States expanding coverage of home, community-based care

States are shifting long-term services and dollars from nursing homes to care in the community, with 75% of states expanding coverage for home services, according to a recent survey by the Kaiser Family Foundation. As states look for ways to cut budgets, long-term care, which accounts for a third of all Medicaid spending, is one obvious possibility.

One way that states can delay use of nursing homes is by providing the home and community-based services as part of an integrated care plan that also provides all Medicare, Medicaid, acute, chronic, and long-term care services through a health plan that receives a capitated payment from the state Medicaid program and from Medicare as a special needs plan. "Longstanding demonstrations in Minnesota, Wisconsin, and Massachusetts have had favorable outcomes," says Mary Kennedy, director of Medicare programs for the Association for Community Affiliated Plans in Washington, DC.

"Unfortunately, states that face budget shortfalls often need immediate savings," she says. "Immediate savings in integrated programs come first to the Medicare program, because inappropriate hospitalizations are reduced once a care manager is helping the person maintain their functioning and avoid health crises."

Substantial savings to the state's nursing home budget does come, but later than the current budget year, notes Ms. Kennedy.

"These integrated programs also require careful planning and development of contracts incentives to rebalance spending directed toward the community," she explains. "This planning staff is often some of the first administrative cuts, as a reduced state work force is redirected to the immediate crisis."

$452 saved per person

Wisconsin's Family Care program gives seniors and people with disabilities more choices about where they live, while giving them the supports and services they need to stay healthy and independent. Family Care helps frail elders and people with disabilities live in their homes and communities and stay independent for as long as possible.

"We have piloted Family Care for the past seven years, and we know a great deal about the people who will enroll and what they can be expected to cost," says Stephanie Marquis, spokeswoman for Wisconsin Department of Health and Family Services.

An independent assessment of the early results of the Family Care pilots, released in October 2007, showed that in 2003 and 2004, Family Care saved the Medicaid program $452 per person per month.

The report said those savings were achieved by keeping people out of institutions, such as nursing homes, keeping them healthier, and maintaining their level of functionality. "The report proved that providing the right care, at the right time, in the right place-usually at home-is very cost-effective," says Ms. Marquis.

In fiscal year 2009, Maryland Medicaid implemented two new home and community-based waivers. "The first was a conversion of a state plan medical day care service into a 1915(c) medical day care waiver," says Susan J. Tucker, executive director of the Offices of Health Services. "The second is a CMS demonstration project on community-based alternatives to psychiatric residential treatment facilities. We do not expect the economy to have a negative impact on these two waivers."

The Medical Day Care Services Waiver was implemented on July 1, 2008, and about 3,000 individuals are enrolled. In addition, Maryland Medicaid added medical day care as a service under most of its other Home and Community-Based Services (HCBS) waivers, including the older adults waiver, the living at home waiver, the two waivers targeted at developmentally disabled populations, the traumatic brain injury waiver, and the model waiver for medically fragile children. Maryland expects to implement the other waiver shortly after Jan. 1, 2009.

Program will expand

In 2007, Utah implemented a new 1915(c) waiver, bringing the state's total to six home and community-based services waivers. The waiver that started in 2007, the New Choices Waiver, was unique in that its specific purpose was to de-institutionalize Medicaid recipients who would otherwise be receiving services in nursing facilities. In order to be eligible for this waiver, an applicant must be a current resident of a nursing facility and must have lived there for 90 days or more.

"Originally, this waiver was only located along the Wasatch Front, the most densely populated area in Utah. But as of July 1, 2008, the waiver is now available statewide," says Tonya Hales, RN, director of the Utah Department of Health's Bureau of Long Term Care, Division of Health Care Financing. "Due to this service being newly available in all areas of the state, we do anticipate this will result in expansion of the program over fiscal year 2009. We served 648 people in fiscal year 2008, and have available slots of up to 1,000 participants going forward."

Programs such as the New Choices Waiver and other HCBS programs have resulted in clients having additional choices about the setting in which they receive long-term care services. "The New Choices Waiver and our other waiver programs are assisting the state to have a more balanced approach to the provision of long-term care services," she reports.

For example, on July 31, 2008, 2,938 Medicaid clients were receiving services in nursing facilities across the state. At that same time, 520 Medicaid clients were being served by the New Choices Waiver. "Without the existence of the New Choices Waiver, these 520 individuals would have continued to reside in nursing facilities rather than in community-based settings," says Ms. Hales.

Although the report on total expenditures for FY 2008 is not complete, preliminary numbers show that the average daily rate for nursing facility services is $151.68, while the average daily rate paid for the New Choices Waiver Program was $74.33 per day.

"We are continuing to look for opportunities to provide more balance between facility-based and home and community-based care," says Ms. Hales.

Currently, Utah is discussing whether the use of Section 1915(j) of the Social Security Act (authorized by the Deficit Reduction Act), which allows self-directed personal care to be provided as a state plan service, might be a mechanism to improve choice for participants and assist in addressing the shortage of direct care service providers.

"This is a small-scale program but is something that we believe addresses chronic care needs of individuals, who without the assistance at home, may need to seek facility-based care," says Ms. Hales.

Utah also is making efforts to "right-size" the number of nursing facility beds. "Currently, Utah's average daily census in nursing facilities is about 68% occupancy. We are looking at what other states have done to assist in taking some of their nursing facility beds off-line," she explains. "There are no specific plans under way on how to address this, but it's something we're trying to better educate ourselves about."

Ms. Hales says she doesn't anticipate the downturn in the economy will have an impact on the New Choices Waiver. "Because people are only allowed into the program if Medicaid is already paying for them in a nursing facility, we know that this program saves the state money," she says. "As far as starting any new initiatives, the economy will definitely have an effect on our ability to get funding."

Contact Ms. Hales at (801) 538-9136 or, Ms. Kennedy at (202) 701-4749 or, and Ms. Tucker at (410) 767-1432 or