Medicaid Managed Care Organizations Help Address SDOH, Health Equity

Medicaid managed care organizations (MCOs) may be better equipped to address members’ social determinants of health and health equity compared to fee-for-service models, according to a report from Health Management Associates (HMA) and Together for Better Medicaid.

State Medicaid programs send requests for proposals (RFPs) to managed care organizations when preparing to enter a new contract. The report focused on 10 state RFPs from 2020 and 2021 and found that many included key policies that centered around advancing health equity and addressing social determinants of health.

In addition to states requiring Medicaid managed care organizations to focus on health equity, these care models have flexible characteristics that allow them to prioritize nonmedical needs.

For example, MCOs may offer coverage for additional services beyond the ones covered under state Medicaid plans. Certain incentive programs may push MCOs to address social determinants and health equity as well.

“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,” Kathleen Nolan, regional vice president of HMA, said in a press release.

“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.”

A handful of states required managed care organizations to screen their enrollees for social determinants of health needs. Notably, managed care models in Louisiana and Ohio must reimburse providers for these screenings.

All of the contracts required managed care organizations to incorporate social determinants of health into their care management programs as well. A few required care managers to coordinate with community providers to address member needs.

Similarly, most of the contracts required managed care organizations to refer members to proper community-based organizations, with some states even calling for partnerships between the organizations.

Managed care models must have a quality assessment and performance improvement program to comply with federal requirements, according to the report, and some states have asked MCOs to include social determinants of health and health equity measures in these programs. States can either develop separate performance improvement programs and quality initiatives or create a strategy that is specific to these measures.

Most of the state RFPs included a staff requirement as well that asks MCOs to ensure that their staff can address social determinants of health issues.

For example, in Arizona, managed care organizations must employ a housing specialist who is equipped to manage housing concerns and resources. North Dakota requires that managed care models provide social determinants of health training to all staff that interacts with enrollees and providers.

State RFPs also included health equity requirements when it came to staffing.

Managed care organizations in Indiana must have a health equity officer who oversees the implementation of strategies to address care disparities and health equity representatives who are actively involved in the initiatives.

Other requirements are simpler, such as Nevada’s requirement that managed care organizations have quality improvement teams with health equity experts.

Additionally, seven of the states called for managed care organizations to provide staff members with training on how to address racial disparities, diversity, and inclusion, with some requiring training for providers as well.

Per federal regulations, states require managed care organizations to participate in each state’s effort to promote culturally competent delivery of services. Several states have expanded this provision and ask that managed care models develop cultural competency plans to further address enrollees with limited English proficiency, disabilities, and diverse cultural backgrounds.

A few states required managed care organizations to use race, ethnicity, and language data to further their cultural competency strategies, employ culturally diverse staff, and develop marketing materials that address cultural appropriateness.

Some states have developed reimbursement policies that help managed care models address health equity. For example, Nevada has determined that alternative payment model contracting strategies must prioritize incentivizing providers to improve health equity to ensure easier access to care.

Many of the RFPs included state-specific provisions that require managed care models to evaluate health outcomes through a health equity lens. For example, Nevada requires organizations to implement a population health strategy to identify and address racial and ethnic disparities in health outcomes.

The inclusion of these requirements in state RFPs ensures that managed care organizations will be ready to address members’ social determinants of health and health equity concerns, the report concluded.