Deep Cuts Leave Seniors on Shaky Ground

The Long-Term Care Imperative recognizes the effort that went into putting together the HHS budget and praises Rep. Abeler for repealing rate equalization, which is an important first step in reforming long-term care financing.

However, the effects of reforms like this do not make nursing homes and other care providers immune to the huge cuts to seniors that are included in the budget proposal. “Rather than small, across the board rate cuts for nursing homes, this budget includes $35 million in deep, uneven slices that will certainly result in facility closures at a time when demand for service is only going up,” said Patti Cullen, president and CEO of Care Providers of Minnesota. “The tone coming from the capitol this year has been that nursing homes should be protected. If nursing homes are indeed going to be protected, that is not what has happened in this bill.”

Home and community-based services were also hit with significant cuts under the proposal.

“The services that help seniors stay at home were hit with a huge cut under this proposal, and that can only lead to more pressure on nursing homes or leaving vulnerable seniors without the services and support they need.” said Gayle Kvenvold, president and CEO of Aging Services of

Minnesota. “We are pleased to see the progress towards reforming the way we pay for long term care by repealing rate equalization, but at a time when we will have more seniors in our state than ever before, we still need to be investing in the core infrastructure of older adult services and the jobs that this field represents.”

In total, the House HHS budget will cut $110 million from older adult services programs.  This will result in an average 4% cut on nursing homes and over a 20% cut to the Elderly Waiver program, although the cut to any one provider will vary. 

Now that the bill has been released, seniors and caregivers are left with more questions than answers. In particular, uncertainty exists about the looming potential for additional rate cuts tied to the home and community based services appropriation limits and $300 million in potential cuts to provider rates that hinge on Federal approval of a global Medicaid waiver.

At this point, The Long-Term Care Imperative doesn’t know exactly what this might mean for Minnesotans, but if the state fails to get a Federal waiver or if savings are lower than projected, the $300 million in cuts would be catastrophic for Minnesota seniors and caregivers.

How this affects Assisted Living (Home and Community based) providers

Some of the biggest cuts in the bill fall on waivered services.  In total, $483 million in savings is achieved in the house bill through waivered services cuts.   This is also one of the most unclear sections of the bill, as the bill delegates implementation of appropriations limits to DHS.   $66 million of the cuts to waivered services comes out of the Elderly Waiver program. 

Home and community based services waiver appropriations limits 

The biggest area for savings in waivered services is achieved through appropriations limits.  The bill caps funding for all Medicaid home and community based waivers at 2010 funding levels.  Of those amounts, the bill mandates that 5% of the funding for each program shall be set aside for emergency situations around the state.  The bill also requires that the commissioner must ensure that at least the same number of people will be served through the waivers as were served on March 22, 2010.  Aside from those requirements, DHS is allowed to meet the funding limits through a variety of activities including: 

• Reducing or adjusting benefits and services
• Reducing or adjusting case-mix capitation rates
• Limit or freeze waiver enrollment
• Establish needed thresholds for service eligibility
• Adjust eligibility criteria (to the extent allowable by federal regulations)
• Establish prior authorization criteria
• Adjust county home and community based waiver allocations as needed

If the commissioner determines that the actions listed above will not keep spending within the prescribed limits, the commissioner must reduce by ten percent the salaries of central staff that have a salary greater than $90,000.

If the commissioner finds that the actions listed above and the salary reductions listed above still will not maintain the prescribed spending limits, the commissioner may reduce provider rates by the amount necessary to remain within the spending limits. 

Case Mix L Changes

Criteria would be revised to also include individuals with up to 2 ADL needs (currently Case Mix L applies to those with only one ADL need).  For the Alternative Care program, which currently has a Case Mix L community budget cap of $593 per month, this change would affect approximately 60 individuals. 25% of those EW clients now classified as Case Mix A would be re-classified as Case Mix L, or about 1,585 people would be impacted.

Also, the budget caps for EW Case Mix L individuals, the cap would be reduced from $2272/month to $1750/month, affecting 436 people or 7.5 percent of the Case Mix L population.

Finally, service rate limits for customized living would be reduced.  Currently the limits are the same for Case Mix A and L. This proposal would create a new, lower Case Mix L service rate limit for CL. The service rate limits for 233 individuals (3.2% of the CL service population) will be impacted.

Eligibility Criteria for 24-hour Customized Living increased

One of the current eligibility criteria for 24-hour CL is a dependency in at least 2 ADLs, plus a need for medication management and at least 50 hours per month of allowed CL services. The proposal would revise this criterion to require a dependency in at least 3 ADLs plus a need for medication management and at least 50 hours per month of planned component services. ADLs include bathing, dressing, grooming, walking, or eating when the need exceeds meal preparation, (which is not considered an ADL). The other eligibility criteria for 24-hour CL are not changed. However, individuals classified as Case Mix L would no longer be eligible for 24 CL. 34 individuals (0.36% of the 24 CL service population) will be impacted by this change.

Complete details of the House budget proposal can be found at the following websites:    

• For bill language:  http://www.house.leg.state.mn.us/comm/docs/A11-0177.pdf

• For spreadsheets:  http://www.house.leg.state.mn.us/comm/docs/2011tocommittee(7).PDF
   

   

At this point, The Long-Term Care Imperative doesn’t know exactly what this might mean for Minnesotans, but if the state fails to get a Federal waiver or if savings are lower than projected, the $300 million in cuts would be catastrophic for Minnesota seniors and caregivers.

The Long-Term Care Imperative is a legislative collaboration between Care Providers of Minnesota and Aging Services of Minnesota, the state’s two long-term care trade associations.