Medicaid Reimbursement for Community Health Worker Services: Model State Plan Amendment & Other Guidance

Overview

Community health workers, promotores, and community health representatives (CHW/P/CHR) are a workforce that addresses people’s health-related social needs. A large body of research suggests that well-designed CHW/P/CHR programs improve chronic disease control and mental health, promote healthy behaviors, reduce hospitalizations, and increase participation in primary care. However, CHW/P/CHR programs have mostly relied on a patchwork of grants for funding. Recognizing these public health workers can improve health and reduce cost of care, Medicare and state Medicaid programs are beginning to pay for their services. This toolkit provides model language for state Medicaid leaders and CHW/P/CHR advocates to use as they develop State Plan Amendments and accompanying guidance documents to establish coverage and payment for CHW/P/CHRs services, as well as considerations for payment rates. 

Background

New National Health Expenditure projections suggest that by 2032, US health care spending will reach $7.7 trillion, roughly 20% of the gross domestic product (GDP).¹ Yet, the health status of Americans — particularly those insured by Medicaid — is deteriorating.²
 
The way that we in the United States spend money on health care is inversely related to the value of our dollar. The majority of US health care spending goes to clinicians who deliver the most costly medical care rather than to lower-cost preventive care and social services. Yet the effect of medical care on health outcomes is dwarfed by the impact of adverse social determinants of health (SDOH).³
 
The evidence is clear that community health workers, promotores, and community health representatives (CHW/P/CHRs) and their flexible, person-centered approach to addressing health-related social needs can produce remarkable outcomes.⁴ A large body of research suggests that well-designed CHW/P/CHR programs improve chronic disease control⁵ and mental health,⁶ promote healthy behaviors,⁷ reduce hospitalizations,⁸ and increase participation in primary care.⁹ Their effect on health translates into cost savings. Randomized controlled trials have shown that CHW/P/CHRs working with Medicaid beneficiaries with chronic diseases prevent costly hospitalizations and save $2,500 per enrollee annually.¹⁰
 
Over their 80-year history in the United States, CHW/P/CHR programs have mostly relied on a patchwork of grants for funding. Recognizing these public health workers can improve health and reduce cost of care, Medicare and state Medicaid programs are beginning to pay for their services. In its 2024 Physician Fee Schedule, Medicare introduced the first billing code for CHW services.¹¹ Medicaid programs are following suit: as of January 2024, just over half of state Medicaid programs covered CHW services.¹² While some states include reimbursement for CHW/P/CHR services under Medicaid managed care organization (MCO) contracts, most states are implementing CHW coverage through State Plan Amendments (SPAs). The National Academy for State Health Policy recently published an excellent review of the process of CHW SPA development, including best practices for engaging CHW/P/CHRs in the process.¹³ We build on this work and offer model language that states may use in their SPAs.  

Introduction

Community health workers,¹⁴ promotores, and community health representatives¹⁵ (CHW/P/CHR) are a Department of Labor–classified workforce¹⁶ that addresses people’s health-related social needs. CHW/P/CHRs are trustworthy individuals who share life experiences with the people they serve and have firsthand knowledge of the causes and impacts of poor health. In best practice models, authentic CHW/P/CHRs find and meet people where they are, get to know their life stories, and work together on goals that will improve clients’ lives and health. They provide social support, health coaching, navigation, and advocacy for community members.
 
This toolkit provides model language for state Medicaid leaders and CHW/P/CHR advocates to use as they develop SPAs and accompanying guidance documents to establish coverage and payment for CHW/P/CHRs services. This toolkit also includes considerations for payment rates. 
 
The development of this toolkit was guided by a set of key principles: 

• Inclusion. “Nothing about us without us” is a philosophy that emphasizes the inclusion of the individuals who will be impacted by policies in their development.¹⁷ As policies are developed or refined, it is critical that CHW/P/CHRs are at the table. 
• Empowerment. There is power in the lived experiences and perspectives of CHW/P/CHRs. This power should be recognized and uplifted by policymakers in the development of policies that govern this workforce.
• Evidence. CHW/P/CHRs serve people who have significant needs and have historically been underserved by health and social services systems, making it even more critical that CHW/P/CHR programs draw on good data to ensure they effectively improve clients’ health and well-being.

Our process for developing this document was grounded in these principles. CHW/P/CHRs were coauthors who substantially contributed to the content, and we incorporated feedback from several leaders of CHW associations. We also used our principles to guide our selection of model SPA text. We chose model text that was recommended by or empowering to CHW/P/CHRs, and/or was supported by the best available evidence. In select cases, we included model text that did not align with our principles because that text is already widely in use. In these cases, we are careful to explain that while the text has precedent, it also carries risks. 
 
The toolkit is organized into the following sections:

• CHW State Plan Amendment Model Text Model text for SPAs or guidance that is organized by section (e.g., eligible population, services covered). In some sections we provide more than one option for model text and list the benefit of each option.  
  • CHW Model Text Rationale. Our rationale for selecting model text, including references to existing precedent or supporting research, pros and cons of using the model text, and recommendations for where exactly the model goes (e.g., SPA, rule, guidance). 
• Principles for CHW Reimbursement Rates. Guiding principles for states developing or refining payment rates for CHW/P/CHR services.  
• Glossary. Definitions of key features of CHW/P/CHR policy.