Addressing Social Needs through Medicaid: Lessons from Planning and Early Implementation of North Carolina’s Healthy Opportunities Pilots

Copublished with the Duke-Margolis Center for Health Policy

Executive Summary

States, payers, and health systems across the United States are developing cross-sectoral solutions to address health-related social needs. However, most evidence on the effectiveness of these interventions to date is from time-limited interventions focused on specific subpopulations or services and often in urban areas only. In 2019, as part of North Carolina’s Section 1115 Medicaid Demonstration, the Centers for Medicare & Medicaid Services (CMS) authorized up to $650 million in Medicaid funding to implement the Healthy Opportunities Pilots (“Pilots”). The Pilots, launched in 2021, is a cross-sectoral program providing 29 evidence-based services to address social needs related to housing, food, transportation, interpersonal violence, and toxic stress through networks of community-based organizations (CBOs) to eligible Medicaid enrollees in three regions of the state. The Pilots will test the impact of these interventions at scale in Medicaid for the first time, including through major new payment and delivery designs. An ongoing evaluation sponsored by CMS will examine the effect of the Pilots on health outcomes, health care utilization, and health care costs.

To complement this evaluation, the authors conducted a multi-method qualitative study to generate timely and practical findings and recommendations from the planning, capacity-building, and early implementation of the program. Our findings can be useful not only to the Pilots’ policymakers, implementors, and providers, but also to stakeholders interested or involved in similar or smaller-scale initiatives in other states.

We identified six implementation and policy themes with recommendations for cross-sectoral programs to address social needs:

1. Create a structure that accommodates and balances building local capacity with scaling service delivery. Building the capacity of CBOs and scaling service delivery are two high-level goals that can be complementary. But depending on the design and pricing of services, achieving one of these goals may come with tradeoffs that affect the other. Cross-sectoral programs must also balance tradeoffs between centralization and decentralization of program oversight and CBO network management. We therefore recommend that programs consider oversight structures that focus on building regional capacity with local CBOs to avoid overemphasizing large vendors — but pair that approach with a phased program design that includes upfront and ongoing infrastructure funding. We also recommend stakeholder engagement activities and rapid cycle evaluations to regularly assess and adapt program design features as needed to make sure administrative and service provision fees reflect true costs.
2. Consider leveraging Medicaid demonstrations as part of a broader funding strategy to maximize flexibility and sustainability. Medicaid demonstrations, particularly Section 1115 demonstration waivers, provide a significant opportunity to address health-related social needs, but also have specific requirements, limitations, and policy implications. Using an 1115 waiver to expand or modify versions of services that could have been offered, even in a more limited form, within pre-existing authorities (for example, through state plans or Section 1915 waivers) can ease challenges associated with budget neutrality requirements, for example. Moreover, blending and braiding funding from Medicaid and non-Medicaid sources maximizes flexibility and sustainability. We recommend that states consider statewide coordination of a multi-pronged funding strategy to align initiatives to address social needs.
3. Engage diverse community stakeholders during design and implementation to maximize existing community infrastructure. Stakeholder engagement in program design, implementation, and oversight is critical to success, and leveraging existing community infrastructure (e.g., stakeholder networks) helps tailor programs to local and cultural contexts. We recommend that states involve key community stakeholders, including through recurring forums where all stakeholders engage with the state in one space, as well as through learning collaboratives and stakeholder-specific forums. Programs must also consider ways to design streamlined outreach and enrollment processes that facilitate community awareness and enrollee access from any point of contact with the health or social system.
4. Build a business case for scaling and sustaining CBO capacity to overcome historic funding challenges. For many CBOs, cross-sectoral programs to address social needs present new models of service delivery, funding, reimbursement, and partnerships. Programs should be designed with multiple participation options and funding and payment pathways to allow CBOs to participate regardless of their size, scope, geography, or organizational capacity. Programs should also be designed to flexibly respond to CBOs’ emergent needs. Policymakers should monitor CBO service delivery stratified by funding source to prevent “crowding out” CBOs’ existing clients.
5. Develop sophisticated training and technical assistance approaches to build cross-sectoral knowledge across all program entities. Health policy programs that include many different sectors require a more sophisticated training and technical assistance approach to meet the needs of the various stakeholders and service sectors. These opportunities should be offered in real time and on demand to address emergent issues while accommodating varying schedules.
6. Ensure data and technology are flexible to support key cross-sectoral program functions and in compliance with multiple sectors’ laws and regulations. Cross-sectoral data platforms can be designed to support key program functions, including closed-loop referrals and billing, but it is important to continue to respond to opportunities to refine these new systems. Cross-sectoral laws, regulations, and interoperability standards also impact the sharing of program data across stakeholders. Establishing cross-sectoral interoperability standards could support the development of necessary technical infrastructure and effective use of referral systems.

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