Long-term Care Provisions in Health Reform
Updated November 2011
The following report gives brief explanations of many of the long-term care provisions included in the federal health reform law.
The federal Patient Protection and Affordable Care Act (P.L. 111-148), signed March 23, 2010, as amended by the Health Care and Education Reconciliation Act, signed March 31, 2010, is also referred to as the Affordable Care Act (ACA), or simply as “federal health reform.” The 900+-page act contains many provisions, with various effective dates. The law includes an extensive range of provisions changing how private market health insurance works and how it is regulated. The provisions are of particular importance to state legislatures for two reasons: (1) many have taken effect during 2010-2011, or have a series of effective dates stretching from immediate through 2014 and beyond; and (2) many establish uniform federal standards in areas previously regulated primarily by state laws and state regulations.
The ACA enacted several long-term care provisions, including an HCBS State Plan Option, the Balancing Incentive Payments Program, the Community First Choice Option, changes to the Money Follows the Person Program, expanded funding for Aging and Disability Resource Centers, increased nursing home transparency and improved care coordination.
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HCBS State Plan Option
The Deficit Reduction Act (DRA) allowed states to offer home- and community-based services through a Medicaid plan amendment established under 1915(i) of the Social Security Act. The ACA builds on this option by expanding eligibility to individuals with incomes up to 300 percent for the maximum Supplemental Security Income (SSI) payment. The ACA also eliminates a state’s ability to cap enrollment or maintain waiting lists.
Balancing Incentive Payments Program
The ACA established the Balancing Incentive Payments Program. Beginning October 2011 states may receive additional Medicaid matching funds when they meet certain requirements for expanding the percentage of long-term care spending for home- and community-based services. In order to qualify, states must explain how they will expand and diversify home- and community- based services. They must include a statewide single point of entry into the system, conflict-free case management systems, and a single standardized state assessment for determining eligibility for all types of care. These three items must be implemented by states within six months of their application date. Individuals will have increased accessibility to needed services and supports. States must also prove that they devote less than 50 percent of their total Medicaid long term care services and supports expenditures on home- and community-based services. If they are able to do so, they will eligible to compete for $3 billion in enhanced matching funds for Medicaid 1915(c) HCBS waivers, PACE programs, and home health and personal care services under their Medicaid state plans. The Centers for Medicaid and Medicare Services must approve the state for funding. The program incentivizes and targets states with the least balanced systems or those with more focus on institutional settings.
Community First Choice Option
The ACA established the Community First Choice Option, a new optional Medicaid state plan service under 1915(k) of the Social Security Act. Beginning October 2011 states may create state plan options to provide community-based attendant care services and supports for individuals with disabilities who are Medicaid eligible and who require an institutional level of care. The services and supports include assistance completing activities of daily living and health tasks. States that choose to implement this option will be eligible for enhanced matching rates of six percent.
Implementation of the option requires data collection to determine how states are providing home- and community-based services, the cost of such services, and whether states allow individuals with disabilities to obtain care outside of the institutional setting.
This option also modifies the Money Follows the Person Program so that individuals may qualify for the program more quickly—in 90 days.
A recent Health Affairs article stated that at least nineteen states expressed interest in this option.
Money Follows the Person Rebalancing Demonstration
The Deficit Reduction Act of 2005 authorized the Money Follows the Person Program. It was set in place to encourage states to transition Medicaid enrolled individuals from nursing homes into home- and community-based settings. The program allows Medicaid funding to follow the person into the community and pays for the home- and community-based services needed. The ACA extends the Money Follows the Person Rebalancing Program through 2016. The program also reduces the length of time an individual must spend in institutional care before they qualify for the program to 90 days.
For more information, please visit our LegisBrief, Money Can Follow the Person in Long-Term Care.
Expanded Funding for Aging and Disability Resource Centers
The ACA allocates $10 million a year for five years to states in order to improve and expand Aging and Disability Resource Centers (ARDCs). ARDCs are often one-stop locations where people of all income levels and all types of disabilities can find comprehensive information and assistance.
For more information about ADRCs, please visit our online report, Aging and Disability Resource Centers.
Increased Nursing Home Transparency
The ACA contains several nursing home transparency provisions, namely applying to information disclosure and quality of care, enforcement and staff and employment training. It requires nursing homes to disclose their owners, operators, suppliers, financers, and others with whom they do business so they can be held accountable for the care their residents receive; to take steps internally to reduce criminal and civil violations; to file cost reports with the government to show expenditures by category — nursing, therapy, capital assets, and administrative services; and to provide training to workers who care for residents with dementia and to prevent abuse. The Centers for Medicaid and Medicare Services must develop a Quality Assurance and Performance Improvement Program to improve quality assurance standards. The law also requires the federal government to implement a system to collect and report information about how well nursing homes are staffed, including accurate information about the hours of nursing care residents receive; staff turnover rates; and how much facilities spend on wages and benefits. Also included in the law are requirements of civil monetary penalties (fines) to be held in escrow pending appeals rather than allowing nursing homes to delay payment indefinitely while they file appeals; the implementation a pilot program to improve federal government oversight of nursing home chains that have quality of care problems;
Improved Care Coordination
Health Homes for Enrollees with Chronic Conditions: Many states are adopting the “patient-centered medical home” or “health home” model to help patients manage complications or multiple chronic diseases. The model includes a multidisciplinary team, coordinated by a primary care physician or specialist who coordinates and directs appropriate and timely services. The models attempt to reduce overuse and misuse of services so the patient receives better results at a reduced cost. The health reform law requires the secretary of HHS to establish standards that designate providers as eligible health homes.
For more information, please visit our Cost Containment brief, Medical Homes.
Independence at Home Demonstration Program: The ACA created a demonstration program to test a payment incentive and service model that uses physician- or nurse practitioner-directed home-based primary care teams to provide continuous, coordinated and accessible care to high-need groups. The design is expected to reduce expenditures and improve health results by reducing preventable hospitalizations, hospital readmissions and emergency room visits; providing more efficient care; reducing the cost of health care services; and satisfying beneficiaries and family caregivers. A number of chronic diseases are designated for which applicable beneficiaries may receive treatment. These beneficiaries must be served through a qualifying independence at home medical practice, must be entitled to such benefits, must not be enrolled in Medicare Advantage Plan Part C or a PACE program, and must have two or more chronic illnesses. The act allocated $5 million for each fiscal year from 2010 to 2015.