Today, 40% of Americans face significant material hardship, which includes limited access to vital resources such as nutritious food, medical care, affordable housing, and essential utilities. Yet, the support provided by social service agencies and nonprofit organizations reaches less than 16% of those struggling with material hardship, leaving the majority to manage on their own. What happens when someone cannot pay rent or has a disconnected phone? These unmet health-related social needs carry substantial health implications, with research indicating that they account for 30% to 55% of an individual’s overall health outcomes.
All over the United States, people find it extremely challenging to obtain assistance. Our interviews with dozens of citizens revealed their difficulties in figuring out the resources that were available to them and that they were eligible for. Some did not seek help at all because they had no idea where to start, while others found the process to be convoluted, with too many choices and little guidance. As a result, many decided to adopt a “tough it out” approach; they led irregular diets or missed medical appointments, putting their health in jeopardy.
Within the past year, Medicaid and Medicare have offered state health officials several new options to tackle health-related social needs. These opportunities include the clarification of in-lieu-of service opportunities, allowing managed care organizations to offer cost-effective alternatives to Medicaid-covered services. Community supports such as meal delivery and housing navigation are expected to reduce or obviate the need to use state-plan services in the future and can be covered as medically appropriate substitutes for Medicaid benefits. In addition, states can also use 1115 demonstration waivers to be exempted from certain Medicaid provisions, thus having the freedom to create and implement new initiatives tailored to their distinctive needs. Several states have used this waiver to experiment with changes to their Medicaid programs, such as exploring different support models for housing, nutrition, and essential utilities. Many states have taken advantage of in-lieu-of service opportunities and 1115 demonstration waivers to address health-related social needs, providing others with valuable insights regarding implementing Medicaid to enhance health outcomes.
How Six States Have Used Medicaid to Resolve Health-Related Social Needs
California has an active 1115 waiver to tackle various health-related social needs, which was approved in 2020 and executed in June 2021. Through their Medi-Cal (CalAIM) initiative, California utilizes Enhanced Care Management, Community Supports, and Population Health Management to aid people faced with material hardship. Most notably, this waiver includes 14 new community supports explicitly designed for health-related social needs, including housing transition navigation services, housing deposits, housing tenancy, and sustaining services, and medically supported meals. In addition, the 1115 waiver also incorporates technical assistance to community-based organizations, particularly planning and implementation efforts for public hospitals, county agencies, and similar entities.
Massachusetts provides up to 12 months of continuous coverage for Medicaid and Children’s Health Insurance Program (CHIP) beneficiaries upon release from correctional settings, with the possibility of extending the duration to 24 months for those who are homeless. In the newly approved 1115 amendment, Massachusetts offers housing support, clinical nutrition education, and food assistance services for those struggling with material hardship. Under the demonstration, state officials will also create a medical loss ratio oversight process focusing on health-related social needs services. Additionally, Massachusetts plans to use quality measures to make accountable care organizations and managed care organizations responsible for health-related social needs screenings and referrals. Moreover, by leveraging the Massachusetts Upstream Investment Program, the Social Service Organization Flexible Services Preparation Fund and Integration Fund aim to enhance the capacity of community-based organizations to establish healthcare partnerships.
3. New York
To address health-related social needs, New York’s Department of Health created the Bureau of Social Care and Community Supports (BSCCS). The BSCCS spearheads value-based program initiatives that require managed care organizations to include at least one social determinant of health intervention and contract with a community-based organization. BSCCS was also authorized to use an in-lieu-of services program to provide medically tailored meals to meet the individual needs of Medicaid members with chronic diseases such as diabetes. In addition to establishing BSCCS, New York has mandated that advanced value-based payment agreements incorporate a partnership with a community-based organization and a health-related social needs intervention. In addition, the Medicaid Redesign Team Supportive Housing Initiative channels state-only funds towards rental subsidies, tenancy services, and capital allocation for Medicaid’s heavy users.
4. North Carolina
Through their health opportunity pilots, North Carolina is working to address needs in nutrition, housing, transportation, and interpersonal violence. The statewide social determinants of health map guides community investments and resource prioritization, and their standardized screening questions identify patients with unmet resource needs. Additionally, NCCARE360 electronically connects individuals with identified needs to community resources, while Tier 3 Advanced Medical Homes conduct comprehensive assessments, including priority domains like housing and food. Moreover, North Carolina has established a community health worker initiative with future intentions of integration into Medicaid and given the auto-assignment preference for managed care providers who can invest in health resources in-lieu-of-remittance.
Ohio mandates that managed care organizations establish partnerships with certified community hubs to complete closed-loop referrals for health-related social needs. Under new Next Generation contracts, these entities must reinvest three percent of their annual post-tax profits into community services and compensate Comprehensive Primary Care practices with an agreed “per member per month” payment for assigned members. For projected non-benefit costs, Ohio considers expenses associated with the Enhanced Maternal Care Services Program and the hub contracting requirements. Notably, Ohio’s Quality Withhold program will potentially collaborate with community-based organizations and other Medicaid plans for collective impact when addressing health-related social needs.
Texas has proposed guidelines for health-related social needs screening during a child’s checkup, with possible implementation in 2023. Notably, the Delivery System Reform Incentive Payment Transition Plan features milestones relevant to health-related social needs, notably the Assessment of Social Factors influencing Health Quality in Texas Medicaid. It also offers 1915(i) state plan services to individuals with serious mental illness, which include home-delivered meals and one-time transition costs sponsorship. The state is contemplating modifications to its alternative payment model framework to recognize managed care organizations that cater to health-related social needs as part of such a model. Finally, a segment of the Texas Incentives for Physicians and Professional Services program provides a rate boost for certain outpatient services and mandates the reporting of food insecurity screening.
How Non-Participating States Can Improve Health Outcomes through Medicaid
To better address the health-related social needs of its Medicaid-eligible community, states that have not yet adopted Medicaid expansion can consider the following courses of action:
- Applying for an 1115 demonstration waiver for health-related social needs case management. The December 2022 guidance from CMS allows states to fund health-related case management. It could help states expand existing case management offerings to include coordination with services addressing housing, food, or utility needs.
- Investing in a state-wide community resource platform and directory. Platforms like these connect healthcare and community-based organizations that address health-related social needs, and healthcare organizations can fulfill their obligation to provide quality referrals for social needs by integrating these systems into their existing electronic medical records system.
- Requiring managed care organizations to make community reinvestments. These organizations should be mandated to invest part of their profits in community services. A share of these community reinvestment allocations should be used for training and technology integration that would aid in the transition to a community resource referral platform.
- Embedding community health workers in locally trusted, community-based organizations. Managed care organizations could contract with community health workers to perform much-needed local outreach to help residents understand and access services. These workers are crucial to encouraging people “toughing it out” to seek help.