Health Reform WK-EDGE GAO examines Medicaid home- and community-based care for individuals with self-care difficulties
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Friday, October 5, 2018

GAO examines Medicaid home- and community-based care for individuals with self-care difficulties

By David Yucht, J.D.

The Government Accountability Office (GAO) conducted a study and issued a report at the request of the Senate Finance Committee on approaches several states used to provide Medicaid coverage for home- and community-based services (HCBS) for beneficiaries with self-care difficulties. In this report, the GAO noted the significant role the Patient Protection and Affordable Care Act (ACA) (P.L. 111–148) played in efforts to shift care away from institutions through the use of HCBS. The structures of the various HCBS programs reflected decisions about which populations to cover, whether to limit eligibility or enrollment, and whether to use managed care to deliver these services. Challenges facing states providing HCBS via Medicaid included staffing, funding, and serving beneficiaries with complex needs (GAO Report, GAO-18-628, August 30, 2018).

Purpose of study. The need for long-term services and supports (LTSS) to assist individuals with limited abilities for self-care is expected to increase as the population ages. Medicaid is the nation's primary payer of LTSS, with spending estimated at $167 billion in 2016. State Medicaid programs are generally required to cover institutional LTSS, such as nursing home care, but coverage of these services outside institutions, that is, HCBS, is generally optional. In recent years there have been efforts to shift LTSS away from institutions to HCBS. National spending for HCBS now exceeds that for institutional services. However, Medicaid HCBS programs vary by state. The Senate Finance Committee asked the GAO to review the approaches states used to provide Medicaid coverage for HCBS.

Scope of study. From July 2017 through August 2018, the GAO reviewed information and conducted interviews with officials from five states—Arizona, Florida, Mississippi, Montana, and Oregon—which the GAO selected to obtain variation in geography, the percentage of total Medicaid LTSS/ HCBS expenditures and other factors. The GAO also reviewed information and interviewed officials from four managed care organizations (MCOs), two in each of the two selected states that used managed care to provide HCBS. The MCOs varied in enrollment size and population served.

HCBS program structures. The structure of the 26 HCBS programs the GAO reviewed reflected decisions about which populations to cover, whether to limit eligibility or enrollment, and whether to use managed care to deliver these services. Four of the five states had multiple HCBS programs that targeted specific populations. For example, Mississippi had separate HCBS programs for aged or physically disabled individuals and individuals with intellectual or developmental disabilities. The fifth state, Arizona, had one program that targeted two specific populations. All five states had at least one HCBS program that limited eligibility to beneficiaries whose needs would otherwise require care in a nursing home or other institutional setting. Four of the five states limited enrollment in one or more of their HCBS programs; 19 of the 26 programs had enrollment caps, and 12 of these programs maintained a waiting list. Two of the five states used managed care to provide HCBS, paying MCOs a fixed fee for each beneficiary rather than paying providers for each service delivered.

HCBS challenges. State and MCO officials identified several challenges providing HCBS and described their efforts to respond to them, including challenges recruiting and retaining HCBS providers, particularly given the low wages these providers typically receive. To respond to this, officials from Mississippi, Montana, and two of the MCOs reported offering providers higher payment rates. Another challenge officials identified was serving beneficiaries with complex medical and behavioral health needs, including individuals who display aggressive or other challenging behaviors. Officials from Montana and one MCO reported responding to this challenge by providing behavioral health training for providers. State officials also reported that limitations on overall HCBS funding posed a challenge, which they responded to by providing their state legislatures with information on the projected need for HCBS to inform future funding decisions, and leveraging other available resources, such as federal grants.

ACA impact on HCBS. The ACA offered new options and funding for states to make HCBS available to eligible Medicaid beneficiaries. Under the ACA’s Community First Choice option, states must provide personal care services to assist beneficiaries with Activities of Daily Living and Instrumental Activities of Daily Living. States that offer this benefit receive an increase in their federal medical assistance percentage for these services. The Balancing Incentive Program was also created by the ACA to help states rebalance their provision of LTSS toward greater use of HCBS. States agreed to increase the percentage of LTSS spending for HCBS to achieve a specific benchmark. According to CMS, nearly 75 percent of the participating states met the goal by September 2015, when the program ended.

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