Indiana Employers Say Community Health Worker Financing Still Runs on Short-Term Dollars
Community health workers remain central to outreach, care coordination, and trust-building in settings that often struggle to reach patients through traditional clinical staffing alone. In Indiana, however, the financial structure behind that workforce is still unstable. A qualitative study published in the Journal of Public Health Management and Practice examined how employer organizations think about Medicaid reimbursement and other funding strategies for community health workers, and the picture that emerged was one of persistent fragility rather than durable financing.
Leaders from eight Indiana-based organizations participated, including health systems, federally qualified health centers, a local health department, and a community-based organization. Their perspectives were supplemented by leaders from three organizations outside Indiana involved in CHW policy, research, or advocacy. The interviews, conducted in 2024 and analyzed with a framework approach, centered on a practical question with major workforce consequences: how can CHW programs survive long enough to become routine parts of care delivery?
The answer, for most employers, was not Medicaid billing. Short-term grant funding remained the dominant support mechanism, leaving CHW programs vulnerable to the stop-start cycle that has long limited community-facing workforce models. One Indiana employer billed Medicaid for CHW services; seven did not.
Medicaid Billing Friction Is Narrowing Access to Sustainable Payment
The barriers described by employers were structural and operational, not abstract. Low reimbursement rates made billing unattractive even when it was technically possible. Complex billing procedures added another layer of burden, especially for organizations without robust administrative infrastructure. Employers also described limited billable activities, which constrains the kinds of CHW work that can be reimbursed even when the work itself is clinically and socially valuable.
For some providers, the obstacle was more fundamental. Structural exclusion from Medicaid reimbursement affected organizations such as federally qualified health centers, narrowing the pool of employers able to treat CHW services as a reimbursable function. In practical terms, that means the workforce most often deployed to address housing instability, transportation barriers, care navigation, and chronic disease support may be supported by the least stable funding model in the system: temporary grants with fixed end dates.
A single reimbursable pathway is not enough when the administrative rules around it are this restrictive.
For public health systems and health services organizations, the implications are direct. CHWs are often expected to improve engagement and close gaps in access, yet their employers must navigate a reimbursement structure that appears poorly matched to the breadth of their role. When billing rules recognize only a narrow slice of CHW activity, organizations are pushed to choose between mission-driven service delivery and financial sustainability.
Employers Are Building Around the Gaps with Braided Funding and Payment Reform
Because Medicaid reimbursement alone has not solved the problem, Indiana employers described a range of alternative strategies. Some looked to reforms in current Medicaid policy. Others pointed toward value-based payment models, where CHW support could be justified through better outcomes, reduced utilization, or improved care coordination. Braided funding approaches also surfaced as a recurring theme, reflecting the reality that no single payer source is likely to cover the full scope of CHW services in many settings.
Employers also emphasized the importance of advocating with organizational leadership using return-on-investment arguments. That framing is clinically and operationally important. CHW programs may be easier to defend internally when leaders can connect the work to measurable organizational goals such as improved follow-up, stronger patient engagement, or downstream savings. Even without a randomized trial embedded in this study, the financing logic is clear: programs that reduce avoidable gaps in care are easier to sustain when executives see them as investments rather than expenses.
The non-Indiana stakeholders added another layer of policy strategy. They pointed to managed care incentives or requirements for employing CHWs and to dedicated workforce development partner organizations that could help employers build and maintain CHW teams. Those ideas move the financing conversation beyond fee-for-service reimbursement alone. They also recognize that workforce sustainability depends on more than payment codes; training, infrastructure, and employer support shape whether CHW programs can scale without collapsing under administrative strain.
What the Indiana Experience Means for CHW Workforce Stability
This study does not present a claims-based outcome analysis or measure patient endpoints. Its value lies elsewhere: in documenting how employers responsible for CHW programs actually make financing decisions in a real-world state environment. The qualitative design captures the tension between policy intent and implementation. Medicaid may formally allow some reimbursement pathways, yet the lived experience of employers suggests that those pathways remain difficult to use, limited in scope, and uneven across provider types.
For Indiana, the policy challenge is not simply whether CHWs should be funded. It is how to create a reimbursement structure broad enough, simple enough, and financially credible enough for employers to rely on it. Grant funding can launch a program. It rarely stabilizes one. Medicaid reimbursement could, in principle, offer a more durable base, but only if rates, billing rules, and eligibility structures align with the daily work CHWs are actually hired to do.
The findings point toward a system-level problem with system-level solutions. Rate adequacy, billing simplification, broader recognition of billable CHW activities, value-based arrangements, braided financing, and managed care incentives all emerged as plausible pieces of a more durable model. None alone appears sufficient. Together, they sketch the outline of a workforce strategy that would treat CHWs as a permanent part of care delivery rather than a temporary add-on supported by unstable grants.
For employers, the next phase will likely depend on whether policymakers are willing to redesign reimbursement around what CHWs do best: extend the reach of clinical teams, connect patients to community resources, and keep care from unraveling outside the exam room. The study leaves little doubt about the current financing gap. The harder question is whether state Medicaid policy and employer strategy will move quickly enough to close it.