Rebalancing Medicaid’s Long-Term Care Expenditures: How Is Your State Doing? Information Bulletin #323 (9/2010).
In the Affordable Health Care Act in 2010, Congress provided that States would receive an increased federal match IF they “rebalance” their Medicaid expenditures from institutional expenditures to community expenditures. This was Section 10202 - “Incentives for States to Offer Home and Community-Based Services as a Long-Term Care Alternative to Nursing Homes”. States that spend less than 25% on community service could receive a 5% enhanced match and states that spend less than 50% could receive a 2% enhanced match.
In this Information Bulletin, we focus on why this section is important and how best it should be implemented to get the funding to the most states and to the states most out of balance regarding institutional and HCBS community spending.
Last Bulletin highlighted how well the DD Community has done in most states to reverse the institutional bias in Medicaid spending in relationship to the aging and physical disability community. Section 10202 could be used to make both the NF and ICF-MR funding streams more community based in states with the most inequitable systems.
Rebalancing of Medicaid’s long-term care expenditures is critical for older and younger people with disabilities eligible for nursing home services as well as persons with developmental disabilities. If your State shifts expenditures from the more expensive nursing home budget to the less expensive community budget, there will be more Medicaid funds available to serve more people in the community. By offering a larger federal match to move money from nursing homes to the community (HCBS), there will be a financial incentive for states to confront the lobby of the nursing home industry and increase funding for community services (HCBS).
This would be an opportunity for advocates in aging and disability organizations to join together to push for this new HCBS opportunity that begins October 1, 2011.
We decided to look at how state expenditures were made in FY 2009. Remember the Supreme Court ruled in Olmstead in 1999 over 10 years ago.
From that data, we computed what follows.
Here’s what all the terminology and acronyms mean for this bulletin:
1. Long-term care (LTC) is the total Nursing Home (NH) and
Home and Community-Based Services (HCBS) spending;
2. Institutional is the total Nursing Home spending;
3. Home and Community-Based Services includes the total of Medicaid Waivers, Home Health and Personal Care Option spending.
Here’s what we found:
1. The Overall Picture -
In 2009, 66.2% went to NH and 33.8% went to HCBS.
While percentages are important we should also look at funds spent. In 2009, over $50 billion went to NH and over $25.5 billion went for HCBS.
2. A State Breakdown
In 2009, there were only four States that definitely spent less than 50% of A/D on nursing home institutions [WA, MN, OR, and Alaska]. These four therefore spent more than 50% of their LTC funds in the community for HCBS. It is likely that NM and CA are also in this category, but neither has reported all of its data for 2009. [In DD, only 6 states in FY 2009 spent less than 50% in community! Wow – absolutely opposite the A/D world.]
In 2009, there were 23 States that spent more than 75% of their Medicaid LTC A/D on nursing homes.[NE, ME, CT, OH, WY, AL*, MI, NJ, AZ, FL, UT, HI*, IL*, KY, PA, NH, IN, MS, MD, SD, DE, ND, RI*]. *All data not reported. These 23 States have not “rebalanced” their A/D expenditures and 10 years after Olmstead still are overwhelminingly institutionalized biased.
While the field as a whole is moving in the correct direction by increasing spending in the community for HCBS, these 23 states still lag far behind in overall HCBS expenditures.
According to the FY 2009 data gathered for the above analysis 44-46 states would be eligible to apply for the 2% enhanced match offered in the Section 10202 HCBS Rebalancing language IF CMS makes the policy decision to have the percentages based on these funding streams.
23 states would be eligible to apply for the 5% enhanced match offered in Section 10202 HCBS Rebalancing language if CMS makes the policy decision to have the percentages based on funding streams.
If the policy goal of Congress was to “Rebalance” the LTC system, using Section 10202 to focus on the states with the most inequitable funding patterns, seems like a simple CMS policy decision to focus on those States with the most egregious unbalanced LTC services.
Steve Gold, The Disability Odyssey continues
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