The Future of LTSS May Rely On a Shift in Focus

In 1979, the Illinois Department of Aging created a program that was far ahead of its time, and it is still being utilized today. The Community Care Program (CCP) is designed to assist older adults, who might otherwise be at risk for being moved to a Medicaid funded nursing home, with the goal of staying in their own homes for as long as possible. In this program, individuals who meet age, health, and asset requirements are given access to resources that include adult day services, emergency home response services, senior companions, and homecare aides. There is even a flexible spending fund that provides for non-traditional resources such as minor home modifications (e.g. ramps) or assistive devices.

The CCP program has continued for nearly four decades because it is beneficial for both the patients and the payers. Most patients want to stay in the familiarity of their own homes and neighborhoods, and many even fear institutional care. Staying at home, or with family, can also be beneficial to individuals because maintaining social connections is an important part of a patient’s overall wellbeing. The CCP program also benefits the state Medicaid program because the cost of institutional care is so high that it is usually much more cost effective to provide a patient with mild to moderate assistance needs with the resources to stay in their own homes than it is to pay for a skilled nursing facility.

Home and Community-Based Services

What Illinois discovered forty years ago has become a national trend. Home and community-based services (HCBS) are becoming the focus of more and more programs that provide long-term service and supports (LTSS), particularly for those programs that serve older adults. HCBS provides such a wide variety of services that one piece that has become increasingly important is care coordination. In the case of the CCP, the Care Coordination Unit is tasked with both meeting with prospective patients to assess their needs and maintaining ongoing communication with the patient to make sure that resources are continuing to meet those needs. Care coordinators collaborating with both patients and providers are an essential piece to making sure that HCBS programs are providing patients with the best possible outcomes while also controlling costs for the payers.

Shifting Payment Models

The shift towards encouraging HCBS is only one of the changes facing LTSS providers. Another shift that promises to create major change in the industry is in the realm of payment models. Like most healthcare, LTSS has traditionally been fee-for-service, where each individual service is billed and paid for individually. In the last few years over twenty states have changed their LTSS programs to a managed care model. This means that instead of paying for each individual service, a predetermined fixed amount is paid for each enrolled patient whether they use services or not. The advantage of a managed care program is that it is simpler to run, with less administrative costs and a more regular payment schedule for both providers and payers. While there are critics, such as those who believe that the model incentivizes providers to lower the quality of care, managed care has been growing in popularity with more states implementing programs nearly every year.

As state models increasingly move towards managed care, it appears that the national trend may be shifting towards a related payment model known as value-based care. In April of 2018, the Centers for Medicare and Medicaid Services (CMS) announced a proposal to shift post-acute and LTSS reimbursements towards a system that reimburses providers based on the health status of the patients instead of the specific services they receive. In this proposed model, patients would be categorized by predetermined criteria and then payments would be tied to the quality of care and health outcomes of the individuals. As part of this plan, CMS is also proposing to eliminate many policies and reporting requirements that they believe are restrictive and place an undue burden on providers, a move which they estimate will save the industry about $2 billion dollars over the next ten years. The proposal is currently open for public feedback and so it may go through multiple revisions before any new program is implemented.

In 2016 there were approximately 69 million adults in the United States over the age of 60 years. By 2040, that number is expected to increase to over 100 million. In addition to the increase in numbers, the individuals currently approaching retirement are more likely to suffer from one or more chronic illnesses than were previous generations. These two facts mean that LTSS resources will become even more necessary in the coming years. Finding ways to provide high quality LTSS in a cost effective manner so that they are available to everyone who needs them is going to be one of the most critical challenges for the future of the healthcare industry. If current trends continue, that future will include an emphasis on both HCBS and alternative payment models.

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