Redesigning the Long Term Care System
In January 1998, Governor Tommy G. Thompson proposed to redesign
Wisconsins 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) systems 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
proposals 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 states mental
health and substance abuse treatment systems, are being studied separately.
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 Countys 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
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 persons 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
persons 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 persons 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 persons
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 individuals service plan will be developed based on a comprehensive
assessment, conducted with the person and others who know the person. The persons
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 persons 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
persons identified needs. Individual values and preferences, quality, cost, and the
ability to meet the individuals 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 individuals service plan. In return, the system
will expect people of working age to contribute to their own support and the cost of their
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 consumers home.
For these kinds of services, the CMO must purchase services, at a consumers request,
from any provider who meets the CMOs 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
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 Councils 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.
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.
Wisconsins 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