LTC Bullet: "Doing LTC RIght" or The Medicaid Mouse that Roared
Friday, January 15, 2010
LTC Comment: Our new blockbuster report on LTC financing assaults assumptions, shatters shibboleths and confounds convention. Read it now here or follow the serialized version on our "LTC Blog" next week.
LTC BULLET: "DOING LTC RIGHT" OR THE MEDICAID MOUSE THAT ROARED
LTC Comment: The State of Rhode Island took a daring leap into radical Medicaid reform last year. The state requested and the Centers for Medicare and Medicaid Services (CMS) granted a "global Medicaid waiver." Under this unique plan, Rhode Island agreed to a cap on Medicaid matching funds for five years in exchange for more flexibility to administer the program than federal law and regulations otherwise allow. Among other objectives, the state is using the global waiver to increase Medicaid-financed home and community-based services while reducing nursing home utilization.
Rhode Island's gutsy move and noble goals are praiseworthy. But will they save money or break the bank? Will offering more services people want (home care) and fewer they'd rather avoid (nursing homes) swell Medicaid ranks? How will home care providers fare with higher acuity patients? How will nursing homes survive with fewer low-acuity (profitable) residents? Why are low-acuity patients in expensive skilled nursing facilities in the first place? Can private financing alternatives like insurance and reverse mortgages grow if Medicaid LTC becomes more attractive than ever? Is Rhode Island jumping from the fiscal frying pan into a financial firestorm? What might the state do with its global Medicaid waiver authority to reinvent and save the LTC safety net? Can Rhode Island get it right and become a model for the rest of the country?
Our new report, titled "Doing LTC RIght," released today in collaboration with the Providence-based Ocean State Policy Research Institute, answers all these questions. The executive summary, findings, and recommendations follow. Read the whole report here now or in serialized form all next week on the LTC Blog at www.centerltc.com and in our LTC E-Alerts for members.
With state and federal budgets in crisis, public officials will have to address Medicaid and long-term care costs sooner rather than later. The good news is the problem of financing long-term care is easy to fix. Our report explains the solution. If Rhode Island follows our recommendations, it can become a model for long-term care reform the rest of the country should follow. So, roar Rhode Island, show the rest of America how it's done. Save the Medicaid LTC safety net and unleash the potential of private market alternatives.
Excerpts from "Doing LTC RIght" with footnotes omitted:
Rhode Island Medicaid has embarked upon a financially risky, but potentially very beneficial reorganization of its long-term care delivery system.
State policy makers agree on the "Basic Principles" guiding their long-term care reform initiative:
So far, Rhode Island's LTC reform measures have addressed two of those objectives (numbers 2 and 3) but largely disregarded three others (numbers 1, 4, and 5).
The state's unique global waiver enables Rhode Island Medicaid to provide more LTC services in settings people prefer (home and community) and fewer in settings most people would rather avoid (nursing homes).
Thus, the principles of providing the right services in the right settings are being met.
In the absence of equally radical changes to Medicaid's generous financial eligibility for long-term care, however, the clinical changes implemented by Rhode Island could cause LTC expenses to skyrocket, waiting lists to explode, or both.
Easy access to Medicaid LTC eligibility after the insurable event has occurred increases public expenditures and crowds out potential private LTC financing sources.
Clearly, the objectives of caring first for the neediest, leveraging all available money, and remembering the taxpayers are not yet achieved nor even being strongly pursued.
To be sure, Rhode Island is constrained by generous and elastic, federally imposed LTC eligibility rules that prevent the state from targeting scarce Medicaid resources to people most in need.
It was precisely the domineering, over-restrictive federal laws and regulations governing waivers, home and community-based services, and institutional bias that Rhode Island sought to escape by means of its global Medicaid waiver.
So, the next logical step for Rhode Island is to seek authority under the global waiver to pursue Medicaid LTC financial eligibility rules that comport more fully with the state's principles of long-term care reform.
The following recommendations if implemented would position Rhode Island Medicaid to achieve all of its remaining LTC reform goals by (1) targeting scarce public resources to people most in need and (2) attracting nontax revenue to LTC financing from private assets, home equity and insurance, thus (3) relieving the financial burden of Medicaid LTC on taxpayers.
If some of these recommendations seem harsh, consider them in the context of what will happen when Medicaid and other state and federal safety net programs are unable to continue supporting current programs. Consider the potential benefits to all concerned--care receivers, caregivers, and care funders--of attracting new sources of private financing to the long-term care system.
I. Establish a baseline. Study a valid random sample of LTC cases to determine how much money Rhode Island Medicaid loses because of . . .
The results of this study should provide ample evidence of the need for and the benefits of implementing the remaining recommendations.
II. Seek authority from the federal Centers for Medicare and Medicaid Services under the state's global Medicaid waiver to change Rhode Island's financial eligibility rules for long-term care services in the following ways.
III. Enhance Rhode Island's lien and estate recovery program.
III. Educate Rhode Islanders about the importance of planning for long-term care.
IV. Implement measures to encourage the use of reverse mortgages and private long-term care insurance to fund long-term care privately.
Why not try these measures in a small state that has already embarked on Medicaid experimentation with its global waiver? If they work, Rhode Island Medicaid could become a model for LTC reform throughout the country.
It happened for welfare reform when an experiment in Wisconsin went national in the Welfare Reform Act of 1996. It must happen for long-term care somewhere soon, because the Age Wave will make fixing long-term care harder and harder as time goes on.