Summary of the Future of Medicaid Long-Term Care Services in PA: A Wakeup Call

1. Summary of the Future of Medicaid Long-Term Care Services in PA: A Wakeup Call Report cosponsored by University of Pittsburgh Institute of Politics & the Jewish Healthcare Foundation

2. The Urgent Need for PA to Reshape How It Provides LTC through MA • Demographics: • Ahead of the national curve in experiencing the economic pressure of an aging population • Fourth-largest percentage of residents age 65 years and older. • During the next decade PA’s population will grow by 2% but its 85-and-over population will grow by 42%.

3. Demand for LTC • 70% of people reaching age 65 in 2012 are expected to need LTC services at some point—for an average of 3 years. • The increase in the number of older Pennsylvanians alone could cause MA long-term care costs to increase by 24% in the next 13 years, even with no other factors.

4. Cost-Shifting to the Public Sector • Most older Pennsylvanians will exhaust their savings in less than a year if they need to pay for nursing home care (which currently costs an average of $91,652/yr. in PA) for semi-private room and will then have to depend on public funding for care. • 94% of Pennsylvanians age 50 and older erroneously believe that Medicare will cover their LTC costs. • The recession depleted older Pennsylvanians’ saving & only 40 out of 1,000 Pennsylvanians age 40 or older have LTC insurance. • PA MA already pays 65% of PA nursing home care.

5. Fragmented Care • DPW review of hospital admissions from NF found that 30% were unnecessary. • PA’s LTC system is fragmented & poorly coordinated causing many to land unnecessarily in a NF with 82% of LTC delivered in NF in 2010. • Adjusting for PA’s aging demographics, PA spends 22% more than the national average on NF care and 8% less than the national average for HCBS services. • We are spending a lot public dollars for people with LTC needs in ways that do not improve patient outcomes and in the least desirable settings.

6. Lack of Coordination between Medicare & Medicaid • 400,00 Pennsylvanians qualify for Medicare and also have incomes and assets low enough to also qualify for Medicaid (Dual-eligibles) and have to navigate both programs. • Medicaid pays for Medicare premiums, cost sharing, LTC, etc. • Medicare pays for physician care, hospitalizations, prescription drugs, home health care and some LTC. • Lack of coordination causes perverse financial incentives. • PA’s dual-eligibles are 18% of PA’s MA enrollees but represent 43% of total PA MA spending—over $20,000 year for PA MA.

7. Action Steps Needed • PA should redesign its Medical Assistance funded long-term care delivery system to: • Prepare for the demographic implosion of older Pennsylvanians needing LTC services. • Improve and coordinate care, and • Wherever possible, serve people where they prefer to be served, generally in their homes, at a cost significantly less than NF care.

8. Specific Recommendations • Establish an advisory committee, with direct access to top leadership in DPW and the Governor’s office, to guide the development, implementation, and operations of Medicaid long-term managed care and of the redesign of publicly funded long-term care in general. • Seek CMS approval to contract with MCOs for the management and delivery of Medicaid-funded long-term care in Pennsylvania. • Pursue participation in the capitated demonstration program for dual-eligibles proposed by CMS. (PA is the only large state that has not and our neighboring states all have.

9. Specific Recommendations • In any requests for managed-care proposals that DPW solicits in accordance with the previous recommendations, require specific evidence-based quality-of-care measures and consumer protections as contract requirements. • Have Area Agencies on Aging (AAAs) target services to older Pennsylvanians not eligible for Medicaid who are at risk of nursing home placement and who might ultimately become dependent on Medicaid after spending down their own resources.

10. Specific Recommendations • While working toward implementation of managed long-term care, expand the availability of home- and community-based services across the Commonwealth, and expand programs to help long-term care recipients receive care in the community first, reserving nursing home placement for those who cannot be cared for in their communities. • Implement an expedited Medical Assistance eligibility and care planning process for people not already on Medicaid but who may be able to avoid placement in a nursing facility through the delivery of appropriate home- and community-based services.

11. Specific Recommendations • Develop educational programs to support consumer choice of long-term care settings, and to promote the benefits of advance care planning, use of advance directives such as the Pennsylvania Orders for Life-Sustaining Treatment (POLST) form, hospice, and palliative care. • Maximize grant opportunities to improve the long-term care system. Relevant grant opportunities include: • The State Medicaid health (medical) home state plan option • Money Follows the Person Rebalancing Demonstration grants, which includes development and provision of adequate, affordable, accessible housing • The State Balancing Incentive Payments Program • Community Transformation Grants

12. Specific Recommendations • Pursue quality and coordination improvements outlined in the report. • Pilot these recommendations on a voluntary basis .

13. Paying for LTC at the most expensive and least desired location

14. Unsustainable Situation