Homes, Not Nursing Homes

New Jersey is seeking federal approval for major changes to its $11 billion Medicaid program, hoping to rein in what state officials and some non-government stakeholders say is an unsustainable escalation of spending.

But saving money is only one of the goals of the 160-page Comprehensive Medicaid Waiver that New Jersey submitted to the federal Centers for Medicare and Medicaid Services in September. It also aims to keep the aged and people with disabilities out of nursing homes, which is what most patients would prefer and would be cheaper for taxpayers. But the waiver has major ramifications for how the system is managed, what services become available under Medicaid, and how healthcare is delivered.

Those were just a few of the issues on the docket at the most recent NJ Spotlight Roundtable Series: Rebalancing Medicaid Long-Term Care, held this past Friday in Trenton. Also up for discussion: Spending controls the state says are woven into the new measure that expand the role of managed care organizations, which will have financial incentives to deliver essential services quickly.

A Worrying Waiver

The waiver is worrying some Medicaid providers who argue that federal and state budget cuts in recent years already make it difficult for them to operate -- and they don’t know if the proposed changes will help or hurt them. Medicaid is 50/50 funded by the state and the federal government.

Valerie Harr, who directs the state’s Medicaid program as head of the Division of Medical Assistance and Health Services in the state Department of Human Services, pointed out that in 2009, New Jersey ranked 49th in the U.S. when it comes to providing home and community care for the elderly and developmentally disabled.

“We can and must do better,” she said.

A number of states are doing just that. They've already filed waivers with the federal government that allow them to offer minor modifications like building wheelchair ramps or making houses more wheelchair-friendly, straightforward alterations that would enable the elderly or people with disabilities to live at home longer.

About 95 percent of the state’s 1.3 million Medicaid beneficiaries are already in managed care programs delivered by the four companies that run the Medicaid under contracts with the state: Amerigroup, HealthFirst, Horizon and UnitedHealthcare. On July 1, 2011 certain services for long-term care patients living in their homes were moved into managed care. Assuming CMS approves the waiver in time, DHS hopes to bring long-term care patients now in institutions under managed care by July 1, 2012.

Home and community-based care costs about a third of institutional care, Harr said. She predicted some patients will return to their communities under managed care, “but the big savings will be avoiding placement” in a nursing facility to begin with.

Harr said managed care will improve health because “all of your care—doctors, hospitals, pharmacy, support services at home—will be coordinated with one person responsible.” She said these care coordinators “will make sure the right services are provided at the right time.” She also indicated that the state will monitor the managed care companies through independent quality review, to ensure care is not shortchanged.

Continue reading this story in NJ Spotlight.

NJ Spotlight is an issue-driven news website that provides critical insight to New Jersey’s communities and businesses. It is non-partisan, independent, policy-centered and community-minded.