In this study, we expand on earlier work in Wenzlow et al. (2008) by using MAX 2006 to gain insight into both interstate and intrastate variations in LTC system performance. The study has two broad aims: (1) to characterize differences in LTC systems within and across states; and (2) explore how state constraints and policies might lead to better or worse LTC system performance.
To characterize the performance of LTC systems in each state, we summarize HCBS and institutional care service use and expenditures to determine whether some states are achieving better balanced systems either by serving more people or spending more per person covered compared to other states. We also explore how balance varies across important Medicaid subgroups -- aged enrollees over 65, enrollees under 65 and eligible for Medicaid on the basis of disability, and two subgroups of enrollees with disabilities -- those with physical disabilities and those with ID/DD.4 (See Appendix A for a glossary of terms, including the basis of eligibility [BOE] groups.) These subgroups of enrollees tend to have different demographic characteristics and service needs and often are served by different Medicaid programs.
The second portion of our analyses explores how state constraints and policies are associated with the LTC system performance indicators developed in the first portion of the study. Specifically, we examine how factors that may challenge system transformation -- for example, cost of living, fiscal constraints, and state demographics -- and Medicaid and non-Medicaid policies are linked with LTC balance and other indicators of system performance. Finally, we examine how the association between state constraints, policies, and system performance varies across three enrollee subgroups -- the aged, enrollees with physical disabilities, and enrollees with ID/DD.
There is a strong -- virtually universal -- consensus among LTC experts and as well as among federal and state Medicaid officials that state systems should encourage use of HCBS over institutional care. The goal is for HCBS to account for at least half of Medicaid LTC expenditures. As evidence of this consensus: in the 2010 Affordable Care Act, Congress legislated the "Balancing Incentive Payments" (BIP) program that allows states that spent less than 50 percent Medicaid LTC expenditures being spent on HCBS as of 2009 to apply to receive a higher federal match rate to make infrastructure improvements intended to increase their LTC spending on HCBS to at least 50 percent (http://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Long...). As of June 2013, CMS has approved 16 states to receive BIP. If the 50 percent spending standard is met, it logically implies (since institutional care costs more per-capita) that more than 50 percent of Medicaid LTC services users would be receiving HCBS rather than institutional care. The "50 percent" benchmark is, however, admittedly arbitrary. It suggests that the appropriate balance is "equality" whereas, in fact, many experts would like HCBS to become the dominant mode of service provision.
Many LTC experts consider the "oldest-old" (those 85 and older) and LTC service users who lack informal caregivers and must rely largely or exclusively on paid help to be those most likely among Medicaid LTC users with high service needs to require institutional care; that is, those for whom available Medicaid HCBS is least likely to be an adequate alternative to long-stay nursing home placement. With respect to individuals with ID/DD, most of whom are adults under 65, a massive shift occurred during the 1980s and 1990s from large state-run institutions, into private (non-state-operated) smaller institutions and group homes. Currently 14 states have no state-operated ID/DD residential care facilities. In the past decade, there has been a further shift toward family support (providing services or individual budgets) to individuals with ID/DD living with parents or other caregivers and toward out-of-home living arrangements (group homes and supported apartments) where fewer than six individuals with ID/DD share a residence. Braddock (2009) found that 75 percent of all Medicaid and other federal/state funding for ID/DD services went toward non-institutional care (that is, services in settings with fewer than seven residents with ID/DD) and 92 percent of all LTC users with ID/DD in out-of-home placements were in settings with six or fewer residents with ID/DD.
Nevertheless, some states that serve some Medicaid users with ID/DD in residential care settings with 7-16 residents (which, at least by some definitions, qualify as "non-institutional" because of their size, nevertheless certify and pay for care in these settings (including room and board) as small Medicaid ICFs/IID -- which has the effect of blurring the boundaries between Medicaid institutional and non-institutional spending and services use for the ID/DD subpopulation. In marked contrast, however, there are no comparable small residential settings serving the elderly and younger physically disabled adults that may be certified and paid under a special category of "small" Medicaid nursing facilities in some states but not in others. There are comparatively few Medicaid-eligible elders or younger adults with physical disabilities residing in assisted living, adult foster care, or other "out-of-home" residential care settings and any services covered in these settings for Medicaid beneficiaries is always classified as HCBS (room and board costs are ineligible for Medicaid coverage).
Our analyses of state constraints, policies, and LTC system characteristics should be viewed as exploratory. We were unable to assess causal impacts.