Home Health & Hospice Week

Some agencies stand to benefit from Money Follows the Person grants.

Plan ahead and you could increase your long-term care market share.

Pressure from consumers and Medicaid budget constraints is driving some states to increase care options for Medicaid recipients, including the elderly and disabled. The goal is to shift some funds that would go to institutions such as nursing homes to agencies providing home and community-based services under Medicaid, as well as skilled home health care services.

Lawmakers in Massachusetts, New Jersey and other states have drafted and approved legislation allowing their elderly citizens to decide whether they would like to receive care in the home or in an institution.

Program to watch: And at the federal level, the Centers for Medicare & Medicaid Services is expanding its Money Follows the Person demonstrations. States had until Nov. 1 to submit their plans to secure a share of the $1.75 billion allotted for the Money Follows the Person demonstrations. The Deficit Reduction Act of 2005 calls for the funds to be distributed over the next five years.

Under the Money Follows the Person program, participating states for one year will receive a higher rate of federal Medicaid matching funds--between 75 percent and 90 percent--for beneficiaries that states move from nursing homes into their homes or into their communities. States also can use the funds to make modifications to the homes of Medicaid beneficiaries to allow their continued residence and to provide respite for family caregivers

Biggest impact: Home health agencies positioned to provide supportive home and community-based services such as personal care under Medicaid will benefit from such initiatives most directly, notes Bob Wardwell of the Visiting Nurse Associations of America.

But agencies providing primarily skilled home health care services such as nursing and therapy also stand to gain, especially in the long run.

"Once Medicaid agencies recognize the skills of home health agencies in chronic care management and avoiding more costly medical interventions, their services may be in greater demand," Wardwell tells Eli.

Keep An Eye On State Initiatives

In Massachusetts, the state Senate recently passed the Equal Choice Bill, which would make it easier for residents to receive Medicaid funding for care in community settings, rather than nursing homes.

The availability of federal waivers is driving some state initiatives. Though Massachusetts Gov. Mitt Romney's (R) administration had previously estimated this type of bill would cost the state more than $83 million, more recent and "rigorous" projections show the bill could be combined with federal waivers to save money, according to the Boston Globe.

The average cost of nursing home care per person for a year in Massachusetts is about $51,000, while community-based care is estimated to cost $28,000.

In New Jersey, a new law set to take effect in 2008 gives seniors a choice in the type of long-term care they receive through Medicaid. The law will spur "extraordinary change in direction and policy in a way that makes sure our seniors have a choice," says Gov. Jon Corzine (D), who estimates the new focus on community-based care could save the state about $500 million over a 10-year period.

Currently, nursing homes receive about $1.68 billion of New Jersey's Medicaid long-term budget, while $162 million is budgeted for community-based care, according to the state's Department of Health and Senior Services.

New Jersey spends about $50,000 annually per person on nursing home care, while the state's community-based care costs about $20,000, according to the Asbury Park Press.