State Strategies for Engaging Community Health Workers Amid Federal Policy Shifts

See a related toolkit on Medicaid Reimbursement for Community Health Worker Services: Model State Plan Amendment & Other Guidance.

Health insurance coverage for 1 in 5 Americans is at risk as states respond to changes included in HR1/OBBB. These changes follow significant cuts to federal public health funding. Because state Medicaid agencies will have to do more with less, they will need to focus on policies and cost-effective programs with demonstrated results — and may want to consider investing in community health worker (CHW) programs. 

CHW programs have been proven to improve population health outcomes while also delivering a return on investment (ROI). Community health workers, promotoras, and community health representatives (referred to under the umbrella term “CHW” in this article) are individuals who share life experiences with the people they serve and inspire trust. In best-practice models, CHWs connect with people where they are, build relationships, and provide social support, health coaching, health system navigation, and advocacy to help improve clients’ lives and health. 

Recognizing the potential of this workforce, over half of states have moved to include CHW services in their Medicaid programs.

CHW Programs Can Help States Address Persistent Challenges

Regardless of a state’s political environment or policy goals, CHWs can help address longstanding challenges in Medicaid that are exacerbated by the recent changes in federal policy. A growing body of research shows that CHW programs can help Medicaid agencies:

• Control spending. CHWs can help Medicaid enrollees connect with cost-effective, preventive care, reduce unnecessary hospitalizations, and address health-related social needs, which have an outsized impact on health care spending. A study of a well-established CHW program found it delivered a return of $2.47 for every Medicaid dollar invested. This adds to a growing body of research showing that CHW programs can reduce costs and deliver a ROI.
• Improve health access, outcomes, and quality. CHWs can increase engagement with primary care and the healthcare system, especially in rural areas where there are workforce shortages. Studies show that patients who worked with CHWs in high-quality programs had positive outcomes, including statistically significant improvements in chronic disease control and self-reported mental health.
• Support continuous enrollment and work requirement reporting. CHWs can help clients who are employed navigate new reporting requirements or help individuals who are not working find jobs. They can also help clients already enrolled in Medicaid navigate the more frequent eligibility redetermination process.

Options for Integrating CHWs into Care Delivery

About half of states cover CHW services for at least some Medicaid beneficiaries, most commonly through a state plan amendment (SPA), Medicaid managed care contracts, or a Section 1115 Demonstration Waiver. Although the current fiscal environment may make it difficult for some states to incorporate new benefits into their programs, states can still support access to CHW services through innovative approaches.

• Require Medicaid plans to make CHW services available. States can include language in Medicaid managed care organization (MCO) contracts that requires plans to integrate CHWs into care teams, provide access to certain CHW services, and include CHW employers (e.g., community-based organizations [CBOs]) in their provider networks. For example, in Nevada, MCOs can enable CHWs to serve as case managers for lower-risk members.
• Use Rural Health Transformation Funds to expand access to CHWs. HR1’s Rural Health Transformation Program allocates $50 billion over five years for states to improve access and outcomes for rural residents. Funds may be used for evidence-based interventions, innovative care models (e.g., value-based care), and strategies to expand the workforce, among other activities. Given the impact of CHWs in rural communities, state proposals to the Center for Medicare and Medicaid Services (CMS) have an opportunity to scale the CHW workforce and improve health outcomes.
• Integrate CHWs into value-based care. States can include CHWs in value-based models to improve outcomes and reduce costs. For example, the Center for Medicare and Medicaid Innovation’s Transforming Maternal Health Model, which was designed to improve access, outcomes, and control costs for mothers and their newborns, encourages State Medicaid programs to integrate CHWs to improve access to care and whole-person care delivery. Also, states with patient-centered medical home or accountable care organization models can incentivize participating providers to develop or partner with evidence-based CHW programs to improve care engagement and reduce unnecessary hospital use. 
• Fund CHW programs via Medicaid waivers. States can test innovative policies under Section 1115 waivers, including expanding access to CHW services. Tennessee, for example, has used shared savings achieved under its waiver to fund goods or services not otherwise covered by its Medicaid programs (e.g., diapers) — an approach a state could consider to support access to CHW services. 
• Establish a State Plan Amendment for CHW services. About 20 states have implemented SPAs for CHW services. Some, like Georgia, have used SPAs to establish CHW benefits for specific populations (e.g., certain individuals with mental illness and substance use disorders). Other states, like Washington, offer CHW coverage to a broader population, including individuals with an unmet health-related social need and individuals with high-risk conditions.

Maximizing the Impact of CHWs 

Policy design is vital to the success of CHW programs. Here are critical elements for states to consider:

• Collaborate with CHW associations and allies. State CHW associations and allies must be engaged in policy development to foster shared goals and ensure policies support the workforce and deliver intended outcomes.
• Build on what works. When setting up coverage and payment for CHW services, states must consider what populations will be eligible, what services will be covered, how and where services will be delivered (e.g., in the community or virtually), any limits on how often services can be used, and more. The Medicaid Reimbursement for Community Health Worker Services: Model State Plan Amendment & Other Guidance Toolkit helps address these questions with proven options for states to consider based on their priorities (e.g., containing costs, access).
• Ensure quality through proven CHW infrastructure and program standards. For CHW programs to deliver improved outcomes and ROI, they need the right infrastructure — evidence-based program design, training, and workflows — to support patient-centered care. States can help CHW programs build capacity and infrastructure through grants or leveraging federal funding (e.g., TennCare CHW Infrastructure Grants, Rural Health Transformation Funds). Program guardrails — like CHW program accreditation — also help ensure program quality and sustain the CHW workforce. Tennessee’s CHW Program Accreditation Standards, for example, include best practices for recruitment, hiring, training, professional development, and supervision. States can also require CHW programs to be accredited in order to bill Medicaid.
• Help CHW service providers successfully bill. CHW billing code uptake has been slow in many states. Ensuring entities providing CHW services are paid or able to bill for these services is essential for program sustainability and access to services. To improve this, states can allow CBOs — a main employer of CHWs — to bill Medicaid directly. Aligning Medicaid and Medicare CHW codes can also encourage billing system adoption, as recently done in California and Washington.

A Powerful Workforce

Grounded in evidence, CHW programs can improve health outcomes, reduce costs, and ensure access to care, making them a powerful workforce for addressing state spending and population health challenges. With a range of options for integrating CHWs into Medicaid programs, states can tailor approaches to fit their specific needs while maximizing impact through thoughtful policy design. In an era of uncertainty, investing in CHWs is a smart move.