Capitol Correspondence - 01.28.19

Changes in Federal Rules Help MCOs Finance Non-Health Components

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ANCOR is sharing the article below by Health Leaders because it reflects on a broader changer policy direction the Centers for Medicare and Medicaid Services (CMS) have been taking, which could help inform provider advocacy in the future. CMS has been experimenting with the paramaters of its funding, so that it can include non-health components such as housing. ANCOR has been monitoring CMS’ movements in that area and will continue to keep members informed of developments of interest.

As shared by Health Leaders:

“Federal and state rules have enabled spending on nonmedical services that have health benefits such as food security.


Countries that spend more on social services achieve better health outcomes.

Managed care organizations are receiving financial support to address social determinants of health.

Healthcare organizations can expand the reach of their social services efforts with community partners.









Managed care organizations (MCOs) are on the leading edge of efforts to strike a better balance between health and social service expenditures, a recent article in JAMA says.

Evidence is mounting that countries with higher social services spending such as disability, unemployment, and housing have better population health outcomes. Among Organization for Economic Co-Operation and Development (OECD) countries, higher social services spending is associated with higher life expectancy, lower infant mortality, lower prevalence of chronic diseases, and lower all-cause mortality.

MCOs are taking a leading role in addressing social determinants of health, the JAMA article authors wrote.

“By expanding the scope of service delivery as part of managing population health risk, managed care companies can invest in services and supports that meet their members’ health-related needs, benefit from reduced spending on medical care, and leverage business principles to justify resource reallocation,” they wrote.

The Centers for Medicare & Medicaid Services (CMS) have enabled MCO expenditures for social services.

In 2016, CMS amended the Medicaid managed care rule to prompt Medicaid MCOs to help patients with nonmedical expenses that were considered crucial to achieving health outcomes and cutting costs.

Under the CMS Accountable Health Communities Initiative, many Medicaid MCOs assess patients’ unmet social needs, including housing instability, food insecurity, utility needs, interpersonal violence, and transportation requirements.

An increasing number of states are requiring Medicaid MCOs to address social determinants of health as part of contractual agreements. In New York, The Empire State’s Value Based Payment Roadmap requires MCOs to offer startup funds for partners in Value Based Payment agreements who are conducting social determinant of health interventions.”