HRSN. This new guidance creates formal guidelines for “in lieu of” services requiring these services must be medically appropriate and cost-effective. These services can serve as immediate or long-term substitutes for state-covered services.

The Role of Community-Based Organizations (CBOs)

Even with the recent initiatives to address SDOH, partnerships between HCOs and CBOs are essential to create a more equitable and whole-person health care delivery. Developing interventions that bridge health’s medical, behavioral, and social elements require partnerships with CBOs. How can states help link HCOs and CBOs? A report from the Center for Health Care Strategies titled “Incorporating Community-Based Organizations in Medicaid Efforts to Address Health-Related Social Needs: Key State Considerations” outlines four key policy considerations for states to implement to aid in creating effective partnerships:

  1. Establish roles for CBOs in initiatives.

State Medicaid goals tend to be vague and general; defining priority areas and objectives is essential for successful partnerships. States can specify what type of CBOs are best equipped to address specific needs and use this to make specific goals. For instance, in Massachusetts, states can select CBO partnerships based on the specific needs of their programs, such as care coordination and management.

  1. Create dedicated funding for CBO-HCO Contract.

States can make Medicaid funding to create designated programs for HRSN services that CBOs provide. Many states have crafted resources to enhance equitable contracting and provide partnership guidance. For instance, states can provide financial incentives and assistance to aid partnership development. In Arizona, CBOs can earn up to$10,000 for joining the state’s closed-loop referral and meeting usage metrics.

  1. Guarantee equitable access to HRSN services.

Although states have recognized the importance of HRSN services, states will still experience several obstacles restricting CBOs from adequately providing HRSN services. States can define accountability standards to combat this. Some states have implemented different measures to ensure equitable access to HRSN by creating specific definitions and measures or requiring HCOs to have dedicated staff for CBOs partnerships. California’s Incentive Payment Program requires managed care organizations to submit a plan of action for partnering with CBOs and suggest strategies for closing health disparities.

  1. Evaluate the impact on outcomes and

How can states evaluate their impact on outcomes and disparities? At NNSI, researchers and collaborators measured the performance of systems of care referral technologies across three assessments: accuracy, efficiency, and effectiveness. Systems of care are defined as referral systems across health and human service agencies supported by technological capital and human capital. Systems of care allow clients to receive care from health and human service providers by providing accessible care and enhancing accountability for health services organizations. Efficient systems of care can be achievable through 1115 waivers. Policymakers must turn to these three distinctive metrics when evaluating a network’s operation. These metrics provide insight into how CBO relationships are performing across critical indicators. Want to learn more about #SystemsofCare? Check out our blog series.

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2. 3 million people would gain health coverage in 2024 if 10 states were to expand medicaid eligibility. (n.d.).
Collection of self-reported disability data in medicaid applications. (n.d.).
What are systems of care? (n.d.). NYS SOC.



Yasmin Zaiani authored this post. Yasmin is an undergraduate research assistant in the NNSI lab at Northwestern University.