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Medicaid Reform: Policy Roundtable Session

In the Medicaid Reform Roundtable Session, Charles Milligan discusses proposals for enhancing state program flexibility, delinking LTC benefits from acute care, creating incentives for private financing, and Medicare-related reforms for dual eligibles. He emphasizes the impact of Medicaid on long-term care services and the need for changes in Medicare decisions. For more information, reach out to Charles Milligan, Executive Director at UMBC/CHPDM.

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Medicaid Reform: Policy Roundtable Session

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  1. Medicaid Reform:Policy Roundtable Session June 25, 2006 Charles Milligan, JD, MPH AcademyHealth Meeting

  2. In aggregate, Medicaid is the largest funder of long-term care services nationally . . .

  3. . . . and is the primary source of funding for most residents of nursing facilities.

  4. Out-of-Pocket $25.9 Billion 25% Medicaid $50.9 Billion 49% Late monthsof stay Early monthsof stay 8% Private Insurance $7.7 Billion 3% Other Private $3.5 Billion 13% 2% Medicare $12.9 Billion Other $2.3 Billion Because other funding sources usually cover the early months of a person’s nursing facility stay . . . Sources of Payment for Nursing Home Care, 2002 Total: $103.2 Billion Source: CMS, Office of the Actuary

  5. 80% 70% Medicaid as Payor 60% 50% 40% 30% 20% 10% 0% Less than 3 months 3 monthsto less than6 months 6 monthsto less than12 months 1 year toless than3 years 3 years toless than5 years 5 yearsor more Reasons for Discharge Discharged to the Community Deceased Moved to another institution . . . individuals who move to the community do so after a short stay, before Medicaid can easily divert them. Source: The National Nursing Home Survey: 1999 Discharge Data Summary

  6. Most of Medicaid’s spending on dual eligibles is on long-term care services . . .

  7. . . . due to the lack of an extensive Medicare nursing facility benefit, compared to other Medicare benefits ...

  8. . . . while the remainder of Medicaid spending plugs other gaps in Medicare’s benefits and cost sharing.

  9. Medicare decisions have a major impact on Medicaid. • Cost sharing levels in Medicare • Utilization review decisions governing overlapping benefits • Skilled nursing • Home health • DME • Rx, in the aftermath of Part D • Hospital discharges into nursing facilities • Medicare-paid physicians order Medicaid-paid services

  10. Summary ofReform Proposals

  11. Selected Reform Proposals • Enhanced state program flexibility • De-link LTC benefits from acute benefits • Create incentives for private financing of LTC • Medicare-related reforms for dual eligibles

  12. Enhance State Program Flexibility • Allow “HCBS” to be approved without a waiver • Largely but not entirely addressed by DRA • Allow HCBS waivers to utilize a different level of care than nursing facilities • Partially addressed by DRA • Capitated managed LTC without a waiver • Allow distinct cost sharing rules for LTC • Allow tailoring of LTC benefits to different populations

  13. De-link Medicaid’s LTC benefits from the acute care benefits • Allow Medicaid to offer LTC benefit array to individuals who would not be entitled to Medicaid acute care services • Expect these individuals to receive acute care from Medicare, employer, or retiree insurance • Similarly allow Medicaid to offer acute benefits to people who would not have entitlement to LTC benefits

  14. Create incentives for private financing of LTC • Tax credits or deductions related to the purchase of private LTC insurance • Not addressed in DRA • Remove moratorium on LTC Public/Private Partnerships • Addressed in DRA • Incentivize reverse annuity mortgages • Not addressed in DRA

  15. Medicare-Related Reforms for Dual Eligibles • Revise “homebound” standards for Medicare home health benefit • Earlier engagement of Medicaid at time of discharge from hospital to nursing facility • Medicaid share in savings related to Medicare special needs plans and disease management initiatives

  16. Questions Charles Milligan Executive Director, UMBC/CHPDM 410.455.6274 cmilligan@chpdm.umbc.edu www.chpdm.org

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