Medicaid is a means-tested entitlement program financed by a partnership between the federal government and states, and it provides the bulk of long-term care for more than 60 million low-income Americans. Medicaid also accounts for 17 percent of all hospital spending, and is the single largest source of coverage for nursing home care. Older adults and people with physical disabilities account for 18 percent of Medicaid enrollees, but 66 percent of the costs.
According to the National Association of State Budget Officers, Medicaid is estimated to account for about 23.9 percent of total state spending in fiscal year 2012, the single largest portion of total state expenditures. Clearly, incentives are large to control the growth in Medicaid spending.
Care transitions are one area of state focus to contain spending growth. A “care transition” occurs when a Medicaid recipient moves from one location to another while receiving services. If an elderly woman falls at home and is transported to the hospital for urgent care, when she is released from the hospital setting to a rehabilitation facility, her home, or a nursing facility she experiences a “care transition.”
Often, it is during this transition that the patient’s status declines and they are readmitted to the hospital. While information on the details of Medicaid transitions is somewhat limited, the costs of Medicare transitions are compelling. According to the Center for Medicare and Medicaid Innovations, nearly one in five Medicare patients discharged from a hospital—approximately 2.6 million seniors—is readmitted within 30 days, at a cost of more than $26 billion every year.
Many elders and individuals with disabilities are placed in long-term care facilities rather than transitioning back to home and community-based settings, in an effort to reduce the risk of re-hospitalization. So the incentive for states to provide better care transitions is multi-faceted. First, states want to encourage smoother transitions to reduce unnecessary hospitalizations, but also, states ultimately hope to return individuals to their homes and communities, which can provide better outcomes while reducing costs.
Several programs included in the Affordable Care Act (ACA) will support state’s efforts to improve health and lower costs while focusing on transitions. The Money Follows the Person (MFP) program was expanded under the ACA and restrictions on required length of stay in institutional settings were lessened. These changes should make it easier for states to transition individuals from long-term care settings to home and community-based settings. There has been remarkable success at transitioning elders back home. In Tennessee, their oldest MFP client transitioned home was 98, and the person who was institutionalized the longest prior to transition was institutionalized for 50 years before his return to the community.
With community partners, state Medicaid agencies are also working to reduce hospital readmissions. Interventions such as using hospital discharge planners to coordinate community services and using area agencies on aging and centers on independent living onsite at hospitals appear to yield good results. In addition, having discharge planners that are nurses and having pharmacists make follow-up calls to patients also have shown initial positive results.
The ACA also provides states with an increase in federal support if they create and maintain health homes for people with chronic conditions. A Health Home is a care management model where a person’s caregivers communicate primarily through a care manager who oversees and provides access to needed services—to ensure patients receive what’s necessary to remain healthy, out of the emergency room and out of the hospital. Health home services are provided through a network of organizations—providers, health plans and community-based organizations. In a recent NASUAD (National Association of States United for Aging and Disabilities) report, the majority of states indicated that they would be working toward this goal.
Another program states have tried is a diversion “SWAT” team called anytime a physician recommends someone be moved from a hospital setting into a long-term care facility. Members of the diversion team meet with the patient to determine if the long-term care facility is best suited to meet their needs, or if there is an opportunity to return home. If they are eligible to return home, the team coordinates a plan to ensure a successful transition by putting in place the appropriate long-term services and supports.
States are also actively working to better coordinate care and services for those who are eligible for both Medicare and Medicaid services. While only 15 percent of enrollees are dual eligible, $4 out of every $10 spent in Medicaid, and 25 percent of Medicare spending is on these “dual eligibles.” The majority of states working to improve outcomes for dual eligibles are migrating their services to a managed-care environment to ensure there is better care coordination of services.
Better coordination of care, especially during care transitions, has the potential to improve outcomes, improve quality and decrease costs for older adults as well as the overall healthcare system. Most agree that transitioning elders and those with disabilities back to their homes and communities, while providing long-term services and supports, can be another method of achieving a better balance between institutional and home-based settings.
Martha Roherty is executive director of the National Association of States United for Aging and Disabilities. State agencies on aging and disabilities are responsible for the administration of all state programs impacting elders, individuals with disabilities and their caregivers. Prior to joining NASUAD, Ms. Roherty was director of the National Association of State Medicaid Directors.
Useful federal websites include:
Other useful websites include:
This article is brought to you by the Editorial Committee of ASA’s Healthcare & Aging Network (HAN)
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