Feds Continue to Push Towards Faster Adoption of Social Determinants of Health Strategies

In letter to State Health Officials, CMS lays out all paths to SDOH implementation

Written by Juliette Price

The federal government has just released a letter to states further doubling-down on its position regarding the importance of social determinants of health (SDOH) interventions. The 51-page document outlines how states can “address the contradiction between rising costs and low health outcomes,” by adopting both value-based payment methodology and implementing more SDOH interventions by using existing flexibilities available to states today. 

What You Absolutely Need to Know

1. The letter contains no new flexibilities for states; this document simply clarifies what existing policy & funding levers are available to invest in SDOH interventions

2. The fact that a letter specifically focuses on the ways in which state Medicaid & CHIP programs can invest in SDOH is a clear sign that CMS continues to see SDOH as a key strategy in improving outcomes & reducing costs

3. CMS reaffirms its commitment to value-based payment and alternative payment models and the flexibility therein

4. The document contains great examples of how state are using these powers & flexibilities to accomplish SDOH goals

What You Should Know

First, it’s important to understand that this document is a State Health Official letter, which is a way that CMS communicates & provides federal policy guidance to state health officials across the country. It isn’t state-specific and aims to outline ways in which state health leaders can use the discretion they already have to drive the adoption of strategies that address the social determinants of health. The document specifically outlines three core items:

1. Overarching principles that CMS expects states to adhere to within their Medicaid and CHIP programs when offering services and supports that address SDOH

2. Services and supports that are commonly offered in Medicaid and CHIP programs to address SDOH

3. Federal authorities and other opportunities that exist under Medicaid and CHIP that states can use to address SDOH

Notably, the letter continues to underscore that addressing the social determinants that many of the 76 million low-income Americans on Medicaid & CHIP face can lead to both better health outcomes and lower cost of care. We can take this letter as a signal that CMS continues to be interested in SDOH as a key strategy for improving outcomes and lowering cost. Given a new administration in Washington is just a few weeks away, look for more action in this space. While certain levers outlined in this letter such as value add services are indeed a tool, in my opinion, more work can be done to accelerate adoption, including allowing states to include the cost of value add services in capitation payments, reducing the red-tape process of in-lieu-of services applications, and setting statewide SDOH goals and spending floors. 

Clearly stated in the letter’s opening is CMS’ encouragement for states to continue the move away from fee-for-service and towards value-based or alternative payment models. The reason this matters so deeply for SDOH adoption is the flexibilities available to providers & payers under these arrangements. CMS is clearly communicating here that if SDOH interventions are to become widely invested in, the move to value is key. 

Here’s What I Found Interesting

A few things stuck out to me as I reviewed this document that you might find interesting too: 

• The letter featured a focus on children, including specific language around the concept that health care sector can have an outsized influence on keeping children on a normative developmental trajectory in education. This is an interesting area for CMS to highlight, and follows the lead of the groundbreaking work that I & others on our team led in New York State, especially the First 1,000 Days on Medicaid work. 

• Using very concise & strong language, CMS emphasizes the need for SDOH investments & interventions to be thoroughly measured, evaluated, and a culture of continuous improvement to be embraced by state health agencies. CMS details that in the future, as states approach the federal government for waiver or demonstration flexibility, they will be specifically looking for states to back up their ask with evidence of impact, such as improved quality of care, improved outcomes, and lowering costs for members.

Details, Details, Details

Key Takeaways from the Overarching Principles section (p.3-p.4):

In this section, CMS provide reminders to state health officials regarding principles of how Medicaid and CHIP programs should design their strategies:

• Services must be provided to Medicaid members based on “individual assessment of need, rather than take a one-size-fits-all approach”

• Medicaid is generally a “payer of last resort,” meaning other existing funding streams should be investigated first

• Medicaid programs are required to do the best they can to deliver services “with efficiency, economy, and quality of care,” ensuring that the dollars go as far as possible

• The requirement that “each Medicaid service be sufficient in amount, duration, and scope to reasonably achieve its purpose”

Key Takeaways from the Services & Supports section (p.4 – p.10)

This section of the letter focuses on providing the reader with examples of what kinds of services are being offered in states today. The letter does specify that these should not be seen as an exhaustive list of what can be done, but rather trends that CMS sees across the country. 

Here’s a list of the services that are detailed further in the document:

1. Housing-related Services and Supports

   1. Home accessibility modification

   2. One-time community transition costs

   3. Housing and tenancy supports

2. Non-Medical Transportation

3. Home-Delivered Meals

4. Educational Services

5. Employment 

6. Community integration and Social Supports

7. Case Management

Key Takeaways from the Services & Supports section (p.10-p.36)

This section outlines the various levers that state Medicaid & CHIP programs have to advance SDOH investments & interventions. Each of these opportunities are explained in detail & state examples are provided, making this section of the letter the richest for understanding the existing flexibilities states have. A summary table of these is also included in Appendix A. 

1. State Plan Authority

   1. Rehabilitative services benefit

   2. Rural health clinics/Federally qualified health centers

   3. Case management and targeted case management services

2. Home and Community-based Service Options

   1. HCBS waiver program

   2. State plan benefit

   3. Self-directed personal assistance services

   4. Community first choice optional state plan benefit

3. 1115 demonstrations programs

4. Health Homes

5. Managed care programs

6. Program of all-inclusive care for the elderly (PACE)

Additional opportunities:

1. Integrated Care Models

2. CHIP Health Services Initiatives (HSI)

3. Administrative Procedures

4. Medicare Savings Programs (MSPs)

5. Money Follows the Person Demonstration

Curious about anything in this letter or have questions? I’d love to hear what you think! Drop me a line at juliette.price@hsg.global or find me on Twitter @julietteprice.