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How Payers Are Linking Community-Based and Value-Based Care to Strengthen Outcomes and Equity

Analysis  |  By Laura Beerman  
   January 06, 2022

"Many community-based organizations lack sustainability. It is up to payers—or the holders of the financial and outcomes risk for the individual—to create the infrastructure and processes to add CBOs to their VBC models and pay them for their services," says one health tech executive. 

Like politics, it's been said that all healthcare is local. But when it comes to the role of community-based organizations (CBO) in supporting health, payers and other stakeholders haven’t quite known how to include their closest neighbors. Add to this the rising importance of social determinants of health (SDOH), which CBOs may be qualified to identify and meet but also disadvantaged to address from a healthcare system perspective, including value-based arrangements.

The challenges CBOs, health plans, and state Medicaid programs face in working together range from data and technology to contracting and payment capabilities. "Many CBOs lack sustainability," says Lynn Carroll, COO and head of strategy for HSBlox."It is up to payers—or the holders of the financial and outcomes risk for the individual—to create the infrastructure and processes to add CBOs to their VBC models and pay them for their services."

And yet it is these very organizations that can often make the most immediate and personal contact with someone in need. "The organization providing care in the home or community is going to be the first one to see when a change in a person's health status has occurred," adds Carroll. There are a growing number of health plans, Medicaid- and Medicare-focused programs, and tech solutions that are emerging to include CBOs and maximize their role in whole-person health.

State and Medicaid responses

The Kaiser Family Foundation (KFF) summarizes well the challenges states face in creating SDOH-focused programs, which "require working across siloed sectors with separate funding streams, where investments in one area may accrue savings in another." KFF adds that: "The capacity of community-based organizations and local programs may not be sufficient to meet identified needs and data infrastructure may need to be improved to allow for data sharing across health care and social services settings."

KFF identifies, however, that "state Medicaid programs have been developing strategies to identify and address enrollee social needs both within and outside of managed care." Before the pandemic, states were already using Affordable Care Act provisions, 1115 Medicaid waivers, and demonstration programs and funding through Centers for Medicare & Medicaid Services Innovation Center (CMMI) to include CBOs in SDOH initiatives. For example, Washington State’s 1115 demonstration, Accountable Communities of Health (ACH), has included CBOs and value-based payments over its five-year term (2017–2021).

One of the challenges is how states include SDOH-related services, which are considered "value-added services" and not generally included in capitation formulas. KFF notes: "States can direct that managed care plans make payments to their network providers using methodologies approved by CMS to further state goals and priorities, including those related to addressing social determinants of health."

Some states are requiring that CBOs be part of this formula. Beginning in 2021, Pennsylvania began requiring its Medicaid MCOs to "incorporate CBOs into moderate and high-risk value-based purchasing arrangements, as an effort to address the social determinants of health." In an FAQ, the State outlined the mechanisms MCOs can use to fund, contract, and track CBO participation and activities including:

  • MCOs may direct contract with CBOs or use providers who contract with these organizations as a pass-through mechanism
  • These same options can be used to pay CBOs (via MCO or provider systems)
  • MCOs may use "medical, administrative, or excess revenue dollars" for CBO contracting

The Pennsylvania Medicaid MCOs working through these challenges include Aetna at the statewide level; UnitedHealth Group, UPMC, Gateway, and AmeriHealth at the regional level; and Health Partners, Keystone First, and Geisinger Health Plan in single regions.

Medicare Advantage plan strategies

Outside the Medicaid program, Medicare Advantage payers face similar challenges to incorporate CBOs into their SDOH initiatives, including those that include VBC. A 2021 study commissioned by the Better Medicare Alliance’s Center for Innovation in Medicare Advantage (CIMA) noted three areas where plans are making progress:

  • Improving social needs data reliability and integrating it into clinical programs
  • Facilitating CBO service connection and delivery
  • Tracking results, from health outcomes to program return on investment

Humana’s Bold Goal involves more intensive SDOH investment and resources in select communities such as San Antonio while Blue Cross and Blue Shield of Kansas City and Illinois have launched similar initiatives.

Turning to third parties

The 2021 CIMA study conducted by the NORC research organization at the University of Chicago, reports: "While every health plan employs personnel dedicated to building and maintaining contracts and relationships with health care providers, health plans have largely had to start from scratch in figuring out how to contract with CBOs for non-health services."

Enter a variety of third-party technology solutions that have emerged to help payers of all types address these challenges. "The contracting piece is something that health plans are saying they don't want to own," says Manik Bhat, CEO of Healthify. Bhat reports that his company has helped payers reduce CBO contracting time from more than a year to less than a month. Several Blue Cross Blue Shield companies are among Healthify’s clients.

The previously mentioned Humana Bold Goal uses a Signify Health platform to help CBOs with communication, tracking, and referrals for MA members. In one Medicaid example, Rhode Island announced in May 2021 that it would launch a statewide Community Referral Platform that KFF reports "will allow health care providers to initiate referrals and enable CBOs to inform the provider of the status or outcome of the referral."

Another company, HSBlox, has launched a new version of its CureAlign platform to make it easier for payers to bring CBOs into the VBC fold while shortening the timespan between care event and reimbursement. CureAlign converts the often-unstructured format of community-based patient care notes into discrete care events that can be confirmed as complete and ready for payment. The platform also operationalizes the complex hierarchical contracting that has made it difficult for payers to include CBOs into VBC.

The role of CBO differences: Local versus larger

Hyper-local referrals and care are what HSBlox’s Carroll terms "the edge," which comes with unique challenges: "Traditional care management doesn’t work well at the edge—in the home or community with things like documenting ADLs [activities of daily living]). For CBOs, the process needs to be something that doesn’t require a lot of steps or supplant other processes. The goal is being additive, not disruptive."

Meeting these challenges is naturally more difficult for smaller CBOs than those connected to regional, state, or national networks. The NORC CIMA study reports: "Some health plans report that it is easier to contract with national umbrella organizations because they can scale benefits more effectively, take advantage of more advanced contracting capabilities, or ensure high levels of liability coverage required under corporate risk management policies. Larger regional CBOs are often able to play similar roles …"

It's understandable but not enough, and payers understand this. From the NORC CIMA study, Andrew Renda, Humana’s vice president of Bold Goal and population health strategy, notes that "to address social needs that almost always are very localized, we do need to figure out how to work with smaller organizations."

Laura Beerman is a contributing writer for HealthLeaders.


Community-based organizations (CBO) are often on the frontline of local need but the last to be part of value-based care models.

Payers face multiple challenges to help CBOs and close this gap—from data and technology capabilities to member identification, referral, and service delivery.

Multiple efforts are underway to overcome these challenges, from Medicaid and Medicare Advantage program designs to third-party tech enablers.

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