Insurers want to lead if CMS pilots payments for housing, social determinants of health

Health plans argue they are the best group to manage and receive funding from the CMS if it decides to pay for housing, transportation and other social determinants of health.

HHS Secretary Alex Azar shook up the industry when he remarked last month that the agency is putting together a pilot model that would allow healthcare organizations to bill the CMS for providing services such as assistance with food and housing.

And although details about the program are unknown at this time, it didn’t take long for health systems to speak out and say they would be smart benefactors of such a payment.

Payers beg to differ.

Health plans—particularly those caring for Medicaid beneficiaries— think they should be the ones getting paid by the CMS for managing social determinants of health, given their access to members no matter the care setting, their experience in taking on risk and the work they are already doing to address members’ social risk factors.

“We have the population. You should start with the health plan because they have all the members,” said Michael Schrader, CEO of 
CalOptima, a Medicaid and Medicare health plan based in Orange County, Calif. “You can go to a hospital, but all services don’t happen at the hospital. Hospitals are only going to touch a small number of our members in any given year.”

Hospital industry representatives, though, argue their connection to the community is one of the reasons why they should be a major part of managing social determinants. “America’s hospitals and health systems are leading the way in addressing the social determinants of health,” said Joanna Hiatt Kim, vice president of payment policy at the American Hospital Association. Kim said the AHA supports an enhanced version of the Center for Medicare & Medicaid Innovation’s Accountable Health Communities model, which involves providers working with community groups to address patient’s social risk factors. Health plans aren’t part of the model at this time.

“The AHA will continue to prioritize supporting hospitals, health systems and clinicians as they address social determinants of health, work to eliminate healthcare disparities and provide comprehensive care to every patient in every community,” Kim added.

HHS’ plans are unclear. Azar’s comments about the model were vague and didn’t directly address who would receive the payments. At one point in his remarks, however, he did refer to patients as beneficiaries. “What if we provide solutions for the whole person, including addressing housing, nutrition and other social needs?” Azar said. “What if we gave organizations more flexibility so they could pay a beneficiary’s rent if they were in unstable housing or make sure that a diabetic had access to, and could afford, nutritious food? If that sounds like an exciting idea … I want you to stay tuned to what CMMI is up to.”

More recently, a CMS spokesman said the agency didn’t have any additional details regarding who would receive the payments in such a model.

CalOptima has invested $11 million since 2015 to provide housing and other support services to 445 of its homeless Medicaid members. CEO Schrader said he felt it was CalOptima’s duty to try to address the growing homeless population in Orange County, a situation that has become contentious. A federal judge recently ordered a stay on an Orange County ordinance that would allow local authorities to prosecute homeless people for camping in public places.

Schrader said more than half of the county’s homeless population are CalOptima members. “Homelessness is an issue for our community and CalOptima is very much part of the community,” he said.

CalOptima partnered in 2015 with the not-for-profit Illumination Foundation to offer temporary housing for homeless individuals. The housing is staffed with support workers who help members stay on their medications, find employment and eat well.

Since 2015, roughly 20% of the individuals have graduated from the program to permanent housing while others were transferred to long-term care.

Schrader said the $11 million investment made sense for CalOptima. Under California’s Medicaid program, CalOptima is paid through capitation, or a fixed rate, to cover all the health costs for members.

It costs the health plan about $200 a day to provide housing for a member compared with an emergency room visit that can cost CalOptima at least $1,200.

Schrader said given the success CalOptima has experienced so far with this program, CMS’ potential model “is really appealing. These are things we are starting to pay for now, but we have no reimbursement from the Medicaid program.”

Another capability that health plans have and providers don’t is extensive data about members, said Allen Karp, executive vice president of healthcare management and transformation at Horizon Blue Cross and Blue Shield of New Jersey.

As healthcare services are increasingly provided outside the walls of hospitals, in-depth patient information is hard for providers to gather. Health plans follow their members through all of their interactions with the healthcare system no matter the setting, insurance executives say.

Horizon has recently used its data capabilities to try to address its members’ social needs. Horizon has worked with RWJBarnabas Health since April 2017 to address the social risk factors affecting high-risk members across Newark, N.J.

Horizon helped RWJBarnabas identify the patients who would benefit most from the program through its data analytics and then together both organizations funded community health workers to help those patients “with whatever made sense for them,” said Mary Ann Christopher, Horizon’s vice president for community health. “The kind of intervention took the form of what the need for that member was.”

The intervention has led to reductions in ED visits, inpatient stays and an increase in behavioral health services because a lot of patients had undiagnosed behavioral health problems, Karp said. Horizon plans to expand the program in the first quarter of 2019 to more areas of New Jersey. Horizon is the largest Medicaid plan in the state with roughly 900,000 members.

Karp noted that the inherent mission of health plans makes them a better fit for the CMS model than hospitals. “We can improve outcomes and reduce the cost. That is one of the main things we do for a living, whereas hospitals are focused on getting people well once they are in the hospital,” he said.

Payers can also be the unifiers for the fragmented healthcare system that patients currently struggle to deal with, said Dr. Priya Batra, senior medical director for family and community health at Inland Empire Health Plan based in Rancho Cucamonga, Calif. Given the fact that health plans follow members throughout all their healthcare interactions and already work with health systems and the not-for-profit sector, health plans “are well-positioned to coordinate a lot of these types of programs.”

Inland has about 1.2 million members in California’s Medicaid program. It’s in the early stages of addressing members’ social determinants of health, Batra said.

In terms of likely additional regulations that the CMS will require to prove that the model reduces cost and improves outcome, health plan executives said they aren’t too concerned.

“I think it’s to be expected. It’s par for the course,” CalOptima’s Schrader said.

“We have to evaluate these programs and I think doing that from a return-on-investment standpoint is reasonable,” Batra said. But she also added that “you have to be realistic about when you’ll see the benefits of these types of interventions and it might take longer” for the benefits to be fully realized.

Karp at Horizon also said he expects additional regulation, but “if it’s over-regulated, that stunts creativity; that would be our concern.” Although he added that given the Trump administration’s focus on reducing burdensome oversight, he expects “they don’t want to over-regulate” the model.