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Long Term Care Financing Strategies and Trends

Long Term Care Financing Strategies and Trends. Robert Mollica September 2004. Overview. Spending trends Systems focus Federal policy directions State budgeting framework Broad rebalancing strategies State examples Washington Wisconsin Vermont Maine. System focus.

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Long Term Care Financing Strategies and Trends

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  1. Long Term Care Financing Strategies and Trends Robert Mollica September 2004

  2. Overview • Spending trends • Systems focus • Federal policy directions • State budgeting framework • Broad rebalancing strategies • State examples • Washington • Wisconsin • Vermont • Maine

  3. System focus • One state agency manages the entire system • Flexible money (state agency, local SEP, consumer) • Multiple sources of funding • Eligibility process doesn’t hinder access • Seamless entry (single entry point) • Multiple populations • Full array of services • Available funding/slots • Consumer preferences and control • Care management for nursing home residents

  4. Medicaid spending (billions) Eiken, Burwell, Medstat, May 2004

  5. Medicaid spending (billions) Eiken, Burwell, Medstat, May 2004

  6. Spending balance (billions) Institutions – drop from 77.1% to 66.9%

  7. Spending Balance – Region All populations

  8. Spending Balance – Region Elders and adults

  9. Large states All populations

  10. Large states Elders and adults

  11. Selected states All populations

  12. Selected states Elders and adults

  13. Nursing home supply 65+ Region

  14. NF supply selected states

  15. Federal directions • New Freedom initiative • Legislation • Money follows the person • Presumptive eligibility • Policy guidance • Transition expenses • Modifications • Medical equipment • Eligibility dates

  16. Promoting balance: CMS Grants • Three rounds of funding • Nursing home transition • System Change • CPASS • Independence Plus • Quality Assurance/Quality Improvement • Money Follows the Person • Aging & Disability Resource Centers • Round 4 – Awards end of September

  17. Aging and Disability Resource Center Grant Program • Create a single, coordinated system of information and access for all persons seeking long term support to minimize confusion, enhance individual choice, and support informed decision-making Greg Case, AoA, 3/3/04

  18. ADRC grantees Alaska Louisiana New Mexico Arkansas Maine North Carolina California Maine No. Marianna Florida Maryland Pennsylvania Georgia Minnesota Rhode Island Illinois Montana South Carolina Indiana New Hampshire West Virginia Iowa New Jersey Wisconsin

  19. I&R 39 Web based I&A 18 Initial screening 37 NF PAS 23 Assessment 40 Financial elig 16 Functional elig 37 Develop care plan 42 Authorize service 40 Monitor services 42 Reassess 40 Protective services 8 SEP functions NASHP 2003

  20. Populations served NASHP 2003

  21. Funding sources NASHP 2003

  22. Organizations NASHP 2003

  23. Financing strategies • Single long term care budget • Oregon • Washington • Massachusetts reorganization • Money Follows the Person (Texas, Maryland, Indiana) • Global budget – Vermont proposal • Managed long term care – AZ, MA, MN, TX, WI • Shifting capacity, special fund (Vermont)

  24. Texas – Rider 37, 28 • NF residents call state DHS hotline • Verify Medicaid eligibility, coded • Case manager prepares care plan • Funds moved to waiver budget periodically • Allow up to $2,500 for transition services • Average $1,962 • 2,200 moved 9/2001-8/2003 • 1,169 since 8/2003

  25. Living arrangements Source: Texas DHS

  26. Length of stay before transition Source: Texas DHS

  27. Alternative Residential Settings ADSA Case Management & NH Relocation • ADSA • Home & Community Services Office • Financial Eligibility • Comp. Assessment • Service Authorization Nursing Facilities Senior Information and Assistance Assisted Living Adult Residential Care Adult Family Homes Home Care AAA CaseManagement & Reassessment Hospital The Washington delivery system

  28. Legislative direction… • Consolidate state LTC policy, management and financing functions • Consolidated budget structure gives management flexibility • 95-97 budget reduces NH caseload by 1,600 clients • NH “bed need” assessment includes availability of home/community care • Caseload Forecasting Council projects NH, PC & HCBS trends • NH caseload falling; HCBS absorbs growth in service demand Aging and Disability Services Administration

  29. Nursing home relocation • Assign case managers to each nursing facilities • Priority clients: new admits, 180 day conversions & others expressing interest • Provide assistive technology and individualized community support services • Use civil penalty fund and nursing facility discharge allowance • Promote NH capacity reduction and bed conversion strategies Aging and Disability Services Administration

  30. Nursing Home Caseload Trend Aging and Disability Services Administration

  31. Home & community caseload trend Aging and Disability Services Administration

  32. 20,000 15,000 10,000 Washington LTC Caseload Caseload Trends 35,000 30,000 Home & Community Caseload 25,000 Medicaid Nursing Home Caseload 7-87 7-88 7-89 7-90 7-91 7-92 7-93 7-94 7-95 7-96 7-97 7-98 7-99 7-2000 7-2001

  33. Vermont Act 160 “The reductions required … shall be redirected in FY 1997 to fund home and community-based services. For fiscal year 1998 and thereafter, the reductions required ... shall be redirected … to fund both home and community-based services and any programs designed to reduce the number of nursing home beds. Any general funds redirected but not spent during any fiscal year shall be transferred to the long-term care special administration fund...” Department of Aging and Disabilities

  34. Vermont Act 160 • Shifted funds from nursing home to the HCBS appropriation • Goal 60-40% institution/community • Strategies: NF moratorium, expand residential alternatives, one time investments • Five percent drop in NF supply • Budget crisis may shift funds back to entitlement services Department of Aging and Disabilities

  35. Shifting the spending balance Department of Aging and Disabilities

  36. Vermont spending trends (millions) Department of Aging and Disabilities

  37. VT caseload trends Use of NFs alone would raise spending by $40 million Department of Aging and Disabilities

  38. Vermont global budget (1115 proposal) • Provide maximum choice of services and settings • Eliminate institutional bias • Promote early intervention • Improve satisfaction • Break link between 1915 (c) waivers and NF level of care • Reduce NF use • Control costs Department of Aging and Disabilities

  39. Levels of intervention • Highest need: Entitlement to NF or HCBS • High need: Served as funds available • Moderate need: At risk, as funds available Departmentof Aging and Disabilities

  40. Long term care reformin Maine Goals for Reform • Control Spending • Respond to Consumer Demand for Choices • Address Unmet Needs • Reduce Reliance on Institutional Care Bureau of Elderly and Adult Services

  41. 1993 Soaring nursing home costs Loose eligibility criteria Waiting lists for home care Few residential alternatives to institutional care. 1994 Legislature tightens nursing home admission criteria Diverts savings to home care and the deficit Amends criteria for CON requiring cost neutrality for new projects. Maine: deficit creates opening for reform Bureau of Elderly and Adult Services

  42. System restructuring • Consolidated assessment and case management • reduce overhead costs • address disparities in service allocation • Electronic long-term care eligibility determination system (MECARE) • Increased management tools Bureau of Elderly and Adult Services

  43. What’s working • Home and community care increased from 16% to 39% of total budget • Per capita spending declined 12% • Medicaid NF census dropped 17%, discharges to home tripled, and length of stay reduced • 2000+ nursing home beds (20% of total) banked, delicensed, or converted to residential care • Data system able to respond to questions and challenges, and predict result of policy changes Bureau of Elderly and Adult Services

  44. MECARE • Provides real time program eligibility • Enhances communication between departments, bureaus and organizations • Statewide data on consumer characteristics, service plans and costs across settings/programs • Integrates data sets (assessment and claims) • Promotes maximization of Medicaid funding Bureau of Elderly and Adult Services

  45. Maine NF spending trends

  46. Maine HCBS trends Medicaid only

  47. Maine caseload: state and Medicaid 1995: served 19,742 2003: served 25,667

  48. Maine spending

  49. Common themes among states • Restructure during a budget crisis • Seven point plan • Leadership • Comprehensive entry point system • Financing strategy (pool, MFP, capitation) • Expand in home and residential options • Reduce NF supply • Occupancy penalty, bank, convert • Nursing home relocation • Cover transition costs, Dedicated staff

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