Editor’s note: this piece was submitted by Erdman. Authors’ views are their own and do not reflect the views of NIC. 


Addressing the social needs of communities, including maturing populations, improves long-term health management and reduces health-related expenses. These interventions are fundamental for hospitals and health systems evolving to a System of Health model. As part of current government efforts to advance value-based care, the Department of Health and Human Services (HHS) will encourage the integration of social determinants of health (SDOH) into care planning for Medicare enrollees. Specifically, HHS will focus on pilot models that reimburse providers and payers to address SDOH in care coordination, including housing, nutrition, interpersonal violence, and transportation services. For example, Medicare Advantage (MA) plans now have the flexibility to cover non-medical services for chronic conditions and non-skilled in-home care services. 


Last November, HHS Secretary Alex Azar captured the attention of stakeholders when he announced that the Centers for Medicare and Medicaid Services Innovation Center (CMMI) is initiating a pilot that will allow healthcare providers to bill Centers for Medicare and Medicaid Services (CMS) for services related to social determinants of health.2 Beyond proposed programs that would address housing, nutrition, and transportation, he indicated that CMMI is currently developing additional models that could reimburse costs of housing for beneficiaries.1 

He is “eager” to address SDOH throughout the Medicare system, especially through MA plans because “managed medical care” directly links care coordination performance to patient outcomes and costs. He explained, because MA plans “hold the risk for their patients and they compete for their patients’ business, they have an incentive to offer benefits that are both appealing to their members and that will bring down health costs—whether those benefits are traditionally thought of as health services or not.”1 

In 2020, CMS intends to add transportation and home health visits to the list of SDOH program benefits. At the end of his speech, Secretary Azar suggested that providers watch for movement on Medicare Advantage and pay attention to pilot models coming from CMMI. 


Despite evidence that suggests about 60 percent of a person’s health is determined by social, environmental, and behavioral factors, CMS, until this year, did not pay for non-medical services and social determinants of health had not been a focus of Medicare.4 

Conversely, organizations catering to the needs of mature populations have long been aware of the impact SDOH has on health and well-being. For example, in many instances, moving into communities with robust social programs has reduced the overall need for help with activities of daily living (ADLs). Further, safe senior housing with some level of monitoring helps ensure preventive care and disease management is occurring. When considering the proportion of healthcare services utilized by this group, SDOH has become an important part of population health management. 

States have also recognized the impact on health spending and found ways to address SDOH through pilot programs, 1115 waivers, and innovative Medicaid programs, such as “Accountable Care Communities” and “Totally Accountable Care Organizations,” which link health-related social needs with appropriate community services.5 

Preliminary assessment suggests that Medicaid pilots and state/regional programs are beginning to reap the benefits from addressing SDOH, including better outcomes, reduced utilization, slowed progression of chronic diseases, lowered readmission rates, and cost savings. It’s proven to be important to Medicaid care management, but, to now, has not gotten the needed attention in Medicare.4 


To accelerate the integration of SDOH into care delivery, two barriers must be overcome: 

Payments for non-medical services: CMS approval for SDOH integration requires a legislative change. CMS does not have the authority under the Social Security Act to directly reimburse housing costs, so Congress must amend the law. Industry experts told Modern Healthcare that another option is forming a partnership with the U.S. Housing and Urban Development Department (HUD) to sponsor initiatives that address health and housing needs of the community.5 

Funding: The amount of funding required and its sources are unknowns when integrating SDOH into care planning. Some have suggested dispensing funds by Medicare directly to providers (health systems) and allowing them to appropriate funds to local SDOH resources.3 In doing so, struggling hospitals could benefit from improved financial viability. Others have suggested funds be appropriated through health insurers because they have greater access to Medicare beneficiaries and expertise with risk-based payment models. 


Seniors and senior living operators have long been addressing these issues out of necessity, which has paved the way for effective partnerships under these new policies. Many seniors prefer to continue living at home, even as their health needs increase. This has resulted in an emphasis on facilitating home and community-based services (HCBS) such as Programs of All-Inclusive Care for the Elderly (PACE). Expansion of resources to individuals served by these programs through a renewed focus on SDOH to include housing and other services can only benefit this vulnerable population. 

Recently LeadingAge, the predominant industry association for not-for-profit senior living providers, announced their affiliation with the Visiting Nurse Association of America (VNAA) and ElevatingHOME (EH) as a clear acknowledgement of the trend toward HCBS. 

In the residential space, innovative programs, such as the Supportive Living Program in Illinois, offer instructive examples of what can be accomplished through the assembly of diverse and complementary resources to provide affordable assisted living and achieve outcomes consistent with addressing SDOH. 


Integrating SDOH in tandem with Medicaid and MA managed care plans means hospitals/health systems can’t go it alone. To effectively deliver health-related services, hospitals must create formal relationships with a network of social service agencies, public-private partnerships, state departments of health, housing organizations, and other not-for-profits. As indicated by Secretary Azar, housing is Medicare’s first SDOH focus, with others to follow. That means hospitals master site plans, clinical capabilities, and community outreach efforts will dramatically change. The integration of health and SDOH in risk-based contracts with Medicare and Medicaid will set the stage for services provided to other populations, where, potentially, social determinants will be a focus. Initial resource requirements include: 

  • Community Needs: Identification of the specific social needs of the population, particularly at-risk populations, and construction of a network of resources that can serve as referrals to non-medical services. An inventory of SDOH programs, their scope of services, financial stability, facilities, and performance is needed.
  • New Workforce initiatives: The integration of SDOH requires re-consideration of workforce requirements and the policies and protocols to which their performance is to be assessed.
  • Partnerships and Collaborative Planning: The forging of formal partnerships, including Senior Living, health and housing, behavioral/mental health, employment and training centers, and others are necessary to create a formal network. Ongoing, collaborative, strategic planning is imperative.


It is clear that integrating social determinants of health into diagnostics and care coordination is a burgeoning opportunity for hospitals. It requires strategists to rethink clinical programs, master site plans, digital capabilities, community relationships, and capital deployment in a larger context. 

Hospitals and health systems are increasingly integrating community-based social services programs into their strategies with focused attention on populations served by Medicare Advantage, Medicaid managed care, and accountable care organizations. As a result, the locations of these services and their digital connectivity will be key elements in strategy, master-site planning, and risk-sharing arrangements with payers and community relations. 

In addition, facilities and programs targeted to seniors (i.e. senior housing, home care, rehab, skilled nursing, and others) will become integral to hospitals as Medicare requires coordination of post-acute care with acute services. Hospital strategy must more directly integrate the full continuum of post-acute services and programs to avoid penalties for avoidable complications and optimize reimbursement.