The State Perspective: Rebalancing Long-Term Services and Supports

1. The State Perspective: RebalancingLong-Term Services and Supports Cynthia H. Woodcock Alliance for Health Reform Briefing October 3, 2011

2. States are committed to rebalancing … but efforts are driven by the need to reduce budget deficits. • What is rebalancing? Moving away from a dependency on institutional care towards a system of comprehensive community-based long-term services and supports (LTSS). • As of Spring 2011, 33 states projected $75.1 billion in budget gaps for FY 2012 (with forecasts yet to come from many states) and Medicaid cost containment is a dominant theme in FY 2012 budgets.* *National Governors Association and National Association of State Budget Officers. The Fiscal Survey of States, Spring 2011.

3. Progress has been made in rebalancing, but tremendous variation remains across states. Source: National and State Long-Term Care Spending for Adults Ages 65 and Over and Persons with Physical Disabilities. 2011. Analysis of Thompson Reuters data by The Hilltop Institute, UMBC.

4. Managed long-term services and supports (MLTSS) is the strategy many states are choosing to pursue. • What is MLTSS? A plan in which a contractor is accountable for providing beneficiaries with a defined set of LTSS in exchange for a prepaid capitation payment. Some plans include just Medicaid benefits; others include Medicare and Medicaid benefits (“integrated care”). • Enrollment in MLTSS estimated at 250,000 in 2009 • 15 states have one or more MLTSS programs; 8 of these have multi-region or statewide programs • 15 demonstration sites funded in spring 2011 by CMS Medicare-Medicaid Coordination Office • A number of other states are considering MLTSS as a way to better manage their Medicaid budgets Source: L&M Policy Research, LLC

5. These states have MLTSS programs: One or more state-designed MLTSS programs Multi-region or statewide MLTSS program(s) Source: L&M Policy Research, LLC

6. States with mature MLTSS programs tend to rank high on LTSS system performance, but there are challenges ahead for other states. • Few evaluations of MLTSS programs • Limited literature on best practices • States are in a hurry to implement MLTSS and expect immediate cost savings

7. Some of the challenges in implementing MLTSS include: • Ensuring consumer choice and person-centered care in a managed care environment • Aligning incentives across payers (Medicare and Medicaid) and systems (LTSS, primary/ acute care, behavioral health) • Ensuring effective service delivery • Preserving and growing provider networks • Managing “woodwork”—the unanticipated demand for new services

8. The Affordable Care Act (ACA) offers new opportunities for LTSS … • Medicare-Medicaid Coordination Office (§2602) • Community First Choice (§2401) • State Balancing Incentive Payments (§10202) • Medicaid Health Homes (§2703) • Money Follows the Person (§2403) • 1915(i) State Plan Amendment (§2402) • Community Living Assistance Services and Supports (CLASS) (§8002)

9. … but some requirements in the ACA are likely to deter state participation. • Community First Choice: Maintenance of effort requirement (expenditures for attendant care in first year must be maintained at or exceed prior year’s spending) • State Balancing Incentive Payments: Required structural changes (single point of entry, conflict-free case management, core standardized assessment tool) • 1915(i) State Plan Amendment: Eligibility requirements (required to be statewide, cannot limit number of participants)

10. Contact Information Cynthia H. Woodcock IMPAQ International, LLC 443.718.4343 cwoodcock@impaqint.com www.impaqint.com