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OLR Research Report


February 2, 2009

 

2009-R-0042

LONG-TERM CARE REBALANCING IN OTHER STATES

By: Nicole Dube, Associate Legislative Analyst

You asked for a brief summary of other states' strategies and initiatives for long-term care system rebalancing that may explain Connecticut's being ranked 34th among states in terms of the percentage of Medicaid long-term care funding spent on home- and community-based services.

SUMMARY

States are confronting increasing elderly populations, fragmented long-term care delivery systems, high nursing home Medicaid costs, and an increasing desire among elderly and disabled people to remain in their own homes while receiving care. As a result, states have begun various efforts to reduce the number of people in institutions and increase the number served by home- and community-based services (HCBS), as part of an overall effort to “rebalance” the long-term care system.

States' rebalancing success is often measured by the percentage of total Medicaid long-term care spending on HCBS. According to a 2008 Thomson Reuters report, Connecticut ranked 34th, spending 35% of its Medicaid long-term care funding on HCBS in FY 07. (The state's ranking fell from 26th in 2005.) There is considerable variation among states, ranging from a low of 12.7% (Mississippi) to a high of 72.9% (New Mexico) with an average of 41.7%. Eleven states: New Mexico, Oregon, Arizona, Minnesota, Alaska, Washington, Wyoming, California, Kansas, Colorado, and Maine spend more than 50% of their Medicaid long-term care funding on HCBS. (A list of the state rankings is enclosed.)

There is no simple explanation as to why some states have been more successful at rebalancing than others. But, recent studies have identified successful strategies and initiatives that have helped states to develop more balanced long-term care systems. These include consolidated long-term care funding and agencies, single point of entry (SPE), consumer directed care, reducing institutional capacity, nursing home diversion and transition programs, and standardized assessment tools.

METHOD

The information in this report was obtained from three recent publications: (1) a July 2008 report by the American Association for Retired Persons (AARP) examining state long-term care rebalancing efforts for seniors and adults with physical disabilities (but not those with mental retardation or developmental disabilities.); (2) a 2007 National Conference of State Legislatures (NCSL) report on state long-term care rebalancing efforts; and (3) the University of Connecticut Health Center's June 2007 Long Term Care Needs Assessment report. Part II of this report provides a comparison of rebalancing efforts in Connecticut and the eight states included in a 2008 University of Minnesota long-term care rebalancing study commissioned by the Centers for Medicare and Medicaid Services (CMS). This three-year case study examined management techniques and programmatic features used by Arkansas, Florida, Minnesota, New Mexico, Pennsylvania, Texas, Vermont, and Washington.

We have summarized some of the main points of these reports but urge you to read the reports themselves for a detailed understanding of their findings. Likewise, we list the strategies and initiatives these reports highlight as significant; this list is not comprehensive.

LONG-TERM CARE REBALANCING

Trying to determine why some states have been more successful at long-term care rebalancing is difficult given differences in states' funding levels, service delivery models, client populations, geography, and political climate. But, researchers have identified certain successful strategies and initiatives states used in their rebalancing efforts. These include global budgeting, consolidated long-term care agencies, single point of entry (SPE), consumer directed care, institutional capacity reduction, nursing home diversion and transition programs, and standardized assessment tools.

Global Budgeting

Two states experts widely regard as having the greatest success in rebalancing, Oregon and Washington, pool state and federal funds for both institutional and HCBS services into one budget with an overall spending cap. This practice, also known as “global budgeting,” gives them flexibility to transfer long-term care funds between different programs to promote cost efficiency, provide care in the most appropriate setting, and establish a suitable balance between institutional and HCBS services.

According to AARP researchers, legislatures in Ohio and New Jersey enacted global budgeting legislation that took effect in 2008.

In addition, Vermont implemented “Choices for Care,” an 1115 Medicaid waiver demonstration program in 2005 that in effect turned federal long-term care funding into a block grant for the state. It entitles Medicaid- eligible people in the designated highest need group to choose between institutional care and HCBS. (OLR report 2007-R-0025 describes the Choices for Care program in greater detail.)

Consolidated Long-Term Care Agencies

Many states, including Vermont, Washington, Wisconsin, and Texas have consolidated the administration and oversight of long-term care services and programs for both seniors and people with disabilities into a single agency. For example, Washington's Aging and Disability Services Administration manages, coordinates, and finances all long-term care services for seniors and individuals with disabilities, including those with physical and developmental disabilities.

Other states have partially consolidated state agency functions across different long-term care populations. According to UConn researchers, New Mexico's Department of Aging and Long-Term Services administers the majority of long-term care programs and services for seniors and individuals with physical disabilities, while the Health Department administers mental retardation and developmental disability services. (Long-term care services are also provided by the departments of Health and Human Services.) This is similar to Arkansas, which administers mental retardation and developmental disability services separately from other long-term care services.

Single Point of Entry (SPE)

Aging and Disability Resource Centers (ARDC) provide consumers with long-term care information and referral services through a single access point. One commonly used ARDC model is the single point of entry system, which provides information, referral, assessment, and eligibility screening for individuals seeking long-term care services. The goal of SPE is to promote consumer choice of long-term care options by allowing an individual to obtain standardized information on long-term care services from an SPE agency. According to UConn's report, Connecticut is one of only 10 states that does not have an ARDC. (Connecticut began piloting a SPE in the South Central region in October of 2008 as part of a $500,000 federal Nursing Home Diversion Modernization Grant received in 2007.)

According to AARP researchers, New Hampshire was one of the first states to develop an ARDC, the “Service Link Resource Center (SLRC),” which was created as its statewide SPE for long-term care services. Local SLRC offices provide information, referral, assessment, and eligibility services for elderly and disabled individuals. Each SLRC office is staffed by nurses who perform clinical assessments and by counseling and financial eligibility staff who perform functional and financial assessments for long-term care services. Arkansas, Georgia, Iowa, Mississippi, New Jersey, and New Mexico also maintain statewide SPE systems.

Consumer-Directed Care

An increasing number of states have implemented consumer-directed programs (also called “self-direction” or “cash and counseling”) for HCBS. Consumer direction provides seniors and disabled individuals with greater control over their own care by allowing them to choose how and when services are provided and who provides them.

According to AARP researchers, in the 1990's Arkansas, Florida, and New Jersey received grants from the Robert Wood Johnson Foundation's Cash and Counseling demonstration program. These grants allowed Medicaid 1115c waiver program participants to manage their own budgets and purchase services; 12 additional states received funding in 2004.

Since implementing its original Cash and Counseling demonstration program, “Independent Choices,” Arkansas has expanded its consumer- directed programs to include “Elder Choices,” an HCBS waiver program for seniors; “Living Choices,” an assisted living program; and “Next Choice,” a nursing home transition program. Other states with successful consumer-directed programs include Washington, Texas, Vermont, New Mexico, Minnesota, Iowa, Kansas, Montana, and West Virginia. Several of these states allow eligible participants to manage their own budgets, schedule services, hire their own caregivers, and set payment rates within certain limits.

UConn researchers cite consumer direction as an area Connecticut could improve upon. They note that while the state has a “self-directed care” program under the Connecticut Home Care Program for Elders (CHCPE), it does not give participants hiring authority or the ability to manage their own budgets. Under CHCPE, self-directed care simply refers to the absence of a care manager. Participants may determine the frequency and duration of services, but care is still provided by CHCPE staff.

CHCPE also offers personal care attendant (PCA) services under a state-funded pilot program that gives participants greater control over their own care. Clients can hire and manage their own attendants to help with personal care and activities of daily living. The client hires, trains, supervises, and may fire the attendant, but a financial intermediary administers the PCA's payroll.

Reducing Institutional Capacity

One rebalancing approach some states use is to reduce current levels of institutional capacity and expand HBCS options. This can be achieved in different ways including revising certificate of need requirements, adjusting reimbursement rates, bed banking, reallocating beds, or paying nursing homes to convert their facilities to less costly alternatives.

UConn researchers cite Minnesota and Pennsylvania as leaders in reducing overall nursing home capacity in their states. NCSL's report highlights Indiana's Nursing Home Closure and Conversion Fund (funded by a statewide nursing home quality assessment fee), which the state used to close 1,500 nursing home beds by July 2007 through incentives and direct sales efforts to the nursing home industry. According to AARP, a primary component of Iowa's 2005 Medicaid reform legislation included expanding HCBS by establishing higher eligibility standards for nursing homes while maintaining current standards for HCBS, but the new standards have not been implemented.

UConn researchers also note that states such as Minnesota, New Mexico, and Vermont have made significant progress in reducing institutional care for individuals with mental and developmental disabilities by eliminating all of their state institutions serving this population. Connecticut has also been successful in this area, but still maintains some state facilities. The researchers also noted that these states have very small intermediate care facilities for the mentally retarded (ICF/MRs), particularly Vermont, whose average group home houses 1.3 people.

Nursing Home Transition and Diversion Programs

Nursing home transition and diversion programs have become an important part of state rebalancing efforts and have been supported by several federal grant programs including the Money Follows the Person Rebalancing Demonstration and the Nursing Home Diversion Modernization and Nursing Facility Transition programs.

Diversion Programs. Diversion programs seek to prevent unnecessary nursing home use by redirecting individuals, when appropriate, to HCBS. According to AARP researchers, 2008 legislation increased the number of program slots in Florida's diversion program from 10,000 to 14,000. This voluntary, Medicaid-funded managed care program provides long term care services in the least restrictive setting.

Transition Programs. Transition programs attempt to move individuals already in nursing homes into less restrictive community settings, which are generally much less expensive than institutional care. Several states have been active in developing transition programs. New Jersey's transition program, Community Choice, was one of the first in the country, transitioned approximately 5,000 individuals out of nursing homes from its inception in 1998 to 2004. Connecticut has a small Nursing Facility Transition Program, which started in 2001 with federal grants and is now state funded. The program, administered by DSS, has transitioned approximately 150 seniors and disabled people from nursing homes into community living.

In addition, 31 states, including Connecticut, have received federal Money Follows the Person Demonstration (MFP) grants. (MFP is a five-year program that permits states to move individuals out of institutional settings into community-based settings.)

State legislation has also supported the development of transition programs. In 2003, the Maryland legislature enacted the “Money Follows the Individual Act,” (HB 478), which prohibits the state's Health and Hygiene Department from denying an individual access to HCBS waiver services due to lack of program funding. The following year, it enacted the Money Follows the Individual Accountability Act (HB 946), requiring the department to identify nursing home residents wanting to transition into the community and provide them with assistance and information.

Standardized Assessment Tool

Some states have developed a standardized assessment tool to determine functional eligibility for long-term care services and match individuals to appropriate services and supports. Arizona used part of its $750,000 federal ADRC grant to create a web-based assessment tool that determines eligibility for long-term care populations across all agencies. In 2006, the Illinois legislature passed the “Illinois Older Adult Services Act,” (PA 093-1031) which requires the use of a single comprehensive assessment tool for long-term care services.

All three reports highlight Washington's assessment tool, the Comprehensive Assessment Reporting and Evaluation (CARE), as a model. CARE is a computerized tool used to assess functional eligibility and care planning for Medicaid long-term care services. According to AARP researchers, a case management information system was added to CARE in January 2008 that automatically prompts case managers regarding deadlines and program requirements.

HYPERLINKS

AARP report, “A Balancing Act: State Long-Term Care Reform,” July 2008, http://assets.aarp.org/rgcenter/il/2008_10_ltc.pdf, last visited on January 30, 2009.

National Conference of State Legislatures, “A Guide to Long-Term Care for State Policy Makers: State Initiatives In Rebalancing Long-Term Care,” 2007, http://www.ncsl.org/programs/health/forum/LTC/ guidereblance.htm, last visited on January 30, 2009.

University of Connecticut Health Center, “Connecticut Long-Term Care Needs Assessment Part II: Rebalancing Long-Term Care Systems in Connecticut,” June 2007, http://www.cga.ct.gov/coa/PDFs/Rebalancing %20report%20FINAL%20June%2025%2007.pdf, last visited on January 30, 2009.

University of Minnesota report, “Research on State Management Practices for the Rebalancing of State Long-Term Care Systems: Final Report, June 2008,” http://www.hpm.umn.edu/ltcresourcecenter/ research/ rebalancing/attachments/final_report.pdf, last visited on January 30, 2009.

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