One of the major challenges facing the health care industry as the first wave of “baby boomers” reaches 65 years of age is the increased demand for long term care services in a political and economic environment which can be politely seen as difficult. Irrespective of your “political viewpoint” there are subsets of facts that are non-disputable. Seventy percent of people age 65 today will need some long-term care in their lifetime. Within 20 years, persons age 65 and older will comprise 20 percent of the U.S. population (a level which Florida will reach 10 years earlier). Of the ten million Americans who need assistance with daily activities, 1.7 million live in the country’s 16,000 nursing homes and approximately 520,000 live in assisted living facilities. Fourteen percent of Americans 85 and older live in nursing homes. A total of $207 billion was spent on long term care in the U.S. in 2005. Medicaid is the primary payer for long term care, accounting for just under 50 percent of total long term care spending.Florida will provide a “preview” of this phenomenon. The percent of individuals over 65 is greater than the national average. Medicaid currently is roughly one in three dollars in Florida’s annual budget with nursing home spending greater than 2 billion dollars. Although the Agency for Health Care Administration (AHCA) and the Department of Elder Affairs (DOEA) have worked on the development of community alternatives to long term custodial nursing home care (Medicare funds post-acute nursing home services, Medicaid is the primary payer of long term custodial care), long term care services are “out of balance” with a significantly larger proportion of government funding supporting institutional care.
Given these realities: an aging population, a political climate which looks toward the reduction of government spending, and a care system which is biased toward institutional care during the 2011 session of the Legislature, the Florida Legislature passed and the Governor signed legislation that will radically alter Florida’s publically supported system of long term care as part of the major reform of the Medicaid program.
Managed long term care is the primary feature of this reform. The Agency for Health Care Administration has submitted to the federal Centers for Medicare and Medicaid Services (CMS) a 1915 (b) and a 1915 (c) waiver which will significantly change how long term care is funded in this State. With limited exception all long term care services will be provided by and/or through managed care companies. The waiver is currently under review at CMS.
A number of features of the reform represent major departures from current policy. The State of Florida has been divided into eleven health care districts (Miami Dade with Monroe, Broward is a single county district and Palm Beach is included in a district with several counties to the north and west). A managed care plan must develop a network which meets the needs of all the counties in the health care district. Managed care organizations (MCO) must if licensed risk bearing entities (HMOs), Provider Service Networks (PSNs), Accountable Care Organizations (ACOs) and the legislation authorize a role for Medicare Special Needs Plans to provide Medicaid long term care for dual eligibles (individuals with both Medicaid and Medicare). Managed care organizations will be selected through a “competitive bidding process” and the number of managed care entities selected will be limited. In Miami Dade County a maximum of 10 will be selected and in Broward the limited on managed care plans will be 5. All non-developmentally delayed individuals seeking long term care services support by Medicaid will be required to enroll (or be assigned) to a managed care program. This includes both individuals currently living in nursing homes and the dually eligible.
Two other features of long term managed care are important. As with all managed care, MCOs will be provided a fixed risk adjusted per member per month, the more successful the plans are in moving individuals from institutional to community care, the better the balance sheet. In addition, incentives have been identified to move Medicaid support from nursing home to community long term care.
The Agency for Health Care Administration will release its Invitation to Negotiate for managed Medicaid long term care at the beginning of July 2012. This is the first step in implementing a long range plan to change the way long term services and supports are organized in Florida.
