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Medicaid Managed Care Provides Opportunities for States to Address Social Determinants of Health and Health Equity

This week, our In Focus highlights a new report prepared by Health Management Associates (HMA) on the potential for Medicaid Managed Care to enable states to address social determinants of health (SDOH) and health equity above and beyond what’s possible with traditional fee-for-service models. The report was released by Together for Better Medicaid, a coalition committed to building a better Medicaid system across the country.

The report, Medicaid Managed Care: Strategies to Address Social Determinants of Health & Health Equity, is based on HMA’s review of 10 recent state requests for proposals (RFPs). HMA’s review reveals an overarching commitment by states to address SDOH – such as income, education, food access, housing and unemployment – as well as health equity through their contracts with Managed Care Organizations (MCOs).

The pandemic has led to increasing attention on SDOH and health equity issues among policymakers and public health experts. The report demonstrates that MCOs, which are not tied to the limitations of the fee-for-service model, are in a strong position to help states meet the challenges of the day by offering greater flexibility in covering value-added services and additional services offered in lieu of those covered under Medicaid state plans.

The report identified several main trends in SDOH requirements:

  • Many states are requiring MCOs or provider networks to screen enrollees for SDOH needs.
  • States are increasingly requiring MCO care management programs to incorporate SDOH, to coordinate with community-based organizations and to ensure referrals to social services and supports.
  • Recent RFPs have included requirements that MCOs incorporate SDOH into their quality assessment and performance improvement (QAPI) programs and that MCOs provide SDOH training for staff.

The report also identified the following trends in health equity requirements:

  • Recent RFPs require MCO staffing to address health equity, as well as staff provider training to address racial and ethnic disparities, diversity and inclusion.
  • States are requiring MCOs to develop cultural competency plans and to ensure care management, marketing and an MCO workforce that’s culturally competent.
  • A few states have incorporated health equity principles into their MCO pay-for-performance initiatives, while others are prioritizing health equity in the value-based payment arrangements MCOs implement with provider networks.

“States looking to address social determinants of health and health equity are increasingly turning to the Managed Care model for its flexibility and ability to incentivize better, more equitable health outcomes,” said HMA Regional Vice President Kathleen Nolan. “Our review of states’ recent contracting processes demonstrates that they see the value in Managed Care because of its ability to support the health of vulnerable communities.”

The full report can be found here.