New Policy Opens the Door for States to Address Drivers of Health in Medicaid

Prepared for The Commonwealth Fund

Today, it is too common for low-income children with severe asthma to end up in emergency rooms when their condition could have been controlled by mold removal or ventilation improvements at home. Nor is it unusual for someone living in a “food desert” to have uncontrolled diabetes, partly because he or she cannot afford or does not have access to nutritious food. The COVID-19 pandemic has helped highlight the fact that these situations are disproportionately experienced by people of color.

States have increasingly sought to use Medicaid to address social drivers of health—factors like healthy living environments and nutritious food, which are outside of traditional health care but are among the largest contributors to health outcomes. Recently, the Centers for Medicare & Medicaid Services (CMS) approved California’s use of “in lieu of” services (ILOS) to offer a robust menu of health-related services through managed care. ILOS allows health plans to pay for nonmedical services instead of standard Medicaid benefits when it is medically appropriate and cost-effective to do so.

In a new blog post for The Commonwealth Fund, Manatt Health explains how states can use ILOS authority to support Medicaid beneficiaries by integrating health-related supports into the delivery and financing of Medicaid services. The post also discusses the California ILOS model, and how that model can serve as a guide for other states looking to work with CMS in constructing their own menus of health-related services that address beneficiaries’ social drivers of health.

To read the full blog post, click here.

Manatt Health also recently hosted a webinar in partnership with The Commonwealth Fund examining the ILOS framework and learnings from the California model to help other states seeking to implement ILOS programs. Click here to view the webinar free on demand and download a free copy of the presentation.

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