Community-Based Nonprofit Boards Of Directors: What You Need To Know About Medicaid SDOH Initiatives

Last month, I wrote about state efforts to address health-related resource needs (aka social determinants of health) through Medicaid programs and how genuinely excited I am that this is finally happening.

I also noted that the stakeholders involved don’t really understand the unique role that each party plays and the respective needs and requirements of the others. This is an important gap, as the success of these initiatives absolutely depends upon the ability of stakeholders to effectively collaborate and adapt to each other’s processes to create something new and better.

This month, I want to speak about community-based nonprofits.

Opportunities Wrapped In Challenges For CBOs

Medicaid transformation across the country brings tremendous opportunities for nonprofit community-based organizations (CBOs). This includes the opportunity to contract with health providers and health payors to provide services that a CBO already provides or to expand services to other evidence-based services that the CBO’s constituents need. This creates not only another funding source (always needed) but also a diversification of the CBO's funding streams (which is also important).

Over the last few years, I’ve been on the Board of multiple CBOs. These organizations are deeply committed to their communities; they do all they can to respond to the needs of the community and strive valiantly to achieve their mission. They often accomplish this on shoe-string budgets, and by relying upon the donated time and efforts of community members.

Funding for CBOs can be volatile and competitive. They continuously seek funding needed to provide the services and support to their constituents. Grant applications, fundraisers, donor engagement. It’s a vicious cycle of chasing needed funding that is there one minute and gone the next.

So, to those on the outside, principally health care entities who see CBOs as the answers to so many of their problems, a steady stream of funding strikes them as a no-brainer. Of course, CBOs will want this funding.

This position, though, has some false assumptions that need to be changed.

1. CBOs know what health care entities in the state are up to. While some organizations may be aware of Medicaid efforts to address SDOH, most are not. I speak from direct experience both as a Board member and as a consultant working with CBOs. Health providers and payors, particularly state Medicaid agencies, have been at the table and drawing board for a while thinking through the “what ifs” and “hows” of CBOs integrating into health delivery; it is easy to overlook the fact that, more often than not the CBOs are not, or have not been, at the table. For the most part, they are absorbed in resolving their own strategic goals and existential threats (like keeping the lights on and continuing to meet the needs of their constituents). All this is to say that, when designing and planning for care delivery innovations that integrate new players, do not underestimate the amount of time and investment required to build and reinforce the envisioned coalition.
2. CBOs do or will have the capability and capacity to jump in feet first and get started on the implementation of these programs. Most do not. Most CBOs run on volunteer efforts and have little to no capacity for more. Further, most do not have experience providing services in a highly regulated health care environment. And, let’s be honest, navigating the health care environment, whether as a vendor, partner, or patient, is complex. Contracting as a vendor or subcontractor in the health care space carries exacting technological requirements and compliance processes that many CBOs, particularly smaller, local CBOs, do not have and otherwise do not need to have. In short, once CBOs are recruited to join the care circle, there remains the task of onboarding them and planning for their development over time (so that they can meet these important requirements). This is where the rubber hits the road, and it requires time, real-time issue identification, and the ability to problem solve collectively, an underscored point in a North Carolina Health News article evaluating some of the challenges facing the integration of housing support services and domestic violence shelters in the Healthy Opportunities Pilot.

So, that is what the health care community needs to know about CBOs and nonprofits as payers and providers move forward in implementing these critical innovations. What about the CBOs themselves, and more specifically, their governing boards, who are responsible for the strategic direction and financial integrity of their respective organizations?

What Board Members Need To Know

Medicaid is the federal-state health insurance program for people with low income. Almost 85 million people are covered by Medicaid, making it among the largest source of health insurance coverage in the country. Individuals enrolled in Medicaid often have low incomes, along with medical complexity. Additionally, because of limited resources, Medicaid enrollees also often contend with social factors such as lack of housing, food insecurity, limited access to transportation, and interpersonal violence. It has been well-documented for decades that this social complexity exacerbates existing health conditions or is the driver of health conditions, including chronic medical conditions such as diabetes, heart disease, depression, and anxiety. These drivers of poor health have previously not been addressable by health programs, because the interventions were not viewed as health care.

There is now an evidence base, though, that certain interventions do have a meaningful positive impact on health and by extension impact health care spending. By addressing housing needs, for example, health improves, and health care expenditures decrease. As a result, state Medicaid agencies and the Centers for Medicare and Medicaid Services (CMS) (the federal agency responsible for Medicaid), have seemingly found a path forward to test these interventions as health care interventions and determine if by allowing Medicaid to pay for evidence-based social interventions will the Medicaid program see improvement in health outcomes while also seeing a reduction in program spending.

Not all CBOs are eligible to participate in these initiatives. States are focusing on certain types of needs and interventions. In North Carolina, the Healthy Opportunities Pilot focuses on four areas of need: housing, food insecurity, transportation, and interpersonal violence. This Pilot has been in effect since 2021. Massachusetts has just had its program approved by CMS and is beginning to implement it, focusing on housing and nutrition. Washington State is awaiting the approval of its program, which focuses on housing, nutrition, and transportation. I’m sure you’re starting to notice a trend: housing, food/nutrition, and transportation. Kudos to NC for being so bold as to address interpersonal violence and toxic stress!

The thing to understand is that states may only pay for evidence-based interventions. So, that narrows the interventions that may be used. North Carolina is the furthest along in its model, including having a reimbursement methodology for identified evidence-based interventions. I recommend that Board members review this and begin to understand what may be paid for and whether it falls within their organization's set of services. While this is specific to NC, it still provides a good proxy for what your state may do.

Addressing Opportunities & Challenges Head-On

First and foremost, I encourage CBOs, and specifically Board Members, to investigate these opportunities and to educate themselves on both Medicaid operations and administration and their state's strategic vision for Medicaid transformation. While I stressed that payers and providers need to step up their recruitment of and engagement with CBOs, it is important to recognize that this can be something done to you or done by you. You have an opportunity to advocate for yourselves, and to identify early and often the pain points that must be addressed to make these initiatives successful. The sooner you can get your message out and engage with the state Medicaid agency and other stakeholders, the better.

Boards of Directors of nonprofit community-based organizations, I’m talking to you this month. This is a tremendous opportunity for your organization to take a big step forward in its mission. To do so, Boards and the leadership team must not only be aware of what the state Medicaid agency intends to do, but what it means for the financial sustainability, strategic direction, operational capacity, and legal and compliance capabilities of the organization.

Specifically, this means:

• Participate in the activities state Medicaid agencies are hosting to plan and implement these programs
• Understand what the initiative could mean for the organization and the communities the organization serves
• Prepare for the opportunity before it begins
• Actively engage in contract negotiations
• Provide ongoing oversight

Of course, I recognize that this is a lot easier said than done, particularly when there are so many competing priorities that Boards must contend with. To help get Boards started, here are a series of key questions that should be asked internally as you evaluate the opportunity available in your state.

What Board Members Need To Address

As Boards learn about and evaluate these opportunities, there are some questions that need to be asked and answered:

Strategic

• How does this opportunity align with and further our organizational vision and mission?
• Does this opportunity align with the organization’s existing strategic plan?
• What is the likely benefit to the organization if we pursue this opportunity?
• What is the potential danger or cost to the organization if we do not pursue this opportunity? How likely and how severe is that danger?

Operational

• Does the organization have the capacity to provide services to more clients? How many more?
• Does the organization have the capacity to adapt how services are provided to clients to conform with payer requirements?
• Does the organization have the technology and the personnel to receive and respond to – in real-time – electronic referrals and then provide status updates using the required technology?
• Does the organization have the capacity and skills to review and negotiate a contract with a Medicaid managed care organization (MCO) or other contracting entity?
• Does the organization have the knowledge, experience, capability, and capacity to comply with state and federal health care privacy and security laws, such as HIPAA?

Compliance

• What new regulations or contractual requirements are created by this new opportunity?
• Does the organization have the capacity and capability to undergo an external risk assessment to determine if the necessary safeguards are in place to meet compliance requirements?
• What mechanisms does the organization have now to monitor compliance? Is this sufficient given an expanded risk profile? What new investments or resources are needed?

I genuinely cannot understate the importance of these initiatives to the health and wellbeing of the communities we live in. CBOs have an incredible opportunity to support their communities by providing desperately needed interventions to more members of their community. But nothing about this will be easy, and it will require learning, changing, and making financial investments. CBOs have to understand this and be ready to adapt. That cannot be done without the direct involvement and leadership of the Boards of Directors.