Want to improve the health of Medicare/Medicaid members? Meet their socioeconomic needs

Health Care Current | March 26, 2019

This weekly series explores breaking news and developments in the US health care industry, examines key issues facing life sciences and health care companies, and provides updates and insights on policy, regulatory, and legislative changes.

My Take

Want to improve the health of Medicare/Medicaid members? Meet their socioeconomic needs

By Sarah Thomas, managing director, Deloitte Center for Health Solutions, Deloitte Services LP

Consumers are driving change across all industries, and health care is no exception. To keep up, many health plans and health systems are looking beyond the immediate health needs of their members and patients and are taking steps to address issues related to where they work, where they live, what they eat, how they get around, and other factors that can affect their health. Health care organizations that understand how social determinants of health (SDoH) affect consumers could gain an advantage over their competitors—especially when competing for Medicaid contracts—while also working to drive down health care spending and improving the health of individuals and their communities.

A focus on SDoH can help health plans and health systems become proactive (rather than reactive) when serving their members and patients. Screening and directing people to community resources is where many health plans (and health systems for that matter) are starting. But some are figuring out ways to offer services. A Medicaid managed care plan, for example, could create a low-cost meal service that delivers healthy food to its members with diabetes. A local hospital might connect its elderly patients to ride-sharing services to ensure they don’t miss important appointments, or to prevent them from relying on ambulances for non-emergency care.

Work on SDoH has evolved a lot in just two years

It has been two years since we surveyed hospitals to find out how they were identifying and reaching out to people who could benefit from services that connect them to housing, healthy food options, and reliable transportation. This year, we interviewed executives and leaders from 14 managed care organizations and Medicare Advantage plans to learn what they were doing to address social needs among their Medicaid and Medicare members. We also interviewed leaders from four states to find out how they are supporting SDoH efforts.

Since we published our first SDoH paper, a number of startups and technology vendors have emerged to help health systems and health plans identify people who could benefit from SDoH services and/or help connect them to a network of service providers, and then evaluate the effectiveness of the interventions. Meanwhile, the US Centers for Medicare and Medicaid Services (CMS), along with some advocacy groups, are offering new tools to screen for SDoH. For example:

  • Organizations such as NowPow and TAVHealth provide information about—or connect individuals and health care organizations to—community groups.
  • Some groups have launched screening tools, such as CMS’s accountable health communities (AHC) instrument, and the Protocol for Responding to and Assessing Patients’ Assets, Risks, and Experiences (PRAPARE) from the National Association of Community Health Centers.1, 2
  • Technology companies have developed care coordination tools. Unite Us, for instance, builds coordinated care networks of health and social service providers to help improve patient outcomes.

Some states require SDoH for Medicaid participation

While a growing number of states are using Medicaid Section 1115 waivers to implement work requirements, that same waiver authority can be used to address a wide range of social needs for Medicaid beneficiaries. States also could add SDoH requirements to their requests for proposal. Massachusetts, for example, now requires accountable care organizations (ACOs) to screen for SDoH needs and measure their performance on a host of related quality measures. Under the Delivery System Reform Incentive Payment (DSRIP) program (a mechanism within the broader 1115 waiver), Massachusetts covers services related to housing and nutrition for Medicaid members who meet its health needs-based criteria.

Similarly, North Carolina requires contracted Medicaid managed care plans to screen all members to assess SDoH needs (e.g., food insecurity, lack of stable housing and transportation, and exposure to interpersonal violence). Health plans are required to connect those members to resources in the community that can provide help. The state is implementing a multi-directional, cloud-based resource and referral platform to help connect health and community resource providers, and to evaluate how addressing social determinants can reduce costs and improve health.

While technology is making it possible to extend the reach of community services to the people who need them, some health care organizations are working to overcome two significant hurdles:

  • Consistent coding of SDoH: While coding for SDoH has long been a challenge, some health care organizations are developing their own solutions to standardized SDoH coding.
  • Demonstrating return on investment: Some SDoH initiatives have led to better health outcomes among participants. It has been more difficult to demonstrate cost savings.

Four elements health plans should consider including in their SDoH efforts

According to our interviews, health plans are using the following strategies to address the social needs of their Medicare and Medicaid members:

  1. Employing multiple modalities to identify social needs: Telephone, online, and mail questionnaires are the most common methods health plans use to screen members for social needs. However, in-person and in-home assessments are typically the most effective screening methods. Some health plans also use predictive analytics and machine learning to risk-stratify members and anticipate their social needs. Other organizations are adding marketing or consumer data to social and clinical data to glean more information via predictive analytics.
  2. Using one-on-one support to connect members to services: Health plans often consider care/case managers and community health workers to be critical for addressing the social needs of high-risk members. The health plan executives we interviewed said most enrollees with identified social needs are referred to community-based organizations (CBOs)—local nonprofit organizations that work to meet community needs—and other agencies. However, enrollees who are deemed “high-risk” (often due to diagnosis or high utilization) might be assigned a care/case manager or community health worker who can work one-on-one with the enrollee to coordinate services.3 Peer-to-peer programs can help link enrollees to community resources, too.
  3. Establishing strong partnerships through formal contracts and value-based care (VBC) arrangements: For health plans, multi-stakeholder partnerships could be the core of a strong SDoH initiative. A formal partnership that aligns incentives can be the key to success. In particular, VBC arrangements can be critical to maintaining strong partnerships, something we also found in our research on health systems two years ago. Several of the health plan representatives we interviewed noted that increased participation in VBC arrangements among network providers has driven some health plans to invest more heavily in SDoH initiatives and to work more closely with providers on such initiatives. Many health plans see it as their responsibility to help providers succeed in value-based care.
  4. Monitoring and evaluating interventions: Health plan leaders typically recognize the importance of evaluating social needs interventions. However, few say they can do it effectively. This is not just because these programs are new. In fact, several of the health plan leaders we interviewed said they have been addressing the social determinants of health for a decade or longer but haven’t been systematically collecting data or monitoring and evaluating interventions. A shared data platform can help health plans close the loop on referrals and evaluate the impact interventions have on health outcomes, utilization, and spending. At least one health plan is using a multidirectional data platform, which allows it to share data with providers and social services groups using a cloud-based database.

What’s next?

Most health plan executives told us that when it comes to SDoH interventions, they are still learning. However, they know that now is the time to experiment with new approaches that can contribute to the SDoH evidence base and hone their business cases. Some are considering experimenting with technologies—such as mobile apps and virtual care—while maintaining one-on-one support programs for high-need and high-risk members. Many executives said they are interested in adopting data platforms to share information and evaluate interventions more easily. But they also agree that they need to overcome significant technological and operational challenges before they can get there.

As SDoH innovation and maturity continues, health care stakeholders should continue to coordinate efforts, keep abreast of new evidence and tools to incorporate into programs, and ensure that SDoH efforts remain patient-centered and integrated into patient care. Two years from now, I hope that we have great evidence that guides more investment into this important area.

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1 US Centers for Medicare and Medicaid Services (CMS), The Accountable Health Communities Health-Related Social Needs Screening Tool
2 National Association of Community Health Centers, Protocol for Responding to and Assessing Patients’ Assets, Risks, and Experiences (PRAPARE)
3 “Standardizing Social Determinants of Health Assessments,” Health Affairs Blog, March 18, 2019


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In the news

CBO releases report on specialty drug prices and spending in Part D and Medicaid

A new report from the Congressional Budget Office (CBO) analyzes prices for specialty drugs in the Medicare Part D program and in Medicaid. According to the report, specialty drugs, which are used to treat chronic, rare, and complex conditions, contributed to increased prescription-drug spending in Part D and in Medicaid from 2010 through 2015.

CBO’s report concluded that:

  • Annual net spending on specialty drugs in Part D rose from $8.7 billion in 2010 to $32.8 billion in 2015, increasing from 13 percent to 31 percent of the program’s average annual net drug spending.
  • Net spending on specialty drugs nearly doubled for Medicaid—from $4.8 billion in 2010 to $9.9 billion in 2015—and specialty drug spending increased from 25 percent to 35 percent of average annual net drug spending in Medicaid.
  • In 2015, brand-name specialty drugs accounted for 31 percent of average annual net drug spending in Part D, and 35 percent in Medicaid. By contrast, these drugs did not account for much of the volume of drugs dispensed in each program: they made up only about 1 percent of all prescriptions dispensed.
  • In 2015, the weighted average net price among 50 top-selling, brand-name specialty drugs was $3,600 per 30-day supply in Part D. The weighted average net price for the same drugs in Medicaid was $1,920 that same year. According to CBO, this difference is due to the higher manufacturer rebates in Medicaid compared to those in Part D.
  • Average annual per-person net spending on brand-name specialty drugs for Part D beneficiaries roughly tripled, from $11,330 in 2010 to $33,460 in 2015.

(Source: CBO, Prices for and Spending on Specialty Drugs in Medicare Part D and Medicaid, March 2019)

First year of MACRA participation exceeded goals, CMS says

On March 20, CMS issued a report on the first year of the Quality Payment Program (QPP), which Congress established through the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The QPP offers two participation tracks, the Merit-based Incentive Payment System (MIPS) and the Advanced Alternative Payment Model (APM) option. According to CMS, about 95 percent of all eligible clinicians enrolled in MIPS in 2017, and there were more than 99,000 qualifying APM participants, which exceeded the agency’s expectations. CMS initially projected 90 percent MIPS enrollment and 70,000 qualifying APM participants.

MIPS participants report on performance categories defined by MACRA, and CMS uses participation scores to calculate participants’ Medicare Part B payment bonuses. During the first year, scores were based on performance in three areas: quality (60 percent), advancing care information (25 percent), and improvement activities (15 percent). CMS’s report reflects the agency’s November announcement that 93 percent of MIPS participants earned a positive payment adjustment of up to 1.88 percent for 2017. Participants began receiving payments on January 1, 2019 (see the November 20, 2018 Health Care Current). CMS will assess MIPS clinicians on these three categories—plus an additional one (cost)—for the 2018 performance year, which will affect the 2020 payment year. The submission window for performance year 2018 ends April 2, 2019.

The majority of APM participants—73,600 physicians—were in a Next Generation ACO. More than 59,000 physicians became qualifying APM participants in the Medicare Shared Savings Program (MSSP). In August, CMS released a report showing that the Next Generation ACO Model reduced Medicare spending by $62 million in 2016, the model’s first performance year (see the September 11, 2018 Health Care Current).

In November 2018, CMS issued a final rule detailing payment updates and policy proposals for the QPP and the Medicare Part B Physician Fee Schedule (PFS) for 2019, which will influence 2021 payments. These updates include raising the MIPS performance thresholds and adjusting the participation score calculation.

(Source: CMS, 2017 Quality Payment Program Reporting Experience, March 20, 2019)

Agencies release 2020 budget justifications, briefs

On March 18, a week after the White House released its 2020 proposed budget, CMS submitted its 2020 budget justification to Congress (see the March 19, 2019 Health Care Current). The Congressional Justification of the budget outlines program funding requests, addresses performance measures, and summarizes results. CMS requested funding for several of its accounts, including:

  • Program Management (PM): Of the $3.6 billion that CMS requested for its program management efforts, the agency is seeking $2.4 billion to operate Medicare, Medicaid, CHIP, and additional CMS support programs. This request includes a provision that would allow user fees from health insurance exchanges to cover the federal costs associated with operating and state-based exchanges that use the federal platform.
  • Health Care Fraud and Abuse Control (HCFAC): The agency requested $792 million—a $27 million increase from 2019—in discretionary HCFAC funding to continue efforts targeting fraud in Medicare, Medicaid, and CHIP.

On March 20, the US Department of Health and Human Services (HHS) issued its 2020 Budget in Brief. According to HHS, the 2020 budget supports the agency’s commitment to improve health care by lowering the cost of drugs, addressing the nationwide opioid crisis, and streamlining federal programs.

Commonwealth Fund releases report estimating the effect of Medicaid work requirements on hospitals

Hospitals in states that have added community engagement or work requirements to their Medicaid programs could see higher uncompensated-care costs, according to a March 14 report from the Commonwealth Fund. The study analyzed hospitals in the states that either received CMS’s approval to implement the requirements via 1115 waivers or have applied to do so (see the March 12, 2019 My Take). According to the researchers, the projected increase in hospitals’ uncompensated-care costs ranges from 13 percent to 158 percent, depending on each state’s program. On March 15, Ohio became the ninth state approved to implement Medicaid work requirements.

(Source: The Commonwealth Fund, How Will Medicaid Work Requirements Affect Hospitals’ Finances?, March 14, 2019)

Related: On March 14, CMS published state guidance and resources, including standard-monitoring metrics and research and evaluation methods, tailored to Section 1115 demonstration projects. These resources include an implementation template, a monitoring report template, and evaluation design guidance. According to a statement the agency released the same day, for each approved 1115 demonstration, states must regularly submit reports to CMS on key monitoring metrics. States are also required to conduct evaluations by working with an independent evaluator.

(Source: CMS, CMS Strengthens Monitoring and Evaluation Expectations for Medicaid 1115 Demonstrations, March 14, 2019)


Some industry stakeholders want Congress to end surprise medical bills

A group representing health plans, brokers, and business leaders is urging Congress to pass legislation to protect patients from surprise billing practices, according to a March 18 letter. Unexpectedly large medical bills can increase out-of-pocket spending for both insured and uninsured individuals. In its letter, the group recommends that Congress consider:

  • Prohibiting surprise medical billing in emergency and involuntary care cases
  • Requiring health care facilities to inform patients about their provider’s in-network status without requiring patients to consent to care from out-of-network providers
  • Setting reimbursement rates without increasing premiums or limiting access for patients
  • Avoiding the use of non-transparent arbitration processes

In a joint statement, the Federation of American Hospitals (FAH) and American Hospital Association (AHA) agreed that a common solution is needed to end surprise billing practices. The hospital groups said patients should not be balance-billed and urged greater transparency around cost-sharing. In February, a bipartisan group of senators requested data from health plans and hospitals on surprise medical billing practices (see the February 12, 2019 Health Care Current).

(Sources: AHIP, Sign-On Letter Surprise Medical Bills, March 2019; FAH, Joint Statement from FAH & AHA: Hospitals Seek Common Sense Solutions to Surprise Bills, March 2019)

Breaking Boundaries

Bill Gates includes several health innovations in his picks for the biggest breakthrough technologies

The Massachusetts Institute of Technology (MIT) Technology Review invited philanthropist and entrepreneur Bill Gates to be the first guest curator of its 10 Breakthrough Technologies feature. Several items on the list focused on health care, including:

  • A blood test to more accurately predict premature births: A simple blood test can help determine if a pregnant woman is at risk for giving birth prematurely, defined as less than 37 weeks gestation. Small amounts of “cell-free” DNA and RNA—released by dying cells—float around in our blood. In pregnant women, this material contains nucleic acids from the fetus, placenta, and mother. This free-floating DNA and RNA can yield valuable information, which previously could only be attained through an invasive procedure such as a biopsy or an amniocentesis. In the last few years, scientists have started developing blood tests for cancer as well as for prenatal screening of conditions such as Down syndrome using this material. A team of bioengineers in California have been able to sequence the free-floating RNA in the mother’s blood and examine the expression of seven genes that are associated with preterm birth. With this information, the medical team can take precautions that can give the child a better chance of survival.
  • A tiny, swallowable device that probes the gut and can detect and diagnose disease: Environmental enteric dysfunction (EED) is marked by inflamed intestines that are leaky and absorb nutrients poorly. EED is widespread in the developing world and is a major cause of malnourishment and developmental delays. Therapies are available, but diagnosing and studying illnesses in the guts of infants and young children can be difficult. It often requires anesthesiology and endoscopy, which are expensive and invasive. A pathologist and engineer in Boston is developing small devices that can be used to inspect the gut for signs of EED and even obtain tissue biopsies. The swallowable capsules contain tiny microscopes. They’re attached to a flexible string-like tether that provides power and light while sending images to a monitor. The capsules can also carry technologies that image the entire surface of the digestive tract at the resolution of a single cell or capture three-dimensional cross-sections a few millimeters deep. The technology can also be used to detect early signs of esophageal cancer.
  • Personalized cancer vaccines: Scientists are getting closer to a personalized cancer vaccine that would trigger a person’s immune system to identify a tumor by its unique mutations. By using the body’s natural defenses to selectively destroy only tumor cells, the vaccine (unlike conventional chemotherapies) could limit damage to healthy cells. German startup BioNTech is collaborating with a large biopharmaceutical company to test a vaccine in cancer patients. The ongoing trial is targeting at least 10 solid cancers and aims to enroll upwards of 560 patients at sites around the world.
  • ECG wrist wearable: Researchers have made significant improvements to wearable devices that track biometric data, including developing devices that continuously monitor heart health. While fitness trackers are not medical devices, they can be helpful for promoting fitness. But an electrocardiogram—the kind doctors use to diagnose abnormalities before they cause a stroke or heart attack—typically requires a visit to a clinic or doctor’s office. ECG-enabled smart watches, made possible by new regulations and innovations in technology, could provide the convenience of a wearable device with more precision than a fitness tracker. A few devices on the market can detect atrial fibrillation, which can lead to blood clots and stroke. A few companies have announced plans to market ECG-equipped watches.

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