On January 7, 2021, the United States Centers for Medicare and Medicaid Services (CMS) sent a letter to all fifty states outlining existing authorities that can be used to address social determinants of health (SDOH) through Medicaid and CHIP. The letter, known as a State Health Official (SHO) letter, detailed state plan and waiver authorities that the states may use to address housing, education, and food security, all with the goal of improving beneficiary health and reducing program costs.
The letter puts forth four principles that states must adhere to when providing services to address SDOH:
- Services must be based on individual assessments of need;
- Medicaid is frequently, but not always, the payer of last resort. This means states need to assess other available public and private funding streams;
- Utilization and payment must be consistent with efficiency, economy, and quality of care; and
- Services must be of sufficient amount, duration, and scope, to reasonably achieve their purposes.
In the letter, CMS encourages states to pursue demonstration projects that would help address SDOH. However, it notes that any state proposals for demonstration programs should be (1) grounded in evidence and (2) be accompanied by a rigorous evaluation plan. The agency also notes that many of the services outlined in the letter may be provided using telehealth in addition to in person visits, and therefore, states should assess their telehealth frameworks to determine whether there are unnecessary restrictions preventing maximum utilization of telehealth.
The letter lists opportunities that CMS has identified that may be used to address the social determinants of health, including a discussion and examples of the authorities in action and services that may be covered under the authorities. A quick overview of the authorities identified by CMS include:
- State plan authorities, including rehabilitative services benefits, rural health clinic and federally qualified health centers, and case management;
- Home- and Community-Based Services (HCBS) options, including 1915(c) waivers and 1915(i) and 1915(k) state plan options;
- Section 1115 demonstrations, including those addressing housing supports, home-delivered meals, and supported employment;
- Section 1945 health homes;
- Managed care programs, which states may encourage to use housing supports, home-delivered meals, and more; and
- Program of All-Inclusive Care for the Elderly (PACE).
Health and Human Services Secretary Alex Azar has long held SDOH as a priority. In a 2018 speech, he laid out his goals for addressing SDOH, including leveraging managed care and potentially using Medicaid to directly pay for some housing costs. Congress has also requested guidance from CMS on strategies that states can use to address SDOH in reports accompanying the FY 2020 and FY 2021 appropriations bills for the Departments of Labor, Health and Human Services, Education, and Related Agencies. In the FY 2021 report, Congress also asked for CMS to identify opportunities to partner with academic medical centers on addressing SDOH.