Seven Timely Ways for State Leaders to Use MFP Funds

In September 2020, the U.S. Centers for Medicare & Medicaid Services (CMS) announced access to $165 million in supplemental Money Follows the Person (MFP) funding.

Since it was announced in 2007, these funds have helped more than 101,000 individuals successfully transition from institutional long-term care settings to home and community-based care.

However, in 2019 fewer than 4,500 transitions occurred—suggesting that many states had either already moved their transitions programs into permanent constructs or were discarding them in the future.

Up to $5 million in funding is available now for each of the 33 states that sustained their MFP demonstrations through 2019.

State leaders now have a limited-time, federally funded chance to leverage dollars during a time when long-term care is just beginning to realize the full impacts of COVID-19. The opportunity to capitalize on these funds will be limited if states only use them to sustain a temporary and dwindling demonstration program construct.

There is emerging opportunity to address systemic barriers to rebalancing during this time of massive long-term care sector disruption.

  • Beneficiaries and their caregivers are wary of institutional long-term care due to their widely publicized COVID-19 infection and death rates, heightening a long-standing generational shift in expectation to in-home care for sub-acute and long-term care.

  • Home and community-based services (HCBS) have been heavily impacted by pandemic-related emergency waivers and are wary of additional change; but they’ve seen firsthand where innovation can drive practice and nimble service delivery.

  • Skilled nursing facility (SNF) operators are navigating a census drop while actively weathering an industry crisis that has deepened rifts with regulators and strained operations and financial viability.

  • Because state leaders, including legislators, are more attuned to long-term services and supports (LTSS) issues, they may be more willing to fund initiatives than in the past.

A deliberate and thoughtful rebalancing strategy is timelier than ever.

State leaders should consider the following seven opportunities to use 2020 MFP funds.

  1. Design and modernize 1915(c) waivers

    Many states struggle to offer HCBS programs that are a comprehensive alternative to facility-based care for more complex populations. Funding could be used to study population needs, design specialized waivers for those that are SNF-eligible, including unique populations such as individuals with Alzheimer’s, dementia, or who are aging with a developmental disability, etc. Funds could also be used to study the design and performance of existing programs to modernize service offerings and divert SNF placements.

  2. Expand robust aging and disability resource centers/options counselling

    Timely access to easy-to-use, accurate, unbiased, and individualized education and options counseling for all citizens is a linchpin to a high-performing LTSS delivery system. However, building systems and approaches that can be leveraged by all parts of the healthcare continuum and equitably serve a diverse population is no easy task. The ability to market the program as the go-to resource is even harder. Bolstering options counseling systems and/or improving on existing approaches is a critical step in advancing rebalancing.

  3. Strategically improve transitions of care

    Leaders must work across the continuum to align culture across all facets of healthcare to deter physicians, therapists, and discharge planners in acute and outpatient settings from pressing the “easy button” of recommending unnecessary transitions to SNFs for sub-acute and rehabilitative care. Tried-and-true patterns of referring to SNFs are entrenched, in part, because they are considered “safe” to prevent readmissions. Modernizing the discharge planning process and realigning systems around effective discharge practices takes multiprovider, multidisciplinary engagement and often includes strategies that embed community-based professionals in the transitions process.

  4. Develop and advance an affordable housing strategy

    One of the foremost transition barriers cited by MFP participants was identifying permanent, safe, well-located, affordable housing for SNF residents. Strategic imperatives to address this could range from a feasibility study for Medicaid-funded assisted living to a funded partnership and strategic planning effort between state health, human services, and housing agencies to improve access to affordable housing for LTSS-eligible citizens. Housing options could vary from new project-based development to updated tenant-based policies and subsidy programs.

    Additionally, design and implementation of a well-designed housing support model that can be reimbursed as a 1915(c) waiver service could also help to make transitional and housing supports permanently available within HCBS programs.

  5. Study future demand and capacity

    With the “silver tsunami” of an aging baby boomer generation well underway and record rates of aging Americans slated to explode by 2040, states must look upstream to interventions and non-Medicaid funded programs that address future surges in demand to strategically deter preventable spenddown to Medicaid, as current growth rates in the LTSS population could bankrupt most states.

    Emerging state strategies vary from strategic partnerships with in-state Medicare Advantage programs, to implementing state-funded services and supports all the way to designing innovative buy-in and long-term care insurance models to stem the influx of long-term-care-eligible Medicaid beneficiaries—some of whom can avoid Medicaid altogether with the right upstream services and insurance programs.

  6. Examine rate structures and reimbursement models

    Reimbursement is often a primary barrier to expanding specific HCBS types or availing services and supports in difficult-to-serve regions. Many states recognize that existing rates pose a challenge for providers attempting to recruit staff in a highly competitive labor market. Analyzing rate adequacy is especially compelling during a time when state executive and legislative branches may be more cognizant of the need to invest in HCBS as they navigate the perilous waters of widespread COVID-19 outbreaks in SNFs.

    Strategies to drive more sophisticated reimbursement methods, such as tiered or acuity-based rates or bundled payments, pose future opportunity. States that have used managed LTSS to influence the rate negotiation process may need guidance to identify the right strategy for value-based purchasing of HCBS. Value-based purchasing can be a useful tool to improve quality of care, drive program outcomes, and even incentivize the use of specific services.

  7. Realign the LTSS delivery system

    Ultimately, institutional long-term care still has a valuable and necessary place in the LTSS continuum. SNFs are a sizable employer (sometimes an anchor employer in rural communities), offer care to clinically complex and vulnerable patients, and are a powerful political lobby.

    There is ample opportunity to work more collaboratively across the healthcare continuum, to align the goals, operations, and financial incentives across the spectrum so that all provider types can flourish while navigating necessary institutional disruption. Developing models that align providers on the local and regional level can benefit state Medicaid agencies, managed Medicaid and Medicare payers, and offer innovative steps in bridging the misalignment between Medicare and Medicaid savings for dual eligibles. 

Now is the time to drive sustainable change in LTSS. MFP dollars can help to support a strategic plan to address barriers to rebalancing. States that have scaled down transition programs should inquire with their CMS regional office to explore eligibility to access funds and share the intent to embark on projects that would improve the LTSS delivery model.

We can help. Learn more about our LTSS services.

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