Demonstration Studies What Prevents Patients’ Return from Institutions to the Community

A recent study by Mathematica Policy Research evaluated the progress of the “Money Follows the Person” (MFP) demonstration. Mathematica has evaluated the demonstration since the beginning and has issued several reports on various aspects of its implementation. The purpose of the demonstration is to examine three questions:

  • What supports and services would be needed to allow individuals in institutions to live in the community?
  • Does transition to the community improve patients’ health outcomes and/or quality of life?
  • Would transition programs save money?

The nationwide MFP demonstration was established under the Deficit Reduction Act of 2005 (DRA) (P.L. 109-171). Passed in February 2006, the law appropriated up to $1.75 billion for the five-year period ending September 30, 2011. The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) extended the program for five more years, appropriated an additional $2.25 billion and reduced the minimum residence in an institution from six months to 90 days, not counting days of residence for the purpose of receiving short-term rehabilitation services.

The MFP demonstration may have been the first to allow state Medicaid programs to pay for expenditures that were not medical in nature. A major obstacle to Medicaid beneficiaries’ return to the community has been the lack of funds to pay for the expenses of the relocation. Often, beneficiaries cannot return to their former home because they no longer own it. Therefore, they need funds for one-time expenses such as security deposits for rent and utilities or the purchase of items needed to set up a household. MFP permitted Medicaid to pay for these and other items and services needed to allow beneficiaries to live in the community, such as modifications to make a home or vehicle accessible, personal security systems, adult day care and caregiver support and to consider these expenditures as medical assistance.

MFP also introduced the concept of self-direction of assistance, in which the individual decides how to allocate a set budget toward the services and supports needed. In some states, beneficiaries were given the freedom even to hire and fire their service providers.

For the first few years, progress was painfully slow. The first grants were awarded to three states in October 2007. The target number of beneficiaries to transition by the end of 2008 was about 4,000, but fewer than 1500 beneficiaries had moved out of institutions by then, according to Mathematica’s November 2009 field report.

Some of the obstacles to the use of MFP arise in any effort to shift state programs from institutional to home and community-based care and were discussed in posts last fall. However, when state officials were surveyed about helps and hindrances to their progress in implementing the MFP demonstration, both Mathematica and the Kaiser Family Foundation report, the most significant obstacle cited has consistently been the lack of safe, affordable and accessible housing.

The next major obstacle is the shortage of providers of the home- and community-based services (HCBS) the beneficiaries need. The shortage is worse in primarily rural states, where a care worker might have to drive long distances between clients.

Since the recession began, state budgets have been cut as revenues dropped. Agencies have had to cut funding for waiver programs and optional services in order to continue funding mandatory services—including nursing facility services.

How Well Does MFP Work?

To the extent that beneficiaries were able to take advantage of the program, they often benefited from it. About 85 percent of the beneficiaries remained in the community a year after community placement. Most beneficiaries reported improved quality of life, i.e., greater satisfaction with their lives and living arrangements, greater involvement in the community and fewer unmet needs.

The statistics on return to the institution are conflicting, ranging from 0 to 30 percent among states without comparing severity of illness, services provided, or adequacy of the assessment. Mathematica recently found that beneficiaries who transition to the community under MFP demonstrations fare best when they have thorough assessments, more time with a knowledgeable transition coordinator, and more post-placement visits to be sure any unforeseen issues are met. There are more transitions and fewer returns to the institution when there are clearly defined responsibilities and ample communication between the transition coordinator and the person who will be responsible for the HCBS the individual will receive after the transition. It’s also necessary for someone with knowledge of the local housing market and resources for housing assistance to help the beneficiary find a suitable, affordable place to live. The most successful programs have housing specialists to address these problems.

The services MFP participants receive before leaving the institution and during the first months afterward cost more than typical HCBS services. But the cost drops dramatically after the first month for both the elderly and beneficiaries with physical disabilities. Whether the extra services save money in the long run when compared to typical HCBS service programs is still unknown. There is no doubt though that they are less expensive than nursing facility services.