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New Coverage, Delivery, and Payment for Health-Related Social Needs Services Under New York’s Approved 1115 Medicaid Waiver Amendment
Saturday, January 20, 2024

On January 9, 2024, the Centers for Medicare & Medicaid Services (CMS) approved New York’s recent 1115 demonstration waiver.[1]

Among other things, this most recent demonstration waiver provides significant federal funding to New York for health-related social needs (HRSN) services to be delivered through nine regional social care networks (SCNs) over the next three years.[2] The waiver also provides approximately $500 million for further expansion of the HRSN infrastructure, which includes the creation of the SCNs.[3] These HRSN services will be reimbursed via Medicaid managed care organizations that will contract with the SCNs.

This Insight focuses on the development of the SCNs, delivery of HRSN services, and the interplay of this newly approved network structure and benefit package within New York’s existing Medicaid managed care framework.

Increased Coverage of Certain Services That Address HRSN

As part of this demonstration, New York will be covering HRSN services (e.g., housing support, care management, transportation, and nutrition support) that are evidence-based and medically appropriate for Medicaid beneficiaries who meet predetermined clinical and social risk factors.[4] Eligibility for these benefits will be determined through a two-tiered system as assessed by screenings.[5]

As part of this demonstration, all Medicaid beneficiaries will receive “Level 1” services, which include referrals to existing state, federal, and local programs outside 1115 demonstration and case management services.[6] “Level 2” services—which include housing support, nutrition support, transportation support, and case management as enumerated in the waiver’s Special Terms and Conditions (STCs)—will be made available to certain populations enrolled in Medicaid managed care who meet one or more of the following criteria:

  • Medicaid high utilizers, including homeless individuals
  • Health home enrollees
  • Individuals with a substance use disorder (SUD)
  • Individuals with a serious mental illness
  • Individuals with intellectual and developmental disabilities
  • Pregnant persons up to 12 months postpartum
  • Post-release criminal justice-involved individuals with serious chronic conditions, SUD, or chronic Hepatitis-C
  • Juvenile justice involved youth, foster care youth, and those under kinship care
  • Children under the age of six
  • Children under the age of 18 with one or more chronic conditions[7]

The Level 2 services may not otherwise be covered under Title XIX (i.e., the section of the Social Security Act applicable to the Medicaid program) or supplant any other funding sources otherwise available under federal, state, or local programs.[8] In addition, these Level 2 services must have a reasonable expectation to improve or maintain the health or overall function of the beneficiaries.[9] These HRSN services were perhaps once offered independently by health plans as value-added services. The waiver amendment now makes their delivery eligible for federally matched Medicaid reimbursement, subject to the limitations in the STCs.

A more detailed description of the HRSN services will be available in a forthcoming Insight by the authors, from Epstein Becker Green.

The Role of the SCNs

The SCNs serve two purposes for the provision of HRSN services. First, they will provide HRSN screenings and referral services to both Level 1 and Level 2 via contracts with Medicaid managed care organizations (MCOs).[10] Second, the SCNs will serve as network convenors for social service providers responsible for delivering the HRSN services discussed above.

As a provider network, the SCN will contract with service providers in their communities who deliver HRSN services.[11] The SCN must ensure such providers have sufficient experience and training in the provision of the HRSN services being offered.[12] While the HRSN providers are not required to be licensed, the staff of such providers that furnish particular services must hold the appropriate credentials/licenses when required by law.[13] The SCNs will contract with the MCOs as a participating provider in the MCO network in order to give the MCOs access to the SCN’s network of social services providers.

The New York State Department of Health will select the nine SCNs through a competitive procurement process, described in further detail below.

The Role of MCOs

As in a traditional managed care environment, MCOs are responsible for ensuring benefit access to HRSN services and managing the costs of those services. To maintain the necessary network adequacy, MCOs will rely on their contracts with the SCNs while the MCOs will remain responsible for managing the benefit, including (i) confirming timely delivery of HRSN services, (ii) addressing any network shortages (with policies and procedures to support the same),[14] (iii) following clinical guidelines to ensure the services delivered are clinically appropriate, (iv) keeping records related to HRSN clinical determinations,[15] and (v) flowing payments through the SCNs to the social services providers for their provision of HRSN services.

The MCOs will pay for such services on a non-risk basis, meaning that the MCOs will pay fixed rates for the HRSN services provided by the SCN providers and get reimbursed retroactively by the state for such payments. Throughout the entire term, MCOs must submit encounter data regarding such services, as well as data on outcomes and quality of care metrics, to evaluate the use and effectiveness of the services.[16]

Looking ahead, the waiver amendment requires that HRSN services be incorporated into the MCO’s capitation rates no later than April 1, 2027. This will mark a shift toward including HRSN services as part of the MCO’s comprehensive, risk-based benefit package. Perhaps in the longer term, HRSN services will be further integrated into MCO’s value-based contracting arrangements, as may be required by the state’s Value-Based Payment Roadmap.[17]

If implemented as set forth in the waiver amendment letter, Epstein Becker Green expects that in the long term, HRSN services will become fully integrated into an MCO’s benefits package and managed just like medical services.

Next Steps

Now that New York has received its official waiver amendment approval, the state will likely complete the following as immediate next steps in operationalizing the waiver amendment.

First, the state will contract with various entities to build the infrastructure for HRSN service delivery. For the HRSN delivery networks, New York will procure nine SCNs through a competitive bidding process. On January 16, 2024, New York State’s Office of Health Insurance Programs released a Request for Applications inviting interested entities to apply for an SCN contract. Applications are due by March 27, 2024, and the state expects to announce the contract awards by June 1, 2024. New York will also engage a to-be-determined entity as the Health Equity Regional Organization (HERO), which serves to develop regionally focused health equity approaches and support delivery of HRSN services.[18] It is unclear at this point how New York will select the HERO and whether the state will follow the timeline used for the SCN procurement.

Second, within 90 days, New York is required to submit an implementation protocol that must be approved by CMS prior to federal funding.[19] Some of the items the protocol must include are as follows:

  • Proposed uses of HRSN infrastructure expenditures, including the type of entities to receive funding, the intended purpose of the funding, the projected expenditure amounts, and an implementation timeline
  • A list of the covered HRSN services, not to exceed those discussed above, with associated service descriptions and service-specific provider qualification requirements
  • A description of the process for identifying beneficiaries with health-related social needs, including outlining beneficiary eligibility, implementation settings, screening tool selection, and rescreening approach and frequency, as applicable
  • A description of the process by which clinical criteria will be applied, including a description of the documented process wherein a provider, using their professional judgment, may deem the service to be medically appropriate
    • Plan to identify medical appropriateness based on clinical and social risk factors
    • Plan to publicly maintain these clinical/social risk criteria to ensure transparency for beneficiaries and stakeholders
  • A description of the process for developing care plans based on assessment of need
    • Plan to initiate care plans and closed-loop referrals to social services and community providers based on the outcomes of screening
    • Description of how the state will ensure that HRSN screening and service delivery are provided to beneficiaries in ways that are culturally responsive and/or trauma-informed
  • Plan to avoid duplication or displacement of existing food assistance or nutrition services, including how the state will prioritize and wrap around SNAP and WIC enrollment, appropriately adjust Medicaid benefits for individuals also receiving SNAP and/or WIC services, and ensure eligible beneficiaries are enrolled to receive SNAP and/or WIC services.
  • An affirmation that the state agrees to meet the enhanced monitoring and evaluation requirements stipulated in the waiver amendment, including a requirement that the state monitor and evaluate how the renewals of recurring nutrition services affect care utilization and beneficiary physical and mental health outcomes, as well as the cost of providing such services.[20]

Details shared during these next steps will make up the waiver amendment’s foundational infrastructure and will allow several stakeholders, including providers and community-based organizations, to gain insights into how they may best participate in service delivery under the waiver amendment. As various medical and social services providers gain a better understanding of the state’s strategic plan and come to know the key network entities (i.e., the nine SCNs), Epstein Becker Green expects there to be broad interest in contracting between the SCNs and providers to build the HRSN networks as quickly as possible.


[1] CMS STC Approval Letter (Jan. 9. 2024), https://www.medicaid.gov/sites/default/files/2024-01/ny-medicaid-rdsgn-team-appvl-01092024.pdf

[2] Id. at 3.

[3] Id. at 2.

[4] Id. at 3.

[5] Id. at 59.

[6] Id.

[7] Id. at 59-60.

[8] Id.

[9] Id.

[10] Id. at Sec. 6.8, p. 83. Note that the SCNs will be responsible for the vast majority of HRSN screenings and referrals as 75% of New York’s Medicaid population is enrolled in a comprehensive Medicaid MCO. Kaiser Family Foundation, Total Medicaid MCO Enrollment (January 16, 2024), https://www.kff.org/other/state-indicator/total-medicaid-mco-enrollment/.

[11] Id. at Sec. 6.9(a), p. 63.

[12] Id. at Sec. 6.9(b).

[13] Id.

[14] Id. at Sec. 6.10, p. 63.

[15] Id. at Sec. 6.14(b)(iv), p. 64.

[16] Id. at Sec. 6.14(c)(i), p. 65.

[17] New York’s 1115 waiver amendment proposal included a much more aggressive timeline where HRSN Services were incorporated into value-based payment arrangements from the start of the waiver amendment term. CMS and New York State ultimately agreed to a phased-in approach, which is reflected in the waiver amendment approval letter.

[18] HEROs are specifically tasked with (1) data aggregation, analytics, and reporting; (2) conducting a regional needs assessment and planning; (3) convening regional stakeholder engagement sessions; (4) making recommendations to support advanced value-based arrangements and develop options for incorporating HRSN into VBP methodologies; and (5) conducting program analysis, such as publishing initial health equity plans and health factor baseline data on Medicaid populations.

[19] Id. at Sec. 6.7.

[20] Id.

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