U.S. Department of Health and Human Services

Examination of Texas Rider 37: A Medicaid "Money Follows the Person" Long-Term Care Initiative

Executive Summary

Barbara A. Ormond, Anna S. Sommers and Kirsten J. Black

The Urban Institute

May 30, 2006

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This report was prepared under contract # HHS-100-03-0011 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and The Urban Institute. For additional information about the study, you may visit the DALTCP home page at http://aspe.hhs.gov/_/office_specific/daltcp.cfm or contact the ASPE Project Officer, Linda Bergofsky, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is: Linda.Bergofsky@hhs.gov.

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BACKGROUND

The Texas state legislature included a rider to the biennial budget in its 2002-2003 General Appropriations Act intended to promote choice, independence, and community integration for Medicaid-funded nursing facility residents who expressed a desire to live in the community. Rider 37, as this provision was generally known, allowed Medicaid funds that were being spent for a person in a nursing facility to be transferred to the state’s community-based care budget when the individual elected to return to the community. The initiative was re-authorized in the 2004-2005 budget as Rider 28 and established in regulation in summer 2005 as the Money Follows the Person (MFP) funding policy. Unlike the Rider initiative, the MFP policy in its current form is now a full-fledged program with peripheral supports in place statewide, including relocation contractors, transition assistance funds, and interdisciplinary transition teams.

The Rider initiative in Texas is noted as an example that could serve as a model for other states with similar objectives. In this study, commissioned by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the U.S. Department of Health and Human Services, we examine the experiences in the early years of the Rider initiative using information from site visits to four Texas communities in spring 2004 and analysis of Texas Medicaid long-term care data. As of December 31, 2005, a total of 10,156 people had moved to the community under the Rider initiative and the new MFP program.

Effectively, the Rider initiative provided an alternative eligibility route for the state’s various Medicaid community care programs. The largest Medicaid community care program in Texas, Community-Based Alternatives (CBA), serves older people and adults with physical disabilities who meet the criteria for nursing facility admission. It provides a comprehensive benefit package of long-term care services, including personal care services, nursing, minor home modifications, and therapies. All but a handful of Rider participants enter the CBA waiver program, so in this report we focus on that program.

STUDY OBJECTIVES

The research questions posed by ASPE fall into three broad areas: the transition process, participant characteristics, and service utilization and costs. The process issues studied include how the initiative works at the state and regional level, eligibility and enrollment processes, the scope of services and benefits, quality monitoring procedures, nursing facility participation in and reactions to the initiative, characteristics of Rider participants, as well as implementation issues and how they were resolved.

DATA AND METHODS

The study included both a qualitative and a quantitative component. The qualitative component consisted of site visits to four counties in three Texas Department of Aging and Disability Services (DADS) service regions. Sites were chosen to reflect the diversity of regions and populations in Texas, and focused on areas with a large number of Rider transitions. Key informants included regional DADS officials and an array of provider and community stakeholders involved in assisting with or managing transitions under the Rider. Discussion topics included outreach and education about the Rider initiative for staff, nursing facility clients, and nursing facilities; the process to transition; procedures for monitoring clients after transition and assuring quality of services; administrative procedures and perceived burden; characteristics of participating clients and their facilities; service capacity in the community; and client satisfaction.

The quantitative component of the study used data from Texas Medicaid long-term care data files to explore how Medicaid recipients who opted to transition to the community through the Rider (“Rider participants”) compared to their non-Rider counterparts who remained in nursing facilities (“nursing facility residents”) or who received services through the CBA program (“CBA clients”). The Rider population studied consisted of 4,870 individuals who entered the CBA program directly after a nursing facility stay. The CBA population studied consisted of 15,895 non-Rider participants entering the CBA program beginning in September 2001 when the Rider took effect. The nursing facility resident sample consisted of 65,132 residents who did not use the Rider and who had at least one Medicaid nursing facility payment in October 2003. We compared these groups on an array of demographics, medical diagnoses, and expected level of care dependence. Within each of the groups and across characteristics, we looked at service use, average monthly cost of services, and individual status after entry into the CBA program. We also report on the proportion of facilities with Rider transitions, the frequency of transitions, and characteristics of facilities with and without transitions.

Eligibility for the CBA program is restricted to adults ages 21 and over. As an extension, this analysis is limited to the same age group. Therefore, findings in this report and policy implications extending from it cannot be generalized to children.

FINDINGS: OVERVIEW

Texas initiated a MFP policy by authorizing the transfer of funds from one Medicaid account to another under a rider to its general appropriations bill. Program eligibility and procedures did not change, which allowed this far-reaching change to be accomplished relatively smoothly.

Texas’s experience with the Rider 37/28 initiative demonstrates that a MFP component can be incorporated relatively easily into an existing Medicaid long-term care program. This far-reaching change in the state’s approach to long-term care was accomplished through the authorization of an accounting mechanism allowing funds to be shifted provisionally from the nursing facility component of the Medicaid budget to the community care component. In Texas, because community care programs were in place prior to this accounting change, the only change that the Rider made to the Medicaid long-term care program was, in effect, to identify the nursing facility population as a separate eligibility category for community care programs and to make this eligibility group exempt from any caps on enrollment in these programs. The comprehensive nature of the CBA benefits package allowed a diverse population of nursing facility residents to move back to residential settings that were more integrated in the community. In Texas, the accounting provisions embodied in Riders 37 and 28 later became one component in a comprehensive MFP funding policy, which defined a Medicaid long-term care program and incorporated lessons from the Rider initiative about the transition process.

FINDINGS: PROCESS

Outreach

There is both formal and informal outreach to potential participants in the Rider. An array of stakeholders notifies nursing home residents about the Rider and identifies potential clients for transition to the community.

In all three regions where site visits took place, DADS staff caseworkers and social workers at nursing facilities serve key roles in identifying clients who are interested in or suitable for transition to the community. Local ombudsmen and advocates for the elderly and disabled are an important additional source of information; in some regions, they advocate for and assist residents’ transitions. As the initiative has matured, word of mouth has become a source of information for potential clients.

Steps to a Transition

Steps to a transition include determining eligibility, developing a service plan, and contracting for services in the community prior to the nursing home resident’s discharge. Eligibility for community programs is determined while the participant is still in the nursing facility, which minimizes gaps in services.

Individuals who are interested in leaving the nursing facility are assigned a DADS caseworker and work with a home health agency to develop an Individual Service Plan (ISP). The resident’s choice of agencies and input into the ISP is his or her chief opportunity to influence the care plan, as Texas waiver programs do not currently include provisions for consumer direction. The DADS caseworker then arranges for all of the necessary components of the plan to be put in place by the time the client leaves the nursing facility. Eligibility and service coordination tasks are conducted while the client resides in the nursing facility. DADS staff generally felt that the presence of informal supports greatly facilitated the transition process, but that clients without informal supports were able to transition. Estimates of the time from identification of an eligible resident to the day he or she moved back to the community ranged from one to two months up to as long as four to five months.

Issues Affecting a Smooth Transition to the Community

Informants identified three primary issues affecting a smooth transition to the community.

Payment for community-based services cannot be made prior to a client’s discharge from the nursing facility, which sometimes complicates the coordination of services needed in place by the client’s first day in the community.

An overarching issue affecting smooth transition to the community arises from the fact that the Rider is, in effect, an accounting mechanism that transfers funds from one program budget to another. Clients cannot receive services from a nursing facility and a community care program at the same time, but in order for a participant’s home to be made ready, home modifications need to be complete and adaptive aids and other supports in place when the client arrives. Changes had to be made in state policy to allow work such as home modifications to be contracted before the client leaves the nursing facility, even though payment for these contracts cannot be made until the client’s first day in the community.

Respondents reported that the most difficult challenges to implementing transitions were finding suitable housing, identifying accessible transportation, and finding a physician in the community.

The most difficult challenges reported by site visit informants related to components of community care that are beyond the scope of the CBA program itself. Difficulty finding acceptable housing was identified as a pervasive problem that often delayed transition. The lack of accessible transportation in areas where housing was most affordable was problematic for placing participants. Finding a physician in the community was reported to be most difficult for long-term nursing facility residents or those new to the community, since these clients were least likely to have existing ties to local providers.

Some challenges, such as accessing transportation, are more acute in rural areas, and others, such as the risk of social isolation and finding physician services, are not specific to Rider participants or the CBA program. In general, community capacity for the provision of services to nursing facility residents moving back to the community likely contributes to some of the differences across regions in service use and in the number of transitions observed in this study.

Respondents reported finding reliable contractors for minor home modifications and maintaining quality personal attendant services as the most frequent challenges to a smooth transition.

Certain services presented challenges in implementation. DADS caseworkers and home health agency representatives reported that finding reliable contractors for minor home modifications were the biggest challenges. In addition, a large majority of Rider participants rely on personal attendant services, and these services are a repeated source of problems due to no-shows and high turnover rates among personnel. These problems are not limited to the CBA program and not attributable to the Rider, but need to be resolved if the program is to function smoothly.

Nursing Facility Response to the Rider Initiative

Facility participation is widespread. Transition volume at most facilities is low.

Facility participation in the initiative is widespread with transitions occurring in all regions and in both rural and urban areas, and in many different types of facilities. Transition volume at most facilities is fairly low. Over the three-year study period, a little more than one-third of participating facilities had only one or two transitions, while just under one-third had three to five transitions. The remaining third represented a range of Rider activity, including a few high volume facilities.

This study suggests that although the Rider is significant for individual participants, it is generally not a significant issue for nursing facilities generally. The total number of transitions across the state is small relative to the size of the nursing facility population, and the number from most individual facilities is small. Thus, the direct impact of the Rider initiative on nursing facility occupancy and the larger market for long-term care services, at the time of this study, was small. With the advent of a comprehensive MFP program in 2005 in Texas, the effect on nursing facilities can be expected to increase. The pace of transitions suggests that the changes will be incremental in nature, allowing the nursing facility market to adjust over time.

Quality Monitoring

Quality monitoring under the Rider initiative occurs through the community-based program in which they participate.

Formal quality monitoring under the Rider follows the procedures in place for the waiver programs that the Rider participants enter. Under the CBA, the ISP is reviewed by the caseworker quarterly for appropriateness. DADS is responsible for monitoring the home health agencies, which are, in turn, responsible for monitoring the quality of care provided by their employees. Non-DADS personnel, such as the ombudsman and Meals-on-Wheels volunteers, also assist in quality monitoring, either formally or informally. Day-to-day quality issues are handled through standard DADS complaint procedures, which allow a client to contact their DADS caseworker to report problems. Some advocates and nursing facility personnel expressed discomfort at the lower level of regulation and supervision of assisted living facilities, where a large minority of Rider participants live, compared with nursing facilities or home health agencies.

FINDINGS: RIDER PARTICIPANTS AND COMPARISON GROUPS

Characteristics of Rider Participants

Although Rider participants represent a wide range of nursing facility residents, certain characteristics are associated with a greater likelihood of transition to the community under the Rider.

Rider participants represent a wide range of nursing facility residents in all regions of the state and in both rural and urban areas as well as a wide range of types of disabilities and medical conditions. This breadth of participation suggests that the program has provided opportunities to return to the community for most types of clients.

Rider participants are predominantly elderly and female, reflecting the characteristics of nursing facility residents in general. Hispanics are slightly over-represented in the Rider population, while non-Hispanic Blacks are slightly under-represented as compared to the general nursing facility population. The average length of stay in the nursing facility prior to transition is over seven months, and more than one-third of Rider participants statewide have resided in the facility for six months or more. About one-third of Rider participants are classified as clinically stable with the highest level of functioning and lowest number of limitations in activities of daily living allowed under nursing facility Medicaid eligibility requirements. However, even those needing the most medical resources, such as individuals with quadriplegia or in a coma, are represented among participants.

Younger residents and those in urban counties are more likely to use the Rider than older residents and those residing in rural counties. Those with the lowest care dependence are somewhat over-represented among Rider participants relative to the nursing facility population. The percentage of older Rider participants with diagnosed dementia is far lower compared to nursing facility residents. A higher proportion of Rider participants have a diagnoses of stroke compared to nursing facility residents.

Participant Status After Entry into the CBA Program

Participation in the CBA program is relatively stable among Rider participants. Over 70 percent are still receiving CBA services twelve months after entry into the program.

Over 80 percent of recipients in both the Rider and CBA populations remained in the CBA program in the sixth month after entry into CBA, though slightly fewer Rider participants than CBA clients were still in the program. The proportion remaining on CBA declines over time; nonetheless, 71 percent of Rider participants and 85 percent of CBA clients were still receiving CBA services through the twelfth month, which suggests that the CBA population overall is relatively stable. With a few exceptions and with consideration for omissions in the data, we found that the CBA program appears to be able to provide the opportunity for community living for a very wide range of recipients through the Rider, including those with mental health or behavioral issues and those requiring heavy care. Due to data limitations, no conclusions about hospitalization or mortality rates can be drawn from this study.

Overall, site visit informants evinced enthusiasm for the initiative. However, some informants noted that not all populations are equally well served. Informants identified clients with severe and persistent mental illness, clients with Alzheimer’s disease, and high-needs clients with physical disabilities as more difficult to transition. Respondents noted particularly that the lack of community systems to properly manage complex medication regimens for the severely mentally ill could be a precursor to return to a nursing facility for some participants.

Service Use

About one-third of Rider participants enter assisted living facilities (ALFs), which affect overall patterns of service use. Assisted living use varies widely across regions and participants’ level of care dependence.

About one-third of Rider participants enter ALFs, a rate five times higher than CBA clients. ALF use is twice as common in urban areas as in rural areas for Rider participants. Use of ALFs also varies by expected level of care need. About half of those with the lowest expected level of care needs are living in ALFs compared to 2 percent of those needing the highest level of care need. The share of both Rider participants and CBA clients with a nursing facility stay over the six-month period after CBA entry was low, regardless of assisted living facility use.

The difference in use of assisted living drives other observed differences in service use since the services included in the assisted package are not reimbursed separately. When service use is analyzed separately by assisted living status, there are few differences between the Rider and CBA groups in the proportion receiving each service.

Program Expenditures

Rider participants incurred costs in the CBA program that were about 10 percent higher than for non-Rider CBA clients, a difference driven in part by higher use of assisted living but also higher average costs for personal attendant services among those who did not use assisted living.

Despite differences in service mix between Rider participants and CBA clients, total average monthly program expenditures for all services appear to differ by about 10 percent--or $100 per client per month--with total expenditures of $1,143 per client per month for the Rider population compared with $1,043 for the CBA population. Analysis reveals higher average program expenditures for Rider participants across almost all subgroups, suggesting that no subgroup of Rider participants accounts for the observed difference. The difference in expenditures appears to be driven only in part by differences in the use of assisted living. The total average monthly program expenditures for ALF residents are higher than for non-ALF residents for both Rider participants and CBA clients, but a greater share of Rider participants enter assisted living. For recipients who do not use assisted living, Rider participants have a higher average cost for personal attendant services. In general, assisted living appears to be a nearly cost-neutral substitute for other CBA services.

The Full Report is also available from the DALTCP website (http://aspe.hhs.gov/_/office_specific/daltcp.cfm) or directly at http://aspe.hhs.gov/daltcp/reports/2006/TXltc.htm.