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Enabling sustainable investment in social interventions: A review of Medicaid Managed Care rate-setting tools

D. Bachrach, J. Guyer, S. Meier, J. Meerschaert, S. Brandel
The Commonwealth Fund

Issue: It is widely recognized that social factors, such as unstable housing and lack of healthy food, have a substantial impact on health outcomes and spending, particularly with respect to lower-income populations. For Medicaid, now dominated by managed care, this raises the question of how states can establish managed care rates to sustain investments in social supports.

Goal: To explore practical strategies that states can deploy to support Medicaid managed care plans and their network providers in addressing social issues.

Methods: Literature review, interviews with stakeholders, and analysis
of federal regulations.

Findings and Conclusions: We identify the following options: 1) classify certain social services as covered benefits under the state’s Medicaid plan; 2) explore the additional flexibility afforded states through Section 1115 waivers; 3) use value-based payments to support provider investment in social interventions; 4) use incentives and withholds to encourage plan investment in social interventions; 5) integrate efforts to address social issues into quality improvement activities; and 6) reward plans through higher rates for effective investments in social interventions. More needs to be done, however, to assist interested states in using these options and identifying pathways to braid Medicaid dollars with other social services funding.

Bachrach D, Guyer J, Meier S, et al. Enabling Sustainable Investment in Social Interventions: A Review of Medicaid Managed Care Rate-Setting Tools. New York, NY: The Commonwealth Fund; January 2018. Available online.

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