As states begin to provide more home and assisted living services to seniors the number of nursing home beds begins to decline. A study done by Harvard Medical School found that a 10% increase in assisted living capacity led to a 1.4% decline in private pay nursing home occupancy. Most nursing home residents pay privately for nursing home care thus don’t affect the occupancy in Medicaid beds. In order to decrease the number of nursing home Medicaid beds, states must make an effort to increase funding for Medicaid clients living in nursing homes that want to receive services at home or in a Medicaid funded community care (assisted living) facility. To this day, the private assisted living industry takes Medicaid eligible residents only if they have an occupancy problem. They prefer not to deal with the complexities of billing the government and the excess of monitoring and reporting that goes with having a Medicaid resident. However, state Medicaid agencies are hard pressed to reduce the number of individuals in nursing homes paid by Medicaid if they are going to see reductions in their Medicaid long-term care budgets.
Although this move benefits clients who wish to remain at home, it drastically impacts the financial viability of nursing homes across the U.S. With less private paying clients nursing homes will start cutting back essential services to an ever growing number of very frail clients. What is more, some states like Pennsylvania are billing family members for the cost of nursing homes. The Pennsylvania law stipulates that family members of nursing home clients are ultimately responsible for the cost. Some families have been billed some $96,000 for the care provided to a family member residing in a nursing home.
At the end someone has to pay, either a family member or us, the taxpayers. What the story tells us is that long-term care in the U.S. is broken and needs to be reformed soon. One answer will be for states to continue to rebalance their long-term care program, provide more community care and make it easier for providers to want to work with the government.
The Deficit Reduction Act of 2005 was created to reduce barriers that allowed people to move from nursing homes back to the community. The biggest allocation of funds by Medicaid in 2007, The Money Follows the Person program, allocated $1.7 billion to 30 states with the goal of transitioning 38,000 individuals away from nursing homes. As of June 30, 2011 only 15,818 individuals had actually moved to community care despite the fact that the funding was increased to $4 billion in 2010 and 13 additional states were included in the program. With this additional funding, participating states have until 2019 to meet their targets and until 2020 to spend the funds. Florida was among the 13 states that were approved under the program but failed to secure the needed administrative funds for implementation of the program. In fact, states are given great flexibility by the federal government to use these funds to reduce waiting lists, conduct research and other activities that help rebalance their long-term program. Rebalancing means increasing the funding for community care and decreasing the amount spent on nursing home care.
With so many seniors currently living in nursing homes and wishing to go back to the community it’s a wonder why so little progress has been made. The numbers of transitions vary sharply by state. Some like Texas and Ohio have transitioned thousands back home or to assisted living facilities. Others like North Carolina, Missouri and Kentucky have moved fewer than 500. Our firm has worked in North Carolina and Kentucky and these states have very strong nursing home lobby’s preventing the increase in community care. Some states have found it hard to move the elderly with only 1/3 of transitioning individuals being 65 years and older. 900,000 individuals living in nursing homes are in fact eligible to be transferred. Barriers to transfers reported by the states are the lack of state funds (federal funds must be matched by state funds) and the absence of affordable housing and community care providers.
Our experience, having worked with the program, is that other barriers exist which include very strict requirements by the federal government as to eligibility of both the individuals and the place they are transitioning to. For example, in order for an assisted living facility to be eligible to take clients they must offer full apartments with kitchens, a separate bedroom and dining space. The client must have lived in the nursing home for 90 days. But more importantly is the reluctance of some states to stop relying on nursing home care for the growing number of seniors; a reason that is more political than financial.
This has been our battle cry for over twenty years. The benefits of keeping seniors at home with needed services has proven to be cost-effective, beneficial to the health of these clients and responsive to seniors’ desires. And yet, change has come slowly particularly in southern states. Under the pressure of skyrocketing Medicaid budgets fueled by the increasing numbers of low-income seniors our policymakers have had to shift toward funding more community instead of institutional care (nursing homes), what is called in the industry: “rebalancing long-term care.”
One state that has been successful in doing so is Oregon that rebalanced their budget back in the early 1980’s. Many other states have followed, including Washington and Colorado. The number of people receiving Medicaid-funded nursing facility care in these states grew at a much slower rate than in the rest of the nation from the inception of Medicaid home and community-based waiver programs in the early 19080s to 1994. The number of people in nursing homes as a proportion of the population age 75 and above in these states decreased faster than the average for the rest of the nation. Total annual Medicaid spending on nursing facilities also increased at a slower rate in the study states than nationally after controlling for growth of the age 75-and-older population.
Today only a handful of states remain committed to forcing seniors into nursing homes when no longer able to live independently – Kentucky, Virginia, Alabama and West Virginia do not pay for assisted living services. Although an increasing number of states have created Medicaid waivers to pay for assisted living services, the funding always falls short of the need which creates long waiting lists. clients in need of assisted living services cannot wait the two or three years it takes to receive an allocation. So seniors and disabled adults are still forced into nursing homes and we continue to pay for poor quality and undesirable care.
In 2003 our firm started the conversation with the Department of Housing and Urban Development urging them to join forces with the Department of Health and Human Services (federal Medicaid program) to properly fund community care at least for those living in public/subsidized housing. Seven years later, it happened and both departments partnered to create the Community Living Initiative that funds housing and services for low-income disabled adults. Seniors, however, have to wait longer and as of today no initiatives have been taken to address the issues of the seniors.
Apparently financial crisis alone will not prompt the federal government to act. I firmly believe the issue of low-income seniors ending up in nursing homes prematurely must arouse public opinion. Those most affected, the seniors, the families, the advocates, need to demand this change. Rather than being remembered as the “silent minority” we must be remembered as the generation that changed the way we care for seniors in this country.