LTC Bullet:  Kansas Study 

Monday, July 17, 2006 

Topeka, KS-- 

LTC Comment:  The Center for Long-Term Care Reform and the Wichita, Kansas-based Flint Hills Center for Public Policy are collaborating this week on a study of long-term care service delivery and financing aimed at understanding the potential state-level impact of the Deficit Reduction Act among other objectives.  Details after the ***news.*** 

*** THE FUTURE OF LONG-TERM CARE AND MEDICAID.  Last week, we reported to you on Steve Moses's testimony before a hearing in Hagerstown, Maryland.  Also testifying that day was Grace-Marie Turner, President of the Galen Institute and a voting member of the National Medicaid Commission.  Here's how the Galen Institute described her testimony: 

"Grace-Marie Turner testified before a field hearing of the House Small Business Committee in Maryland on Monday, offering ideas about incentives for working-age people to plan ahead for their long-term care needs.  She recommended that Congress encourage states to participate in the recently-expanded Long-Term Care Partnership program, create new federal and state tax incentives for people to purchase long-term care insurance, encourage the use of reverse mortgages, and enforce new laws that block affluent seniors from giving away their assets to qualify for Medicaid.  She also recommended that a new Medicaid Advantage program be created for seniors who are dually-eligible for Medicare and Medicaid so they have the option of choosing from among competing private plans offering comprehensive, coordinated care.  Full text:" *** 

*** TO RECEIVE THIS WEEK'S LTC EMBED REPORTS, you must be a dues-paying member of the Center for Long-Term Care Reform.  Steve Moses says:  "All this coming week, I'll be exploring the state-level ramifications of the national policy directions we studied last week in Washington, DC.  Tune in."  To join the Center and ensure you receive all Steve's reports from the policy front, contact Damon at 206-283-7036 or  He'll answer any questions you have, get you a user name and password for The Zone, send you current and recent LTC Embed reports, and sign you up to participate in our new LTC Forum online bulletin board.  Get involved, get connected, get going.  Join the Center. *** 



LTC Comment:  The Center for Long-Term Care Reform has a longstanding relationship with the State of Kansas.  A Kansas state legislator served on our predecessor organization's Board of Directors.  Center president Steve Moses has testified before the state legislature three times over the years.  Last year, he joined the Chairman of the Kansas House Appropriations Committee to present three "Legislative Long-Term Care Academies" across the length and breadth of the Sunflower State. 

Since 2002, the Center has been invited three times to propose a project toward the goal of controlling Kansas's Medicaid long-term care costs while improving the program's access, quality and coverage.  Following below is the most recent such proposal we've offered.  We present it here as a quick and reasonable facsimile of the briefer and more focused project the Center for Long-Term Care Reform is about to conduct in Kansas at the behest and with the support of the Flint Hills Center on Public Policy. 

Unlike the project described in the following proposal, the current study will involve only one week of field work.  We'll interview most, but not all of the stakeholder groups listed below.  We'll visit two instead of three Medicaid field offices.  Our focus will be on the status of and potential for the Deficit Reduction Act of 2005 instead of OBRA '93, HIPAA '96, and BBA '97.  Nevertheless, the philosophy behind and the goals motivating this current effort are much the same.  

So, to give readers the flavor of what we're doing in Kansas this week, we offer the following for your review and consideration.  Our "LTC Embed" reports from the state-level long-term care policy front in Kansas will fill in the details throughout the coming week.  We expect to complete our report on long-term care service delivery and financing in Kansas within three weeks of finishing this week's field work.  Stay tuned. 


Project Proposal:  Controlling Medicaid Long-Term Care Costs; Submitted to Members of the Kansas State Legislature on November 19, 2003 by Stephen A. Moses, President, Center for Long-Term Care Financing 

I.  Objective:  Produce a step-by-step plan to save the State of Kansas $60 million per year in Medicaid nursing home expenditures while simultaneously assuring universal access to top quality long-term care for all citizens (rich and poor alike) across the spectrum from home and community-based to nursing home care. 

II.  Problem:  Medicaid nursing home expenditures in Kansas nearly doubled from $160.5 million in 1991 to $302.5 million in 2001.  This rapid cost increase severely impairs the state's ability to maintain generous Medicaid nursing home eligibility criteria, to expand the home and community-based services often preferred by seniors, and to sustain adequate financing for other critical state services such as corrections, education, and highways.   

III.  Diagnosis:  Generous Medicaid nursing home eligibility rules in Kansas (and elsewhere), although well-intentioned and politically popular, have gradually converted a means-tested public assistance program (welfare) into an expensive, de facto long-term care entitlement program.  Consequently, private out-of-pocket and insurance financing of home, community-based, and nursing home care have languished while Medicaid costs for these programs have skyrocketed.  The public policy dilemma is to contain Medicaid long-term care spending in a politically sensitive way without increasing taxes or cutting benefits.   

IV.  Treatment:  The solution to this quandary, proposed in a long series of reports by the US-DHHS Inspector General, the United States General Accounting Office, LTC, Incorporated, and the Center for Long-Term Care Financing is to retain generous Medicaid eligibility criteria while controlling asset transfers and shelters, enhancing estate recoveries, and encouraging private long-term care financing alternatives.  The difficulty with this solution, however, is that it is complicated to achieve and it is often opposed by various long-term care interest groups.  Therefore, a two-fold public policy intervention is needed:  the Medicaid program must ensure (1) that every federal and state statutory, regulatory and administrative remedy is fully employed to target public assistance resources to the most needy while diverting more prosperous people to private financing options and (2) that every stakeholder in the long-term care financing issue understands the benefit to its constituency of implementing the necessary measures.  These are the specific goals that this project would seek to achieve. 

V.  Work Plan:  To achieve the objective and goals of this project, we propose the following activities: 

            A.  Examine Medicaid nursing home eligibility criteria in Kansas with attention to federal and state statutory, regulatory and policy guidelines.  Thoroughly study and review all relevant state and federal statutes, regulations and policy manuals and compare them to eligibility policies in other states.  Provide recommendations for state legislation, program policy changes and federal waivers to achieve a stronger and tighter asset control methodology.  

            B.  Review the state's implementation of OBRA '93 (Omnibus Budget Reconciliation Act of 1993), HIPAA '96 (Health Insurance Portability and Accountability Act of 1996) and BBA '97 (Balanced Budget Act of 1997) authorities.  Interview responsible state staff and study existing plans, proposed legislation, and policy options under consideration.  Recommend ways that the State of Kansas can take full advantage of this powerful federal legislation.   

            C.  Appraise the status of Medicaid estate planning (the artificial impoverishment of frail seniors to qualify them for publicly financed nursing home benefits) throughout the state.  Review the legal literature on Medicaid planning in Kansas and interview influential elder law attorneys.  Recommend measures to control Medicaid estate planning and to encourage attorneys, financial planners, accountants and other senior advisers to suggest private long-term care financing alternatives while their clients are young and healthy enough to afford and qualify for them.   

            D.  Plan and conduct site visits to at least three local Medicaid nursing home eligibility local offices (urban, suburban, and rural).  Interview supervisors and eligibility workers; review eligibility policies and procedures; examine a judgmental sample of Medicaid nursing home eligibility case records; compile examples of Medicaid estate planning techniques; explore the potential impact of possible alternative solutions on affected field staff; and obtain ideas and recommendations from front line workers.   

            E.  Analyze Kansas's lien and estate recovery strategy including statutory authorities, regulations, administrative policies, program activity, and collections.  Interview key program staff; analyze procedures; examine the integration of front-end eligibility controls with back-end collection efforts; estimate maximum recovery potential; research best practices from other states and explore the possibility of applying them in Kansas.  Recommend initiatives to maximize non-tax revenue to the State of Kansas from lien and estate recovery programs.   

            F.  Study long-term care insurance regulation in Kansas.  Interview representatives of the State Insurance Commissioner's office; review laws, regulations and policies governing the content and sale of long-term care insurance products in the state; interview agents and brokers who market home health and nursing home insurance policies concerning the obstacles they face; compare policies and practices in Kansas with other states; and analyze the chilling effect of easy Medicaid eligibility on the marketability of private insurance alternatives.  Recommend statutory, regulatory and policy changes to enhance early planning for private long-term care insurance as an affordable, high quality alternative to reliance on Medicaid nursing home benefits by default.   

            G.  Investigate the potential of home equity conversion (HEC) as a source of private financing for long-term care services and as an income supplement to help older Kansans to afford private insurance for long-term care.  Identify sources of reverse annuity mortgages (RAMs) in Kansas; interview representatives of banks and other financial institutions that offer RAMs; determine the current and potential utilization of home equity conversion as a source of financing for long-term care to relieve the burden on public programs; recommend ways to encourage the use of home equity conversion to help seniors obtain quality long-term care services in the private market. 

            H.  Interview and brief key long-term care stakeholders:  e.g., senior and consumer advocates; Governor's staff; key legislators and staff; proprietary and non-proprietary nursing home, assisted living and home health providers; long-term care insurers; Medicaid planners; taxpayer representatives; the Chamber of Commerce and other business interests; Medicaid management, line and legal staff; and any other group which the state believes would be appropriate.  It is critical to meet with each group separately to avoid adversarial confrontations between groups in the early stages of discussion and to target each group's special interests.  The purpose of these meetings is to discern the prevailing attitudes of the various interested parties, both public and private, in the long-term care area and to introduce them to the consensus strategy described in the Inspector General's reports, LTC, Incorporated's Florida, Montana, Wisconsin, Illinois, Maryland, South Dakota and New Jersey reports, and the Center for Long-Term Care Financing's Nebraska report and policy studies.  We will conduct approximately two-hour meetings with each interest group that has a stake in the long-term care financing issue.  Presentations will include a summary of the problem, an historical perspective on how America and Kansas got into the fiscal and political LTC predicament we are in, a summary of recommendations from the DHHS Inspector General, other government agencies, and the Center for Long-Term Care Financing on how to resolve the situation, and an explanation of why it is in the best interest of each stakeholder group to work cooperatively with the others on the proposal under consideration to the mutual benefit of all.  We will interview the attendees at these meetings to ascertain their positions on key issues and to learn their opinion of and response to the ideas presented.  Each attendee will receive an information pack of articles and reports on the topic similar to the one enclosed herewith.  (Folder to be provided with hard copy of this proposal.) 

            I.  Examine the overall social impact (upon the elderly population, families, etc.) from the transfer of resources and assets.  We propose to explore every aspect of the potential ramifications for seniors of the transfer of assets and resources issue and to provide relevant recommendations on each.  For example, what effect does Medicaid estate planning have on the state's ability to finance and the nursing homes' ability to provide access to quality long-term care?  How serious is the nursing home liability and liability insurance crisis in Kansas and what are the ramifications for public and private long-term care patients?  Will closing Medicaid eligibility loopholes discourage vulnerable seniors from seeking needed care?  Does the easy availability of Medicaid benefits discourage advance planning and purchase of private long-term care insurance products or continuing care retirement community contracts?  To what extent are middle class people on Medicaid consuming state tax revenues needed to fund other public needs such as education, highways, and prisons?  Are there ways to divert the middle class to other financing mechanisms while making Medicaid benefits more readily available to the poor than ever before?  We will address all of these questions and many more similar ones in the final report of this project.   

            J.  Prepare and submit an interim report mid-way through the project summarizing current status, problems encountered, solutions proposed, work remaining, preliminary findings, etc.   

            K.  Analyze all data; write the final report including the action plan implementation strategy; and submit twelve original bound copies to the state.  Two sets of recommendations will be provided.  One set will suggest measures the state of Kansas can take under existing state statutory authorities.  The other set will suggest measures the state could take with and through a CMS (Center for Medicare and Medicaid Services) waiver of federal requirements.  The final report will be entirely substantive, clear and readable as evidenced by our previous work products, samples of which are available upon request.  The goal is to prepare a document suitable for presentation to the State Legislature as a game plan to improve long-term care access and quality, benefit seniors, reduce Medicaid expenditures and enhance the fiscal responsibility of state government.   

            L.  Subsequent to publication of the final report, the principal author will be available in Kansas for up to one week at the Legislature's convenience to present state legislative testimony, advise on implementation strategy, conduct media briefings, present findings to key interest group representatives, and provide any additional follow-up work desired by the state.   

            M.  The preceding proposal is based on the assumption that the state will provide a desk, phone, and meeting space during our site visits and will assist us in obtaining necessary documentation, contacting appropriate respondents, scheduling interviews, and making other arrangements essential to the successful completion of the project.  We strongly recommend that a staff person representing the sponsor of this study accompany the researcher on site visits and attend all or most of the stakeholder briefings.  This kind of shared responsibility has worked very well in previous projects with other states.  We estimate the total state staff time necessary to perform these functions during the entire project to be approximately 80 to 120 person hours. 

VI.  Site Visits:  We anticipate the need to spend approximately 10 to 15 work days in Kansas during this project for the purpose of conducting interviews and briefings, visiting local eligibility offices, analyzing current policies and procedures, conducting legal research, etc.  In addition, we have allowed and budgeted for a post-project visit of five days for follow-up, testimony, briefings, etc. 

VII.  Schedule:  We recommend beginning this project by January 15, 2004 and completing it by April 1, 2004. 

VIII.  Deliverables:  One interim status report of several pages and twelve copies of a formal, bound final report reflecting accomplishment of all of the commitments made within this proposal. 

[Business Proposal, Experience and Credentials, and References omitted to save space.]