CMS releases new Medicaid guidance for states to tackle unmet social needs

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The Centers for Medicare and Medicaid Services has released new guidance for states to address health-related social needs for Medicaid beneficiaries. This is being done through the use of “in lieu of services and settings” in Medicaid managed care. 

The option will help states offer alternative benefits to meet needs from housing instability and food insecurity. States may adopt in “lieu of services and settings” to offer medically appropriate, cost-effective tailored meals for people with severe, chronic health conditions that are made worse by poor diet, a food desert location or lack of access to nutritious food choices, CMS said.

The guidance establishes requirements and guardrails states must meet to ensure that the innovations are cost effective, medically appropriate. They must also preserve enrollee rights and protections and fulfill the objectives of the Medicaid program. 

WHY THIS MATTERS

The new guidance builds on individual states’ efforts for actions in lieu of services. For instance, last year CMS approved a proposal by California to provide asthma remediation in the home, food and housing deposits in lieu of services, according to the Commonwealth Fund.

In lieu of services allows health plans to pay for nonmedical services instead of standard Medicaid benefits when it is medically appropriate and cost effective to do so, the report said. States can write provisions into their risk contracts that allow the Managed Care Organization, with the beneficiary’s consent, to furnish in lieu of services offerings, according to Georgetown University Health Policy Institute.

When a state includes such a service in a risk contract with the MCO, the cost of that service is factored into the capitation rate, the report said.

THE LARGER TREND

The majority of Medicaid beneficiaries are enrolled in MCOs. 

In 2021, over two-thirds of managed care states included in their contracts with MCOs provisions relating to SDOH, such as requirements to screen enrollees for behavioral health needs, according to the Georgetown University Health Policy Institute. Individual MCOs are crafting their own interventions, including contributions to food banks and other community-based organizations, the report said.

CMS said the initiative supports the Biden-Harris Administration’s goal of ending hunger and reducing diet-related diseases by 2030 – all while reducing disparities – and its corresponding National Strategy on Hunger, Nutrition and Health. 
 
ON THE RECORD

“In partnership with CMS, states have been working hard to better meet the health-related social needs of people with Medicaid coverage,” said CMS Administrator Chiquita Brooks-LaSure. “Today’s announcement is the next step in CMS’ effort to use every lever available to protect and expand coverage for all eligible individuals as we work with our state partners to offer whole-person care.”

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