Long-Term Care: Elderly Individuals Could Find Significant Variation in the Availability of Medicaid Home and Community Services
Published: 2002-09-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: As the baby boomers age, spending on long-term care for the elderly could quadruple by 2050. The growing demand for long-term care will put pressure on federal and state budgets because long-term care relies heavily on public financing, particularly Medicaid. Nursing home care traditionally has accounted for most Medicaid long-term care expenditures, but the high costs of such care and the preference of many individuals to stay in their own homes has led states to expand their Medicaid programs to provide coverage for home- and community-based long-term care.
section_title: What GAO Found
paragraphs: GAO found that a Medicaid-eligible elderly individual with the same disabling conditions, care needs, and availability of informal family support could find significant differences in the type and intensity of home and community-based services that would be offered for his or her care. These differences were due in part to the very nature of long-term care needs--which can involve physical or cognitive disabling conditions--and the lack of a consensus as to what services are needed to compensate for these disabilities and what balance should exist between publicly available and family-provided services. The differences in care plans were also due to decisions that states have made in designing their Medicaid long-term care programs and the resources devoted to them. The case managers GAO contacted generally offered care plans that relied on in-home services rather than other residential care settings. However, the in-home services offered varied considerably.

section_title: Letter
paragraphs: I am pleased to be here today as you continue to explore issues that  confront many elderly Americans seeking long-term care services, with  today’s focus on care options that can allow elderly individuals—as they  face declining health and independence—to remain in their homes and  communities as long as possible. This Committee has held a series of  hearings this year examining the current provision of long-term care and  considering the role that the public sector should play in assuring that  long-term care needs will be met for the impending surge of the baby  boom generation. The availability of home and community-based care is  an important aspect of the overall long-term care spectrum.
As the Comptroller General testified before this Committee in March, the  aging baby boom generation is anticipated to greatly expand the demand  for long-term care services, which could result in spending for long-term  care for the elderly nearly quadrupling by 2050. This growing demand for  long-term care will exert increased pressure on federal and state budgets  since long-term care relies heavily on financing by public payers,  particularly Medicaid, which is currently the largest payer for long-term  care services. Nursing home care traditionally has accounted for most  Medicaid long-term care expenditures, but the high costs of such care and  many individuals’ preferences to remain in their own homes has led states  to expand their Medicaid programs to provide coverage of home and  community-based long-term care services.
States have considerable discretion within their Medicaid programs to  decide who may be eligible for home and community-based care and what  services to cover. Most home and community-based services—including  in-home assistance with activities of daily living, such as bathing or eating,  or community-based options, such as adult day care or assisted living  facilities—are optional elements of state Medicaid programs. Local case  managers, who screen Medicaid-eligible individuals to determine what  services they qualify for, also often have discretion to customize care plans  based on an individual’s needs, preferences, and the availability of care  services, including unpaid care provided by family members or other  informal caregivers.
My remarks will summarize findings of a report that we are releasing today  that examines four geographically diverse states—Kansas, Louisiana, New  York, and Oregon—that varied in their coverage of Medicaid home and  community-based services. At your request, we examined how these  states’ coverage policies affected long-term care services available to  elderly individuals needing care. We focused on three specific issues:   (1) the extent to which home and community-based services were  available for Medicaid-eligible elderly, (2) services that local case  managers would offer to two hypothetical elderly individuals based on the  levels of unpaid informal care provided by family members, and (3) the  extent to which care offered to the same individual with the same level of  informal support varied among the selected states.
The cornerstone of our work was the development of vignettes for two  hypothetical elderly persons—an 86-year-old woman with debilitating  arthritis and a 70-year old man with moderate Alzheimer’s disease. For  each of these hypothetical individuals, we developed three scenarios  where the individuals had varying levels of informal care available from  their families and preferred to remain at home as long as possible. We then  asked four Medicaid case managers in each of the four states to develop  care plans for each scenario.
In summary, we found that a Medicaid-eligible elderly individual with the  same disabling conditions, care needs, and availability of informal family  support could find significant differences in the type and intensity of home  and community-based services that would be offered for his or her care.  These differences were due in part to the very nature of long-term care  needs—which can involve physical or cognitive disabling conditions—and  the lack of a consensus as to what services are needed to compensate for  these disabilities and what balance should exist between publicly available  and family-provided services. The differences in care plans were also due  to decisions that states have made in designing their Medicaid long-term  care programs and the resources devoted to them. The case managers we  contacted did offer, in general, care plans that relied largely on in-home  services rather than other residential care settings. However, there was  considerable variation in the extent of in-home services offered. For  example, for our hypothetical 86-year-old woman with debilitating  arthritis, case managers recommended from 4.5 hours per week to 40  hours per week of in-home assistance to supplement the care she received  from her daughter who lived with her but who also cared for her own  infant grandchild. However, despite coverage for varying types and levels  of home and community-based services in all four states’ Medicaid  programs, two states had waiting lists that would at present preclude the  availability of many of these services for elderly individuals seeking them.
subsections: section_title: Background
paragraphs: Individuals needing long-term care have varying degrees of difficulty in  performing some activities of daily living without assistance, such as  bathing, dressing, toileting, eating, and moving from one location to  another. They may also have trouble with instrumental activities of daily  living, which include such tasks as preparing food, housekeeping, and  handling finances. They may have a mental impairment, such as  Alzheimer’s disease, that necessitates supervision to avoid harming  themselves or others or need assistance with tasks such as taking  medications. Although a physical or mental disability may occur at any  age, the older an individual becomes, the more likely it is that a disabling  condition will develop or worsen.
Assistance for such needs takes many forms and takes place in varied  settings, including care in nursing homes or alternative community-based  residential settings such as assisted living facilities. For individuals  remaining in their homes, in-home care services or unpaid care from  family members or other informal caregivers is most common.  Approximately 64 percent of all elderly individuals with a disability relied  exclusively on unpaid care from family or other informal caregivers; even  among almost totally dependent elderly—those with difficulty performing  five activities of daily living—about 41 percent relied entirely on unpaid  care.
Medicaid, the joint federal-state health-financing program for low-income  individuals, continues to be the largest funding source for long-term care.  In 2000, Medicaid paid 46 percent (about $63 billion) of the $137 billion  spent on long-term care from all public and private sources. States share  responsibility with the federal government for Medicaid, paying on  average approximately 43 percent of total Medicaid costs. Within broad  federal guidelines, states have considerable flexibility in determining who  is eligible and what services to cover in their Medicaid program. Among  long-term care services, states are required to cover nursing facilities and  home health services for Medicaid beneficiaries. States also may choose to  cover additional long-term care services that are not mandatory under  federal standards, such as personal care services, private-duty nursing  care, and rehabilitative services. For services that a state chooses to cover  under its state Medicaid plan as approved by the Centers for Medicare &  Medicaid Services (CMS), enrollment for those eligible cannot be limited  but benefits may be. For example, states can limit the personal care  service benefit through medical necessity requirements and utilization  controls.
States may also cover Medicaid home and community-based services  (HCBS) through waivers of certain statutory requirements under section  1915(c) of the Social Security Act, thereby receiving greater flexibility in  the provision of long-term care services. These waivers permit states to  adopt a variety of strategies to control the cost and use of services. For  example, states may obtain CMS approval to waive certain provisions of  the Medicaid statute, such as the requirement that states make all services  available to all eligible individuals statewide. With a waiver, states can  target services to individuals on the basis of certain criteria such as  disease, age, or geographic location. Further, states may limit the number  of persons served to a specified target, requiring additional persons  meeting eligibility and need criteria to be put on a waiting list. Limits may  also be placed on the costs of services that will be covered by Medicaid.  To obtain CMS approval for an HCBS waiver, states must demonstrate that  the cost of the services to be provided under a waiver (plus other state  Medicaid services) is no more than the cost of institutional care (plus any  other Medicaid services provided to institutionalized individuals). These  waivers permit states to cover a wide variety of nonmedical and social  services and supports that allow people to remain at home or in the  community, including personal care, personal emergency response  systems, homemakers’ assistance, chore assistance, adult day care, and  other services.
Medicare—the federal health financing program covering nearly 40 million  Americans who are aged 65 or older, disabled, or have end-stage renal  disease—primarily covers acute care, but it also pays for limited post- acute stays in skilled nursing facilities and home health care. Medicare  spending accounted for 14 percent (about $19 billion) of total long-term  care expenditures in 2000. A new home health prospective payment  system was implemented in October 2000 that would allow a higher  number of home health visits per user than under the previous interim  payment system while also providing incentives to reward efficiency and  control use of services. The number of home health visits declined from  about 29 visits per episode immediately prior to the prospective payment  system being implemented to 22 visits per episode during the first half of  2001. Most of the decline was in home health aide visits.
section_title: Selected States Varied in Expenditures for and Design of Medicaid Home and Community Services
paragraphs: The four states we reviewed allocated different proportions of Medicaid  long-term care expenditures for the elderly to federally required long-term  care services, such as nursing facilities and home health, and to state  optional home and community-based care, such as in-home personal  support, adult day care, and care in alternate residential care settings. As  the following examples illustrate, the states also differed in how they  designed their home and community-based services, influencing the extent  to which these services were available to elderly individuals with  disabilities.
New York spent $2,463 per person aged 65 or older in 1999 on Medicaid  long-term care services for the elderly—much higher than the national  average of $996. While nursing home care represented 68 percent of New  York’s expenditures, New York also spent more than the national average  on state optional long-term care services, such as personal support  services. Because most home and community-based services in New York  were covered as part of the state Medicaid plan, these services were  largely available to all eligible Medicaid beneficiaries needing them  without caps on the numbers of individuals served.
Louisiana spent $1,012 per person aged 65 or older, slightly higher than the  national average of $996. Nursing home care accounted for 93 percent of  Louisiana’s expenditures, higher than the national average of 81 percent.  Most home and community-based services available in Louisiana for the  elderly and disabled were offered under HCBS waivers, and the state  capped the dollar amount available per day for services and limited the  number of recipients. For example, Louisiana’s waiver that covered in- personal care and other services had a $35 per day limit at the time of our  work and served approximately 1,500 people in July 2002 with a waiting  list of 5,000 people.
Kansas spent $935 per person aged 65 or older, slightly less than the  national average. Most home and community-based services, including in- home care, adult day care, and respite services, were offered under HCBS  waivers. As of June 2002, 6,300 Kansans were receiving these HCBS waiver  services. However, the HCBS waiver services were not currently available  to new recipients because Kansas initiated a waiting list for these services  in April 2002, and 290 people were on the waiting list as of June 2002.
Oregon spent $604 on Medicaid long-term care services per elderly  individual and, in contrast to the other states, spent a lower proportion on  nursing facilities and a larger portion on other long-term care services  such as care in alternative residential settings. Oregon had HCBS waivers  that cover in-home care, environmental modifications to homes, adult day  care, and respite care. Oregon’s waiver services did not have a waiting list  and were available to elderly and disabled clients based on functional  need, serving about 12,000 elderly and disabled individuals as of June  2002.
Appendix I summarizes the home and community-based services available  in the four states through their state Medicaid plans or HCBS waivers and  whether the state had a waiting list for HCBS waiver services.
section_title: Case Managers Predominately Offered Medicaid In- Home Care Services, but Number of Hours Varied
paragraphs: Most often, the 16 Medicaid case managers we contacted in Kansas,  Louisiana, New York, and Oregon offered care plans for our hypothetical  individuals that aimed at allowing them to remain in their homes. The  number of hours of in-home care that the case managers offered and the  types of residential care settings recommended depended in part on the  availability of services and the amount of informal family care available. In  a few situations, especially when the individual did not live with a family  member who could provide additional support, case managers were  concerned that the client would not be safe at home and recommended a  nursing home or other residential care setting.
The first hypothetical person we presented to care managers was an 86- year-old woman, whom we called “Abby,” with debilitating arthritis who is  chair bound and whose husband recently died. In most care plans, the  case managers offered Abby in-home care. However, the number of  offered hours depended on the availability of unpaid informal care from  her family and varied among case managers.
In the first scenario, Abby lives with her daughter who provides most of  Abby’s care but is overwhelmed by also caring for her own infant  grandchild. Case managers offered from 4.5 to 40 hours per week of in- home assistance with activities that she could not do on her own because  of her debilitating arthritis, such as bathing, dressing, eating, using the  toilet, and transferring from her wheelchair. One case manager  recommended adult foster care for Abby under this scenario.  In the second scenario, Abby lives with her 82-year-old sister who provides  most of Abby’s care, but the sister has limited strength making her unable  to provide all of Abby’s care. Case managers offered Abby in-home care,  ranging from 6 to 37 hours per week. One case manager also offered Abby  56 hours per week of adult day care.  In the third scenario, Abby lives alone and her working daughter visits her  once each morning to provide care for about 1 hour. The majority of case  managers (12 of 16) offered from 12 to 49 hours per week of in-home care  to Abby. The other four case managers recommended that she relocate to  a nursing home or other residential care setting.
The second hypothetical person was “Brian,” a 70-year-old man cognitively  impaired with moderate Alzheimer’s disease who had just been released  from a skilled nursing facility after recovering from a broken hip. The case  managers usually offered in-home care so that Brian could remain at home  if he lived with his wife to provide supervisory care. If he lived alone, most  recommended that he move to another residential setting that would  provide him with needed supervision.
In the first scenario, Brian lives with his wife who provides most of his  care and she is in fair health. All 16 case managers offered in-home care,  ranging from 11 to 35 hours per week. Two case managers also offered  adult day care in addition to or instead of in-home care.  In the second scenario, Brian lives with his wife who provides some of his  care and she is in poor health. All but one of the case managers offered in- home care, ranging from 6 to 35 hours per week. One case manager  recommended that Brian move to a residential care facility.  In the third scenario, Brian lives alone because his wife has recently died.  Concerned about his safety living at home alone or unable to provide a  sufficient number of hours of in-home supervision, 13 of the case  managers recommended that Brian move to a nursing home or alternate  residential care setting. Two of the three care managers who had Brian  remain at home offered around-the-clock in-home care—168 hours per  week.
Table 1 summarizes the care plans developed for Abby and Brian by the 16  case managers we contacted.
In some situations, two case managers in the same locality offered notably  different care plans. For example, across the eight localities where we  interviewed case managers, when Abby lived alone, four case managers  offered in-home care while their local counterpart recommended a nursing  home or alternative residential setting. The local case managers offering  differing recommendations for in-home or residential care also occurred  three times when Brian lived alone and once each when Abby lived with  her daughter and when Brian lived with his wife who was in poor health.  Also, in a few cases, both case managers in the same locality offered in- home care but significantly different numbers of hours. For example, one  case manager offered 42 hours per week of in-home care for Abby when  she lived alone while another case manager in the same locality offered 15  hours per week of in-home care for this scenario.
section_title: Case Managers in Some States Offered More In-Home Care, Alternative Residential Settings, or Other Supplemental Services
paragraphs: The home and community-based care that case managers offered to our  hypothetical individuals sometimes differed due to state policies or  practices that shaped the availability of their Medicaid-covered services.  These included waiting lists for HCBS waiver services in Kansas and  Louisiana, Louisiana’s daily dollar cap on in-home care, and Kansas’s state  review policies for higher-cost care plans. Also, case managers in Oregon  recommended alternative residential care settings other than nursing  homes, and case managers in Louisiana and New York typically  considered Medicare home health care when determining the number of  hours of Medicaid in-home care to offer.
Neither of our hypothetical individuals would be able to immediately  receive HCBS waiver services in Kansas and Louisiana due to a waiting  list. As a result, they would often have fewer services offered to them— only those available through other state or federal programs such as those  available under the Older Americans Act—until Medicaid HCBS waiver  services became available. Alternatively, they could enter a nursing home.  The average length of time individuals wait for Medicaid waiver services  was not known in either state. However, one case manager in Louisiana  estimated that elderly persons for whom he had developed care plans had  spent about a year on the waiting list before receiving services. In Kansas,  as of July no one had yet come off the waiting list that was instituted in  April 2002.
When case managers developed care plans based on HCBS-waiver services  for our hypothetical individuals, the number of hours of in-home care  offered by case managers could be as much as 168 hours per week in New  York and Oregon but were at most 24.5 hours per week in Kansas and 37  hours per week in Louisiana. Case managers in Louisiana also tended to  change the amount of in-home help offered little even as the hypothetical  scenarios changed. This may have been because they were trying to offer  as many hours as they could under the cost limit even in the scenario with  the most family support available. (See table 2.)
Two states’ caps or other practices may have limited the amount of  Medicaid-covered in-home care that their case managers offered. For  example, case managers in Louisiana tended to offer as many hours of  care as they could offer under the state’s $35 per day cost limit.  Therefore, as the amount of informal care changed in the different  scenarios, the hours of in-home help offered in Louisiana did not change  as much as they did in the other states. In Kansas, case managers often  offered fewer hours of in-home care than were offered in other states,  which may have been in part influenced by Kansas’s supervisory review  whereby more costly care plans were more extensively reviewed than  lower cost care plans. A Kansas case manager also told us that offering  fewer hours of care may reflect the case managers’ sensitivity to the state’s  waiting list for HCBS services and an effort to serve more clients by  keeping the cost per person low. In contrast, case managers in New York  and Oregon did not have similar cost restrictions in offering in-home  hours, with one case manager in each state offering as much as 24-hour-a- day care.
When recommending that our hypothetical individuals could better be  cared for in a residential care setting, case managers offered alternatives  to nursing homes to varying degrees across the states. Case managers in  Louisiana recommended nursing home care in three of the four care plans  in which care in another residence was recommended for Abby or Brian.  In contrast, case managers in Oregon never recommended nursing home  care for our hypothetical individuals. Instead, case managers in Oregon  exclusively recommended either adult foster care or an assisted living  facility in the five care plans recommending care in another residence. It  was also noteworthy that two case managers in Oregon recommended that  either Abby or Brian obtain care in other residential care settings in a  scenario when she or he lived with a family member, expressing concern  that continuing to provide care to Abby or Brian would be detrimental to  the family. Case managers in Kansas, Louisiana, and New York only  recommended out-of-home placement for Abby or Brian in scenarios when  they lived alone.
State differences also were evident in how case managers used adult day  care to supplement in-home or other care. For example, across all care  plans the case managers developed for Abby and Brian (24 care plans in  each state), adult day care was offered four times in New York and Oregon  and three times in Kansas. However, none of the care plans developed by  case managers in Louisiana included adult day care because it was in a  separate HCBS waiver, and individuals could not receive services through  two different waivers.
Case managers in New York and Louisiana also often considered the effect  that the availability of Medicare home health services could have on  Medicaid-covered in-home care. For example, one New York case manager  noted that she would maximize the use of Medicare home health before  using Medicaid home health or other services. Several of the case  managers in New York included the amount of Medicare home health care  available in their care plans, and these services offset some of the  Medicaid services that would otherwise be offered. In Louisiana, where  case managers faced a dollar cap on the amount of Medicaid in-home care  hours they could provide, two case managers told us that they would  include the additional care available under Medicare’s home health benefit  in their care plans, thereby increasing the number of total hours of care  that Abby or Brian would have by 2 hours per week. While six Kansas and  Oregon case managers also mentioned that they would refer Abby or Brian  to a physician or visiting nurse to be assessed potentially for Medicare  home health, they did not specifically include the availability of Medicare  home health in the number of hours of care provided by their care plans.
section_title: Concluding Observations
paragraphs: States have found that offering home and community-based services  through their Medicaid programs can help low-income elderly individuals  with disabilities remain in their homes or communities when they  otherwise would be likely to go to a nursing home. States differed,  however, in how they designed their Medicaid programs to offer home and  community-based long-term care options for elderly individuals and the  level of resources they devoted to these services. As a result, as  demonstrated by the care plans developed by case managers for our  hypothetical elderly individuals in four states, the same individual with  certain identified disabilities and needs would often receive different types  and intensity of home and community-based care for his or her long-term  care needs across states and even within the same community. These  differences often stemmed from case managers’ attempts to leverage the  availability of both publicly-financed long-term care services as well as the  informal care and support provided to individuals by their own family  members.
Mr. Chairman, this completes my prepared statement. I would be happy to  respond to any questions you or other Members of the Committee may  have at this time.
section_title: Contacts and Acknowledgments
paragraphs: For future contacts regarding this testimony, please call Kathryn G. Allen  at (202) 512-7118 or John E. Dicken at (202) 512-7043. Other individuals  who made key contributions include JoAnne R. Bailey, Romy Gelb, and  Miryam Frieder.
section_title: Appendix I: Medicaid-Covered Home and Community-Based Services in Kansas, Louisiana, New York, and Oregon
paragraphs: Kansas, Louisiana, New York, and Oregon each offered home and  community-based services through their state Medicaid plans or HCBS  waivers. Kansas and Louisiana had waiting lists that generally made these  services unavailable to new clients. Table 3 summarizes the home and  community-based services available in the four states we reviewed and  whether the states had a waiting list for HCBS waiver services.