Using Federal Funds to Address Social Determinants of Health
American Rescue Plan Funds & Medicaid helping address SDoH
THE VBP Blog
Increasingly, social determinants of health (SDoH) are being incorporated into health plans through technological advancements. As the chart below shows, the incorporation of SDoH into health strategies has vastly increased since 2019. This number is expected to continue climbing as even more emphasis is placed on nonmedical needs.
While technology addresses one of the challenges associated with incorporating SDoH into care plans by providing enhanced care coordination and improved referral tracking, funding is still an issue. States are getting creative with the use of federal funds.
In our prior blog, we looked at how technology is enabling easier care coordination and incorporation of SDoH into care plans. In this blog, we will take a deeper look at how federal funds are being utilized to address one of the other main challenges.
American Rescue Plan Funds Tied to Social Determinants of Health
The American Rescue Plan (ARP) was signed into law on March 11, 2021, and provided over $350 billion to states, counties, cities, tribal and local governments. One of the five categories of eligible activities was supporting public health expenditures. Many states are allocating these funds to address health disparities and social determinants of health.
One such state is New York. In their Spending Plan for Implementation of American
Rescue Plan Act of 2021, social determinants of health are mentioned throughout. $3 million of ARP funds are going to be invested in Personalized Recovery Oriented Services (PROS). This program integrates rehabilitation, treatment, and support services for people with serious mental illness, and many facilities have been closing due to financial and operational issues. By funding PROs, New York can continue to address social determinants of health through rehab services.
New York is also investing $8 million of ARP funds into Extend Short-Term Support for Behavioral Health Care Collaboratives. Behavioral Health independent practice associations (BH IPAs) screen and respond to identified SDoH needs, and these funds will help them address funding gaps.
In addition, the American Rescue Plan also increased the federal matching rate (FMAP) for Medicaid home and community-based services (HCBS). According to the Kaiser Family Foundation (KFF), this increased federal spending on social determinants of health. States that participate must use the funds to expand HCBS services beyond what they currently offer.
HCBS programs are part of the Centers for Medicare & Medicaid Services (CMS) social determinants of health roadmap, so this is a step in the right direction.
North Carolina Addressing SDoH With Medicaid
Although not related to the American Rescue Plan, North Carolina is also tackling SDoH with federal funds, through Medicaid. Using a Section 1115 Waiver, the state recently launched the Healthy Opportunities Pilots program. This innovative approach integrates a standardized screening process, referral system, care coordination, and enhanced programming all within the Medicaid program.
The program addresses unmet nonmedical needs, including food, housing, and transportation. Over five years, North Carolina will receive $650 million in federal Medicaid funds to support the initiative. This is another positive sign, seeing federal funds used to address SDoH in care plans and connect individuals with the social services that they need.
To qualify for the Healthy Opportunities Pilot program, participants must demonstrate at least one health risk factor and one social risk factor. Health risk factors include adults with two or more chronic conditions, adults with repeated emergency department use or hospital admissions, high-risk pregnant woman, and infant of children at high risk with at least one chronic condition. Social risk factors include homelessness and housing insecurity, food insecurity, transportation insecurity, or the risk of witnessing or experiencing interpersonal violence.
The state underwent important transitions to prepare for the program. This includes transitioning Medicaid from fee-for-service (FFD) to managed care. This allows the state to more efficiently pay for nonmedical services. A statewide bidirectional referral platform, NCARE360, was also created to connect community-based organizations (CBOs), social service agencies, and health care providers.
With these changes, North Carolina should be well-equipped to handle the transition. It will be a big shift, but the first step is creating a platform to coordinate services and incorporate SDoH into care plans.
It is promising to see an increased emphasis being placed on social determinants of health. With the importance of social determinants of health, public health strategies for the future must address health disparities and SDoH. With ARP and other federal funds, public health departments in states across the country are able to focus on health equity like never before. That is an encouraging sign but we need to continue to ensure that social determinants of health are accounted for in value-based payment programs and that they can be seamlessly integrated into care plans with strong referral and care coordination services.
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About the Author
Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).
His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.
About the Co-Author
Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.