Any conversation about improving health outcomes and controlling costs in healthcare is incomplete without discussing the ongoing need for long-term services and supports (LTSS). In 2014, over 13 million adults required assistance fulfilling everyday tasks ranging from food preparation to personal hygiene to prescription management; these services may have been provided in a home or community setting or in an institutional setting such as a nursing home. While many of these individuals are suffering the effects of advancing age, around six million of the individuals utilizing LTSS services to manage daily tasks are under the age of 65 and live with some form of intellectual or developmental disability (I/DD), severe chronic illness, or other physical impairment. Medicaid, the primary payer for LTSS services in the United States, spent $112 billion on LTSS services in 2015, which was over 20% of their total spend for that year.
So, What Now?
Traditionally, LTSS programs have been financed using a fee-for-service (FFS) model where each individual task is billed and paid for separately. In recent years, however, over twenty states have reformed their LTSS programs by utilizing either Section 1115 waivers or Section 1915 waivers to design and implement Medicaid funded Managed Long-Term Service and Support (MLTSS) programs. Like other Managed Care Organizations (MCO), MLTSS providers function on a capitation model where the provider is allotted a predetermined sum for each enrolled patient, regardless if they utilize any services. The MCO, or MLTSS provider, is then required to provide all necessary services for those patients, using the already distributed funds.
State Medicaid programs have been transitioning to managed care models for their long-term care clients for many of the same reasons that a number of standard Medicaid programs have been moving toward MCOs. Managed care programs are often much simpler and more efficient to administer than traditional FFS models because they eliminate many of the complex billing procedures and provide for a much more predictable payment schedule for both the payer and the provider. Advocates of managed care also believe that the model encourages innovative solutions by allowing for services that do not fit under the traditional FFS billing codes. In contrast, detractors of the managed care model argue that it restricts patient choice and encourages providers to lower costs by restricting the quality of care. However, the many states implementing MLTSS programs believe that through transparency and adequate patient protections, they can experience the benefits of managed care while mitigating the potential risks.
In the case of LTSS, the flexibility allowed by managed care models is particularly attractive because it lends itself well to encouraging the use of home and community-based services (HCBS). These services can include a wide range of resources that are designed to help patients stay in their own homes and communities. These services include but are not limited to, home-health, personal care, respite care, and meal preparation. Care coordination is also considered a vital part of HCBS because the complex needs of individuals utilizing long-term care services are most effectively and efficiently met when a comprehensive care plan can be designed and implemented based on the assessed needs of a whole person.
HCBS options are encouraged by MLTSS programs because they are mutually beneficial for both the patients and the payers. Individuals requiring services and support generally prefer the familiarity of their own homes and communities over being relocated to long-term facilities. Keeping patients in their own homes is also beneficial for payers because HCBS are often more cost effective than institutional care. According to the Genworth Cost of Care Survey, in 2017 the median cost of a private room in a nursing home was almost $100,000 per year; nearly double the median annual cost of a home health aid. Additionally, while both home health and institutional care costs are going up, institutional care costs are increasing at a faster rate.
Who is Making the Move to MLTSS?
Around two million patients are enrolled in MLTSS programs across 22 states, with four additional states in the process of developing their own MLTSS programs. These programs vary considerably in how they are structured, who they serve, and what services they provide. Michigan, for example, operates two separate MLTSS programs. One is designed for I/DD clients and the other for elderly and disabled patients, with both programs only providing HCBS care. The state of Kansas has 29,000 patients enrolled in an extensive program that serves elderly, disabled, and I/DD clients with a variety of services that include HCBS, institutional care, physical health, behavioral health, and pharmacy services. Virginia spent the latter half of 2017 implementing a new MLTSS program that will provide the elderly and disabled with a similar range of services to the Kansas program. The new Virginia program, Commonwealth Coordinated Care Plus, is intended to replace their existing system and so all LTSS qualifying patients will be required to enroll.
Millions of individuals are in need of long-term services to help them function in everyday life. This need will only increase as the percentage of the population who are over 65 continues to grow in the coming decades. Finding ways to provide an elevated level of care in a cost-effective manner will be key to ensuring that these services continue to be available for those who need them. For nearly half of the United States, investing in MLTSS programs are their strategy for the future.