Money Follows the Person: Expanding Options for Long-Term Care

Many Americans who need long-term care services and supports would prefer to receive them in home- and community-based settings rather than in institutions. Often, decisions relating to the provision of long-term care services are dictated by what is reimbursable under federal and state Medicaid policy rather than by what an individual needs.

The Money Follows the Person (MFP) Demonstration is the latest federal initiative to help states reduce their reliance on institutional care for people needing long-term care, and expand options for elderly people and individuals with disabilities to receive care in the community. With grants of $1.44 billion over five years, it is the largest demonstration program of its kind in the history of Medicaid. States use the funds to develop systems and services to help people living in nursing facilities and intermediate care facilities for the mentally retarded who want to move back to home or community-based settings. To do so, states use the money that would have been spent on an individual's institutional care to cover costs associated with transitioning back to the community over a one-year period. They also are increasing efforts to shift Medicaid long-term care spending permanently toward community-based care and services.

Mathematica's comprehensive five-year evaluation for the Centers for Medicare & Medicaid Services (CMS) is addressing how state long-term care systems change to support the transition of people from institutions to the community, whether the changes were successful and sustainable, and to what extent MFP helps change state long-term care spending. The evaluation is also analyzing the effects of MFP on Medicaid beneficiaries' health and quality of life, as well as identifying characteristics of individuals and state programs strongly associated with success.

As part of the project, Mathematica is also providing technical assistance to CMS and to state grantees in developing detailed operational plans for their demonstration programs, creating a web-based semi-annual reporting system in collaboration with Thomson Healthcare, and monitoring grantee progress toward benchmarks. A report to Congress will be submitted at the end of the evaluation.

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