by Cindy Gruman

Debra J. Lipson

Debra Lipson is a senior researcher at Mathematica Policy Research, a nonpartisan public policy research organization based in Washington, D.C. She serves as a principal researcher evaluating Money Follows the Person, a federal program that encourages states to shift the balance of funding for long-term care from institutional to community-based settings. Lipson has conducted policy research at the state, national and international levels, focusing on Medicaid financing and delivery, state initiatives to cover the uninsured, and long-term care issues. She recently responded to our questions about Money Follows the Person.

What is the Money Follows the Person demonstration program -- and why is it an important initiative?

The Money Follows the Person (MFP) rebalancing demonstration, which was authorized by the Deficit Reduction Act of 2005, is the latest federal initiative to help states reduce their reliance on institutional care for people needing long-term care and to expand options for elders and individuals with disabilities to receive this care in the community. With appropriations of $1.75 billion over five years, it is the largest demonstration program in the history of Medicaid.

What are the goals of the MFP demonstration program?

States are expected to use these new funds to achieve two objectives. First, state Medicaid agencies will develop systems and services to help people living in nursing facilities and intermediate-care facilities for the mentally retarded who want to move back home or to community-based settings. To do so, states will use the money that would have been spent on an individual’s institutional care to cover costs associated with transitioning back to the community over a one-year period. Second, states will increase efforts to shift Medicaid long-term care spending permanently toward community-based care and services.

What are the challenges that state MFP programs will face in trying to transition individuals from nursing facilities to community settings?

States that developed nursing-facility transition programs have found lack of affordable housing with supportive services to be one of their biggest challenges. In addition, some people enter nursing homes or fail to leave them because they don’t know about available community-based supports or because programs to support them in the community are insufficient. For example, capacity is limited and waiting lists are long in many state Medicaid home and community-based waiver programs. In some states, Medicaid eligibility rules remain biased in favor of nursing-facility care, and Medicaid budgeting practices make it hard to shift funds to community-based options.

What are state MFP grantees planning to do to overcome these challenges?

The Centers for Medicare and Medicaid Services (CMS), which manages the MFP program, has awarded over $1.4 billion in grants to 30 states and the District of Columbia since January 2007. States grantees proposed to transition nearly 38,000 individuals out of institutional settings over the five-year demonstration period. To support people during the first year after leaving institutions, states will receive enhanced federal matching funds, at a rate above the state’s usual federal medical-assistance percentage.

During that period, grant funds will cover one-time costs associated with setting up a household, home modifications or equipment, additional nursing care or personal care above the usual limits, and other services that people with more complex needs may require. Some states plan to expand the capacity of their Medicaid waiver programs for home and community-based services, or add options for self-direction in their home and community-based care programs to allow people to hire and supervise their own personal care attendants. Most states plan to work with state housing authorities to develop housing options for people moving out of institutions.

What will states and healthcare professionals learn from the MFP demonstration?

CMS contracted with Mathematica Policy Research to conduct a comprehensive five-year evaluation of the MFP program. The research will address how state long-term care systems change to support the transition of people from institutions to the community, whether the changes were successful and sustainable, and to what extent MFP helped change state long-term care spending.

The evaluation also will assess the effects of MFP on Medicaid beneficiaries’ health and quality of life and will identify characteristics of individuals and state programs strongly associated with success. The findings, to be presented in a report to Congress in 2011, will help states assess changes to their own systems in order to achieve their goals of greater freedom and dignity at an affordable cost for Medicaid beneficiaries.

Cindy Gruman is a senior researcher at Mathematica Policy Research, Washington, D.C.

Photo: Courtesy Debra J. Lipson

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