Partnering for Impact:
How Social Service and Community-Based Organizations Can Navigate Change in the New Medicaid Landscape
Introduction:
Partnership During a Shifting Policy Landscape in Medicaid
The operational landscape for state Medicaid agencies and Medicaid Managed Care Organizations (MCOs) is undergoing profound transformation, marked by significant federal policy shifts and financial restructuring that demand organizational agility for social service organizations (SSOs) and community-based organizations (CBOs). Recent federal actions, including cuts to Medicaid funding, new Medicaid eligibility requirements (e.g., work requirements), and revocation and expiration of pandemic-era funding mechanisms, are exerting substantial fiscal pressure on states. These changes challenge states to sustain high-quality healthcare access while demanding greater budgetary efficiency from the Medicaid program.
These changes are not temporary adjustments or cyclical budget pressures. They represent a structural and permanent shift in Medicaid toward performance-based accountability and fiscal efficiency. Organizations that treat this moment as acute disruption risk being caught underprepared for when longstanding revenue streams narrow or disappear. The organizations that will thrive are those that recognize the need to build new capabilities now, even while current payment models remain viable.
As a result, SSOs and CBOs are exploring how to solidify their role as, or become, indispensable partners to Medicaid MCOs and state Medicaid agencies amidst these budget constraints. There is a unique and durable opportunity for SSOs and CBOs to demonstrate their value not merely through service provision, but through documented cost-effectiveness and efficiency. MCOs and state agencies are increasingly focused on leveraging existing resources to achieve better outcomes, particularly by managing risk, improving efficiency, and stabilizing the health of people covered by Medicaid. The core competencies of SSOs and CBOs in delivering comprehensive coordination and community supports are strategic assets that align perfectly with payor goals of cost containment and quality metric performance. As structural shifts place greater emphasis on fiscal efficiency, SSOs and CBOs function as core infrastructure for prevention, stabilization, and continuity of care—assets that states and MCOs cannot easily replicate. By framing their work around achieving measurable results that translate into financial savings and improve health outcomes, SSOs and CBOs can secure their role as critical partners in sustaining Medicaid programs.
Who We Are: Lutheran Services in America
It is within this context that Lutheran Services in America (LSA) has developed this guide for SSOs and CBOs both within the LSA member network and beyond. As one of the nation’s largest national networks of health and human service providers with a mission to cultivate caring communities that advance health and opportunity for all, LSA’s work is rooted in a century-long faith tradition of service in, with, for, and to the community. Through its nationwide network of 300 nonprofit organizations, Lutheran Services in America operates in 1,400 communities across 46 states, Washington, D.C., and the U.S. Virgin Islands, reaching more than 7 million people each year.1
Lutheran Services in America utilizes its national member network to identify emerging policy and practice trends, make targeted investments to test innovative approaches, assess opportunities for scaling successful initiatives, evaluate outcomes, and share best practices with stakeholders across the health and human services sector. This guide is part of a multi-year initiative to reshape and foster alignment between health and social care systems to strengthen families.
The purpose of this guide is to:
- Outline the current federal and state Medicaid policy landscape and its impact on potential and existing partnerships with SSOs and CBOs,
- Describe the strategic opportunities that SSOs and CBOs have to add value to state Medicaid agencies and MCO partnerships,
- Outline core strategies for fostering and sustaining partnerships with Medicaid state agencies and/or Medicaid MCOs using examples from Lutheran Services in America member organizations,
- Offer concrete recommendations for Lutheran Services in America members and other SSOs/CBOs to expand and strengthen their partnerships through service delivery.