Medicaid and The Long-Term Care Conundrum, Part 2

This post is part 2 of a series. For part 1, see here.

Section 10202 of the Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) creates the Long-Term Care Balancing Incentive Program,  under which states may receive increased federal matching funds (federal financial participation, or FFP) for efforts to shift the bulk of their payments for long-term care (LTC) to non institutional settings. CMS recently issued guidance to get states started.

The Balancing Initiative will last four years, from October, 2011 through September, 2015. Congress has authorized up to $3 billion for the increased payments during that period. By the end of the grant period, the states that receive the increased funds must make what CMS calls “structural changes” to their programs.  First, the  state must establish a single point of entry/no wrong door system for applicants to gain access to all benefits related to long-term care. There must be one system state-wide through which individuals can apply for cash assistance and other forms of support in their communities and undergo assessment of both their financial eligibility and their levels of functioning. There must be other state and local agencies participating in a network for which the  Medicaid agency will  have primary responsibility. The system must include a web site, a toll-free phone number and designated agencies through which individuals may seek services. The goal is for applicants to receive the same information and have the same experience regardless of the agency or web site where they start.

The second structural change is “conflict-free case management.” Because the agencies that serve seniors and others with disabilities may participate as designated entry points, there is a risk that the  determinations of eligibility and need for assistance may be affected by the interests of  an agency instead of being focused only on the  needs of the client.  To reduce this risk, the  party evaluating an applicant, assessing functioning and developing the plan of care  must be independent of the agencies providing services, and there must be no relationship between the services recommended and the agent’s compensation.  CMS urges states not to permit these functions to be performed by anyone who is:

  • related by blood or marriage to the individual  or any paid caregiver;
  • financially responsible for the individual;
  • empowered to make either financial or health care decisions for the individual; or
  • providers of long-term services  for the individual, or financially interested in such a provider.

Exceptions may be made for rural areas where only one provider is available.

Finally, states must develop and use core standardized assessment (CSA) tools that measure the individual’s needs for help with activities of daily living (ADLs) and instrumental ADLs rather on a diagnosis. The tool must be used uniformly throughout the state.

The level of increased FFP a state may receive will depend on the current percentage of its LTC spending used  for noninstitutional services. States with the lowest percentage spent for noninstitutional services receive a higher increase.

To the extent that CMS moves expeditiously to develop and implement the program, it may give states a needed boost. Applications may be accepted until August 1, 2014, but the neither the letter nor the application announcement states a date to begin. It’s a step in the right direction.

Do other obstacles remain?  The law requires  states to make nursing facility services available. Home health services are only required for individuals who have the level of need for nursing facility services.  Home and community-based services, adult day care and other forms of assistance remain optional benefits.