Bullet: How CMS Bought a
Half-Billion-Dollar Double-Edged LTC Sword
Wednesday, May 23, 2007
Santa Fe, NM--
LTC Comment: Will
the huge grants to state Medicaid programs authorized in the DRA make
matters better or worse for long-term care financing?
After the ***news.***
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Medicaid eligibility guidelines for all 50 states; Alternatives for
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LTC BULLET: HOW
CMS BOUGHT A HALF-BILLION-DOLLAR DOUBLE-EDGED LTC SWORD
LTC Comment: The
facts in the following press release from the Centers for Medicare and
Medicaid Services speak for themselves.
But the unintended consequences of the grants described therein
require some explanation.
The goal of long-term care public policy is rightly
to encourage a broad spectrum of LTC services, support home and
community-based care, discourage institutional bias, and empower
consumers to pick and choose the kind and quality of long-term care they
The other side of the sword, however, is that when
government makes Medicaid-financed long-term care services more
attractive than ever before without targeting those benefits effectively
to the poor, it invites more Medicaid planning and discourages private
LTC financing through insurance and reverse mortgages.
Before itís done, the U.S. government will spend
$1.75 billion with these grants to make Medicaid LTC irresistible to the
middle class while neglecting to (1) close gaping Medicaid eligibility
loopholes, (2) enforce mandatory Medicaid estate recovery laws, or (3)
spend a few measly millions to provide real tax incentives for the
purchase of private long-term care insurance or the use of reverse
So, guess who's getting whacked by the sharper side
of this sword!
IMMEDIATE RELEASE CONTACT: CMS Public Affairs
14, 2007 (202) 690-6145
AWARDS GRANTS TO 13 STATES
ALTERNATIVES TO NURSING HOME CARE
states and the District of Columbia will get more than $547 million in
grants over five years to build Medicaid long-term care programs that
will help keep people at home and out of institutions, Leslie V.
Norwalk, Acting Administrator of the Centers for Medicare and Medicaid
Services (CMS) announced today.
awards are the second round of grants that will total $1.75 billion over
five years (2007-2011) to help shift Medicaid's traditional emphasis on
institutional care to a system offering greater choices that include
home and community-based services.
"Money Follows the Person" initiative was included in the
Deficit Reduction Act of 2005 (DRA), currently being implemented by CMS.
It is a component of the administration's New Freedom Initiative, a
nationwide effort to remove barriers to community living for people of
all ages with disabilities or chronic illnesses.
is more evidence than ever that people who need long-term care prefer to
remain in their own homes and communities whenever possible," said
Ms. Norwalk. "This new program will help states shift Medicaid's
traditional emphasis on institutional care to a system offering greater
choices that include home-based services.
will also benefit by giving the elderly and people with disabilities
more control over how and where they receive the Medicaid services they
expect to be able to move more than 14,000 people into community
settings using these grant awards.
Medicaid program traditionally pays for care for elderly and disabled
individuals living in institutions who need help with activities of
daily living. To fund home and community-based services, states must
obtain waivers of normal program rules designed to pay for care in
concept of money following the person to the most appropriate setting
improves beneficiary satisfaction while reducing Medicaid costs,"
Ms. Norwalk said. "We intend to keep taking steps to remove
barriers and rebalance the options for Medicaid-funded long-term
receiving grants today (see list below) will design programs with four
Increase the use of home and community-based, rather than institutional,
long-term care services;
Eliminate barriers or mechanisms that prevent Medicaid-eligible
individuals from receiving support for appropriate and necessary
long-term services in the settings of their choice;
Increase the ability of the state Medicaid program to assure continued
provision of home and community based long-term care services to
eligible individuals who choose to move from an institutional to a
community setting; and
Ensure that procedures are in place to provide quality assurance for
individuals receiving Medicaid home and community-based long-term care
services and to provide for continuous quality improvement in such
states were eligible to participate in the five-year demonstration
program and had to commit to provide demonstration services for at least
receiving grant funds will qualify for a higher percentage of federal
matching dollars to help cover the costs of moving people out of nursing
homes and into community settings. The higher matching rate will be paid
for one year after an individual moves out of an institution and into
the community. The state must continue to provide community services
after that period as long as the person needs community services and is
demonstration grants are a clear sign of our continued commitment to
expand choice to all Medicaid beneficiaries as well as allowing them the
independence to live at home and contribute to their communities,"
said Ms. Norwalk.
For more details about the New Freedom Initiative, of which this demonstration is part, visit the CMS web site at: http://www.cms.hhs.gov/newfreedom/.