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March 2023  Volume 4Issue 3
Health Law Connections

Moving the Needle? Recent CMS Efforts to Advance Health Equity

AHLA thanks the leaders of the Regulation, Accreditation, and Payment Practice Group for contributing this feature article.
  • March 01, 2023
  • Margia Corner , University of California Office of General Counsel
  • Rachel Carey , Hancock Daniel & Johnson PC
  • Caitlin Parry , Hancock Daniel & Johnson PC
Health Equity

For decades, research has demonstrated persistent disparities in health, access to health care, and health outcomes based on race, ethnicity, age, sex, gender, socioeconomic status, and other factors.1 The disproportionate impact of the COVID-19 pandemic on certain populations and the lack of access to diagnostic testing, vaccination, and treatment for certain communities appear finally to have brought the need to address long-standing health care disparities to the forefront. As a result, governments at all levels, public and private health insurance programs, health care providers, and other stakeholders have renewed their commitment to promote health equity and close gaps in health care access, quality, and outcomes for these patient populations.

The Centers for Medicare & Medicaid Services (CMS) defines health equity as “the attainment of the highest level of health for all people, where everyone has a fair and just opportunity to attain their optimal health regardless of race, ethnicity, disability, sexual orientation, gender identity, socioeconomic status, geography, preferred language, or other factors that affect access to care and health outcomes.”2 While there are initiatives throughout the U.S. Department of Health & Human Services (HHS) and at state and local levels to promote health equity, this article focuses on the efforts of CMS to advance health equity as a critical element of health care quality and value-based care in the Medicare and Medicaid programs.

Recent History of CMS’ Efforts to Promote Health Equity

In 2015, CMS developed its first CMS Equity Plan for Improving Quality in Medicare.3 The plan focused on Medicare populations that experience disproportionately high burdens of disease, worse quality of care, and barriers to accessing care—namely, racial and ethnic minorities, sexual and gender minorities, people with disabilities, and individuals living in rural areas.4 The plan consisted of three core elements: (1) increasing understanding and awareness of disparities; (2) developing and disseminating solutions to achieve health equity; and (3) implementing sustainable actions to achieve health equity.5

Since then, CMS has worked to expand the collection, reporting, and analysis of data related to health care disparities. To improve standardized data collection among stakeholders, CMS developed the Inventory of Resources for Standardized Demographic and Language Data Collection.6 In 2016, CMS released A Practical Guide to Implementing the National CLAS Standards: For Racial, Ethnic and Linguistic Minorities, People with Disabilities and Sexual and Gender Minorities to help providers with providing culturally and linguistically appropriate services.7 CMS also began to report on disparities in the Medicare and Medicare Advantage programs. For example, in 2016, CMS developed the Mapping Medicare Disparities (MMD) tool, an interactive data visualization tool to investigate geographic, racial, and ethnic differences in health outcomes for Medicare patients.8 And in 2018, CMS began publishing its Rural-Urban Disparities in Health Care in Medicare Report to detail differences in health care experiences and clinical care in rural and urban areas.9

CMS has also been working to develop and disseminate solutions to promote health equity. In 2017, CMS implemented a Health Equity Technical Assistance Program, which allows CMS stakeholders to ask questions about how to reduce disparities among their enrollees and beneficiaries.10 In 2019, CMS identified and developed Standardized Patient Assessment Data Elements (SPADEs) to assess Social Determinants of Health (SDOH), including race, ethnicity, and preferred language, and embedded these data elements into the Post-Acute Care Quality Reporting Program.11 More recently, CMS has also provided hospitals and other stakeholders with confidential reports that show differences in readmission rates for patients with dual eligibility in Medicare and Medicaid and certain condition-specific readmission measures,12 and published a Guide to Reducing Disparities to help hospital leaders reduce readmissions in diverse populations. On January 7, 2021, CMS released a letter outlining opportunities under Medicaid and the Children’s Health Insurance Program (CHIP) to better address SDOH and thus lower health care costs.13

Challenges Remain Even to Collecting Necessary Data

Despite CMS’ focus on collecting demographic information necessary to identify health disparities, data collection remains a major challenge for health care organizations and health care professionals. The Affordable Care Act required any “federally conducted or supported health care or public health program, activity, or survey” to collect and report “to the extent practicable” information about race, ethnicity, sex, primary language, and disability status.14 Health policy experts and policymakers, including CMS, have long-recognized voluntary, self-reported demographic information as the gold standard for such data.15 But more than a decade later, there remain administrative barriers for health care providers collecting this information from their patients, including inconsistent definitions for demographic information, no standard data collection tools, and insufficient time or resources to support front-line health care providers or administrative staff to ask patients to provide this information or to follow up with patients for whom demographic information may be missing. As a result, since 2021 CMS as well as other payers, health care providers, and health care technology companies have renewed their commitment to facilitating the standardization and collection of such data.16 While these efforts may help to significantly advance demographic data collection, it is also important to acknowledge that there may be other barriers to patients providing this information, such as a lack of trust in the health care system or the state or federal governments and privacy concerns about how sensitive information may be used or disclosed. That is especially the case when the federal government has threatened to tighten immigration enforcement efforts in health care settings or based on use of public benefits, or now, in the wake of the Dobbs v. Jackson Women’s Health Organization decision, when numerous states are enacting or reviving laws that ban critical reproductive health care services for women. The need to collect demographic information to identify health care disparities must be balanced against patient privacy protections and other policy concerns about collecting more detailed, sensitive information, such as immigration status or pregnancy status.

CMS Framework for Health Equity Adopted for 2022-2032

CMS’ new 2022-2032 framework for health equity expands on the 2015 CMS Equity Plan for Medicare and provides a comprehensive ten-year plan for all CMS programs—Medicare, Medicare, CHIP, and the Health Insurance Marketplace—and is structured to align with HHS initiatives to increase health equity.17 The framework consists of five areas of priority:

Priority 1: Expand Collection, Reporting, and Analysis of Standardized Data. CMS again emphasizes that the collection, reporting, and analysis of comprehensive, interoperable, standardized individual-level demographic and SDOH data are necessary to improve the quality of health care. CMS acknowledges that data should only be collected from individuals voluntarily. CMS encourages the use of technology for data collection but recognizes disparities in access to technology and emphasizes that data collection must occur across settings, regions, and communities.

Priority 2: Assess Causes of Disparities Within CMS Programs and Address Inequalities in Policies and Operations to Close Gaps. As the largest provider of health insurance in the United States, CMS believes that it can be a “critical engine” for promoting health equity. For example, CMS will continue to research the impact that social risk factors have on payment and value-based purchasing programs. CMS is also exploring opportunities to collaborate with its network of partners to provide a more proactive approach to addressing health disparities, such as identifying individuals in need of social support services and bringing those services to them. CMS is also seeking to implement equity policies through its Conditions of Participation and Conditions for Coverage, as well as by upholding requirements that entities receiving CMS funding do not discriminate based on race, color, national origin, sex, age, or disability. And CMS seeks to continue expanding access to health care coverage through Medicare, Medicaid, CHIP, and the Marketplace.

Priority 3: Build Capacity of Health Care Organizations and the Workforce to Reduce Health and Health Care Disparities. Going forward, the CMS Innovation Center aims to engage providers who have not previously participated in value-based care. CMS also is committed to partnering with states through Medicaid and CHIP to bring behavioral health services up to parity with physical health services. CMS can further help organizations embed health equity in their strategic plan and operations through programs such as the CMS Health Equity Technical Assistance Program.

Priority 4: Advance Language Access, Health Literacy, and the Provision of Culturally Tailored Services. CMS seeks to improve health outcomes and increase enrollment in health care coverage by advancing language access, health literacy, and culturally appropriate services. For example, the Health Insurance Marketplace’s Navigator program helps individuals understand and enroll in a health care plan that meets their financial and health care needs. CMS recognizes that with its local partners, the agency can do more to identify language, health literacy, and cultural needs among patient populations and to provide culturally tailored resources, products, and information in multiple languages.

Priority 5: Increase All Forms of Accessibility to Health Care Coverage and Services. CMS will also work to increase accessibility to health care services and coverage for individuals with disabilities. CMS plans to collect data from health care professionals on accessibility, to ensure monitoring and oversight of civil rights protections, and to continue to provide technical assistance on accessibility requirements and training for health care professionals on disability-competent care and increase awareness of programs for people with disabilities.18

Current Efforts to Advance CMS Framework for Health Equity for Health Care Providers and Professionals

Making Health Equity a Strategic Priority

As of January 1, 2023, CMS is requiring hospitals to report a “Hospital Commitment to Health Equity” measure as part of the Medicare Hospital Inpatient Quality Reporting (IQR) Program.19 The measure has the following five domains: (1) Equity is a strategic priority, (2) Data Collection, (3) Data Analysis, (4) Quality Improvement, and (5) Leadership Engagement.20

Collecting Data on SDOH

CMS is also exploring how it can use Medicare payment policies and quality reporting programs to encourage hospitals and health care professions to gather more information on SDOH. CMS requested information on how improved reporting of the ICD–10–CM Z codes found in categories Z55–Z65 (“Persons with potential health hazards related to socioeconomic and psychosocial circumstances”) may help CMS improve its ability to recognize severity of illness, complexity of service, and/or utilization of resources under the Medicare Severity Diagnosis Related Groups used for Medicare payment under the inpatient prospective payment system.21 These codes describe a range of issues related to health such as education and literacy, employment, housing, ability to obtain adequate amounts of food or safe drinking water, and occupational exposure to toxic agents, dust, or radiation.22 CMS acknowledged challenges identified by commenters—such as significant time pressures and administrative burdens on health care providers and case management or care coordination teams and patients’ reluctance to share this information—and will consider this feedback in future policy development.23

CMS also added two new measures to the Hospital IQR Program: (1) Screening for Social Drivers of Health, which measures the percent of inpatient adults who are screened upon admission for at least one of the following five major social risks: food insecurity, housing instability, transportation needs, utility needs, and interpersonal violence; and (2) Screen Positive Rates for Social Drivers of Health, which captures the percent of screened adults who screen positive for each of the five major social risks.24 Hospital reporting for these two measures is voluntary for the calendar year 2023 Hospital IQR reporting period and mandatory beginning in 2024.25

Stratifying Health Care Quality Reporting and Performance

In its annual Medicare payment rules, CMS also requested information on its overarching principles for measuring health care disparities across all CMS quality programs for hospitals and in different settings.26 Although CMS has not yet finalized those principles or announced specific policy changes pursuant to them, it is clear that one of CMS’ goals is to use measure stratification in its quality reporting programs to paint a better picture of disparities and provide results that can help providers eliminate barriers.27 CMS appears to be considering measuring disparities using both “within provider”—using stratification to compare quality measure performance for subgroups of patients served by an individual health care provider—and “across provider”—comparing a health care provider’s performance on a quality measure for a particular subgroup of patients to other health care providers’ performance for that same subgroup of patients—approaches.28 Even with stratification, there remains a risk of measurement bias.29 Reports will depend heavily on the quality of data gathered and submitted by health care providers. Health care providers can prepare to implement data collection efforts by standardizing their data definitions for demographic information and improving data collection workflows.

Focusing Value-Based Payment Models on Addressing Health Disparities

CMS is also looking to the alternative payment models tested by the Center for Medicare & Medicaid Innovation (CMMI) to advance health equity. For example, CMMI re-designed a previous model to launch the Accountable Care Organization (ACO) Realizing Equity, Access, Community Health (REACH) Model to bring the benefits of accountable care to Medicare beneficiaries in underserved communities.30 The first performance year started on January 1, 2023, and the model performance period will run through 2026.

The ACO REACH model introduces five new policies for participants to promote health equity:

  1. Health Equity Plan Requirement: Develop a plan based on the CMS Disparities Impact Statement that identifies health disparities, defines goals, establishes a strategy, sets an implementation plan, and monitors and evaluates progress.
  2. Health Equity Benchmark Adjustment: Establish financial performance benchmarks for participants serving higher proportions of underserved beneficiaries to correct the fact that benchmarks are set in part based on historical spending that may be lower than the level of beneficiary health care needs for underserved populations.
  3. Health Equity Data Collection Requirements: Collect and report beneficiary-reported demographic and SDOH data. For the first performance year, ACOs that do so will receive a bonus in their quality score, but in future years, CMS may impose a downward adjustment if an ACO fails to complete this requirement.
  4. Nurse Practitioner Services Benefit Enhancement: CMS authorizes participants to use nurse practitioners to take on additional responsibilities and provide certain services without physician supervision, to the extent permitted by applicable state law.
  5. Health Equity Questions in Application and Scoring for Health Equity Experience: Application and scoring encourage applicants with direct patient care experience and experience providing care in underserved communities.31

CMS and State Efforts to Integrate Health Equity and SDOH

CMS is collaborating with state Medicaid agencies to promote health equity and address SDOH through state Medicaid programs.32 Many of these state Medicaid initiatives depend on state Medicaid agencies to adopt comprehensive quality strategies for their managed care delivery systems to measure and eliminate health care disparities, placing new responsibilities on both Medicaid managed care organizations and health care providers. For example, the California Department of Health Care Services (DHCS) draft 2022 Comprehensive Quality Strategy included DHCS’s “Bold Goals: 50x2025” initiative in which DHCS defines needed improvements in data collection and stratification, establishes a “Health Equity Roadmap” (to be re-designed with stakeholder input), and introduces a set of priority clinical outcome metrics to stratify by race and ethnicity and inform disparity reduction efforts.33 To advance these efforts, DHCS included a number of health equity requirements in its recent competitive procurement for Medicaid managed care plans to provide Medicaid benefits starting in 2024, including requiring plan respondents to have or obtain National Committee for Quality Assurance Health Equity Accreditation by January 1, 2026; to have a Chief Health Equity Officer; to implement new population health management and care management strategies to address unmet social needs of plan members, such as food security and housing; and to collaborate with local agencies such as local health departments and community-based organizations to understand and meet community needs, including by donating a percentage of any plan profits to support local community activities to develop infrastructure to support Medi-Cal members.34 DHCS also plans to adjust the base capitation rates paid to Medicaid managed care plans on plan performance on high-priority quality and health equity outcome measures and to require plans to implement value-based payment arrangements with health care providers.

Many other states, such as Massachusetts,35 Oregon,36 North Carolina,37 and Virginia38 are adopting similarly expansive approaches to use their Medicaid programs to address unmet health-related social needs (HRSN) and to develop value-based payment arrangements to advance health equity. For example, the Oregon Section 1115 Demonstration Project approved in 2022 includes clinically appropriate services to address HRSN, which the state will make available through its existing Care Coordination Organization (CCO) network and through a fee-for-service delivery system. The state will require CCOs to establish a network of providers to provide HRSN services.39 As another example, the Massachusetts Section 1115 Demonstration Project also approved in 2022 includes the “Hospital Quality and Equity Initiative” in which participating hospitals can earn performance-based incentive payments based on: (1) improving the completeness of beneficiary-reported demographic data and screening for HRSN; (2) improving their performance on selected access and quality metrics; and (3) improving workforce competence to provide accessible and culturally appropriate services based on health status and health needs.40

Many of these state initiatives are still under development and implementation is planned to be phased in over multiple years. Additional policy, legal, and regulatory work will be required to support these initiatives from developing new network provider contracts and payment rates for organizations that furnish HRSN services to prioritizing clinical quality and health equity outcome measures that will be used to adjust capitation payments to Medicaid managed care plans or to determine plans’ health equity incentive payments to providers.

What’s Next for CMS and Health Equity?

CMS’ recent efforts to promote health equity have focused on encouraging health care organizations to make health equity a priority by adopting a health equity plan with measurable objectives, evaluating progress, and improving data collection. CMS is likely to continue to use CMS quality reporting programs to identify health care disparities, eliminate those gaps, and design alternative and value-based payment models that take health equity into account. But health care organizations and providers should also be on the look-out for additional specific policy changes related to health equity in the future, such as maternal health and the impact of climate change.41

Margia Corner is a Senior Principal Counsel in the University of California Office of General Counsel. Margia advises the Executive Vice President—University of California Health (UCH) and her division within the Office of the President, as well as executives at the University’s six academic health centers, on a variety of federal and state health care regulatory and compliance matters, including Medicare and Medicaid laws and regulations, the Affordable Care Act, the Physician Self-Referral (Stark) law, the federal Anti-Kickback Statute, and the Beneficiary Inducement Civil Monetary Penalty. Prior to joining the University, Margia served as Counsel—Health Care Regulatory & Transactions in Sutter Health’s Office of General Counsel, advising multi-specialty hospitals, medical foundations, ambulatory surgery centers, and a home health agency on a variety of reimbursement and fraud and abuse compliance matters. Margia previously worked at Hogan Lovells US LLP, in Washington, D.C., and before that, as a law clerk for U.S. District Judge Cormac J. Carney in the Central District of California in Santa Ana. Ms. Corner is a graduate of Stanford University (B.A.) and the University of Michigan Law School and School of Public Health (J.D./M.P.H.).

Rachel Carey is an associate with Hancock Daniel & Johnson PC in Richmond, Virginia. Her practice focuses on health care regulatory matters including compliance program development, support, and assessment; reimbursement payments and appeals; and resolution of health care risk management or operational issues.

Caitlin Parry is an associate with Hancock Daniel & Johnson PC in Richmond, Virginia. Her practice focuses on labor and employment matters including administrative claims, litigation, and advice and counseling on employment agreements and policies.

AHLA would like to thank the leaders of the Regulation, Accreditation, and Payment Practice Group for contributing this feature article: Jeanne Vance, Weintraub Tobin (Chair); Ross Burris, Polsinelli PC (Vice Chair—Education); Janus Pan, Bradley Arant Boult Cummings LLP (Vice Chair—Education); Emily Towey, Hancock Daniel & Johnson PC (Vice Chair—Education); Hilary Isacson, Sutter Health (Vice Chair—Education); and Trent Stechschulte, I Am Boundless, Inc. (Vice Chair—Member Engagement).

1 Ctrs. for Medicare & Medicaid Servs., Office of Minority Health, Paving the Way to Equity: A Progress Report (2015-2021) at 3, (hereafter Progress Report (2015-2021)”).

3 Progress Report (2015-2021), supra note 1, at 7.

4 Id.

5 Id. at 8.

6 Id. at 14.

7 Id. at 16-17.

8 Mapping Medicare Disparities by Population, Ctrs. For Medicare & Medicaid Servs. (Oct. 12, 2022),

9 Progress Report (2015-2021), supra note 1, at 4.

10 Health Equity Technical Assistance, Ctrs. For Medicare & Medicaid Servs. (Aug. 31, 2022),

11 Progress Report (2015-2021), supra note 1, at 27.

12 CMS Disparity Methods Confidential Reporting Overview, Ctrs. For Medicare & Medicaid Servs.,

13 CMS Issues New Roadmap for States to Address the Social Determinants of Health to Improve Outcomes, Lower Costs, Support State Value-Based Care Strategies, Ctrs. For Medicare & Medicaid Servs. (Jan. 7, 2021),

14 Patient Protection and Affordable Care Act § 4302, 42 U.S.C. § 300k.

15 See, e.g., Grantmakers in Health & Nat’l Comm. for Quality Assurance, Improving Data on Race and Ethnicity: A Roadmap to Measure and Advance Health Equity (Dec. 2021),; Olga F. Jarrin et al., Validity of Race and Ethnicity Codes in Medicare Administrative Data Compared to Gold Standard Self-Reported Race Collected During Routine Home Health Care Visits, 58(1) Med. Care e1-e8 (Jan. 2020),

16 Ctrs. For Medicare & Medicaid Servs., Inventory of Resources for Standardized Demographic and Language Data Collection (Mar. 2022),; Mimi Morenz, Forum—Health Equity Pledge Supporters, Health Evolution (Oct. 18, 2021),

17 Ctrs. For Medicare & Medicaid Servs., CMS Framework for Health Equity 2022–2032, at 8.

18 Id. at 10-28.

19 87 Fed. Reg. 48785 (Aug. 10, 2022) (codified at 42 C.F.R. pts. 412, 413, 482, 485, and 495).

20 Id.

21 Id. at 48867.

22 Id.

23 Id.

24 Id. at 48793.

25 Id.

26 Id.

27 Id. at 48868.

28 Id.

29 Id.

30 Ctrs. For Medicare & Medicaid Servs., Provisionally Accepted ACOs and Implementation Period 3 Participant List (Aug. 15, 2022),

31 Dora L. Hughes, CMS Innovation Center Launches New Initiative to Advance Health Equity, Health Affairs (Mar.3, 2022),

32 See, e.g., HHS Approves Groundbreaking Medicaid Initiatives in Massachusetts and Oregon, Ctrs. For Medicare & Medicaid Servs.,

33 California Dep’t of Health Care Servs., Comprehensive Quality Strategy 2022,

34 California Dep’t of Health Care Servs., Transforming Medi-Cal Managed Care Through Statewide Procurement (Feb. 2022),

35 Ctrs. For Medicare & Medicaid Servs., Letter to MassHealth (Sept. 28, 2022),

36 Ctrs. For Medicare & Medicaid Servs., Letter to Oregon Health Authority (Sept. 28, 2022),

37 Ctrs. For Medicare & Medicaid Servs., Letter to North Carolina Department of Health and Human Services (Apr. 25, 2019),

38 Commonwealth of Virginia, Dep’t of Med. Assistance Servs., 2020-2022 Quality Strategy,

39 See supra note 36.

40 See supra note 35.

41 87 Fed. Reg. 49168 (Aug. 10, 2022).