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Nursing Facility Transitions: A Cornerstone for Balancing Long-Term Services and Supports

Wheelchair-bound African descent, female senior adult enjoys the outdoors with her home healthcare nurse or caregiver. The multi-ethnic group is at the patient's home or a nursing home or assisted living facility.

When Abbie was first admitted to a nursing facility in Henderson, Nev., in December 2012, she was told she would probably be there for the rest of her life. For Abbie, who was 76 at the time, that was not an option.

“That place was not my cup of tea,” she said. “I didn’t belong there.”

About 1.5 million Americans currently live in a nursing facility. Like Abbie, whose story was told first by Nevada’s Money Follows the Person (MFP) program, many of these individuals don’t want to reside in these institutions permanently and would prefer to return to their homes and communities. We know this both from personal stories such as Abbie’s as well as from the data available on people living in nursing facilities. The Minimum Data Set (MDS), which all nursing home residents complete, shows that approximately 30 percent of people in nursing homes expect to return to the community. Additional research from AARP indicates that 78 percent of adults 45-plus want to remain in their homes and communities for as long as possible.

In fact, many nursing residents can return to the community. But in order for that to happen, the right policies and practices need to be in place. We’re not there yet, but certain policies have moved us in the right direction.

A tale of policy evolution

Transitioning a person from a nursing facility back to the community can be a complicated endeavor. Transitions require detailed planning that includes identifying and securing appropriate services, paid support staff and, in many cases, supportive housing and accessible transportation options. Moreover, several barriers, including lack of housing and availability of services, prevent or delay transitions. Because of all these barriers and complexities, the pace of nursing facility transitions for people already in those settings was often slow.

This began to change in 1999 following the Supreme Court’s ruling in Olmstead v. L.C., which held that under the Americans with Disabilities Act, people with disabilities cannot be unnecessarily institutionalized and must receive services in the most integrated setting possible. States are obligated to “ make reasonable modifications in policies, practices, or procedures when the modifications are necessary to avoid discrimination on the basis of disability, unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program or activity.

The Olmstead decision had particular implications for the Medicaid program as the primary payer for LTSS. The decision directed state Medicaid programs to offer home- and community-based services (HCBS) to facilitate transitions from a facility to the extent states had the funds and services available to do so. Oftentimes, however, states did not have the necessary policies, financing frameworks or service capacity in place to serve every individual looking to return home.

One key policy response to this was the MFP Rebalancing Demonstration. Since 2007, MFP has provided states with enhanced federal funding to transition people living in institutions back to their homes and communities through Medicaid. In addition, MFP also provided states with enhanced funding to balance and expand HCBS across all populations.

By 2016, the MFP demonstration had grown to include 44 states and the District of Columbia. More than 63,000 individuals transitioned out of nursing facilities, including more than 11,000 people in 2015 alone.

MFP has proven to help contain costs within Medicaid LTSS. Independent evaluations of the program suggest that the cost of serving people who transition decreases once they are in their homes and communities. Among older adults in particular, there is an estimated cost decrease of 16.1 percent, which is an annual savings of $11,912 per person. At the same time, people who complete transitions report higher satisfaction with their overall quality of life after having returned home.

While MFP was a demonstration and not a permanent Medicaid benefit, it has become an integral part of how many state Medicaid programs finance nursing facility transitions and deliver LTSS. Federal funding for MFP ended in September 2016, and although states have until 2020 to spend down existing funds, they will need to identify alternatives to financing MFP services beyond these federal dollars.

States are taking a mixed approach toward sustaining services associated with MFP. While some plan to discontinue services once funding expires, others have incorporated transition services into their general HCBS programs (such as 1915(c) waivers).

Next steps

Clearly, the road ahead is not without its challenges, but working through them can result in a better system that works across the board. States may not be in the position to fund the full range of services they may have offered through MFP, but they should nevertheless consider investing in at least some services that would allow people in nursing facilities to pursue care transitions and access HCBS. Doing so allows people to choose where they live, and it can prove to be a more efficient use of Medicaid dollars.

Thus, in addition, states should invest in programs and services that divert people from entering nursing facilities in the first place. Minnesota, which ranked as No. 1 overall in the AARP LTSS Scorecard, offers the Essential Community Supports program for people who need services to live in the community but do not meet the state’s nursing facility level of care criteria. The state provides up to $424 monthly for adults 21 and older for services including caregiver training and education, home-delivered meals and homemaker services. By offering a package of supportive services that meet people’s basic LTSS needs, states could delay nursing facility stays, or prevent them entirely.

On the federal level, the next step for nursing facility transition policy falls to Congress. It will require new legislation to authorize additional funds for MFP or to begin a new program that incorporates nursing facility transition services.

After determining which services and supports she needed and getting them into place, Abbie was able to leave her nursing facility to move in with family, and eventually live on her own. In her own words, “I’m very thankful to have a place of my own again. I absolutely love it.” If it hadn’t been for both the funding and policy changes MFP provided, Abbie may not have been able to leave her nursing facility. As efforts continue to balance LTSS and contain costs within Medicaid, revisiting a proven investment such as MFP would be a wise choice for policymakers to consider.


Brendan Flinn

Brendan Flinn is a policy research senior analyst for the AARP Public Policy Institute. He works on Medicaid, long-term services and supports, and family caregiving issues.

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