Moving Toward the Promise
July 2006
In the last days of June the
director of the Indiana Division of Aging, Steve Smith, held a series of
meetings and press events in South Bend, Evansville and Indianapolis announcing
to the public the rollout of a new package of services for senior
citizens and persons with disabilities called Options. The
Generations Project, advocacy organizations, area agencies on aging,
academics, and providers were invited to participate in these
events. (See the related news
stories on this website.) Options represents the first tangible steps to
implement the primary features of Senate Enrolled Act 493, the nationally
significant long term care reform law that was unanimously passed by the
2003 Indiana General Assembly.
More commonly called SEA 493,
or simply 493, the act gives Indiana all the legal and programmatic tools
it needs to establish a first rate system of home and community based
services (HCBS). Thousands of
senior citizens and persons with disabilities have been on waiting lists
for years for HCBS services through Indiana’s outstanding CHOICE program
or through an existing Medicaid waiver.
For these people the implementation of SEA will be a godsend.
Why? SEA 493 allows the state to treat its
entire Medicaid long term care budget as a single global budget. The law empowers the state to move
people from nursing homes to HCBS through the Medicaid program (meaning,
the funding will follow individuals within the Medicaid system), and it
allows the Medicaid dollars that are saved by reducing the use of
institutional care to be used for additional HCBS. The law requires the state to provide
access to a full array of HCBS. Of
great importance is the equalization of income eligibility for
individuals between nursing home care and HCBS. Because of that provision in SEA 493
people will no longer be forced to be far poorer than persons in nursing
homes in order to receive Medicaid funded HCBS .
Indiana’s CHOICE program,
established in 1987, has been and continues to be a great program. But CHOICE is only allocated a fixed
number of state dollars each year.
That has resulted in long waiting lists for CHOICE funded
services. Likewise, the Medicaid
waivers that have been used by the state prior to SEA 493 to provide
additional HCBS have been more restricted in scope than the CHOICE
program and have only been provided to a finite number of individuals
each year. Consequently, extensive
waiting lists for CHOICE and Medicaid waiver services have been a part of
the Indiana long term care landscape for many years. So much so that the primary means for
getting off the waiting lists have been death and nursing home
placements.
By expanding the funding pie
to the entire Medicaid long term care budget, SEA 493 represents the
potential to dramatically expand the availability of HCBS through
Medicaid waivers. Over time this
will allow a huge drop in the utilization of Medicaid funded nursing home
care, the elimination of waiting lists for home and community based
services, improvements in direct care for consumers, and a drop in the
per capita cost of all long term care services.
Mr. Smith has made it clear
that as of July 1, 2006 the new consumer income
eligibility standard for all Medicaid waiver HCBS is 300 percent of the
federal Supplemental Security Income (SSI) level. 300 percent of SSI is the eligibility
level set in SEA 493. Presently,
that means an income for an individual of just over $1,800 per
month. SEA 493 became the law in
July of 2003 but previous administrations had openly balked at
implementing its major provisions.
Mr. Smith has also made it
clear the Division of Aging is seeking ways to grow the capacity of home
and community based services as quickly as possible. There are important reasons for doing
this. One, SEA 493 cannot work and
its savings cannot be achieved because a full array of HCBS is not
available to consumers. Two,
Indiana has a moratorium on the growth of new nursing home beds. When that moratorium is lifted HCBS
capacity must be in place in order to prevent a possible run up in
nursing home bed utilization. That
would also defeat the re-balancing objectives in SEA 493 and drive up
costs for the state. A third
reason would be to demonstrate tangible SEA 493 successes prior to the
2007 legislative session. During that session the state’s next biennial
budget will be enacted.
In the first quarter of the
year Mr. Smith worked closely with AARP, The Generations Project, the
Alzheimer’s Associations, and area agency on aging interests to design a
capacity building plan through the establishment of a capacity work
group. He has since brought all
provider interests into this process.
Recently providers have played a greatly enhanced role in the
state’s capacity design and implementation plans including the
development of a Medicaid bed buy out strategy. Advocacy groups are worried this may
signal a lessening of the role of consumers in shaping the SEA 493
process and could have a negative impact on the quality and cost of HCBS.
In state fiscal year 2007 the
Division of Aging plans to “buy out” a minimum of 1,500 Medicaid beds
from nursing homes as a means for reducing capacity. According to Mr. Smith the money for
the bed buy outs comes from a portion of the bed tax on nursing
homes. That portion has been used
to establish a bed buy out and closure fund.
While the bed tax on nursing
homes sounds like a burden on those entities it is actually a source of
revenue. First enacted by the 2003
General Assembly at the urging of the nursing home industry, the bed tax
is technically called a quality assessment fee charged for each Medicaid
certified resident bed a nursing home contains. However, the bed tax dollars are then
used to draw down nearly 63 cents on the dollar from the federal
government in matching funds. Of
the total funds generated by the bed tax the nursing home industry gets
80 percent and the remainder stays with the state. That is the portion that is now being
used to do one time “buy outs” of Medicaid certified beds.
Without a doubt bed buy outs
will reduce the number of Medicaid certified beds, but that strategy will
only save the state money if the beds are not refilled and if the buy
outs are not too generous.
Consumer groups believe the buy outs are much too expensive: $10,000 for an empty bed and up to
$25,000 for an occupied bed. The
buy outs can be seen as a form of double dipping by nursing homes. Legally, it is not necessary to buy out
beds: they can be decertified by
the state. SEA 493 also allows
nursing homes to convert to other businesses through the use of
bonding. However, the buy outs
may be a necessary evil in order to minimize nursing home angst about the
impact of implementing SEA 493.
Clearly, that industry will lose substantial market share over
time with the expansion of HCBS if it fails to change as the system
changes.
From the consumer perspective
the bottom line must always be driven by the impact of public policies on
the users of long term care. In
that context the question is whether or not the buy outs unintentionally
slow down or even impede the ability to finance HCBS as quickly as they
are needed in order to made SEA 493 work and to protect highly vulnerable
LTC consumers. A final word of
caution regarding the closure of nursing home beds is the impact on
consumers. United Senior Action, a
member of the Project, is presently studying this issue and has raised
its concerns with the state on behalf of the Indiana Home Care Task
Force.
The
home and community based services that are getting special attention in
the efforts of the Division of Aging to build capacity quickly are
assisted living, adult foster care (also called adult family care), and
adult day care. Steve Smith and
his program managers have talked at length with consumer groups and
providers on how to develop these services as soon as possible through
Medicaid waivers. The analytical
work of The Generations Project definitely supports the growth of these
services in order to establish HCBS capacity. These services clearly address a number
of housing needs when trying to move people out of nursing homes. Nonetheless, traditional home care and
self-directed care must not be lost in the SEA 493 implementation
process. They are the most
cost-effective and can ultimately serve the most people in HCBS
settings. Home care is already
utilized on a significant scale through the CHOICE program and the aged
and disabled Medicaid waiver. As
493 is implemented it will be the aged and disabled
waiver that receives the vast bulk of the enrollees in the new system
during the coming biennium. In the
years that follow all of the HCBS options, including self-directed care,
must see considerable growth if savings are to be realized and all persons
who need LTC are properly served.
A service that has never
received public funding in Indiana is adult foster care
(AFC). The Generations Project is
very familiar with this service.
It received substantial review in the Project’s Moving Forward
study and has been examined in detail by the member organizations of the
Project. The Project and AARP
Indiana have had extensive dialogue with the officials in Oregon who pioneered publicly
funded AFC. Oregon has advised Indiana to carefully recruit
families who want to provide AFC for humanitarian reasons in order keep
inappropriate providers out of the LTC system. At this point in time it is not clear
if the Division of Aging will fully follow the lessons learned in Oregon.
The
actions described in this article are clearly intended to implement the
major features of SEA 493. They
are moving toward the promise of home and community based services for Indiana’s senior citizens and persons
with disabilities. The coming weeks, months and years will test how well
that promise is met as it is implemented under the Options nameplate.
