New Jersey’s 1115 Waiver Approval Brings Big Investments to Health-Related Social Needs

Post Written by Kalin Scott, Senior Advisor

Another 1115 waiver has been approved by CMS, bringing with it significant investment to NJ and further insight into what the Biden Administration is prioritizing for the Medicaid program.

1115 Medicaid Waiver demonstrations have long been an opportunity for the states and federal government to partner on new policy approaches and investments in Medicaid. Focuses on health equity, social determinants of health, and the social care needs of Medicaid members are a common focus across recent state requests and current federal policy priorities for the Biden administration.

In the last six months, the Centers for Medicare and Medicaid Services (CMS) has approved Medicaid 1115 Waiver renewals and amendments with a significant focus on health-related social needs for Medicaid members in Oregon, Massachusetts, Arizona, and Arkansas. The Oregon and Massachusetts approvals made clear the CMS priority to align 1115 waiver priorities with investments in these areas.

CMS’s recent approval of New Jersey’s “NJ FamilyCare” 1115 waiver demonstration renewal—and commitment to invest $655 million for health-related social needs—follows this direction and expands available services tied to health-related social needs for the state’s Medicaid members.

What are health-related social needs?

Health-related social needs (HRSN) are an individual’s unmet, adverse social conditions that contribute to poor health. An individual’s HRSN are a result of their community’s underlying social determinants of health - defined as the conditions in which they are born, grow, work, live and age, and the wider set of forces and systems shaping their conditions of daily life, including economic policies and systems, development agendas, social norms, social policies, and political systems.

Through recent approvals and guidance to states, CMS has been building a case to link HRSN, health coverage, and health outcomes. CMS is funding innovative initiatives in states that tie interventions around an individual’s HRSN to new and innovative interventions that introduce new covered services and delivery models for specific high-need populations. To date, CMS has approved HRSN interventions including nutrition supports and housing supports and has indicated a willingness to cover other HRSN services on a case-by-case basis through 1115 waiver demonstrations.

What was approved in New Jersey?

New Jersey submitted its demonstration renewal request for the state’s 1115 NJ FamilyCare waiver in February 2022, and aligned its waiver renewal strategy with new programs. The waiver period runs from April 1, 2023 through June 30, 2028. NJ FamilyCare covers 2.2 million Medicaid and CHIP members, just about 1 in 4 New Jersey residents.

New Jersey’s request focused on supporting families and communities through NJ Family Care centered around high-quality, integrated, evidence-based care. The state also drew attention to the importance of addressing key social determinants of health and HRSN to address gaps in care, improve the quality care, and support better access and outcomes for communities of color and individuals with disabilities.

In addition to extending the state’s 1115 waiver which includes authority for the state’s Medicaid managed care program and managed long-term services and supports, new investments are now authorized with CMS’s approval. The updated programs include investments in integration of primary and behavioral health, updates to continuous eligibility, investments in health information technology, and expansion of Medicaid coverage for up to twelve months after pregnancy. Notably, CMS’s approval of New Jersey’s request follows the direction of other state waiver approvals focused on expanding programs for its Medicaid members tied to HRSN.

What’s included in New Jersey’s 1115 waiver HRSN approach?

Major elements of the New Jersey’s HRSN approach include housing and nutrition interventions and supports, consistent with CMS’s previous approvals in other states. In addition, CMS approved some investments in programs to support provider infrastructure and workforce training to align with new programs addressing Medicaid member HRSN.

The overall federal investment in New Jersey’s HRSN programs, including both the HRSN services themselves and HRSN infrastructure investments, is capped at $655 million over the five-year waiver. While many details are yet to be revealed (the state still needs to negotiate protocols or operating documents supporting its agreement with CMS) the investment reflects CMS’s commitment to partner with the states on these new programs.

Housing Programs

New Jersey’s program include a multifaceted, integrated housing strategy incorporating coverage for targeted services, and coordination across state and community organizations and resources involved in the provision of health and housing services. Aimed at addressing housing instability, certain Medicaid populations are now eligible for services including home modifications, pre-tenancy services, tenancy sustaining services, and housing transition navigation services.

The population eligible for services includes:

• Individuals transitioning from an institution to the community setting or who could potentially transition to the community;

• Individuals being released from correctional facilities;

• Individuals at risk of institutionalization who require a new housing arrangement to remain in the community; and

• Individuals who are transitioning out of high-risk or unstable housing situation.

Services includes:

• Targeted Medicaid coverage of key housing-related services, including housing transition and tenancy support services;

• Strengthened requirements for managed care organizations (MCOs) to employ dedicated housing specialists;

• MCO innovation and accountability for assessment of members’ housing needs and coordination of appropriate services to improve health outcomes;

• A newly created, dedicated unit responsible for implementing these housing strategies with community partners and tracking progress towards housing-related milestones for Medicaid-related populations; and

• Ongoing, enhanced engagement between MCOs and public housing authorities, developers, shelters, and other housing-related community resources.

Nutrition Programs

CMS also approved New Jersey’s approach to providing enhanced nutrition supports for long-term care and pregnant Medicaid members. The investments target individuals who experience disruptions in their ability to obtain food and maintain a food supply at home, address chronic health conditions and nutrition needs and support improved health outcomes.

For MLTSS beneficiaries, the program includes:

Nutrition counseling and education; one-time transition costs when moving from an institution to the community (including pantry stocking); and short-term grocery provision

For pregnant individuals with diabetes, the program includes:

Medically indicated meals pilot: Pregnant individuals with either pre-existing diabetes and/or gestational diabetes (up to 300 beneficiaries per year)

Other HRSN Programs

CMS approved other components of New Jersey’s approach to addressing HRSN needs of Medicaid members.

• The state can claim federal financial participation for infrastructure investments to support the implementation and delivery of HRSN services, including technology; development of business or operational practices; workforce development; and outreach, education and stakeholder convening.

• A Community Health Worker Pilot will focus on overcoming health disparities within local communities by providing care coordination services and directly providing preventive or related services.

What does this mean for other states?

The Biden administration is moving in a policy direction to expand Medicaid coverage, access to care, and benefits that support individual social needs impacting health outcomes. With more state requests pending - currently New York, Washington, Delaware, Maine, Montana, New Mexico and Rhode Island all have requests before CMS with health equity and social care components - expect to see more activity, approvals, and investments in these areas in the near term.

What’s happening with New York’s 1115 waiver request?

As we watch and wait for more approvals from CMS, a significant amount of attention is on New York’s pending 1115 waiver request, the New York Health Equity Reform (NYHER) amendment. The state’s request goes beyond housing and nutrition related programs, and proposes a comprehensive approach and $13.5 billion investment in promoting health equity and addressing HRSN, largely through advanced value-based payment models.

New York formally submitted their request in September 2022, and stakeholders have been processing each 1115 waiver approval since then to understand what may play out in the waiver amendment’s approval. Currently, New York officials report that the state is engaged in negotiations with CMS, and the waiver request is pending. Questions remain about what will make it in (and what will be left out of) the final programs. To date, CMS has largely remained focused on approving housing and nutrition HRSN-focused programs, but has provided guidance to states that additional areas will be considered on a case-by-case basis.

Approval of New York’s request will reveal where CMS stands on expanding investment in new areas addressing HRSN beyond housing and nutrition, will drive funding to impact and improve health outcomes across all of the state’s 6+ million Medicaid members, and will have a major impact on the shape of New York’s health care delivery system now and in the future. The team at HSG is closely tracking developments and their implications for providers, plans, and stakeholders--stay tuned, and follow along with our blog for more updates.

Understanding Medicaid 1115 waivers and their implications on your organization’s future will be key to your success in the next few years. If you’re an entity looking to develop its Medicaid waiver strategy, reach out to our team to learn more about how we can support your goals.

About the Author: Kalin Scott is a Senior Advisor at Helgerson Solutions Group. Connect with her on LinkedIn.