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History of LTC Redesign

 

Family Care History: Redesigning the Long Term Care System

In January 1998, Governor Tommy G. Thompson proposed to redesign Wisconsin’s long term care system and to create a flexible, new "Family Care" benefit to cover long term care services. The new system will emphasize independence and quality of life while recognizing the need for interdependence and support. This paper outlines the Family Care legislation recently passed by the Legislature as part of the 1999-2001 biennial budget bill. Federal approval of changes that affect Medicaid also will be needed before the new system can be implemented.

The vision of the new long term care (LTC) system’s structure and goals is the result of four years of effort by many concerned citizens and policy experts. Hundreds of consumers and their family members have been involved in every phase of the proposal’s development, through steering committees, work groups, focus groups, forums and other mechanisms. Many other stakeholders, including county and tribal representatives, service providers from various sectors of the LTC system, advocates and academics, have also provided their insight throughout the process.

Family Care will cover elderly people and other adults with physical or developmental disabilities. Services for children with LTC needs, as well as the state’s mental health and substance abuse treatment systems, are being studied separately.

Pilots

Current legislation authorizes the Department of Health and Family Services to establish Family Care Pilots in areas of the state in which not more than 29% of the eligible population resides. This corresponds to the nine pilot sites that are working to develop Resource Centers and Care Management Organizations. The first group of counties planning to begin operation in 2000 includes: Fond du Lac, La Crosse, Milwaukee, Portage and Richland. Later in 2001, a second group of sites is expected to implement Family Care: Kenosha, Marathon, Waukesha, and the tri-county consortium of Vilas, Forest and Oneida. Milwaukee County’s program will cover only the elderly population, and the Vilas-Forest-Oneida site will cover only people with developmental disabilities. All other sites will serve all three eligible populations. In addition to these full Family Care sites, Jackson and Trempealeau Counties will continue to operate Resource Center pilots.

Aging and Disability Resource Centers

In each participating county, Aging and Disability Resource Centers will provide one-stop shopping for information and assistance to help people connect with all kinds of services, benefits and community resources for elderly people, people with disabilities, and their families. Here, people can get accurate and timely advice about the options available to them and help in getting what they need. The Resource Centers will also provide prevention, early intervention and outreach services, to help people maintain their independence.

Resource Centers will be the access point for LTC services, screening for eligibility for the new Family Care benefit and for admission to residential LTC services, and determining client cost-sharing amounts. They will counsel clients about LTC options and enroll people who choose the new Family Care benefit in the care management organization (CMO). As much as possible, Resource Centers also will provide access to other benefits that might be sought by elderly people and people with disabilities, including Medicaid and Food Stamps.

Family Care: a Long Term Care Benefit with Options

In the current system, state and federal LTC funds flow through a confusing maze of many programs, each with its own eligibility criteria and service restrictions. In the new system, funds from all these programs will be used to fund one flexible new LTC benefit, individually tailored around each person’s needs, preferences, values and circumstances. Care Management Organizations (CMOs) will be established to help people arrange and manage their services.

The CMO will receive a fixed amount of funding each month for each person enrolled. This amount will be related to the projected need for LTC services based on the person’s level of functional disability. Payment levels will reflect the different level of care requirements which different groups of people experience.

The monthly per person payment amount will be based on average actual costs for groups of people at various functional levels; the actual cost for any given person will likely be higher or lower than the payment. The monthly payment that a CMO receives related to a given individual will not limit the amount that may be spent on that person’s care, nor does it "entitle" the person to services up to the level of the monthly payment amount. This averaging of costs and payments across caseloads is similar to that done now by counties under the Community Options Program and Home and Community Based Waivers and by nursing facilities under Medicaid. Each CMO will be responsible for meeting the needs of its enrollees within the funds that it receives. The State and the CMO will share financial risk and other protections will be in place to assure the financial stability of CMOs.

The new benefit will offer services in three basic categories: Community Options (in-home services, supported apartment, and community day services), Nursing Home Options (intermediate and skilled nursing facilities, including ICF-MR), and Other Residential Options (residential care apartment complex, community based residential facility, adult family home).

Each CMO will be required to offer a state-established minimum array of service types. Since each consumer is different, the new benefit will also cover any other service that will meet consumers’ LTC needs. A personalized assessment and service/care plan, developed for and with each consumer, will determine the preferred package of services and supports to meet his or her needs. Flexibility of funding is essential to achieving high quality outcomes for consumers and to promoting creative and cost-effective ways of meeting individuals’ needs.

Eligibility for the new benefit will be based on the degree to which a person’s physical or cognitive condition limits his or her ability to manage independently the everyday activities of living such as moving around, eating, bathing and dressing. Two levels of eligibility will be established: comprehensive (equivalent to the level of care requirements for nursing home care or the Community Options Program), and intermediate (less severe disability than comprehensive level).

Everyone who meets the comprehensive level of functional eligibility will be assured of receiving services promptly. In addition, everyone who meets the intermediate (lower) level of functional eligibility and who is Medicaid-eligible and/or has a confirmed need for adult protective services will be assured prompt access to the Family Care services. Others at the intermediate level will be eligible for services, but may be placed on a waiting list if funding is not immediately available. If a waiting list is necessary, the Resource Center will develop an interim plan of care consisting of informal supports, local community resources and other services the person may be able to purchase. When funding for the Family Care benefit becomes available, people will be removed from the waiting list according to uniform criteria (i.e., functional capacity, risk factors and financial status) and referred to a CMO for services.

There will be no "cliff" of financial eligibility. All clients will be required to share in the cost of their services to the extent of their ability to pay, from nothing to 100%. Cost sharing will be determined on the combined factors of income and assets, offset by several types of deductions and exemptions. Current disincentives to employment will be substantially reduced. Private pay people will be welcome to purchase case management services from CMOs.

More Choices for More People

The current LTC system is biased toward institutional services, which are readily available and an entitlement under Medicaid. Community programs like the Community Options Program provide more choices for people, but have waiting lists. In the new system, the institutional bias will be eliminated; regardless of where they live and receive services, people who have high levels of need will not have to wait.

People will be free to choose whether or not to enroll in a Care Management Organization. Those who are Medicaid-eligible will have the option of obtaining services through the Medicaid fee-for-service system, which will continue to offer the current range of benefits. The new, flexible Family Care benefit will be available only through a CMO. Where a CMO is available, the Community Options Program and Home and Community Based Waivers will no longer be operated as separate programs.

An individual’s service plan will be developed based on a comprehensive assessment, conducted with the person and others who know the person. The person’s values and preferences must be solicited as part of the assessment and addressed in the plan. The primary consideration about where someone lives will be the person’s own preference. No one will be required to live in a nursing home as his or her long-term residence. No one currently living in a nursing home or other residential care facility will be required to move.

People will have the opportunity to live in housing that they have chosen unless there are essential health or long term support needs that cannot reasonably be met in such a setting or the preferred setting includes a package of services that exceeds the person’s identified needs. Individual values and preferences, quality, cost, and the ability to meet the individual’s needs will all be considerations in development of a service plan, including living arrangement. For people whose cost of care is very expensive, shared community living arrangements will be a likely alternative to nursing home care. Alternatives must be developed and offered to people who choose not to live in a nursing home, but those alternatives do not necessarily have to be more expensive than the cost of the nursing home.

People of working age will have more opportunities to work under the new system. Employment will be an important outcome for people of working age, and if employment is desired, it must be addressed in an individual’s service plan. In return, the system will expect people of working age to contribute to their own support and the cost of their services.

Each CMO will be required to develop, in consultation with local consumers, a network of service providers that provides adequate consumer choice of readily accessible providers for all types of services. Consumers must be able to choose, without waiting, from among a broad array of providers with characteristics that consumers find convenient and desirable. Being able to choose a specific provider is crucial when that provider is attending to intimate personal needs or comes frequently into the consumer’s home. For these kinds of services, the CMO must purchase services, at a consumer’s request, from any provider who meets the CMO’s standard price and quality standards.

Family members may be paid for providing care in circumstances where it is appropriate, under criteria established by the state. In addition, each CMO must offer a self/family-directed care option for any consumer who is able and willing to choose and manage his or her own services and supports or who has support in decision-making from someone who is committed to the consumer and knows his or her preferences and needs.

Looking Out for Consumers

A variety of mechanisms will work together in the redesigned LTC system to protect consumers from failures in the system. Formal and informal complaint and grievance mechanisms will be built into each part of the system, internal to each Resource Center and Care Management Organization, and through a State grievance system. Appeal processes will also be in place, including a direct appeal to a state administrative hearing. Advocacy will be multi-level, built into each organization, and also provided through one or more independent organizations contracted through the Board on Aging and Long-Term Care. To help assure that the system maintains a consumer focus, consumers and their families will be a part of advisory and governing bodies at every level.

Quality assurance and improvement systems will focus more on consumer-defined and consumer-centered outcomes and, over time, less on regulating processes. The new system will focus on meeting and exceeding customer expectations more than on complying with rules about procedures. The values and preferences of people receiving care and their families will define the meaning of success. The state will establish performance standards, but allow flexibility in how contract organizations meet them. Each organization will be required to maintain a continuous quality improvement program to evaluate its own performance and that of its subcontractors. Some current regulatory activities will remain in place, such as licensing of some service providers.

Management of the New LTC System

Given their long experience in performing many of the roles envisioned for the new system, counties and tribes will be given preference to serve in key management roles, including first preference to be an Aging and Disability Center. If a county is unwilling to serve in this role, or cannot meet Resource Center performance standards, competition will be opened to private, not-for-profit organizations. Counties and tribes will also have right of first selection to serve as Care Management Organizations for one or more target groups. If a county chooses to operate a CMO and meets contract standards, it will have an opportunity to establish operation without competition. In the pilot counties, there will be no competition through at least 2002, with an additional year unless they are not meeting performance standards. If a county CMO cannot develop the capacity to serve all persons in the county who are entitled to the new benefit by 2002, the Department of Health and Family Services will contract with an additional CMO to provide that added capacity.

To assure that consumers are protected from possible conflicts of interest, the Aging and Disability Resource Center must be structurally separate from the CMO. Pilot counties will have until January 1, 2001 to meet this requirement. There are several ways that a county could achieve the necessary degree of separation, including creation of a Family Care District, a new special purpose unit of government authorized in the state legislation.

A Local LTC Council will be established in each participating county, or at local option, in a multi-county region. More than half of the Council’s members must be elderly people, people with physical and developmental disabilities, and their family members, guardians and other advocates. When the Council is appointed, it may assume the duties of the currently required Long Term Support Planning Committee, which will no longer be required. The Council will develop an initial plan, within state guidelines, for the local structure of the LTC system, including the number and types of CMOs that should be available. Each county must consider this plan and consult with its LTC Council when deciding whether to apply for certification to operate a Resource Center and/or Care Management Organization. After the start-up period, the LTC Council will have ongoing responsibilities for guidance of the local LTC system.

A State Council on Long-Term Care will also be created to provide guidance for the system at the statewide level. The State LTC Council will assist the Department to develop LTC policies and help oversee implementation of the new system in Pilot Counties.

Funding

The total projected cost of Family Care is $57.9 million in state fiscal year (FY) 1999-2000 and $224.3 million in state fiscal year 2000-2001. Approximately half of the total cost will be funded with federal funds. A small amount will be funded with revenue collected from clients based on a sliding client cost-sharing scale. The remaining portion, $26.8 million in FY 1999-2000 and $100.3 million in FY 2000-2001 will be funded by state revenue (known as general purpose revenue--GPR). The bulk of the GPR funding will be funding reallocated from existing programs, including the Medicaid fee-for-service, Community Options, and Community Aids programs. This reallocation reflects the fact that some individuals will be served in the Family Care program rather than these other programs. The projected amount of new GPR funding needed for Family Care is $6.5 million in FY 1999-2000 and $7.7 million in FY 2000-2001. Anticipated new federal funding amounts to $9.1 million in FY 1999-2000 and $15.6 million in FY 2000-2001.

Wisconsin’s LTC system is currently one of the most expensive in the nation. On average, we spend about 50 percent more than the national average for each Medicaid-eligible older person. Only two states in the country spend a higher proportion of their Medicaid budgets on long term care. More people can be served within our current budget if we manage public LTC funds more efficiently and effectively. The LTC budget will have to increase in future years under any system, to account for higher numbers of elderly people and people with disabilities, and for inflation.

To obtain federal approval of this proposal, we must show that benefits in the new system would cost no more than LTC services would have cost under the current system. We will be able to assure more people of services and meet this federal requirement only if the new system achieves several key outcomes. First, we must reduce the cost per person served by providing services more cost effectively. Whenever feasible, services must be provided in less restrictive, less expensive settings and forms. The system must improve the capacity of people to do things for themselves, give value to the role of community and family, and respect the values and preferences of people. Second, we must reduce the need for services through strong prevention and early intervention programs. Third, we must reduce the need for public subsidy for services. The new system must provide good, timely information to people before and when the need for long term care arises, to allow them to remain independent longer and conserve private resources by making informed choices about purchasing services.

Last Revised:  June 20, 2000