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March 2018

At a Glance: Pathways for Sustainably Funding Community Health Workers in Medicaid

As trusted members of their communities, community health workers (CHWs) have a proven track record of increasing access to preventive services, improving health outcomes, and even reducing costs. And by addressing the social determinants of health, CHWs can play a key role in reducing health disparities.

Learn about our CHW Sustainability Collaborative.

Despite their effectiveness, CHWs often lack sustainable sources of funding, preventing their more widespread integration into the health care system. For CHWs and advocates who want to establish more sustainable funding, Medicaid offers several different pathways.  

If you are interested in securing sustainable funding for CHWs, this chart will provide you with high-level information about several pathways for doing so, and you can use it to compare and contrast the processes, advantages, and challenges of each pathway.

Download the chart

 

What is it?

What scope of services can CHWs provide?

What are this pathway’s advantages?

What are this pathway’s challenges?

What is an example of this pathway?

Preventive Services State Plan Amendment (SPA)

Direct reimbursement for services recommended by a licensed provider

Preventive services that include direct patient care

Offers a targeted starting point for states to begin paying for CHW services

Only reimburses for a narrow set of services provided by CHWs

MO: reimburses certified asthma counselors, can include CHWs (amount of CHW participation still TBD)

Broader Fee-for-Service (FFS) Reimbursement

SPA and/or state legislation authorizing direct reimbursement

Defined in SPA and/or state legislation

Allows for full utilization of CHW services, in keeping with versatility of CHW model

1. Difficulty in defining broader services

2. Fee-for-service limits impact on broader delivery system

MN: patient education & care coordination benefit

1115 Waivers

Typically used for broader Medicaid changes, but could have CHW component

Defined in waiver  

State flexibility to define scope and eligibility for services, unlike FFS SPA

Approval process can take a year or more, especially for a larger proposal

MA: uses CHWs in care coordination for dual eligibles

Medicaid Managed Care Benefit

Contracts with Managed Care Organization (MCO) require coverage of CHW services

Defined in contract—can be network provider or provided directly by MCO

1. In most states managed care is dominant

2. Combines state flexibility with potential broad CHW benefit

Contracting process can be complex

NM: Integrated Primary and Community Support model (I-PaCS)

Shared Savings or Accountable Care Organization (ACO) Contracting with Providers

Model 1: Combined with CHW SPA

Model 2: Required in ACO contract

Model 3: Provider pays CHW out of shared savings

Providers pay for CHWs to help meet cost and quality targets

1. CHWs align with savings and quality incentives

2. Possibility of driving broad health equity gains via ACO

1. Providers may be unprepared to take on risk

2. Challenging to structure risk adjustment for safety net providers

CT: requires ACOs in Medicaid Shared Savings Program to use CHWs

Bundled Payments/ Episode Payments

Providers are paid set amount based on expected cost for each episode of care

Providers pay for CHWs to help meet bundled payment target

Provider risk is limited but still a significant shift from FFS

1. Providers may be unprepared to take on risk

2. Defining “bundles” can be difficult

MA: pediatric asthma bundle (never implemented)

Download the chart

To learn more about sustainably funding community health workers in Medicaid, please visit our CHW Sustainability Collaborative.