Medicaid Funding and Health-Related Social Needs: A Policy Analysis

The U.S. has disproportionately high health care spending compared to other high-income nations and comparatively poor health outcomes. The Centers for Medicare and Medicaid Services (CMS) have recently increased emphasis on addressing Medicaid member social needs. CMS believes addressing health-related social needs (HRSN) may reduce costs and improve health outcomes for Medicaid members. CMS has begun to test theories regarding the impact of member HRSN on health care by designing federal mechanisms to address HRSN, such as in lieu of services and settings-funded services, and by encouraging state Medicaid programs to develop their own approaches, such as Flexible Services. Information about how these mechanisms function in various settings and across different dimensions is valuable to other state Medicaid programs interested in addressing their own patient population's HRSN. In this policy analysis, we applied framework analysis to a combination of key informant interviews and document review to examine HRSN mechanisms in California, Massachusetts, North Carolina, Oregon, and Washington state Medicaid programs. We focused on advantages, disadvantages, scalability, and administrative structures associated with each HRSN mechanism. Across the five states and their 12 mechanisms, we interviewed 25 key informants and analyzed 81 documents. Our analysis found that, while administrative burdens were largely unacknowledged at the policy level, they did impact patients, practitioners, community partners, evaluators, and administrators involved with HRSN mechanisms. These administrative burdens are a potential leverage point for mechanism improvement. Additionally, states experienced challenges with mechanism scalability and data collection, though in some cases these challenges were mitigated through strategic planning prior to implementation. We also found that many state Medicaid administrators felt their ability to impact patient health was limited, particularly in circumstances where patients needed housing, because of discrepancies between the HRSN Medicaid programs are attempting to address and the HRSN they are able to address. This study is the first to describe barriers to and facilitators of HRSN mechanism development, implementation, and scalability across multiple states and mechanism types. While other studies have addressed aspects of this topic, they have only focused on specific states or provided limited assessment of mechanism elements. This also represents the first application of the administrative burden framework to the assessment of policy related to CMS-approved HRSN mechanisms.