Medicaid-Financed Institutional Services: Characteristics of Nursing Home and ICF/IID Residents and Their Patterns of Care

Executive Summary

Jeffrey Ballou, Valerie Chen, Dean Miller and Audra Wenzlow

Mathematica Policy Research, Inc.

August 2013

Although states have begun to re-balance their long-term care (LTC) systems toward a greater emphasis on home and community-based services (HCBS), many low-income elderly, persons with physical disabilities, and persons with intellectual disabilities or related developmental disabilities (ID/DD) continue to reside in institutions such as nursing homes or intermediate care facilities for individuals with intellectual disabilities (ICFs/IID). Many of these individuals need complex or continual care that can be effectively provided only in an institution. Others would like to return to the community but have been unable to transition because of the lack of resources, such as affordable housing. Some residents might benefit from living in the community but are not fully aware of their options outside institutional care, and still others might prefer to continue living in the institution even if their needs could be met by HCBS.

Through an analysis of Medicaid enrollment and LTC claims data, this report seeks to provide researchers and policymakers with information on the characteristics of institutionalized enrollees, their stays, and the interaction of institutional services and HCBS, building on the earlier work of Wenzlow et al. (2008) by using more recent data and extending the analysis to residents of ICFs/IID.

To better understand the population of Medicaid enrollees living in nursing homes or ICFs/IID, we analyzed data from the Medicaid Analytic eXtract (MAX) from 2006 and 2007 to address the following two sets of research questions:

1. What are the characteristics of enrollees remaining in nursing homes and ICFs/IID and their stays?

   • How many enrollees had new spells of nursing home care or ICF/IID care, what were their demographic characteristics, how did they become eligible for Medicaid, and how long were their stays?
   • Did enrollees receiving nursing home or ICF/IID care also use HCBS before or after their institutional stay? Did they use both nursing home and ICF/IID care?

      

2. How does the length of institutional spells vary at the state-level with changes in state constraints and policies? State-level variables examined included the following:

   • The percentage of Medicaid LTC spending allocated to HCBS, and the percentage of Medicaid LTC recipients using HCBS.
   • The supply of nursing home beds per 1,000 elderly, the percentage of ICFs/IID that are large (more than 15 beds), and the percentage change in the number of ICFs/IID from 2006 to 2007.

      

Key findings from the analysis of enrollees living in nursing homes included the following:

• Enrollees with nursing home stays tended to have either very short or very long spells of care (34 percent and 41 percent, respectively), indicating a mix of residents, some of whom likely need only temporary care while others will likely require access to nursing and medical services for the remainder of their lives.

• Although most people with new nursing home spells were already enrolled in Medicaid before their spell began (69 percent), a significant number of enrollees with new spells (31 percent) were not enrolled in Medicaid prior to the beginning of their Medicaid-financed spell. Approximately half (49 percent) of these new enrollees qualified for benefits under "other" eligibility criteria -- which include the 300 percent rule. (The 300 percent rule allows individuals with income up to 300 percent of the Supplemental Security Income threshold to qualify for Medicaid assistance for institutional care.)

• Among those with spells of six months or less, 30 percent used HCBS prior to receiving nursing home services, while more than one in four used HCBS following discharge.

• Although the percentage of nursing home spells lasting three months or less was generally higher in states with larger investments in HCBS relative to nursing homes and higher HCBS utilization rates, these associations were not especially large.

• Relative to 2001-2002, there were fewer elderly and people with disabilities enrolled in Medicaid in 2006-2007, and fewer of these individuals had either new or ongoing nursing home spells. The percentage of this population receiving care in nursing homes declined slightly in states that allocated a high proportion of their Medicaid LTC expenditures to HCBS while rising slightly in others.

The following key findings emerged from the analysis of enrollees residing in ICFs/IID:

• Enrollees residing in ICFs/IID were generally younger adults who remained in residence for a year or longer. The vast majority (89 percent) qualified for Medicaid even before they were admitted to the ICF/IID, and those who qualified in advance generally retained the same maintenance assistance status upon admission.

• More than 40 percent of enrollees living in ICFs/IID used HCBS before their ICF/IID stay, suggesting that it is not uncommon for an individual to use both community and institutional services rather than solely ICF/IID services.

• Although few enrollees had both ICF/IID and nursing home stays during the study period, most of those individuals moved from nursing homes to ICFs/IID, rather than the other way around.

• There was little meaningful relationship between lengths of ICF/IID spells and most state policy variables, although the percentage of stays lasting three months or less was lower in states that closed facilities during the study period.

In recent years, the percentage of elderly and disabled Medicaid enrollees living in nursing homes has declined. Although the reasons for this decline are not clear, states that have successfully begun to re-balance their LTC systems away from institutional care and toward HCBS would expect to experience such declines. The positive relationship between HCBS investment and use and shorter nursing home stays also suggests that continued expansion of HCBS might be a contributing factor in lowering rates of institutionalization, although many other factors not measured here are also undoubtedly involved.

New ICF/IID placements during our study period were relatively uncommon, reflecting the long lengths of stay of the typical ICF/IID resident, the well-established movement from placing developmentally disabled individuals in larger institutions toward greater reliance on community-oriented group homes and HCBS, and the smaller size of this population more generally. Because of the diverse and complex needs of this unique population, ICF/IID residents and those at risk of being placed in an ICF/IID will continue to need programs that are tailored to their individual circumstances. Because large state-run ICFs/IID and smaller community ICFs/IID represent significantly different care settings, additional research that explicitly considers utilization of services provided by these different types of ICF/IID is critical to fully understanding how low-income individuals with ID/DD are being served in different states, and how to serve them better.

Sizable minorities of both nursing home and ICF/IID residents used HCBS prior to their Medicaid-financed stays. To the extent that a given Medicaid enrollee is likely to need both HCBS and institutional care at different times in his or her life, systems of care that have a "no wrong door" policy -- according to which individuals requiring long-term services and supports have all options for services made available to them regardless of how they access the system -- hold the potential to ease transitions to and from the community. The small number of individuals who experienced multiple episodes of institutional care likely represents an important population requiring complex services for whom a key challenge is providing appropriate care tailored to their specific functional and medical needs.

Because this study is fundamentally broad and descriptive, the findings presented here lend themselves to only tentative conclusions but suggest directions for future study. Analyses that use detailed person-level and claim-level data, including the information available through MAX, are especially likely to enhance our understanding of what types of individuals are likely to benefit most from which type of care (institutional or HCBS), and under what circumstances.