Medicaid-Financed Institutional Services: Characteristics of Nursing Home and ICF/IID Residents and Their Patterns of Care. A. Summary of Results and Policy Implications

08/01/2013

Nursing Home Utilization. In recent years, the percentage of elderly and disabled Medicaid enrollees living in nursing homes has declined, a finding consistent with other recent studies (see, for example, Wiener et al. 2009). 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. In fact, we found that rates of nursing home utilization dropped in states that allocated a higher share of their Medicaid LTSS expenditures to HCBS, while rising in states allocating a lower share to HCBS. 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.

The Population of ICF/IID Residents. 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. ICF/IID residents were generally younger or middle-aged adults, the vast majority of whom had low-incomes even prior to being admitted (unlike nursing home residents). 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 benefit from 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.

Use of Both Institutional Care and HCBS. Sizable minorities of both nursing home and ICF/IID residents used HCBS prior to their Medicaid-financed stays, suggesting that different types of LTSS are being used for the same individuals at different times, determined possibly by their changing levels of need or trial-and-error efforts to find the most appropriate service setting. 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 LTSS 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 (Lind et al. 2010).

Multiple Episodes of Care. Multiple episodes of institutional care (separated by at least two months of living somewhere other than in a nursing home or ICF/IID) were uncommon, suggesting limited cycling in and out of institutions by the same individuals. However, the small number of individuals who did experience multiple episodes of 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. Moreover, while uncommon among LTC users generally, multiple spells of care among enrollees who were admitted to ICFs/IID during the 18-month period over which we observed them were not unusual; many of these individuals used both nursing home and ICF/IID services, usually in that order.

Eligibility for Medicaid Benefits. Although approximately 30 percent of nursing home residents were not enrolled in Medicaid two months before the beginning of their Medicaid-financed stay, the vast majority of ICF/IID residents (nearly 90 percent) were previously enrolled, with nearly half qualifying for benefits via cash assistance. In contrast, most nursing home residents qualified for benefits via "other" criteria (including the 300 percent rule) during their stays. The large percentage of ICF/IID residents who qualified for Medicaid prior to their stay might not be particularly surprising, since many disabilities are lifelong and (in the absence of and sometimes even with support services) limit an individual's ability to earn income. That nursing home stays often precipitate enrollment in Medicaid reflects the high cost of nursing home services for individuals with modest incomes and assets who previously did not require institutional care.

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