Medicaid Proposals Contained in the President’s FY16 Budget
February 6, 2015 03:53 PM
President Obama recently submitted his FY16 budget to Congress. Although many lawmakers in the Republican-controlled House and Senate proclaimed the budget dead on arrival, some of the President’s proposals could have a significant impact on upcoming Congressional budget deliberations.
Many of the provisions included in his budget that would affect the home care and hospice community are similar to proposals from previous years. NAHC Report recently highlighted Medicare provisions contained in the President’s budget – including the continued call for additional cuts to home care payments and the misguided proposal to implement a “sick tax” in the form of a home health copayment. While there are some proposals that raise serious concerns within the Medicare components of President Obama’s budget, the Medicaid provisions are mostly beneficial to home and community-based care.
The Budget includes legislative proposals in Medicaid which have a net impact of $3.7 billion on federal spending over 10 years, including $26.7 billion in Medicaid investments to make the program, according to the Administration, “more flexible, efficient, and accountable.” The Budget extends and refocuses the rate increase for Medicaid primary care providers. The Budget also extends free preventive care services to all Medicaid beneficiaries, creates a new state plan option to provide continuous Medicaid coverage and limit churn, expands access to home and community-based long-term care services and supports, and provides permanent flexibility to facilitate enrollment of children into Medicaid.
Below is an analysis of some of the most significant Medicaid proposals in the President’s FY16 budget.
Advancing Comprehensive Medicaid Long-Term Care
The Budget proposes an eight-year pilot program to create a Medicaid comprehensive long-term care state plan option for up to five states. Participating states would be authorized to provide long-term care services across the continuum of care under one authority, creating equal access to home and community-based care and nursing facility care. The Secretary would have the discretion to make these pilots permanent at the end of the eight years. This proposal works to end the institutional bias in long-term care and simplify state administration. [$4.1 billion in costs over ten years].
Improve and Extend Money Follows the Person Rebalancing Demonstration
This proposal would extend the Money Follows the Person demonstration period through FY 2020 to enable states to continue to rebalance their long-term care systems and transition individuals to home and community-based services as well as providing additional flexibility to states to support individuals remaining in the community within the existing appropriation.
Currently, individuals must enter institutions to qualify for covered home and community based services in the Money Follows the Person Demonstration. To support individuals remaining in the community, this proposal would modify the demonstration to allow funds to be used to prevent individuals from entering an institution in the first place, as well as transition services.
This proposal would also reduce the institutional requirement from 90 to 60 days and allow skilled nursing facility days to be counted towards the institutional requirement.
Lastly, this proposal would allow individuals in certain mental health facilities to transition to home and community-based services under the demonstration.
[No budget impact].
Expand Eligibility Under the Community First Choice Option
This proposal would provide states with the option to make medical assistance available to individuals who would be eligible under the state plan if they were in a nursing facility. Under current law, any state interested in the Community First Choice Option must create or maintain a 1915 © waiver with at least one waiver service to make the benefit available to the special income group or provide eligibility for the Community First Choice benefit through another eligibility pathway. This approach is administratively burdensome for states. This proposal would provide equal access to services under the state plan option and provide states with additional tools to manage their long-term home and community-based service delivery systems. ($3.6 billion in costs over 10 years)
Allow Full Medicaid Benefits for Individuals in a Home and Community-Based Services State Plan Option
Thisproposal would provide states with the option to offerfull Medicaid eligibility to medically needy individualswho access home and community-based servicesthrough the state plan option under section 1915(i) ofthe Social Security Act.
Under current law, when astate elects to not apply the community income and resource rules for the medically needy, these individuals can only receive 1915(i) services and no other Medicaid services. This option will provide states with more opportunities to support the comprehensive health care needs of individuals with disabilities and the elderly. [$38 million in costs over 10 years].
Create Pilot to Expand PACE Eligibility to Individuals between Ages 21 and 55
This program provides comprehensive long-term services and supports to Medicaid and Medicare beneficiaries through an interdisciplinary team of health professionals who provide coordinated care to beneficiaries in the community. For most participants, the comprehensive service package includes medical and social services and enables them to receive care in the community rather than to receive care in a nursing home or other facility. Under current law, the program is limited to individuals who are 55 years old or older and who meet, among other requirements, the state’s nursing facility level of care.
This proposal would create a pilot demonstration in selected states to expand eligibility to qualifying individuals between 21 years and 55 years of age. This effort would test whether the Program for All-Inclusive Care for the Elderly can effectively serve a younger population without increasing costs. The pilot would promote access to community services in line with the integration of the landmark Olmstead Supreme Court decision, supporting self-determination and achieving better health outcomes. [No budget impact].
Allow States to Develop Age-Specific Health Home Programs
The Affordable Care Act includes a provision that allows states to create Health Homes for Medicaid enrollees with chronic conditions. Under a Health Home program, states can develop a comprehensive system of care coordination for the purpose of integrating and coordinating all primary, acute, behavioral health, and long-term services and supports to treat the whole person. States receive an increased federal match for Health Home services for the first eight quarters of their program.
This proposal would allow states to target their Health Home programs by age. Currently, states are required to cover Health Home services for all categorically needy individuals with the specified chronic condition(s), regardless of age. Many states have voiced support for allowing age-specific targeting of their Health Home model to better serve the needs of youth with chronic conditions. [$1 billion in costs over 10 years]
Expand Medicaid Fraud Control Unit Review to Additional Care Settings
The Budget proposes to allow Medicaid Fraud Control Units to receive federal matching funds for the investigation or prosecution of abuse and neglect in non-institutional settings, such as home-based care—in which a beneficiary may be harmed in the course of receiving health care services. The current limitation on federal matching was established in 1978, at a time when Medicaid services were typically provided in an institutional setting, but does not reflect the shift in delivery and payment for health services to in-home and community based settings. [No budget impact, but $66 million in non-PAYGO savings over 10 years].
There are numerous other provisions – covering both Medicare and Medicaid program integrity, pilot programs and new initiatives – that may be of interest to the home care and hospice community. These additional provisions will be analyzed in a future NAHC Report article.
While it is unlikely that the President’s HHS budget will be approved as is by Congress, it does offer a starting point for discussions on the size and scope of the Department for the coming year. As Congress considers and debates President Obama’s 2016 budget, it is important for NAHC members to contact their elected officials urging them to oppose home health payment cuts as well as the implementation of a “sick tax” in the form of a home health copayment.
Please click here to contact your elected officials on these important topics.
To see how HHS’ budget allocation was received on Capitol Hill, please see NAHC Report, February 6, 2015.