Community health workers (CHWs) play a vital role in helping people navigate the health care and social services ecosystems in their communities. Most CHW work involves helping people with low income, including Medicaid beneficiaries, address multiple challenges to accessing health services and supports. This includes linking people to primary care providers, strengthening health literacy, addressing upstream factors tied to poor outcomes, and avoiding reliance on costly acute care or forgoing care altogether.
Consequently, many states are investing in CHW services programmatically and through Medicaid reimbursement approaches. NASHP’s state CHW policy tracker details Medicaid state plan and waiver approaches across the country. While a body of research shows CHW services significantly improve outcomes and generate return on investment, states are seeking more systematic impact analyses of CHW services in Medicaid.
South Dakota’s preliminary analysis of Medicaid claims data captures early findings of CHW cost-effectiveness for the state’s Medicaid program.
Key Takeaways
- South Dakota has found promising outcomes in a preliminary analysis evaluating data from Medicaid beneficiaries who received paid CHW services.
- CHW services were associated with increased access to a range of preventative and support services and decreased use of costly acute services.
- South Dakota will use these initial findings to inform continued policy design and CHW workforce development, as outlined in the state’s Rural Health Transformation Program (RHTP) application (see NASHP’s blog post, Rural Health Transformation Program: State Focus on Community Health Workers).
Background on South Dakota’s CHW Landscape
South Dakota began covering CHW services under Medicaid in 2019. The state reimburses CHW services on a fee-for-service basis, covering health promotion and coaching, health education, and health system navigation and resource coordination.
South Dakota’s Initial Analysis
Methods
South Dakota analyzed two years of data, examining changes and overall trends for Medicaid beneficiaries who received CHW services compared with a matched group who did not. The state specifically analyzed claims data for Medicaid beneficiaries (sample size = 1,145 CHW beneficiaries) who received paid CHW services in state fiscal year 2024 and had a social determinants of health diagnosis code for low-income, an unspecified screening, and transportation insecurity ( Z59.6, Z13.9, or Z59.82). The state compared these findings to claims for a matched control group (sample size = 411) comprised of Medicaid beneficiaries who did not receive CHW services but were similar in age, race, and sex.
Groups were compared on the following variables: types of services, number and amount of paid claims, and unique recipient counts.
NOTE: Given the current population size and levels of utilization, all findings should be considered preliminary. A deeper and more comprehensive analysis — including additional years of data and more granular variables — will be needed to further understand and validate the observed impacts.
Initial Findings
These preliminary findings show that CHW services were associated with increased access to a wide range of preventative and support services, including:
- 39% greater use of colorectal, cervical, and/or breast cancer screenings
- 10% greater use of preventative visits
- 14% greater use of vaccinations
- 10% more likely to access community transportation services
- 26% more received vision services
- 18% more received durable medical equipment
- 27% more received dental care (Note: South Dakota allows dentists to order CHW services and dental offices may employee CHWs)
- 76% more accessed home health services
In addition, findings showed that people receiving CHW services were less likely to use costly acute services than the control group, including:
- 15% less likely to use ambulance services, resulting in a 53% decrease in spending for those recipients
- 14% fewer recipients required in-patient stays
These findings align with intentional program design structured to drive increased access to preventative and clinical services. Specifically, South Dakota Medicaid policy requires CHWs to either establish or re-establish care with a recipient’s primary care provider if the referral for services was not submitted by the primary care provider. The policy also outlines a data-sharing requirement for CHWs between the referring provider and the primary care provider.
What's Next
As highlighted across numerous studies, CHW interventions have proven to have a significant monetary return on investment while also improving population health outcomes. One plausible interpretation of South Dakota’s analyses is consistent with these studies; that CHW services contributed to better care coordination, early intervention, and improved connections to health and/or social support services and thereby reduced use of high-cost, institutional services. Future analyses will allow for overall assessment of cost-effectiveness.
South Dakota’s preliminary findings can be used to navigate strategic investment in and implementation of CHW programs across the state. The state also plans to augment the analysis with additional data to continually inform the CHW benefit design and implementation. States interested in developing a Medicaid benefit for CHW services could benefit from a similar data-informed program design to promote outcomes-driven policy approaches. This type of data strategy also can help direct continuous program improvement efforts and cultivate transparent collaboration with key partners.
In addition, as states consider CHW investments as part of their RHTP grants, data collection efforts and analyses can further inform future direction.
Acknowledgments
Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the foundation.
