The State Perspective: Rebalancing Long-Term Services and Supports Cynthia H. Woodcock Alliance for Health Reform Briefing October 3, 2011

States are committed to rebalancing … but efforts are driven by the need to reduce budget deficits.  What is rebalancing? Moving away from a dependency on institutional care towards a system of comprehensive community-based long-term services and supports (LTSS).  As of Spring 2011, 33 states projected $75.1 billion in budget gaps for FY 2012 (with forecasts yet to come from many states) and Medicaid cost containment is a dominant theme in FY 2012 budgets.* *National Governors Association and National Association of State Budget Officers. The Fiscal Survey of States, Spring 2011.

Progress has been made in rebalancing, but tremendous variation remains across states. Source: National and State Long-Term Care Spending for Adults Ages 65 and Over and Persons with Physical Disabilities Analysis of Thompson Reuters data by The Hilltop Institute, UMBC.

Managed long-term services and supports (MLTSS) is the strategy many states are choosing to pursue.  What is MLTSS? A plan in which a contractor is accountable for providing beneficiaries with a defined set of LTSS in exchange for a prepaid capitation payment. Some plans include just Medicaid benefits; others include Medicare and Medicaid benefits (“integrated care”).  Enrollment in MLTSS estimated at 250,000 in 2009  15 states have one or more MLTSS programs; 8 of these have multi-region or statewide programs  15 demonstration sites funded in spring 2011 by CMS Medicare-Medicaid Coordination Office  A number of other states are considering MLTSS as a way to better manage their Medicaid budgets Source: L&M Policy Research, LLC

These states have MLTSS programs: One or more state-designed MLTSS programs Multi-region or statewide MLTSS program(s) Source: L&M Policy Research, LLC

States with mature MLTSS programs tend to rank high on LTSS system performance, but there are challenges ahead for other states.  Few evaluations of MLTSS programs  Limited literature on best practices  States are in a hurry to implement MLTSS and expect immediate cost savings

Some of the challenges in implementing MLTSS include:  Ensuring consumer choice and person-centered care in a managed care environment  Aligning incentives across payers (Medicare and Medicaid) and systems (LTSS, primary/ acute care, behavioral health)  Ensuring effective service delivery  Preserving and growing provider networks  Managing “woodwork”—the unanticipated demand for new services

The Affordable Care Act (ACA) offers new opportunities for LTSS …  Medicare-Medicaid Coordination Office (§2602)  Community First Choice (§2401)  State Balancing Incentive Payments (§10202)  Medicaid Health Homes (§2703)  Money Follows the Person (§2403)  1915(i) State Plan Amendment (§2402)  Community Living Assistance Services and Supports (CLASS) (§8002)

… but some requirements in the ACA are likely to deter state participation.  Community First Choice: Maintenance of effort requirement (expenditures for attendant care in first year must be maintained at or exceed prior year’s spending)  State Balancing Incentive Payments: Required structural changes (single point of entry, conflict- free case management, core standardized assessment tool)  1915(i) State Plan Amendment: Eligibility requirements (required to be statewide, cannot limit number of participants)

Contact Information Cynthia H. Woodcock IMPAQ International, LLC