FutureFocus September 26, 2018: Five Trends Focused On Social Determinants

Lisa Remington

In this week’s FutureFocus, we discuss new developments focused on social determinants. Emerging trends and policy are integrating social determinants into readmission policies, Medicare Advantage Plans, expanded government oversight, payor plan benefits, and Medicaid Managed care. This is a market signal that social determinants are coming to the forefront of care. Stakeholders will be teaming-up with PAC providers, community-based organizations and using big data to identify patients at higher risk.

Lisa Remington, President, Remington Health Strategy Group

By: Lisa Remington, President Remington Health Strategy Group, Publisher, The Remington Report

New developments are increasing the focus on social determinants. Payors, providers and government entities are realizing the financial imperatives of social determinants of health (SDOH). Controlling the cost of care cannot be done without addressing social determinants. Nor can addressing social determinants be managed within the walls of hospitals or physician offices. Social determinants are 40 to 50 percent of the cost structure in Medicare and Medicaid.

Emerging trends and policy make social determinants a focal point for both payors and providers. We explore five key trends focused on social determinants.

1. Hospital Readmission Penalties Include Social Determinants

The 21st Century Cures Act required that CMS develop a methodology for the Hospital Readmissions Reduction Program (HRRP) for the dual-eligible. These beneficiaries are eligible for both Medicare and Medicaid. CMS will incorporate the socioeconomic status of dual-eligible patients toward readmission penalties. Dual-eligible tend to have fragmented care experiences, leading to higher use of health services.

CMS finalized a payment adjustment methodology whereby hospital performance is assessed relative to the performance of hospitals within the same peer group. Hospitals are stratified into five peer groups, or quintiles, based on their proportions of dual-eligible stays. CMS will implement the stratified methodology in the 2019 program.

2. HHS Expands Its Oversight To Include Social Determinants

In their 132-page re-org plan for federal agencies and programs, the Office of Management and Budget (OMB) announced that the Health and Human Services (HHS) is renaming itself to the Department of Health and Social Welfare. Under its new oversight, the Department of Health and Social Welfare picks-up a number of social services programs including the Supplemental Nutrition Assistance Program (SNAP). The expansion of the Department of Health and Social Welfare oversight will likely accelerate the integration of social determinants with traditional care delivery in regulatory oversight and reimbursement of hospitals by the federal government.

3. Medicare Advantage (MA) Plans Focus on Social Determinants

In April, CMS issued a final rule giving Medicare Advantage plans additional flexibility in determining supplemental benefits to include items and services to address social determinants of health (SDOH).  

Previously, MA supplemental benefits had to have a primary purpose of preventing, curing, or diminishing an illness. CMS’s new regulation will permit non-traditional MA benefits as long as they “increase health and improve quality of life.” This is a step to move closer to value-based care and aligning Medicare Advantage Plans with commercial payors and states.

Medicare Advantage Plan Beneficiaries

  • Thirty-seven percent of Medicare Advantage beneficiaries have annual incomes of less than $20,000.
  • Medicare Advantage has a higher overall share of racial/ethnic populations compared to traditional Medicare fee-for-service (FFS): 30 percent versus 23 percent.
  • Medicare Advantage has a higher share of individuals with incomes under $30,000: 59 percent versus 50 percent for FFS.

Medicare Advantage and Expanded Benefits for Social Determinants

  • CMS is changing the existing standards for supplemental benefits to include additional services that “increase health and improve quality of life, including coverage of non-skilled in-home supports and other assistive devices.”
  • CMS reinterpretation of the statute expands the scope of the primarily health-related supplemental benefit standard. Under this reinterpretation, CMS would allow supplemental benefits if they are used to diagnose, prevent, or treat an illness or injury, compensate for physical impairments, act to ameliorate the functional/psychological impact of injuries or health conditions, or reduce avoidable emergency and healthcare utilization. 
  • Medicare Advantage plans can offer targeted cost sharing and supplemental benefits for specific enrollee populations based on health status or disease state in a manner that ensures that similarly situated individuals are treated uniformly. This flexibility helps Medicare Advantage plans better manage health care services.

One of the concern for many MA plans is how performance measurements do not adjust for sociodemographic factors and penalize plans that disproportionately serve disadvantaged populations. Patients with social determinants have worse outcomes on some quality measures that impact Medicare Advantage plan ratings.

4. Payors Gearing-up Big Data and Community Relations

More than 80 percent of payors are integrating SDOH into their benefit program according to a Pulse survey earlier this year. Organizations are taking steps to leverage community programs and resources, integrate medical data with financial census and geographical data, and training doctors to identify social indicators.

In August, Humana announced their plans for a digital health and analytics center. Known as Humana Studio H, the focus supports integrated care delivery and ongoing efforts to provide customers with differentiated healthcare experiences. Humana CEO Bruce Broussard said in a statement. "We understand that where lifestyle and health care intersect, there is an opportunity to influence health and well-being in a holistic way — especially for seniors."

Payor strategies will look to investing in partnerships with community-based organizations and using big data to help identify patients at higher risk due to various economic and environmental factors.

Currently, about 21 million American are enrolled in MA plans – or a little more than a third of Medicare beneficiaries.

5. Medicaid Managed Care Organizations (MCOs) Are Increasing Their Focus On Social Determinants

In 2017, 19 states required Medicaid MCOs to screen beneficiaries for social needs and/or provide enrollees with referrals to social services and six states required MCOs to provide care coordination services to enrollees moving out of incarceration, with additional states planning to implement such requirements in 2018.

CMS regulations in May 2016 modernized Medicaid managed care’s operations, accountability, and oversight. One aspect of the modernization included promoting practices to address the social and structural factors of poverty, access to stable housing, social support networks, exposure to environmental toxins or community violence, and systematic discrimination.

Medicaid managed care organizations are focused on social determinants through:

  • Alternative payment models to incentivize investments in routine screening for health influencers such as domestic abuse, poor living conditions, and food security.
  • Home-based community service programs.
  • Care coordination.
  • Coverage for non-traditional ancillary services such as nutrition classes and peer-support services for individuals with substance abuse disorders.

What’s Ahead for Social Determinants

The road ahead is focused on how social determinants and new payment models can change to reduce the cost of care, provide better patient care management, and deliver better outcomes. Bernard J. Tyson, CEO of Kaiser Permanente, “estimates that roughly 40 percent of health is determined by individual behaviors, 30 percent by genetics and 20 percent by “place” — where one lives. Just 10 percent of health is impacted by what we think of as “health care.”