Medicaid

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Medicaid Supporting People with Developmental
Disabilities

• Trends, Challenges, and Opportunities

Gary Smith HSRI May 21, 2003
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Medicaid is the linchpin

• Underwrites primary health care for at least 1.4
  million individuals with mental retardation and
  other developmental disabilities
• EPSDT is very important in supporting children
  with disabilities in low-income households
• Adults Rely on Medicaid for primary health care
• Underwrites long-term services and supports for
  about 500,000 people with developmental
  disabilities

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Long-term Services and Supports

• Medicaid accounts for 75 of state expenditures
  on long-term services and supports for people
  with developmental disabilities
• Key benefits HCBS waiver, ICF/MR, and Targeted
  Case Management
• 2002 Spending 24.1 Billion
• HCBS waiver program now the primary program in
  virtually all states

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DD LTS Medicaid Beneficiary Growth 1990 to 2002
Growth Rate 8.2/year
1999 2002 Increase 110,000 (29)
2002 HCBS 379,000 ICF/MR 111,000
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Expenditure Trends 1990 to 2002
Annual Total Expenditure Growth 6.1 (inflation
adjusted)
2002 HCBS13.3 B ICF/MR 10.8 B
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Principal trends

• ICF/MR Slow fade
• Downsizing/closure public institutions
• Limited development of non-state facilities
• HCBS Waiver Program
• States main vehicle for underwriting community
  services
• Expenditures and number of participants have
  grown very rapidly
• States have leveraged old and new dollars through
  the waiver program to acquire more federal
  dollars
• Outcome HCBS waiver program fueled expansion of
  community services

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Shift to waiver program has

• Lowered state per capita costs
• Decoupled funding from location
• Aided in reducing/containing waiting lists
• Infused dollars into services for people who live
  with their families
• Substantially boosted dollars for integrated
  employment services
• Given states an enormously flexible, agile
  funding stream

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Dialing for dollars

• Waiverization Unmatched state dollars
• Family support leveraging existing dollars
• In-home supports
• Local match
• Opportunities vary state-to-state

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Going Forward
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Critical Issue State Financial Health

• State budget crash
• Cuts in Medicaid physical health eligibility
• States throwing on the brakes on system expansion
• Result waiting lists are climbing fast
• Payment freezes and cuts
• Prognosis Little or no growth over the mid-term
• Problems
• Most states have emptied their unmatched dollars
  piggy-banks
• Going forward, slow growth in state revenues
• Outgrowth future funding will hinge on recovery
  of overall state budget

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Critical Issue Litigation

• Lawsuits in 23 states over wait listing
  individuals with developmental disabilities for
  Medicaid services
• Other lawsuits concerning payments, including
  worker wages
• Aim put home and community services on equal
  footing with entitled institutional services
• Outcome and impact uncertain

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Federal Focus Areas

• Administrative policy changes to address barriers
  to HCS across full spectrum of people with
  disabilities
• System change grants aid states to strengthen
  community infrastructure and systems pave the
  way for change
• Consumer-direction
• Quality

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Consumer-direction

• Movement for individual-direction of services and
  supports cuts across individuals with all types
  of disabilities
• CMS Independence Plus Initiative
• Individual/family-directed Medicaid home and
  community services are the next big thing and
  will lead to substantial changes in public
  systems (eventually)

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Quality

• CMS Major focus on HCBS waiver quality
  management and improvement
• Technical assistance/tool development
• Oversight
• Going forward requirement for states to spell
  out full-featured HCBS waiver quality management/
  improvement systems
• States engaged in high volume of system
  enhancement/development activities
• Going forward appreciably higher quality
  management expectations

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State Management

• The scale of HCBS waiver programs has increased
  enormously
• Waiver Community System
• States are revamping program management
• Revising/rationalizing payments/fund allocation
• Reconfiguring systems and business model
  around the waiver program

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Wrap-up

• Developmental disabilities services and Medicaid
  are wedded at the hip
• Medicaid has fueled system growth
• HCBS waiver program is a powerful tool to expand
  community supports
• Going forward future hinges on financial health
  of the states
• Focus areas
• Consumer-direction
• System and quality management

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For more information about Medicaid Home and
Community Services

• Understanding Medicaid Home and Community
  Services A Primer available at
  http//aspe.hhs.gov/daltcp/reports-u.shtmlSmith1
• Also go to http//www.hcbs.org/index.htm for
  information about a wide variety of topics