This report is one section of State Strategies to Leverage Medicaid Managed Care Contracting for Investments in Health and Housing Alignment. See the full resource guide.
For more information on financing housing-related services, please visit our Medicaid and Housing toolkit.
In addition to encouraging investments in community infrastructure to strengthen health and housing systems, state Medicaid agencies are uniquely positioned to leverage their contractual relationship with MCOs to improve coordination of health and housing resources for their individual enrollees. Many states leverage their Medicaid managed care contracts to ensure that MCOs screen their enrollees for housing instability and document housing needs, refer individuals and coordinate care with community resources, and reimburse for the provision of housing-related supportive services. States may choose to update contracts to include efforts to identify and address SDOH more broadly, embed these efforts into care coordination/care management requirements, or coordinate with an existing state program to address individual enrollees’ housing needs. States may also encourage MCOs to voluntarily cover a range of services through value-added and in-lieu-of services provisions.
Leverage SDOH Screening and Referral Requirements
In recent years, some states have moved to leverage their MCO contracts to screen and refer for SDOH broadly. These states require MCOs to establish policies to identify and address health-related social needs, screen enrollees for specific social risk factors, and refer enrollees or otherwise partner with state or community initiatives to address social needs, including housing. States require these elements to different degrees — for instance, within SDOH screening requirements. The most prescriptive contract provisions require MCOs to use a specific screening tool or closed-loop referral system (North Carolina requires use of NCCARE360), use specific SDOH questions in the MCO’s screening tool (e.g., Hawaii, Iowa, and North Carolina), or use a tool that has been approved by the state (e.g., Arizona).
Washington, DC requires MCOs to assess each enrollee to identify social factors; establish policies to identify and comprehensively address SDOH; and screen and address SDOH through community referrals, peer navigation support, or other strategies. Contracts also require MCOs to use DC information systems and tools to screen for SDOH and participate in DC initiatives that promote opportunities to collaboratively or independently address SDOH (p. 223 of Amerigroup Contract).
Leverage Care Coordination Requirements
Similarly, some states are incorporating requirements to screen individuals for housing instability and refer those with unmet needs to community agencies that deliver housing services into care coordination or care management provisions of their MCO contracts. For example, Nevada leverages three requirements to strengthen care coordination for individuals experiencing housing instability:
- “Members in Supportive Housing” and “Homeless/Transient Status” are listed as priority conditions for case management, which ensures that all MCOs must provide case management to enrollees fitting these description (p. 159, 2022 Molina Managed Care Contract).
- MCOs are responsible for designating a specific clinician or case manager to ensure continuity of services for enrollees with special needs, which includes “homeless members” (p. 132, 2022 Molina Managed Care Contract).
- As part of the state’s population health care management contract provisions, Nevada requires MCOs to submit a Population Health Annual Strategy to the state Medicaid agency. The strategy must include a description of the MCO’s screening process for SDOH, the process to address identified SDOH needs, and how enrollee SDOH needs, as well as cultural, ethnic, and racial factors, are incorporated into risk stratification algorithms (p. 136, 2022 Molina Managed Care Contract).
Coordinate with an Existing State Housing Program
Louisiana
Louisiana’s Medicaid agency instructs MCOs to augment the state’s centralized Permanent Supportive Housing (PSH) Program. The PSH program is jointly administered by the Louisiana Department of Health (LDH) and Louisiana’s state-level housing authority, which is located within the state’s housing finance corporation. Louisiana requires MCOs to work with the PSH program by identifying and providing outreach to eligible individuals/households with disabilities, assisting MCO enrollees with applying to the program, and working with the state’s PSH program staff to ensure an adequate and qualified network of PSH program providers. The state’s contracts require MCOs to contract with providers that meet a specific set of PSH program requirements and that are approved by the LDH PSH program director (p. 210 of MCO Manual). Additionally, MCOs must employ a housing specialist responsible for connecting individuals to appropriate housing resources, including referring people to the MCO’s PSH liaison for application to the Louisiana PSH program (p. 20 of MCO Manual).
Washington
The Washington Health Care Authority (HCA) requires MCOs to coordinate with its Foundational Community Supports (FCS) program for supportive housing or supportive employment. The HCA contracts with Amerigroup to be the sole third party administrator for FCS. In this arrangement, Amerigroup authorizes individuals for FCS supportive housing or supportive employment services, selects and contracts with providers, and reimburses providers for services. HCA’s contracts with MCOs require MCOs to coordinate with and refer enrollees to Amerigroup, as the contracted third party administrator, for supportive housing and supported employment (p. 282 of Integrated Managed Care Contract).
Cover a Broader Range of Services
Outside of or in addition to using waivers or state plan amendments, state Medicaid agencies have two other avenues to cover housing-related supportive services specific to managed care. MCOs may voluntarily cover “value-added services,” which are services outside the Medicaid benefits package that improve health outcomes and/or reduce costs by reducing the need for more expensive care. These services are provided at the discretion of MCOs and are not included in capitation rates, but they can be included in the numerator of the medical loss ratio if it is part of a quality initiative. In-lieu-of services (ILOS) are another avenue for MCOs to voluntarily cover additional services that are cost-effective substitutes to services covered under the state plan. In a recent letter to state Medicaid directors, the Centers for Medicare & Medicaid Services highlighted the potential for ILOS to address unmet health-related social needs (HRSNs) and established a policy framework for ILOS. Several states are already leveraging value-added services and ILOS through their MCO contracts. For instance:
- In Washington, DC, the contracts define value-added services and state that MCOs must submit all proposed value-added benefits for review and approval prior to implementation in a format as determined by the Medicaid agency. Further, the contract specifies that an MCO that operates a community facility must at minimum provide support and resources to enrollees identified as homeless or facing housing instability (p. 64 of Amerigroup contract).
- Through the state’s administrative rules and 1115 waiver, Oregon permits each CCO to count spending from its global budget toward health-related services (HRS), which are non-covered services intended to improve care delivery and overall enrollee and community health and well-being. For example, an MCO may use this authority to “implement, promote and increase wellness and health activities,” including paying for a coaching program designed to educate individuals on methods for managing a chronic disease. Oregon implemented financial incentives for CCOs to provide HRS and requires CCOs to ensure a role for the community advisory councils and Tribal Nations in how HRS spending decisions are made. According to the Oregon Health Authority, HRS “are offered as a supplement to covered benefits under Oregon’s Medicaid State Plan [while] ILOS are determined to be a medically appropriate and cost-effective substitute for a covered benefit under Oregon’s Medicaid State Plan.” Oregon’s contracts additionally list nine ILOS that CCOs may choose, but are not required, to offer to beneficiaries (for instance, community transition services, enhanced case management, and post-hospitalization recuperative care). CCOs must indicate in their Member Handbook which ILOS they offer to CCO enrollees and may add or remove ILOS annually. CCOs can submit an Administrative Notice to the Oregon Health Authority to offer an ILOS not listed in the contract (p. 83 of 2024 CCO Contract Template). Outside of CCO contracts, Oregon Health Authority published a document comparing CCO spending initiatives, which outlines requirements and spending examples for HRS, ILOS, and the SHARE Initiative.
- Under the CalAIM initiative, California MCOs can cover a menu of 14 ILOS services, or “Community Supports” services on a voluntary basis, including the following related to housing:
- Housing transition navigation services
- Housing deposits
- Housing tenancy and sustaining services
- Day habilitation
- Recuperative care
- Short-term post-hospitalization housing
In addition, recuperative care and short-term post-hospitalization housing services are provided through California’s 1115 waiver while the other 12 Community Supports are provided under ILOS authority through the state’s 1915(b) waiver and incorporated into MCO contracts (p. 226 Exhibit A, Attachment 22, Provisions 20-21 of Medi-Cal Managed Care Contract).
Acknowledgements
The authors would like to thank Robin Wagner, Elaine Chhean, and all the state officials who reviewed this brief for their thoughtful feedback. This resource is supported by the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS) under the National Organizations of State and Local Officials as part of a three-year award totaling $2,632,044 with 0% financed with non-governmental sources. The information, content, and conclusions are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by HRSA, HHS, or the U.S. Government. For more information, please visit HRSA.gov.
