State health officials received a much-needed New Year’s present on January 7, 2021 from CMS. Cash-strapped and resource-drained after nine months of a pandemic, states health officials welcomed the center’s tidings of guidance, funding, and services to better address social determinants of health (SDOH). The 51-page Medicaid Director’s letter from CMS provides leadership and guidance to drive the adoption of SDOH strategies, further improve beneficiary health outcomes, reduce health disparities, and lower overall costs in Medicaid and Children’s Health Insurance Program (CHIP).

CMS lays out programs, benefits and services that can more effectively improve population health and reduce the cost of caring for our nation’s most vulnerable and high-risk populations. While states maintain the flexibility to design their SDOH programs, the guidance focuses on a set of services and supports that states can cover under current law, including housing-related services and supports, non-medical transportation, home-delivered meals, educational services, and employment supports. Mechanisms to address the delivery of SDOH programs are designed for both traditional and value-based care approaches to care.

HealthEC’s client, Barbara-Banks Wiggins, Executive Director, Prince George’s Health Alliance, was one of three Prince George’s health experts interviewed by Healthcare Innovation in December of 2020 regarding the county’s community-wide collaborative effort around SDOH. An innovator in SDOH programs, Wiggins worked in conjunction with Prince George’s County Health Department to reduce hospital visits per patient from 3.55 to 2.05, after intervention; and to an average reduction in hospital charges per patient from $18,929 to $8,6991.

With new support and services from CMS, I predict other state and public sector affiliated SDOH programs will experience similar success. Here are important highlights from the good news posted by CMS on January 7, 2021.

State Medicaid and CHIP programs can use a variety of delivery approaches, benefits and reimbursement methodologies, tailored within the constraints of federal rules, to address state-specific policy goals and priorities. They must, however, adhere to four overarching principles when providing services to address SDOH.

• Services must be provided to Qualified Medicaid beneficiaries based on individual assessments of need, rather than a one-size-fits-all approach.
• States must assess all available public and private funding streams, including Medicaid, to cover assistance with unmet social needs when developing a strategy for addressing beneficiaries’ SDOH.
• Services provided to address SDOH are limited to those expected to meet the beneficiary’s needs in the most economic and efficient manner possible and are of high quality.
• Each Medicaid service must be sufficient in amount, duration and scope to reasonably achieve its purpose.

With these overarching principles in mind, the remainder of the announcement focuses on specific services that can be covered under Medicaid and CHIP to address SDOH and mechanisms to deliver these services.

Specific Services Covered, Mechanisms, Eligibility, and Examples

Services ranging from housing and tenancy to home-delivered meals and non-medical transportation are described in the CMS letter to state health officials (SHOs). Officials and their teams are encouraged to dive into the details and uncover all the various ways that CMS is providing official guidance and support here: https://www.medicaid.gov/federal-policy-guidance/downloads/sho21001.pdf. Key federal authorities that can address SDOH and examples of services and supports that can be covered under Medicaid and CHIP are also displayed in table format throughout Appendices A and B.

Through these efforts it becomes abundantly clear that CMS remains committed to partnering with states to address beneficiaries’ SDOH. This is good news for states during trying times and for the foreseeable future as we work together toward the common good: close social gaps in care and address healthcare disparities nationwide.