Changes in LTC Services and Supports

Falls Church—Until recently, long-term services and supports in Medicaid were refined to nursing homes or institutional care. For the past few years, however, there has been a “very dramatic” change in where Medicaid long-term care spending is taking place, according to Barbara Edwards, director, Centers for Medicare & Medicaid Services (CMS), disabled and elderly health programs group.

In 2011, 47% of the spending in Medicaid long-term services and supports was done in community-based and home settings, up from approximately 20% in 1997. Ms. Edwards, who spoke at the Leadership Summit on Medicaid Managed Care, said the trend away from institutions is “very strong” and “very steady.” She added Medicaid is serving >1 million people alone in the 1915 (c) program for home and community-based waivers.

“This is clearly the direction of the program,” Ms. Edwards said.

The ACA’s Impact

The Medicaid program has changed for several reasons, according to Ms. Edwards, including due to the Patient Protection and Affordable Care Act (ACA). She said the ACA has 3 major components that affect this: (1) eligibility and benefit reform in the commercial marketplace and in the expansion of Medicaid; (2) health system and healthcare delivery reform in public and private sectors with the goal of creating a more sustainable and effective system to make universal coverage successful and sustainable; and (3) long-term services and supports. She said the latter objective does not get much attention, but she calls long-term services and supports “a really monumental focus” of the ACA.

“[The ACA] is one of the most significant pieces of legislation to move the advancement of long-term services and supports transformation that we have seen,” Ms. Edwards said.

Under the ACA, long-term services and supports have mainly pertained to Medicaid because Medicaid is the major third-party payer of long-tern services and supports in the United States. In 2011, Medicaid spent $120 billion on long-tern services and supports, accounting for one-third of all spending in the Medicaid program. The growth rate of long-term services and supports is 5% to 7% per year from 1995 to 2010, according to Ms. Edwards.

The ACA has provided states with increases in federal funding and new opportunities to invest in community-based long-term care. For instance, it introduced health homes for people with multiple chronic conditions to help them with transition planning, individual and family supports, and care coordination. There are currently 17 health homes approved in more than 12 states, according to Ms. Edwards. She said that for the first 2 years of health homes, the federal government matches 90% of the health home spending. Health homes are required to pay attention to primary care, acute care, behavioral health, and long-term care services, although states can choose how the health homes are organized.

The law also expanded existing programs to make them available for longer time periods, offered more money, or made them easier to use. For instance, Congress extended the Money Follows the Person long-term grant program through 2026 and put more money into the program, in which states receive enhanced matching for the first year for people who come out of an institution and return to a community-based setting. Ms. Edwards said 44 states and the District of Columbia have Money Follows the Person programs.

Even before the passage of the ACA in March 2010, there had been other legislation that changed Medicaid. The first Medicaid home care waiver program was permitted in the 1980s by Congress to keep people in their homes instead of placing them in institutions. In the 1990s, the enactment of the American with Disabilities Act gave people with disabilities access to the same public services in the community as people without disabilities and changed how Medicaid and other public service programs are obliged to support people with disabilities in community settings.

Current Trends in Long-Term Health

Today, there are 3 major trends influencing long-term services and supports in Medicaid, according to Ms. Edwards: (1) the enforcement of the American with Disabilities Act and the 1999 Olmstead decision requiring states to offer services in community settings to people with disabilities instead of in institutions; (2) new federal investments in community-based long-term care, thanks to the ACA; and (3) the high expenditures and rate of growth in long-term care spending.

The increasing costs have led to a movement towards managed care and the integration of primary care, acute care, behavioral health, and long-term care services and supports, according to Ms. Edwards. In 2011, 74% of people with Medicaid were enrolled in managed care programs compared with 58% in 2002. In all, there are 20 million Medicaid beneficiaries enrolled in managed care in 38 states. From 2004 to 2013, the number of states with managed long-term care services and supports has increased from 8 to 19, according to Ms. Edwards. By the end of this year, she said as many as 25 states may offer capitated managed care for long-term care beneficiaries.

Access to Care

Although spending in Medicaid has shifted toward community care and away from institutional care, Ms. Edwards said “the access to community-based care has not been even.” She said some states are spending >75% of their long-term care dollars in institutional settings, while other states are spending nearly all of their money in community-based settings. In addition, the access to community-based care is not consistent among disability groups. For instance, community-based care is the norm for people with developmental disabilities, but institutional care is common for older people relying on Medicaid for long-term care and for people with physical disabilities that are not developmental.

“When we think about access to community care, the fact that we have moved to 50-50 across the country on average across all populations does not really project the real picture, in terms of pockets and sometimes whole systems of care that are still very dependent on institutional spending,” Ms. Edwards said.

The United States Department of Justice (DOJ) is committed to enforcing rules related to Medicaid and long-term care, according to Ms. Edwards. In the past few years, the DOJ has been involved in Medicaid and long-term cases in at least 25 states, including litigation, settlement negotiations, and findings letter regarding compliance issues.

“[The DOJ] is very serious about this,” Ms. Edwards said. “They are working very hard not just to go in and sort of pull the rug out from the states, but to say, ‘There are better ways to do this. You can take the resources you are spending today, and you can spend them smarter and you can get people into community-based settings.’…There is a lot going on, and it is changing our systems, not just because it is the thing consumers are asking for, but it is also changing it because it is what is the law of the land.”