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TITLE: State Long-Term Care: Recent Developments and Policy Directions, July 2002.

AUTHORS: Barbara Coleman, Wendy Fox-Grage and Donna Folkemer, National Conference of State Legislatures

GENERAL STATE ENVIRONMENTS: States are trying to cut the increasing costs for nursing homes and at the same time, they are trying to give seniors, people with mental retardation, developmental or physical disabilities, and other diverse populations with disabilities more options for home and community-based services (HCBS). Unfortunately, states are facing a decline in revenue and an increase in Medicaid spending. Other challenges include: the slowing economy increases the number of people who are turning to public assistance for help; the shortage of direct care workers increases the pressure on states to provide incentives to attract and to retain workers; the Olmstead decision and other court decisions encourage states to offer community-based alternatives to people with disabilities who are institutionalized.

TRENDS, THEMES AND FUTURE OUTLOOKS: States are slowly shifting money from institutional services to HCBS programs. In FY 1990, more than 90 percent of Medicaid long-term dollars went to institutional care, nursing homes and intermediate care facilities for the mentally retarded (ICF/MR) and only 10 percent went to HCBS programs. By 2001, institutional care received only 71 percent of Medicaid long-term care dollars and HCBS services received 29 percent. From FY 1999 to FY 2000 Medicaid spending for nursing homes increased by 8.8 percent (from $36.4 billion to $39.6 billion,) and again by 13.5 percent to $42.7 billion in FY 2001, despite the national decline in occupancy.

On the other hand, HCBS waiver programs have been growing rapidly in recent years. Money has increased from $10.6 billion in FY 1999 to $12.7 billion in FY 2000 (a 14.6 percent increase) and to approximately $14 billion in FY 2001. About three-fourths of waiver expenditures (about $10.5 billion) were allocated to services for people with mental retardation or developmental disabilities. Costs are higher for MRDD services than the Aged/Disabled population even though the Aged/Disabled population is larger, because many people who receive MR/DD services need 24-hour support. One reason for the shift was the 1999 Supreme Court Olmstead decision. The court ruled that states must provide services in the most integrated setting appropriate to the needs of qualified individuals with disabilities and make "reasonable modifications" in programs and activities. As of January 2002 18 of the 40 states that were reviewing their long-term care systems, issued long-term care plans or significant papers addressing options for serving more people in home and community based services.

COMMON THREADS BETWEEN STATES:
Home and Community-Based Services Expansions:

Ohio has increased the number Medicaid HCBS waiver program slots from about 11,000 in FY 1992 to nearly 38,000 in FY 2000, a 242 percent increase. In 2001 spent $480.6 million for waiver programs but added almost 5,000 new slots in the 2002-2003 budget.

Minnesota, the most ambitious in expanding its spending on home and community services, created a comprehensive framework for reshaping the state's long-term care system, resulting in $183 million in appropriations for long-term care reforms for FY 2002-2003, of which more than $75 million was invested in expanding home and community-based service options.

Maryland created a new program to provide community attendant services and other supports to individuals with physical or cognitive disabilities who qualify for Medicaid. Participants will be able to obtain services in a variety of settings, such as in their own homes or in a supported living environment, and will be permitted to hire their own personal assistant.

Pennsylvania lawmakers dedicated a significant portion of the state's tobacco settlement revenue ($45 million) to expand HCBS to 3,000 additional people eligible for Medicaid-funded waiver services. A portion of the funds also will be used to establish a new program to provide HCBS for individuals with low incomes who do not qualify for Medicaid services.

Nursing Home Spending

Ohio was providing care for more than 55,000 people in nursing homes in 1999, and 44.6 percent of people age 65 and older in poverty were Medicaid nursing home residents that year (compared to a national average of about 30 percent. In 2001, spent $3.1 billion for institutional care, $2.3 billion for nursing home care and $787 million for ICF/MR facilities.). A moratorium on new nursing home and MR/DD beds has been in place since 1994.

Vermont officials projected the nursing home facility caseload of 2,381 residents in FY 2000 to decrease to 2,234 residents in FY 2002. Expenditures for nursing facility care were estimated to climb slightly, however, from $79 million to $91 million during those years. From 1995 to 1999, there was a 12.3 percent decline in the number of nursing home residents, compared to a 1 percent increase nationally.

Washington’s nursing home expenditures totaled $614 million and ICF/MR facilities totaled $130.6 million in FY 2001 and experienced about a 23 percent decline in the number of nursing home residents from 17,500 residents in 1994 to a total of about 13,500 in February 2001.

Illinois spent 88 percent of its Medicaid long-term care expenditures on institutional care in 2001 and only 12 percent on HCBS.

Mississippi spent 91 percent of its Medicaid long-term care funds on institutional care and only 9 percent on home care.

Olmstead Plans and System Change:

Ohio, along with Mississippi, Missouri, and Texas, were cited for an impressive Olmstead plan. In June 2000, the Ohio ACCESS task force was formed and issued its report and recommendations entitled "Ohio Access for People with Disabilities," in February 2001. The task force gave priority to the needs of people with developmental disabilities and people with physical disabilities, with the goal of developing strategies to move people with these disabilities out of institutions. The three "guiding principles" in the report are: increase community capacity; prioritize resources by developing a process to determine where reform is most needed and by seeking cost efficiencies and appropriateness of care, particularly in institutional settings, to make more dollars available to support community-based care; assure quality and accountability by assuring clinical, programmatic; and fiscal accountability and compliance at federal, state, local and provider levels. The thrust of Ohio Access is the development of a comprehensive state policy centered on the concept of community-based services.

In Mississippi, the Legislature mandated a comprehensive plan to provide services to people with disabilities in the most integrated setting possible. The Mississippi Access to Care (MAC) plan proposes significant increases during the next ten years in the number of people receiving HCBS. The increases proposed during the next five years include: 1) Elderly and Disabled waiver program; 2) Independent Living waiver program; and 3) Assisted Living waiver. By 2011, the report calls for expanding supported living services to individuals with MR/DD from 400 people to 800 people; adding 17 more group homes for individuals with serious mental illness; serving an additional 1,600 individuals in the MR/DD waiver; and identifying and moving 1,035 individuals to the community from institutions.

In Missouri, a 15-member Home and Community-Based Services and Consumer Directed Care Commission was created to make recommendations in December 2000. Its recommendations have been the focus of the state's long-term care planning work and legislative activities. The 2000 legislature enacted a law requiring that an individual eligible for Medicaid-funded nursing home care be given the opportunity to have those Medicaid funds follow the person to the community to be used for the personal care option that best meets the individual's needs.

Texas has been engaged in a major long-term care planning process since 1999 to expand home and community-based services (HCBS) for people with disabilities. Although the state already has a considerable network of community services, it also has had long waiting lists for those services and a large nursing home population. Created by executive order in September 1999, the 12-member Health and Human Services Commission issued a comprehensive long-term care reform plan ("Promoting Independence") in January 2001. The commission arrived at its recommendations with guidance from the Promoting Independence Advisory Board, consisting of providers, state officials, and people with disabilities and their representatives. The lengthy plan includes an inventory of available services, state budget requests and proposed statute changes, and identification of the agencies responsible for implementing the recommendations, primarily the Department of Human Services and the Department of Mental Health and Mental Retardation. The plan includes recommendations to expand all waiver programs, increase outreach to people with disabilities about community care options, help nursing facility residents make the transition into the community, provide temporary rent subsidies for consumers who are awaiting federal housing assistance, train staff, and implement a data collection system.

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