Medicaid Covers Nonmedical Services as Part of Initiative to Address Social Determinants of Health

Children with severe asthma living in low-income homes are disproportionately affected by environmental factors that can trigger asthma exacerbations. Frequently these children experience asthma complications requiring costly hospitalizations or emergency room visits. These outcomes can often be prevented with simple adjustments to the home. Even so, the changes may be financially out of reach for low-income families.

To help address this issue, some states have turned to Medicaid to help focus on social drivers of health factors, such as healthy living environments. An example is a California policy recently approved by the Centers for Medicare and Medicaid Services (CMS). Last December, CMS approved the utilization of “in lieu of” services (ILOS) in California, allowing the state’s Medicaid managed care plan to cover a list of cost-effective but nonmedical interventions in place of standard Medicaid services.

As part of the new policy, CMS approved twelve ILOS, which include the implementation of asthma remediation in the homes of eligible individuals. Asthma remediation consists of making necessary physical modifications to a beneficiary's home that would potentially reduce the occurrence of severe asthma exacerbations and, consequently, reduce the risk for hospitalizations or emergency room services.

Examples of asthma remediation modifications and supplies provided through ILOS include:

• air dehumidifiers or other moisture-controlling measures
• air filters
• asthma-friendly cleaning materials
• hypoallergenic mattresses and pillow covers
• improvements in ventilation
• integrated pest management (IPM) services
• minor mold removal
• vacuum cleaners equipped with high-efficiency particular air (HEPA) filters

These services are approved for homes occupied by the benefit member or their caregiver, including rented, leased or owned homes.

CMS stipulates that each ILOS be offered as an option, and beneficiaries are not required to use the service instead of traditional Medicaid services. Moreover, members retain the right to appeal or contest any ILOS denial.

California’s new policy opens doors for other states to offer these services. According to statements from CMS leaders during a webinar hosted by Manatt Health in April, California’s ILOS approval provides a guideline for other states to mirror or use as a framework as they develop similar health-related social programs.