Barbara Coleman
November 6, 2002

I. DIVERSE AND FRAGMENTED LONG-TERM CARE SYSTEM

• Only common theme in recent years has been concentration of long-term care resources on institutional options. But picture is gradually changing.

• In FY 1990, 90% of Medicaid long-term care dollars went to institutional care (nursing facilities and Intermediate Care Facilities for the Mentally Retarded/Developmentally Disabled) and only 10% to home and community-based services (HCBS).

• In FY 2001, 71% institutional, 29% HCBS.

• Since 1990, HCBS waiver expenditures have increased more than ten-fold, totaling $14.4 billion in FY 2001.

• From FY 2000 to FY 2002, states realized about 5% revenue growth.

• Over the same years, states saw a 25% rate of growth in Medicaid expenditures. Medicaid is the single largest source of public funding for long-term care.

• Total Medicaid expenditures increased about 10.6% from FY 2000 to FY 2001 and were estimated to have risen another 13.3% from FY 2001 to FY 2002.

• Thirty-nine states reported Medicaid shortfalls in FY 2001; 28 states anticipated shortfalls in FY 2002.
  

• Forty states had task forces, commissions, or state agency work groups in 2000 and 2001 to assess their current long-term care systems.

• Some states like Ohio and Texas developed detailed plans with specific strategies and goals, timelines and budgets. Ohio plan contained proposed executive budget for FY 2003 of $145 million for new initiatives and expansion of existing programs.

B. Other comprehensive planning

• Minnesota Long-Term Care Task Force:
  Issued substantive long-term care recommendations in January 2001. Legislature appropriated $183 million for FY 2003 to carry out some of the recommendations. State expected to downsize the nursing home industry by 5,100 beds.

• Michigan Long-Term Care Work Group:
  Issued series of recommendations in July 2000, which included proposals for testing four different models of long-term care in selected regions of the state that build on capitated payment systems.
  

C. Systems Change grants

• Centers for Medicare and Medicaid Services awarded grants totaling $70 million to 37 states and Guam to encourage improvements in home and community long-term care service systems.

• Grants ranged between $300,000 and $3 million.

• Seventeen states proposed using grants to move people out of nursing homes who could live in the community (nursing facility transition grants).

• The most predominant activity proposed by grantees was information, referral, assessment, and outreach, followed by education and advocacy.

IV. BUDGET CRISIS STILL MAKES OUTLOOK UNCERTAIN

• Cost-containment measures often target nursing home rate reimbursement. Many states freeze rates at previous year's level.

• Other strategies: imposing provider taxes, tightening estate recovery and asset transfer recoupment, and capping enrollment in Medicaid waiver programs.

V. STATES MAY FOCUS ON QUALITY OF CARE, INCREASING NUMBERS OF WORKERS

• Minimum staffing ratios for nursing homes - Arkansas, Florida

• New regulations for assisted living - Alabama, Arkansas, New Jersey, Texas

• Workforce strategies, including wage pass-through laws, career ladders, training

MINNESOTA

"Reshaping Long-Term Care in Minnesota"

I. LONG-TERM CARE TASK FORCE

• Composed of state legislators and state agency commissioners

• Issued report and recommendations, January 2001

• Identified six policy directions and 48 strategies. Policy directions included reducing reliance on institutional care and expanding community long-term care.

• Listed 15 strategies as priorities for action in 2001 legislative session, including encouraging voluntary closure of nursing homes and expanding consumer information and assistance and ensuring adequate funding for waiver programs.
  (See: http://www.dhs.state.mn.us/agingint/ltctaskforce/report.htm)
  

II. 2001 LEGISLATIVE ACTION

• Appropriated $183 million in additional money for long-term care (FY2002-03).

• $108 million for cost-of-living increases for nursing homes and continuing care providers.

• $75 million for expansion of elderly waiver and alternative care programs and funding of community service grants.

• Increased spending to be offset by savings of $44 million from downsizing nursing home industry by 5,100 beds (10%).

• Incentives for voluntary closure of nursing homes.

• Actions to stimulate recruitment and retention of workers, such as loan forgiveness and scholarship programs, internship programs, and development of web-based training.

III. A YEAR LATER

• Setting benchmarks at county level for measuring progress toward meeting long-term care goals.

• Award of 100 community service grants, ranging from $20,000 to $250,000 for variety of projects such as caregiver respite and chore programs to transportation initiatives and home modifications.

• Reduction of 1,000 nursing home beds.

• Development of central information system to connect 211-line with Senior LinkAge Line for elderly and Minnesota Centers for Independent Living to share database.

FLORIDA

A Series of Initiatives

I. ON THE NURSING HOME FRONT: INSURANCE REFORM AND QUALITY CARE

• Mounting lawsuits against nursing homes prompted insurance companies to threaten to pull out of Florida market.

• 2001 Legislature stabilized financial risks for LTC facilities

• Legislature also imposed higher nursing home staffing standards; set new training requirements for nursing assistants, and increased penalties for homes with deficiencies.

II. OFFICE OF LONG-TERM CARE POLICY

• 2002 Legislature establishes Office of Long-Term Care Policy in Department of Elder Affairs. Given primary responsibility for coordinating all state agency policies on long-term care.

• Office to recommend ways to increase availability and use of noninstitutional settings.

• Office to have 13-member Advisory Council composed of other state agencies, legislators, and consumers.
  

III. CONSUMER-DIRECTED CARE

• Participants in Medicaid waiver programs must be allowed to direct their own care, choose their own providers of services, and decide how they want services to be delivered.

• Expands existing RWJ Foundation "Cash-and-Counseling" demonstration to allow all participants to self-direct.
  

IV. OTHER INITIATIVES

• Planning and development of a statewide information and referral system using the 211 telephone number.

• Development of a model managed, integrated long-term care delivery system in one area of the state under the direction of a single entity to provide health care and social services to elderly recipients.

• Determining the feasibility of integrating state-funded health care eligibility determination with information and referral services through a pilot project.

• Establishing Nursing Home Transition Program to identify nursing home residents who could live in community to move out of nursing homes.

• Boosting the budget for the Medicaid elderly and disabled waiver from $78 million in FY 2002 to $87 million in FY 2003, adding almost 1,000 more persons to the program.

• Tripling funding for developmental disabilities services since 1998. Between 1998 and 2001, the number of persons participating in the waiver program for people with developmental disabilities doubled from 12,000 to 24,000.

TEXAS

A Long-Term Planning Process

I. PLANNING PROCESS BEGUN IN 1999

• Long waiting lists for services, large nursing home population.

• Goal of planning process to expand home and community-based services.

• Long-term care reform plan, "Promoting Independence," issued in January 2001.

• Ambitious goals for making community placements possible for NH or ICF/MR residents and reducing waiting lists for HCBS.

II. 2001 LEGISLATIVE ACTION

• Allowed nursing home residents to monitor their care with electronic monitoring devices. (Texas becomes first state to allow these devices.)

• Created new training requirements for nursing home inspectors.

• Provided funds to expand six Medicaid waiver programs.

III. 2002 LEGISLATIVE ACTION

• $40 Million over two years for workforce recruitment and retention in nursing homes.

• Increase of $68.6 million for FY 2003 to add 665 new slots to MR/DD waiver program.

• $63 million earmarked to serve 5,600 persons on waiting lists for Medicaid HCBS waiver programs.

• Legislative intent that funds be transferred from nursing homes to community care services as residents relocate from nursing homes to community settings.

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