BDT Broadcast

January 22, 2018 | By: Matthew Maughan, Policy Manager

How 1115 Waivers Can Address Social Determinants of Health for Medicaid Beneficiaries

Over the past five years, the Social Determinants of Health (SDOH) have become a predominant point of discussion between healthcare entities, hospitals and government agencies. While the field may agree that addressing SDOH is important, such a large swath of needs can seem daunting to undertake. A strong tactic for state agencies to employ are Medicaid waivers, known as Section 1115 waivers.

Late last year, the Centers for Medicare & Medicaid Services (CMS) released an informational bulletin designed to facilitate expedited approvals of Section 1115 waivers (“waivers” or “demonstrations”). 1115 waivers allow states to experiment with their Medicaid program using different coverage approaches not authorized under typical federal program rules. States have broad discretion in designing these waiver demonstration projects; they may receive CMS approval provided they are budget neutral and promote the Medicaid program’s objective of better serving enrollees.  

This broad flexibility of the 1115 waivers has resulted in diverse demonstrations by different states over time. Beginning in the 1990s, demonstrations were used to expand eligibility to populations not traditionally covered under Medicaid. Broadly speaking, 1115 waivers in the 2000s were used to restructure Medicaid financing to make expenditures more predictable, responding to public health emergencies, implementing the ACA and authorizing Medicaid long-term services. With CMS recently announcing that demonstration can be approved for up to 10 years, now is the time to set the next trend of demonstrations.

While recent CMS guidance has promoted the use of 1115 waivers to implement work requirements – requirements repeatedly proven to be detrimental to individuals and families – states can instead use the waivers to improve beneficiaries’ health. This next trend of solutions must focus on what affects the health of Medicaid beneficiaries the most: SDOH. The SDOH such as nutrition, education and social supports account for 40% of an individual’s overall health, yet have not received correspondingly high attention or funding.

That being said, the healthcare landscape is beginning to shift – healthcare payers and state Medicaid agencies are increasingly aware of the necessity to address the SDOH. While still exploring efficient and scalable solutions to address the SDOH, several states have found a promising solution: 1115 waivers. Pennsylvania, New York and Florida have already begun utilizing 1115 waivers to improve enrollees’ nutrition. These 1115 waivers are used to provide Medicaid recipients with nutritional assessments, education and risk reduction techniques.  

Future demonstration efforts can go further to help Medicaid recipients meet their basic needs. For example, 1115 waivers can be used to support initiatives to connect enrollees to nutritional supports such as the Supplemental Nutrition Assistance Program (SNAP) that are proven to reduce food insecurity rates.  

As the link between SDOH and poor overall health becomes more apparent, state Medicaid agencies must utilize the reach, efficiency and effectiveness of Medicaid to reduce food insecurity rates. Addressing food insecurity not only benefits recipients, but agency budgets as well. Recent evidence demonstrates that access to SNAP reduces a dual eligible (on Medicaid and Medicare) senior’s likelihood of admission into a hospital by 14% and reduces the likelihood of entrance into a nursing home by 23%. This ultimately translates to $2,100 in annual healthcare savings per senior enrolled into SNAP.

States looking to realize these savings can capitalize on the new streamlined 1115 waiver approval process to draft a request to proactively connect Medicaid recipients to SNAP. BDT welcomes the opportunity to partner with an interested state agency to produce and implement such a waiver. For more information or to discuss a partnership, please contact Pauline Abernathy, Chief Strategy Officer, at 215-207-9100 or pabernathy@bdtrust.org.

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