California Community Choices Financing Study

1. California Community Choices Financing Study Robert Mollica National Academy for State Health Policy And Leslie Hendrickson Hendrickson Development November 12, 2009

2. Goal 3: Financing Study • Examine laws, regulations, policies and payment methodologies affecting long-term care in California • Identify barriers and make recommendations to: • Improve access to home and community based services • More effectively manage funding for services that promote community living options • Report addresses older adults, adults with physical disabilities and persons with developmental disabilities • Does not address persons with mental illness

3. Focus • Medi-Cal services • IHSS • HCBS waiver programs (MSSP, ALW, NF/AH, AIDS) • Nursing Facility services • ADHC • Did not include • State general revenue programs • Older Americans Act

4. Challenges to Managing Long Term Care • Fiscal, geographic • Services covered by multiple state and county agencies • Department of Social Services • Department of Health Care Services • Department of Aging • Department of Public Health • Department of Developmental Services • General lack of streamlined access • No common database across programs

5. Balancing: What Is It? • No standard definition of balance • System enables consumers to choose services and settings based on their preferences • Defined by state policy • Possible measures • Percent of spending on HCBS • Percent of people served in community settings • Months in the community vs institutional settings • Percent of new users who receive HCBS

6. Comparing States • CMS 64 expenditure data released annually by Thomson Reuters • Under-reports HCBS spending in some states • Expenditures not included in rankings • State plan Adult Day Health Care • Targeted Case Management • State general revenue services • Defining “Institution” and Community Settings

7. Key Findings: Rankings • Participant rankings: • 1st in number of personal care participants/1,000 • 42nd in HCBS waiver participants/1,000 • 6th in total HCBS participants/1,000 • Per capita spending (all populations) • Personal care 4th • Total HCBS 18th • HCBS waivers 48th • Nursing facility 41st • ICF-MR 33rd

8. Percentage HCBS Spending Population CA NAT AVE Percent HCBS (all populations) 54% 42% Older adults, individuals with 52% 31%physical disabilities Individuals with developmental 62% 63%disabilities

9. Key Findings… • Programs spread across multiple agencies • Only DDS has a single entry point system • No agency-wide long-term care strategic plan • Institutional bias in financial eligibility for nursing facility and HCBS waiver services • Limited organizational base to build or expand new programs (eg statewide transition program)

10. Key Findings… • Progress relocating individuals from Developmental Centers • Nursing home supply and Medi-Cal use declined from 2001 to 2008 California National • Supply - 6.0% -1.6% • Medi-Cal census -.4% - 8.3% • Nursing facility rate does not control for low occupancy • Rates exceeded inflation

11. Cost effectiveness/woodwork effect • Change the service mix to meet expanding need • Reduce the spending growth rate • Set aside waiver slots for persons relocating from institutions • Conduct a “break even” analysis • “Cost avoidance” through diversion

12. Use of the Report • Continue status quo • Formulate a transition plan • Incremental changes • Broader changes

13. Recommendations: 28 • Time to implement • General • Short-term (12 months) • Medium-term (12 – 24 months) • Longer-term (24 months or longer) • Category • Financing • Access/delivery system • State-level organization

14. General Recommendations • Establish a philosophy and legislative intent for all long-term services and supports • Currently only described for specific programs • No overall statement of intent for the “system” • Develop a strategic plan for long-term services and supports • Populations addressed • Timetables, responsibilities and measureable goals

15. Financing

16. Budget Flexibility • Create a unified long-term care budget for aged/disabled services • Nursing facility services • In Home Supportive Services • Multipurpose Senior Services Program • Other HCBS waivers

17. Reinvest Savings in HCBS • Waiver programs are cost effective and should be expanded • Transfer savings to HCBS programs from individuals who transition from nursing facilities • Allow appropriations for nursing facilities to pay for HCBS for waivers with waiting lists

18. Rental Assistance Voucher • Addresses need for affordable housing for individuals who want to transition from an institution • Convert a portion of the state share of savings in a nursing home to a temporary rental assistance subsidy • Individuals must be on a waiting list for a housing choice voucher

19. Nursing Facility Reimbursement • Adopt nursing facility case mix reimbursement system for the staffing component of reimbursement rate • Creates incentives to serve higher acuity residents and divert lower acuity applicants to community programs • Reimbursement level for property costs seems too low • Examine reimbursement level for insurance which might need cap on size of per diem costs

20. Reduce Payments for Vacant Nursing Facility Beds • Establish a nursing facility occupancy provision • Based on a flat percentage of licensed beds or the statewide average occupancy rate • GAO report on 19 states found the average nursing facility occupancy provision used by other states was 88.6% • 25% of CA nursing facilities have occupancy rates below 85%

21. Convert “labor driven operating allocation” • Now used as incentive or bonus for hiring staff instead of contracting for staff • Some or all of labor offset can be converted to support other policies: • Incentivize homes to support transition efforts • Promote “Culture Change” • Pay for Performance for meeting quality of care and quality of life goals, e.g. example of Colorado • Restructure physical plants, build residential options • Promote more staff training

22. Managed Long-Term Care • ASPE report – “most studies and officials report that managed LTC reduces use of institutional services and increase use of HCBS relative to fee for service programs” • Consumer satisfaction is high • Improves coordination of health and long term care needs • Reduce hospital use, emergency room visits, lower overall costs

24. Increase Scope of Provider Fees • Add Medicare revenue to Quality Assurance Fee • Added after study was completed • Identify provider groups interested in establishing QAFs for HCBS

25. Access/Delivery System

26. Streamline Access to HCBS • Create single entry points for older adults and adults with physical disabilities • Scope of programs and activities • Possible entities • Regional or County based organizations • ADRC • MSSP sites • Area Agencies on Aging • Co-locate financial eligibility workers in SEPs/ADRCs

27. Diversion • Work with hospitals to provide preadmission screening/options counseling for individuals who: • Seek admission to a nursing home • Discharged from a hospital with health & supportive service needs • Provided by single entry points, ADRCs, community organizations • Priority groups • Medi-Cal beneficiaries • Likely spend down within 3 or 6 months

28. Transition Program • Establish a statewide nursing facility case management function to support residents who can relocate to the community • Support and expand Money Follows the Person project • Provide funds to help Independent Living Centers, MSSP sites, Area Agencies on Aging, other non-profits and counties to expand transition programs • Takes several years to build an effective infrastructure

29. Eligibility Changes to Increase HCBS Use • Addresses institutional bias • Add the 300% of SSI eligibility group to HCBS waivers • Allows people who would spend down in a nursing home to be eligible for HCBS waivers in the community • Establish maintenance allowance/share of cost

30. Help Individuals in Nursing Facilities Keep a Home • Increase the home maintenance allowance • Allows individuals admitted to a nursing home to retain income to maintain their home • Must expect to return home within 180 days • Current allowance is $209 a month • Options: Exempt up to 100% FPL; Percentage of the SSI/SSP payment; Total SSI/SSP payment

31. Keep a Home… • Maintain the SSI/SSP eligibility status for short-term nursing home admissions • Allows individuals in a nursing home for less than 90 days to receive their full SSI/SSP payment to maintain their home

32. Services in Residential Settings • Offers options for people who need access to services for unscheduled needs, oversight and supervision • Program options • Allow IHSS payments in RCFEs • Expand assisted living waiver statewide • Add assisted living services to MSSP, NF/AH waiver

33. Expedite Financial Eligibility • Allow case managers to presume financial eligibility and enroll applicants in an HCBS waiver to avoid nursing facility admission • “Fast track” the eligibility process • Co-locate financial eligibility workers with single entry points/ADRCs

34. State-level Organization

35. New Department • Create a Department of Long-Term Services and Supports • Little Hoover Commission recommendation • Possible components • In Home Supportive Services • Multipurpose Senior Services Program • Assisted Living Waiver Program • Other HCBS waivers • Nursing home level of care • Nursing home licensing • RCFE licensing