LTC Community Wants Inclusion in Reform

Abstract

SUSAN M. PETTEY has directed health policy and advocacy programs for long-term care physicians, administrators, and other professionals, including AMDA and the American Association of Homes and Services for the Aging. Her experience also includes work with the Health Care Financing Administration (now the Centers for Medicare & Medicaid Services) and the National Association for Home Care. She currently is a health policy consultant. Long-term care providers weren't invited to President Barack Obama's White House summit on health care March 5, but they are making the case for inclusion of LTC in the President's reform agenda. In days leading up to the summit, the American Association of Homes and Services for the Aging (AAHSA) organized its members to ask Congress to include LTC services. With the Alzheimer's Association and Easter Seals, the association generated 5,000 telephone calls to senators and 1,500 e-mails to representatives. The groups planned to follow up with more congressional contacts. AAHSA advocates a public insurance program to cover LTC services as part of universal health coverage. Low-income individuals would receive assistance with premiums. Benefits, including cash for buying LTC services, would be based on functional needs. The group doesn't anticipate that the program would cover all LTC costs, so individuals could purchase supplemental policies, and Medicaid would be retained for individuals who are unable to pay costs beyond the federal benefit. The American Health Care Association (AHCA) and the National Center for Assisted Living (NCAL) are also pressing the Obama administration for inclusion of LTC with other health reforms. In testimony for various congressional hearings, AHCA and NCAL have jointly stressed that “we believe that one essential objective of reform must be to ensure every U.S. senior and disabled citizen always retains ready access to quality long-term care.” AHCA has proposed its own reform plan, a program to cover catastrophic-care costs for older individuals who have purchased federally endorsed LTC insurance policies. To access the benefit, individuals would be required to purchase sufficient LTC insurance to finance $100,000 worth of care. The program would cover services received in skilled nursing facilities, assisted living settings, and the community and would include LTC within Medicare Advantage plans. Premiums would be adjusted by income, with poor people exempt from paying. AHCA also supports tax-deferred LTC savings accounts, as well as expanded post-acute-care payments under Medicare. “AMDA has historically supported inclusion of long-term care in the health-care reform agenda,” said AMDA Executive Director Lorraine Tarnove. “No aspect of our health care system is more fragmented than long-term care. Transitions between acute and long-term care, and among various long-term care settings, are often disjointed, with confusion over patient condition, medication, and treatment. Improvements in care transitions which could result from health care reform would benefit patients as well as save money. This country needs to develop a real long-term care system, rather than our current patchwork quilt of federal and state programs that are based on an individual's financial status or services for which an individual is eligible, rather than on an individual's actual needs.” A Senate Special Committee on Aging hearing in March helped focus attention on the issue. Committee Chair Herb Kohl (D-Wis.) announced, “Our message is a simple one: Any serious health reform proposal must address long-term care.” Several speakers at the hearing focused on the need for continued expansion of home and community-based services as well as the need to integrate Medicare and Medicaid LTC services. Melanie Bella, senior vice president for the nonprofit Center for Health Care Strategies, pointed out that the 7 million people eligible for both Medicare and Medicaid (“dual eligibles,” about 18% of Medicaid beneficiaries) consume 41% of Medicaid resources and 24% of Medicare resources. She lauded efforts to better integrate the programs, such as the Program of All-Inclusive Care for the Elderly (PACE), social HMOs, and state-based Medicare-Medicaid integrations in Massachusetts, Minnesota, and Wisconsin. “While there are gems among all these programs,” said Ms. Bella, “after 30 years, most remain relatively small in scale, covering less than 5% of the dual eligibles who could benefit from a more integrated system.” She suggested that Medicare Special Needs Plans, which provide managed LTC services, are the most promising option for better integration of Medicare and Medicaid. She blamed “countless regulatory and administrative barriers” for continuing to separate the two public programs. Thomas Hamilton, director of survey and certification at the Centers for Medicare & Medicaid Services, reported that Medicaid dollars spent on home and community-based programs have almost reached parity with that program's dollars going to nursing homes. In 2007, 53% of the $113 billion in Medicaid LTC funding was spent on nursing homes and intermediate care facilities for the mentally retarded, while 47% was spent on home and community-based services. Mr. Hamilton outlined for the committee various CMS programs to further expand home and community-based care: waivers for states to experiment with Medicaid spending, “money follows the person” demonstrations, “cash and counseling” programs for at-home seniors, grants to states, and PACE. Health care expert Judy Feder, PhD, a professor at Georgetown University, called for a better way of spending the more than $200 billion in public and private dollars that are currently spent on LTC per year. She agreed with extending Medicaid support for home and community-based care and improving services for dual eligibles, but noted that those steps alone would be insufficient to address all LTC needs. “Our current fiscal problems should not obscure the importance of building a long-term care system that goes beyond the low-income population,” said Dr. Feder. She suggested adding an LTC benefit to Medicare as one option. A proposal from some of her Georgetown University colleagues would replace most of the Medicaid program with a federal plan to cover nursing home services and up to 100 hours per month of home care for persons meeting specified disability criteria. Beneficiaries would be responsible for deductibles and other cost-sharing, depending on their income. A trust fund relying on an income tax surcharge would provide part of the funding. Dr. Feder noted that another option would be to create a new public LTC insurance program along the lines of the Community Living Assistance Services and Supports Act (CLASS Act), introduced in the past Congress. That legislation would have created a new public insurance program including cash payments to people with disabilities. President Obama's first proposed budget, released Feb. 26, was sketchy. One clear proposal, however, that would have an impact on LTC is the bundling of Medicare payments to hospitals, physicians, and perhaps nursing facilities for some post acute care. Hospitals would receive the reimbursement and have to pass on payments to certain providers of care during the 30 days after discharge. Hospitals would be paid less if many of their patients have to be readmitted within that period. Testifying on the budget to the Senate Finance Committee, Office of Management and Budget Director Peter Orszag asserted that postacute-care bundling will yield better care and fewer hospital readmissions, thereby saving Medicare roughly $26 billion over 10 years. “Sometimes such readmissions cannot be prevented, but many are avoidable,” said Mr. Orszag. Finally, it turns out that the president's economic stimulus package also contained some fine print not so encouraging for nursing homes, despite earlier reports. The American Recovery and Reinvestment Act of 2009 may not fund much health information technology (HIT) innovation in LTC. Although skilled nursing facilities, nursing homes, and home health agencies would be eligible, the act provides no specific HIT funding for LTC, while doing so for physicians and hospitals. A provision in the House version of the act would have established Medicaid grants for nursing facilities in a few states to adopt HIT in demonstration projects, but the language didn't make the final act. It may be possible for LTC facilities to access other HIT funding, but that would be at the discretion of each state. Instead, the new law requires HHS to study how HIT funding could help providers such as nursing facilities, home health agencies, hospice programs, and nonphysician professionals. The study is to address, among other issues, the adoption rates of HIT by those health care providers, whether the services they furnish would benefit from the use of HIT, and the potential costs and benefits of making HIT payment incentives and other funding sources available. The report is due to Congress by June 30, 2010. Meanwhile, states apparently vary in how they will use the additional $87 billion in Medicaid funds that Congress approved as part of the stimulus plan. Governors and legislatures in some states are reportedly considering using at least some of the additional funds to balance the state budget, replenish state “rainy day” funds, and fulfill other state priorities, rather than funding their state Medicaid programs. Using stimulus funds to bolster general state revenues could result in continued cuts to LTC providers counting on Medicaid payments. On the other hand, the act requires states to maintain prior standards for individuals' eligibility for Medicaid.