What lessons have been learned from this long-running demonstration program?
Almost fifty years ago, the United States created a new program known as Medicaid to support healthcare for people with very low incomes and assets. Because this healthcare program originally included only institutionbased care, it has a deep-seated bias toward nursing home care. The Home- and Community- Based Services (HCBS) waiver programs that began thirty years ago started as a separate long-term-care option in most states, with dedicated and limited funding for which states could apply. Consequently, most states had waiting lists for the waivers, made up of people who needed nursing home−level long-term care, but were entitled only to institutional care under federal law. Many could not wait until a “waiver slot” became available, so they entered a nursing home—often straight from the hospital, but sometimes from home. Once they did so, they crossed a one-way bridge.
Few could return to the community because the waiting lists for HCBS remained long and those waiting in nursing homes often lost the living arrangements and social supports they had before entering the institution. And many professionals, including case managers, nurses, and social workers felt that once people entered a nursing home, they became residents who needed to adjust to their new home rather than work to leave it. Ageism in the United States reinforced this predominant view, stereotyping older adults as fragile people who need protection more than they need independence and control.
States Pioneer Nursing Home Transition
A few states provided two-lane bridges and help navigating a return to the community. For decades, Oregon and Washington deployed state staff to nursing homes to help people of all ages return to their homes or more home-like living arrangements, such as assisted living or adult foster care. They did so for philosophic and budgetary reasons.
Operating under the values of “independence, dignity, and choice,” they assertively sought to align people’s desire to live outside institutions with the financial reality that it was also more cost effective to serve them outside nursing homes. And, these states did not wait for months to talk to people entering nursing homes, or even restrict their discussions to those already on Medicaid. For example, Washington assigned state staff to specific nursing homes to talk with every person admitted within a two-week window to assess their desire to leave and what it would take to do so. They worked with the person, family, nursing home, and community staff to organize and implement a nursing home transition whenever possible (Mollica et al., 2006).
Some states looked to these pioneers to create similar nursing home transition programs. For example, New Jersey created its Community Choice Counseling program in 1997 (Eiken, 2003), sending nurses and social workers to Washington for on-the-ground training. To support and learn from these early adopter states, the Centers for Medicare & Medicaid Services (CMS) and the Office of the Assistant Secretary for Planning and Evaluation launched the Nursing Home Transition Demonstration Program, awarding grants to twelve states between 1998 and 2000 (Arkansas, Colorado, Florida, Michigan, Nebraska, New Hampshire, New Jersey, Pennsylvania, Rhode Island, Texas, Vermont, and Wisconsin).
These states could use their funds for almost any direct service or administrative cost that supported the transition of a person from a nursing home back to the community. State and federal officials began to learn how to identify nursing home residents who wanted to return to the community, educate consumers and their families about potential options, overcome practical and attitudinal resistance and other barriers, and develop the crucial infrastructure and supports in the community to make it possible for former nursing home residents to live in their own homes and communities(Eike n et al., 2003).
Evolving rapidly into a national movement, in 2001 and 2002 the CMS awarded thirty-three grants to state agencies and independent living centers to transition or divert consumers from nursing homes. Independent living centers are nonprofit, community-based organizations that provide services and supports by and for persons with disabilities to help them achieve their maximum potential in their communities. Through technical assistance and peer-to-peer learning, states found that they needed dedicated staff to work with consumers and families to have a successful transition, particularly coordinators to work closely with HCBS programs, public housing authorities, and private landlords. And they needed flexible funds to help consumers establish a community residence, with full consumer engagement in planning their move to the community.
"Money Follows the Person" Becomes the Mantra
While these federal grants helped change the psychological bias of a one-way ticket to a nursing home, especially for older people, they did not provide sufficient funding to overcome the institutional bias so firmly rooted in the financial entitlement to nursing homes alone. The 2003 Money Follows the Person (MFP) grants to nine states kicked off the next wave of nursing home transition efforts, allowing funds paid to nursing homes to “follow” the consumer to the community and pay for the home- and community-based services consumers need to remain independent.
The MFP term gained prominence in Texas as a strategy to deal with those on “interest” or waiting lists for home- and community-based waiver services. Consumer advocates made the successful case to their legislatures that a person in a nursing home was already receiving financial support for their care and would cost the state less if the money could follow them to the community instead. First adopted for fiscal years 2002 and 2003 as “Rider 37,” Texas permitted bills for HCBS waiver services to be paid from the nursing home account, thereby overcoming the waiting list barrier for people already residing in a nursing home.
Extended during fiscal years 2004 and 2005 (as “Rider 28”), officials could transfer funds from the nursing home appropriation to the HCBS waiver appropriation on a quarterly basis for individuals who moved to the community. The program became permanent in fiscal year 2006 by creating an account within the nursing home appropriation to pay for waiver services for individuals who move from a nursing home. Since 2001, the MFP program has helped more than 20,300 individuals who would have been placed on either an “interest” list or a waiting list to be relocated to community settings (Gold, 2010).
Inspired by Texas’ policy change, consumer advocates successfully lobbied for a national MFP Rebalancing Demonstration program in the 2005 Deficit Reduction Act (DRA). The DRA authorized CMS to spend $1.75 billion over five years to implement the program. In 2007, thirty states and the District of Columbia were awarded $1.4 billion in grants implemented through an enhanced federal match for twelve months of services for individuals who spent at least six months in an institution, and who transitioned to a “qualified residence” in the community. These extra federal funds go to the state, not the consumer, to encourage states to invest in the extra effort to help move people who lack strong connection to the community. But, the state had to continue to provide community services after the twelve-month period for as long as needed and for as long as the individuals maintained their eligibility for Medicaid. The 2010 Affordable Care Act (ACA) amended the DRA, extending the MFP Demonstration program through 2016, but permitting states awarded grants in 2016 to use those funds until 2020. The total MFP program now stands at $4.0 billion. Thirteen additional states were awarded MFP grants in 2011, for a total of forty-four grants.
The ACA offered another sought after change. The DRA required a six-month nursing home stay to be eligible for transition assistance under the MFP program. While this eligibility requirement brought needed attention to long-term institutionalized individuals who often need considerable help to find housing and other supports, it did not acknowledge that earlier intervention is critical to prevent longterm nursing home stays that make transition more difficult. It is hard to maintain crucial community connections after six months or more in an institution: people lose their homes, apartments, and connections to neighbors who had been informally helping them in many different ways (Reinhard, 2010).
The ACA expanded the definition of who may be eligible for a nursing home transition under the MFP program to include individuals who reside in an institution for at least ninety consecutive days instead of the 180 days mandated by the initial DRA. (Any days that an individual was in the nursing home receiving short-term rehabilitation services reimbursed under Medicare are not counted toward the ninety-day requirement.) More than half of the MFP states report that the reduced institutional residency requirement will make it possible to transition more consumers (O’Malley Watts, 2011).
MFP Progress Is Improving
Although enacted through the 2005 DRA, the MFP program has taken time to launch and demonstrate progress. The CMS required operational plans to assure appropriate use of funds, and states without a pre-existing, mature nursing home transition program needed time to gear up. The first awards were made in 2007, and states did not begin to actively transition individuals into community settings until the spring of 2008.
Observers note that progress has been slow, but each year the number of participants transitioning has increased as solutions to barriers are identified and technical assistance is provided to help states meet transition goals. Nationwide, as of June 30, 2011, 15,818 individuals have returned to the community, nearly double the number from the year before. More than one-third (34 percent) of these individuals were older adults. Two-thirds were younger persons with physical disabilities (37 percent), developmental disabilities (12.5 percent), or mental illness (2 percent). States vary significantly in their success, with small states like Delaware transitioning forty-four people, while the large and experienced state of Texas transitioned 4,658, which accounts for 29 percent of the total number of people transitioned under the MFP program to date. Five states accounted for about another third of total transitions (Washington, Ohio, Maryland, Michigan, and Pennsylvania) (Denny-Brown et al., 2011).
It is important to note that these numbers do not include nursing home transitions conducted outside MFP program rules. As noted earlier, many states began nursing home transition programs before the MFP program was enacted. Many of them continue to operate these parallel transition programs, including seventeen MFP grantee states (Denny-Brown et al., 2011). Individuals who are transitioned through these
parallel programs are not eligible for the enhanced federal matching funding available through the MFP program for one of three reasons. First, they may not be eligible for Medicaid if they have not yet spent down to poverty. Second, they may not have been a nursing home resident for the required ninety days. Third, they may have chosen to move to an unqualified residence, which is typically an assisted living facility.
Assisted Living Is Not a MFP Option
The issue of what constitutes a “qualified residence” remains a thorny issue for states trying to help older adults leave nursing homes. Advocates for younger people with physical or developmental disabilities worry that assisted living is another form of institutional care—a nursing home on training wheels. As they lobbied for the MFP program to be part of the DRA, they obtained statutory language that specified that no more than four unrelated individuals could reside together, and that the individual or family member must own or lease the residence, which must have lockable access and egress to living quarters (such as sleeping, bathing, and cooking areas). They felt this definition of a qualified residence would ensure that people transitioned from nursing homes would have housing options that offer maximum consumer control and independence rather than congregate settings that exert institutional control over residents.
The ACA did not change this definition, which arguably codifies the features most desired by younger people with disabilities, but restricts options that many older adults prefer, including assisted living apartments and some adult foster care alternatives.
The restrictions on assisted living may also help explain why MFP states continue to report transitioning more younger persons than they do older adults. Several states that pioneered “balanced” long-term-care systems, spending funds more evenly across institutional and community-based services, have relied on assisted living and adult foster care as important alternative nursing home options. States with mature nursing home transition programs relocate up to 35 percent of their nursing home residents to assisted living (Mollica, 2009). The CMS guidance clarifies that assisted living may be considered a qualified residence under certain circumstances that enhance consumer control, but it does not address the four-person limit since this is a statutory requirement for eligibility (CMS, 2010). The dilemma remains, even though one could argue that an assisted living apartment in a complex with ten or even 100 apartments
could be considered less institutional than a group home with four residents.
MFP Offers Funding for System Change
Although enhanced MFP funding for the Medicaid program is not available for all of those who are discharged back to the community, transitioning in any state, the MFP program provides enhanced matching funds to improve their long-term-care systems to make it possible for money to follow the person. For example, states have used funds at the 100 percent administrative federal match level to provide staff to Aging and Disability Resource Centers to support counseling on options and transition help. States are also using funds for caregiver education, better ways to coordinate housing with services, and information system upgrades (Denny-Brown et al., 2011).
Lessons Are Emerging: Three Program Components
A formal evaluation of the MFP program is being conducted by Mathematica Policy Research, but lessons are accruing and being published on a regular basis. Highlights include three essential program components: the people, the resources, and the extra services available to MFP beneficiaries (Lipson et al., 2011).
First, and most important, are the people. Nursing home transition is a labor-intensive process that requires patient, creative coordinators who are skilled in interpersonal relationships and communications, grounded in person- and family-centered planning, and knowledgeable about community resources. The most successful coordinators are passionate and dedicated full time to this work. They are comfortable working with both nursing home staff and community-based organizations, especially those in housing. Because this is such a complex role with multiple functions, some states distribute the functions across several different kinds of coordinators.
Some coordinators may focus on outreach to potential nursing home residents who might desire a return to community living, perform a comprehensive assessment, and develop a person-centered plan with the consumer and family (when identified by the consumer as a critical partner in support). They may work hand-in-hand with another coordinator who confirms Medicaid eligibility, gets approval for HCBS waiver enrollment and specific services, and arranges for those services and supports. Yet another coordinator may focus on finding accessible housing. Because a lack of suitablehousing is the biggest barrier to a successful transition for many individuals in a nursing home, several states find it helpful to use MFP funds to hire specialized housing coordinators.
Second, the resources to pay for one-time moving expenses, such as basic furniture (e.g., bed, chair, table), food, rental security and utility deposits, and accessibility modifications are crucial. Most people who have been living in a nursing home for three months under Medicaid do not have funds for these basic needs. The MFP rules allow states to pay for moving expenses even before the person leaves the nursing home—an extremely helpful policy that pioneer states in nursing home transition advocated for with CMS.
Finally, the MFP program permits the use of enhanced Medicaid funds for “extra HCBS,” such as overnight companions, additional hours for a personal care worker and peer support to help people adapt to life outside an institution. States can also use these funds to pay more to providers to help individuals with complex needs (Lipson et al., 2011).
Barriers and Gaps Are Clearer
The shortage of affordable and accessible housing remains the chief challenge to successful nursing home transition. The supply of HCBS is also problematic, especially for people, including those with dementia, who require specialized services. Particularly in rural areas, the shortage of direct-care workers limits the ability to serve people in individual apartments. In the current economic climate, cuts to Medicaid benefits and payment to providers exacerbate these challenges. Reductions in state staff also compromise stable and effective program leadership and coordination.
What Lies Ahead
Money Follows the Person can be viewed from two perspectives: where does the funding come from and where does the person come from? The first MFP perspective focuses on an overall funding strategy, often called a global budget, which supports individuals’ choice of settings through pooled appropriations cross settings. Pioneering this approach thirty years ago, Oregon used a pool of money in one long-term-care global budget that could be used to provide support in the community or the nursing home, with a major goal of helping people remain at home whenever desired and feasible. In this model, the person does not need to start from a nursing home to get support in the community, but rather can be diverted from institutional care. The second MFP perspective, codified in the DRA and ACA, focuses on individuals who must move from an institution to get support for community living (Mollica et al., 2006).
Ideally, states could support the first MFP perspective, the combined nursing home diversion and transition approach that Oregon initiated thirty years ago. The second MFP perspective might be considered a pragmatic work-around to promote community living. But it holds the promise of expanding the infrastructure for HCBS through enhanced federal investments and state peer-to-peer learning on how to balance long-term service and supports systems.
The current economic challenges and rapid evolution toward managed care will have significant effects on the MFP demonstration, which will continue for almost another decade. States that move toward managed long-termcare contract with organizations to provide a package of benefits on a risk basis, giving these organizations a specified amount to provide long-term care to eligible Medicaid beneficiaries. Some states do not include nursing home care in risk contracts, others include up to 180 days in a nursing home within the managed care contract, and some include the full risk of nursing home placements (Summer, 2011).
Given the limited experience that states have with both managed long-term care and MFP, it is not clear how these two programs will interact. If the managed care company has full risk for nursing home care, the incentive is to divert or transition whenever possible. Creative housing and service arrangements may emerge, fueled by the managed care organizations themselves. In states where managed care organizations have no responsibility for nursing home care, will the state need to operate an even more robust MFP program to ensure that nursing home residents have an opportunity to return to their communities, if desired and if it is possible? And what happens in states that fall in between these incentives?
While there is no doubt that people who need long-term services and supports want to live in their homes and communities, it is premature to conclude that the MFP program will be the dominant mechanism to help them do so. As states consider major changes to their programs and financial arrangements, it will be important to consider all potential strategies to maintain the momentum to build two-lane bridges. Older adults may choose nursing home care for some period of time, but some may desire a return trip home.
Centers for Medicare & Medicaid Services (CMS). 2010. Initial Announcement Invitation to Apply for FY2011 Money Follows the Person Rebalancing Grant Demonstration. Retrieved November 8, 2011.
Denny-Brown, N., et al. 2011. “Money Follows the Person Demonstration: Overview of State Grantee Progress, January to June 2011.” Cambridge, MA: Mathematica Policy Research. Retrieved February 21, 2012.
Eiken, S. 2003. “Community Choice: New Jersey’s Nursing Home Transition Program.” Thomson Reuters. Retrieved November 8, 2011.
Eiken, S., et al. 2003. “1998–2000 Nursing Home Transition Grant Programs.” Thomson Reuters. Retrieved November 8, 2011.
Gold, M. 2010. Money Follows the Person Demonstration. Texas Department of Aging and Disability Services Project. Retrieved November 8, 2011.
Lipson, D., et al. 2011. “What Determines Progress in State MFP Transition Programs?” The National Evaluation of the Money Follows the Person (MFP) Demonstration Grant Program, Reports from the Field #8. Washington, DC: Mathematica Policy Research. Retrieved November 8, 2011.
Mollica, R. L., et al. 2006. “Money Follows the Person Toolbox: Community Living Exchange Toolbox.” New Brunswick, NJ: Rutgers Center for State Health Policy. Retrieved November 8, 2011.
Mollica, R. L. 2009. “State Medicaid Reimbursement Policies and Practices in Assisted Living.” Washington, DC: American Health Care Association/National Center for Assisted Living.
O’Malley Watts, M. 2011. “Money Follows the Person: A 2010 Snapshot.” Washington, DC: Kaiser Commission on Medicaid and the Uninsured. Retrieved October 29, 2011.
Reinhard, S. C. 2010. “Diversion, Transition Programs Target Nursing Homes’ Status Quo.” Health Affairs 29 (1): 44–8.
Summer, L. 2011. “Examining Medicaid Managed Long-Term Services and Support Programs: Key Issues To Consider.” Washington, DC: Kaiser Commission on Medicaid and the Uninsured. Retrieved November 16, 2011.
Susan C. Reinhard, R.N., Ph.D., is a senior vice president at AARP, directing its Public Policy Institute and the Center to Champion Nursing in America Washington, D.C. She led the redesign of long-term services and supports in New Jersey, and technical assistance for states across the country for the Centers for Medicare & Medicaid Services.
Editor’s Note: This article is taken from the Spring 2012 issue of ASA’s quarterly journal, Generations, an issue devoted to the topic “30 Years of HCBS: Moving Care Closer to Home.” ASA members receive Generations as a membership benefit; non-members may purchase subscriptions or single copies of issues at our online store. Full digital access to current and back issues of Generations is also available to ASA members and Generations subscribers at MetaPress.
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