Centers for Medicare Medicaid Services

1. 1 Centers for Medicare & Medicaid Services Managing Home and Community-based Services in A Challenging Economy NASDDDS Annual Conference November 13, 2008 Suzanne Bosstick and Mary Sowers Center for Medicaid & State Operations Disabled and Elderly Health Programs Group

2. 2 Overview Focus of presentation: availability of Medicaid �authorities� helpful to states in providing quality HCBS while managing/controlling increase in costs (Mary Sowers) Context within CMSO: HCBS initiatives of interest (Suzie Bosstick)

3. 3 In the Hopper New Administration brings transition and the unknown Meanwhile�. HCBS Waiver Program More than 350 waivers Increasing use of the web-based application Increasing number of applications that add or enhance self-direction Increasing interest in managed long term care States building or enhancing QI systems

4. 4 HCBS Waiver Developments Emphasis on quality improvement systems at the state level Continued work within CMSO on federal oversight Standard Operating Protocols Performance Measurement Tools Internal Controls for Consistency Concurrent Waiver Reviews Transparency, clear expectations to States and CMS Regional Offices

5. 5 HCBS Waiver Developments White Paper on �silo funding� and defining the nature/characteristics of home and community settings NASDDDS and other stakeholder comments

6. 6 HCBS State Plan Option 1915(i) NPRM was published, comment period ended, and final rule is in clearance now Emphasis on person-centered plans, self-direction, quality, and needs-based criteria (not target populations) Two states with approved HCBS State Plan Options: Iowa and Nevada Characteristics that define HCBS was addressed in the regulation Focus on serving those with chronic mental illness

7. 7 Universal Principles Across business lines � HCBS waivers, State plan options, managed care waivers, demo waivers, Money Follows the Person, and system transformation grants: Person-centered systems Self-direction Facilitating transitions/diversions from institutions Measuring quality Assuring true �home and community settings� Efficiencies Global approaches � e.g. quality improvement

8. 8 Medicaid and Managed Long-Term Care, Tiered Waivers and Other Strategies States are Exploring to Manage Costs

9. 9 Context Tight State Budgets Increasing per person Medicaid costs Increasing percentage of population over age 65 Increasing life expectancies

10. 10 Proportion of U.S. Residents Age 65 and Older The older adult population will increase rapidly between 2010 and 2030 and the baby boom generation ages. The older adult population will increase rapidly between 2010 and 2030 and the baby boom generation ages.

11. 11 LTC Expenditures by Payer: United States, 2005 Medicaid is largest payer of formal long-term care, accounting for about half of spending.Medicaid is largest payer of formal long-term care, accounting for about half of spending.

12. 12 Medicaid Institutional and Community-Based Expenditures in 2005 Dollars: FFY 1980-2005 Home and community-based services were 37% of Medicaid LTC expenditures in 2005, compared to only 3% in 1980. Home and community-based services were 37% of Medicaid LTC expenditures in 2005, compared to only 3% in 1980.

13. 13 Strategies States Are Using to Address the Inevitable: Developing or utilizing uniform assessment tools that assist the State in determining need for services. In some States, these tools have also been successfully tied to individual budget allocations. Developing Tiered Waivers A combination of both� Also, many States are looking at managed long term care.

14. 14 Increased Interest in Managed Long-Term Care States pursue managed long-term care for a number of reasons: Budget predictability Coordinated, accountable care options Quality Managed long-term care models strive to achieve a coordinated approach to serving a vulnerable population.

15. 15 Managed Long-Term Care: What does that Mean? Medicaid managed long-term care is a contractual agreement between a Medicaid agency and a contractor (health maintenance organization, community services agency, provider organization or other entity) under the terms of which the contractor accepts financial risk through a capitated payment for providing long-term care (LTC) benefits to Medicaid beneficiaries. Medicaid Managed Long-Term Care Research Report Paul Saucier, Muskie School of Public Service, University of Southern Maine Wendy Fox-Grage, AARP Public Policy Institute November 2005

16. 16 Ranges of Managed Long Term Care Managed long-term care may be a continuum that includes the following: - Integrated Medicare and Medicaid services (PACE is a good example, and some States are exploring the use of Medicare Special Needs Plans, as well). - Integrated Acute, Primary, Institutional and Home and Community Based Services - Managed HCBS only

17. 17 Managed Long-Term Care: Early Assessments � Studies of managed long-term care programs have been largely positive, finding high consumer satisfaction levels, lower utilization of institutional services and increased access to home- and community-based services. Cost studies have been more mixed, with no clear consensus emerging as to whether managed long-term care saves money for public purchasers. Savings notwithstanding, the budget predictability that comes with capitated payments is appealing to state policymakers as growing numbers of long-term care consumers place increasing pressure on Medicaid budgets.�

18. 18 Vehicles for Medicaid Managed Long-Term Care Section 1915(b)/1915(c) Waivers 1915(b) Waivers 1915(b)(1) � mandates managed care 1915(b)(2) � utilize a central broker 1915(b)(3) � use cost savings to provide additional services 1915(b)(4) � limits number of providers for services 1915(c) Waiver Allows Waiver of: Comparability Statewideness Income and Resources for the Medically Needy

19. 19 Vehicles for Medicaid Managed Long-Term Care, Continued 1915(b) Managed Care Title XIX Eligibility State Plan Services Cost Effective Initial - 2 Years Renewal - 2 Years CMS 64 1915(c) HCBS NF/ICF/MR LOC Alternative Services Cost Neutral Initial - 3 Years Renewal - 5 Years HCFA 372

20. 20 Vehicles for Medicaid Managed Long-Term Care, Continued Section 1932(a) State Plan/1915(c) Waiver Concurrent Authority Deficit Reduction Act � Benchmark Provisions Section 1115 Research and Demonstration Projects Arizona, Vermont and Hawaii

21. 21 Vehicles for Medicaid Managed Long-Term Care, Continued Section 1915(a) Provision of the Social Security Act that allows for voluntary managed care, including pre-payment and capitation; May be limited geographically; Does not provide for a limitation of provider; For LTC, this authority may be coupled with a 1915(c) waiver All applicable managed care rules (42 CFR 438) will apply (i.e., for PAHP, PIHP and MCO)

22. 22 Integrated Models: Medicare and Medicaid PACE � growing interest in the use of PACE models Utilization of the Medicare Special Needs Plans as Plans for Medicaid Managed Long Term Care. A number of States have explored or are implementing MLTC by using SNPs as plans.

23. 23 Challenges and Next Steps for CMS in Managed Long Term Care Helping States Ensure Basic Principals in Managed Care: Person-Centered Plans of Care Meaningful Choice and Control (including self-direction) Transparency and Information Identification and removal of barriers to managed long-term care while: Ensuring quality for Individuals Ensuring financial accountability Assisting States to Identify Positive Incentives