Getting Medicaid to Pay for Pest Control
Getting Medicaid to Pay for Pest Control
By Sandra Larson, Shelterforce, June 3, 2022
word count: 2039
There’s a connection between one’s home environment and asthma. An array of home-related factors can trigger or worsen asthma: pests such as cockroaches and mice can cause allergic reactions, and secondhand smoke, air pollution, and mold can make it worse. In New York City, children with asthma who are exposed to pests are three times more likely to be hospitalized, and they account for more than two-thirds of asthma-related rehospitalizations annually, according to the city’s Department of Health and Mental Hygiene (DOHMH).
The department recently launched a pilot project to zero in on pest-related pediatric asthma by delivering comprehensive pest management to patients’ homes—and tapping a group of Medicaid health insurers to fund it, even though such nonmedical interventions aren’t typically covered. If the three-year Medicaid Together Improving Asthma Program pilot succeeds in reducing repeat hospitalizations, the insurers should reap returns in the form of direct health care cost savings—but if not, a $1.2 million fund is in place to mitigate any losses.
“The environment in which a person lives directly affects their health,” says DOHMH project manager Beatrice Mauger, launch lead for Medicaid Together. “Our hope is to have a win-win for the health care sector and their clients. That can be achieved if this model shows the health care sector that investing in housing-based improvements can generate sustainable financial benefits.”
Over the years, other programs have worked more generally to tackle home health hazards that could exacerbate asthma, such as the U.S. Department of Housing and Urban Development’s Healthy Homes Program and the National Institute of Food and Agriculture’s Healthy Homes Partnership. At Boston Medical Center, building in better asthma-trigger screening and outreach has reduced emergency room visits for acute asthma care. And in recent years, Medicaid insurers have been tapped to help finance affordable housing construction. But the Medicaid Together project is innovative in the way it harnesses the spending power of health insurers upfront to achieve not only health improvements, but measurable and sustainable health care cost savings.
Launched in September 2021, the pilot is a complex, collaborative operation overseen by DOHMH and involving multiple hospitals and Medicaid managed care organizations (MCOs) and a community-based nonprofit.
Here’s how it works: Participating hospitals (seven so far, and rising) implement new screening questions to identify young patients whose asthma flare-ups may be related to pests at home and who are insured by one of the participating MCOs. When such a patient comes in, the hospital connects the family to the nonprofit CABS Health Network, which functions as a single point of contact to both deploy pest management services to the patient’s home and to contact the patient’s health plan. CABS pays for the services and is reimbursed by the insurer. The insurer then continues engaging the family with additional case management.
The pilot will run for three years and be followed by a two-year evaluation. DOHMH will collect and analyze the data.
The five participating insurers together cover 87 percent of New York City’s Medicaid-insured children, and their contribution to Medicaid Together is proportional to their share of members. The idea is that if this carefully targeted comprehensive pest treatment, which costs about $1,000, successfully reduces repeat hospitalizations, which cost about $6,000 on average, according to DOHMH, it will easily pay for itself. The health department expects the pilot to reach 1,200 children, translating to millions of dollars saved. Even so, the commitment involves a financial risk that insurers might be leery of taking on, so the national nonprofit Enterprise Community Partners has committed $1.2 million to guarantee profitability for the insurers if the expected cost savings aren’t realized.
Elizabeth Zeldin, director of Enterprise’s neighborhood impact program, was closely involved with the health department in devising the project. She likens the setup to pay-for-success models that shift risk from government funders to new investors, though the Medicaid Together project is a bit of a reversal.
“In a way, it’s a ‘pay for failure’ model,” she says. “But if we succeed, it’s going to be so cool—a game changer.”
[The Green and Healthy Homes Initiative recently launched a somewhat similar asthma initiative for adults and children in which a mission-based investor takes on the upfront costs of things like pest management, cleaning supplies, and even carpet removal and plumbing repairs, and is paid back by a single insurer if cost savings are realized.]
Integrated pest management with allergen reduction, referred to as IPM-AR in this project, is a less toxic, more comprehensive pest control method that includes a range of preventive and remedial measures beyond just spraying chemicals or laying traps, including using HEPA-filter vacuums, sealing up holes and cracks, and improving trash management.
“There’ve been a lot of studies throughout the country about the connection between pests and asthma, and small pilots here and there. The idea of using IPM as a health intervention has been building up momentum over many years,” Zeldin says.
In her view, the real game changer will be proving that funding these health-preserving measures results in sustainable cost savings for insurers.
“This pilot ties the actual financial beneficiary to the work. That’s where it gets exciting,” Zeldin says. “It alleviates the ‘wrong pocket’ problem that we often talk about in the health and housing space.” “Wrong pocket” describes what happens when an investment produces savings but those benefits go to entities who are not paying the cost.
For Insurers, Potential Cost Savings and Enhanced Member Relationships
Claribel Blake, program director for quality management at Empire Blue Cross Blue Shield and its designated lead for the Medicaid Together partnership, says that when DOHMH reached out to insurers in 2019, it was clear that Enterprise’s funding would provide a financial guarantee, but she suggests that Empire would be interested in such preventive investments in any case.
“Over the years, we have invested in innovative asthma prevention programs and in a community health workers program. Therefore, we were excited about this opportunity to address the social drivers that impact our asthmatic children,” Blake says. “The belief is that this project could sharply reduce repeated visits and result in cost savings. These savings will allow us to continue to invest in new and ongoing programs.”
Empire has seen two referrals of member asthma patients so far. Blake cites the positive impact of not only the pest management itself, but the resulting interaction between the health plan and its members.
“When we get the info, right away we communicate with the member to make sure they are connected to our case management services and to other resources—food, housing, assistance in making doctor appointments. It could be that we have tried to contact them before, but now that there’s been a hospitalization, parents may be more receptive to receiving services.”
The MCOs provided input on the pilot project design and on tools, ongoing processes, communications materials, and billing codes, and continue to meet regularly.
“Collaborating is a good thing,” Blake says. “Although we each have our own focus and programs, we can learn from each other and share ideas and best practices.”
Nonprofit Serves as Central Point of Intake
The Brooklyn-based CABS Health Services has been working for more than 40 years to address health inequities in disenfranchised populations and jumped at DOHMH’s spring 2020 request for proposals, says Belinda Freeman, CABS project manager and point person for the Medicaid Together program.
CABS had previously participated in a pediatric asthma self-management program through a five-year Delivery System Reform Incentive Payment program that served as a foundation for the Medicaid Together pilot.
“We saw how working on the home conditions that exacerbate asthma is really effective, so we knew we wanted to be involved,” she says. “We are the central point of intake. We receive referrals. We check a database to make sure they have active insurance with the health plan. We get consent from the guardian. We let them know the pest management will be free of charge to them.”
CABS had processed referrals of around 25 asthma patients as of early May.
And if a hospitalized asthma patient is not a member of one of the participating health plans? At this point, CABS would be unable to serve the family, Freeman says.
“What makes this program sustainable is that it’s being paid for by the insurers. There’s no mechanism for us to do this as charity cases,” she says, adding that CABS is working to find other ways to provide service for those not eligible for this program.
The Pilot Does Not Involve Landlords
The Medicaid Together program bypasses landlords. Though landlords are responsible under local law for pest control, Enterprise says there often is little incentive for them to carry it out as comprehensively as integrated pest management with allergen reduction does.
DOHMH’s Mauger notes that the health plans’ continued case management may include referring families to the city’s Healthy Homes Program, which often does involve landlords. In emailed responses to questions, Mauger explains, “If they see that there is mold in the home when conducting their home environment assessment, or if there are some structural changes in the home that were too big for the IPM vendor to address, the family’s consent would then be obtained to contact the landlord in order to have that problem fixed.”
Tips for a Successful Partnership
For other cities or organizations considering similar projects, Mauger advises, “Give yourself plenty of prep time.” Beyond the two years or so of designing the project and gathering the partners, it took DOHMH an additional year to get all the contracts signed. “With the health plans, the project entailed negotiating a contract with their legal teams, though there was buy-in for the project. This ended up being a lengthier process than expected,” Mauger said.
Blake says, “For this to be successful, a lot of communication had to take place, with our members and also between the project partners. From the beginning, it’s important to come together to review workflows, and put in place expectations and a process to review outcomes on a monthly basis, between all the entities engaged. That allows an opportunity to identify gaps and make improvements.”
Freeman suggests creating a project portal that all partners can access. “That would be helpful, working with different hospitals, and different health plans. CABS doesn’t have capacity to create a new piece of technology like that. Right now it’s a lot of spreadsheets and emails. A central portal would simplify things.”
Freeman also emphasizes the importance of ensuring that partners are all in on the project’s goals.
“One lesson learned is that for a program of integrated pest management, having a success story—even just one—showing pictures of the before-and-after, is one of the most impactful pieces to get the buy-in you need from multiple players. If there’s a way to really paint the picture, it brings everyone to the same level of understanding: ‘We are here to help this child and family be healthy.’ From there, working out the details should be easier,” she says.
Buy-in must come from the families, too. “No one wants someone to come into their home,” Freeman says. “They may be mistrusting; some don’t want to admit they have pests. But when they see how it works, it really makes a difference. You need champions at every place.”
A Gateway to Other Health and Housing Targets?
The final outcomes of Medicaid Together won’t likely be known until 2026, but Zeldin envisions this pilot sparking other initiatives—from wider asthma prevention projects to eviction prevention or aging-in-place efforts—that could be funded by health insurers.
The Medicaid Together pilot intentionally targeted one concrete intervention to one narrow subset of patients. That could be important in laying groundwork for other projects.
“If we want to demonstrate something at scale, the pilot needs to be successful,” Zeldin says. “With any sort of innovation experimentation, you start with one cohort—and then if that’s successful, you figure out ways to scale it up. It’s a matter of fiddling with the box once it’s established.”
She adds, “We want insurers to say, ‘Wow, this really worked. Let’s do it more broadly, let’s do this in other markets,’ and without needing the financial guarantee. The idea here is to prove the case.”
