Understanding North Carolina’s Healthy Opportunities Pilots

Historically, Medicaid funds were not able to be used to pay for non-medical interventions that target the social determinants of health.

But last October, CMS approved North Carolina’s Section 1115 waiver which provides financing for a new pilot program called “Healthy Opportunities Pilots,” designed to cover evidence-based non-medical services that address specific social needs linked to health and health outcomes.

In four regions of the state, Medicaid managed care plans-known as Prepaid Health Plans (PHPs)-were set up to address housing instability, transportation insecurity, food insecurity, and interpersonal violence and toxic stress for a limited number of high-need enrollees. 

Melinda Dutton, a partner with Manatt Health, an interdisciplinary policy and business advisory division of Manatt, says the Healthy Opportunities Pilots offer an unprecedented opportunity for North Carolina to test, evaluate and learn the healthcare-related impacts of providing evidence-based, non-medical interventions to a subset of higher-need Medicaid enrollees.

“The North Carolina Department of Health and Human Services (NC DHHS) will look to systematically integrate interventions that are shown to be effective in improving health outcomes and reducing healthcare costs based on rigorous evaluation into its Medicaid managed care program on an ongoing basis statewide,” she says.

More specifically, over a five-year demonstration period authorized in the State’s Medicaid 1115 waiver, North Carolina has been authorized to spend up to $650 million in state and federal Medicaid funding to cover the cost of select services related to housing, food, transportation and interpersonal violence and toxic stress that are expected to directly impact enrollees’ health outcomes and healthcare costs.

“PHPs will work with their frontline care managers to identify members who meet minimum eligibility criteria and determine whether one or more Pilot services, and which ones, may meet their needs and ultimately improve their health outcomes and/or reduce their healthcare costs,” Dutton says. “Once a PHP has determined an individual eligible, enrolled them in the Pilot, authorized a specific Pilot service for them, care managers will refer that individual to a human service organization in their community that can provide that specific service.”

Related:Why Community Health Workers Are Vital To Addressing SDoH

Samantha Artiga, director of the Disparities Policy Project at the Kaiser Family Foundation (KFF) and associate director for the KFF’s Program on Medicaid and the Uninsured, explains the Healthy Opportunities Pilots represent one state initiative to address social determinants of health in response to the growing recognition that many broader social and environmental factors play a major role in shaping health.

“Under the Healthy Opportunities Pilots waiver program, North Carolina will use Medicaid funds to pay directly for certain non-medical interventions that target the social determinants of health for a limited number of enrollees that have at least one physical or behavioral health risk factor and at least one social risk factor,” she says.

Typically, Medicaid funds cannot be used to pay directly for non-medical interventions that target social determinants of health, except for some individuals with disabilities. Artiga notes the pilot program is designed to provide insight into how addressing certain non-medical needs may impact program costs and health outcomes for these high-risk enrollees, but its scope and impact is restricted by its limited funding.

“The model stands in stark contrast to a number of other recent waiver approvals by the Trump Administration, which have largely focused on conditioning Medicaid eligibility on meeting work and reporting requirements and other eligibility restrictions,” Artiga says. “It remains unclear whether CMS will use this waiver as a model for other states.”

Pilots in action

A network of community-based organizations and social service agencies will deliver the pilot services and will be established, managed and overseen by Lead Pilot Entities organizations that will serve as the essential connection between the PHPs and community-based providers.

A new entity that the Department will procure-called the “Lead Pilot Entity”-will establish, contract with and oversee the network of Health Standards Organizations (HSOs) that may provide the authorized Pilot services to Pilot enrollees, Dutton says. PHPs will contract with the Lead Pilot Entities to ensure its members receive Pilot services from the network of HSOs. HSOs will be paid for Pilot services delivered to Pilot enrollees based on a NC DHHS-standardized Pilot service fee schedule.

Elizabeth Osius, a director at Manatt Health, provides an example of how it will help.

“Megan, an eight-year-old Medicaid managed care enrollee, lives with her mom and brother in a county that has a Healthy Opportunities Pilot,” she says. “Megan’s PHP identifies her as having frequent emergency department (ED) visits for uncontrolled asthma. A Medicaid care manager learns from Megan and her mom that they live in housing that may be exacerbating Megan’s asthmatic conditions.”

So, once Megan’s care manager and PHP enroll her in the Pilots, Megan is able to receive a housing inspection, which identifies moldy carpets, a broken air conditioner and a mite infestation-all of which are well-established triggers for asthma exacerbations.

“Rather than continuing to pay for Megan’s regular, unnecessary ED visits, the PHP leverages a network HSO to remedy these conditions,” Osius says. “Megan’s Medicaid care manager checks in with her and her mom to ensure that Megan’s asthma is better controlled, and healthcare data demonstrate improved health and reduced ED use due to delivering the cost-effective, non-medical intervention.”

Keith Loria is an award-winning journalist who has been writing for major newspapers and magazines for close to 20 years.