Early Implementation of “Money Follows the Person” Initiative More Challenging than Expected According to New Report from Mathematica

Contact: Cheryl Pedersen, (609) 275-2258

WASHINGTON, D.C. (November 18, 2009)—The Money Follows the Person (MFP) program, the largest Medicaid demonstration to date, aims to help long-term residents of institutions relocate back to their home and community-based settings and make broader changes to state long-term care systems. The national demonstration program provides up to $1.7 billion in federal grant funds to 29 states and the District of Columbia to help them offer elderly people and individuals with disabilities more options for choosing where they want to live and receive support services.

Fifteen months after the first set of 30 grantees began to implement the program, however, administration and reporting barriers, worsening state budgets, and lack of affordable and accessible housing have hindered early implementation efforts, as detailed in a new report from Mathematica Policy Research.

The 30 grantees planned to transition about 34,000 individuals from institutional settings to home and community-based care over the course of the demonstration. Between the start of the program in October 2007 and the end of calendar year 2008, only 1,482 long-term care residents had returned to their communities, compared to nearly 4,000 that states planned to transition by that point based on projections in their approved operational protocols as of June 2008. The number of people relocated back to their home or another community residence through MFP programs in 2009 has increased substantially, but still falls short of this year’s annual goal.

Many participating states have found that establishing MFP programs and reaching their transition targets have been harder to achieve than expected due to several critical barriers:

• The lack of affordable and accessible housing options has been a major obstacle to faster progress for about half of MFP grantee states.
  
• About a third of states also report shortages of home- and community-based services (HCBS), providers, and direct care workers, making it difficult to ensure individuals will receive safe and adequate care in the community.
  
• Some state reports suggest that certain MFP statutory requirements, such as the minimum six-month institutional residency requirement and need for participants to reside in certain types of qualified residences in the community, can hinder transition programs.
  
• The economic downturn has strained state budgets, leading to cuts in services to close budget shortfalls. Nearly two thirds of all states have been affected by the decline of economic conditions; many states have cut agency budgets or staff, limiting Medicaid management resources as well as HCBS capacity. This combination has reduced the number of people who can be transitioned through MFP.

"State budget cuts and a shortage of home and community-based service providers are making it hard for states to transition as many people as they wanted,” said Noelle Denny-Brown, co-author of the report and a research analyst at Mathematica^®.

“Any new program takes time to get started, and MFP has presented states with unique implementation challenges,” said senior researcher and co-author Debra Lipson. “But as states overcome initial start-up problems, transition numbers are starting to rise,” she added.

“Early Implementation Experiences of State MFP Programs,” Reports from the Field No. 3, by Noelle Denny-Brown and Debra J. Lipson, is available at www.mathematica-mpr.com/publications/redirect_pubsdb.asp?strSite=pdfs/Health/mfpfieldrpt3.pdf. Subsequent reports in this series will assess the balance of spending between HCBS and institutional services before the MFP program to establish a baseline, compare the level of need and functional status of participants who transition to the community in each state with those who remain in institutions, and examine how states are using enhanced Medicaid matching funds generated by these transitions to improve their long-term care systems. The research was funded by the Centers for Medicare & Medicaid Services.

Mathematica Policy Research, a nonpartisan research firm, provides a full range of research and data collection services, including program evaluation and policy research, survey design and data collection, research assessment and interpretation, and  program performance/data management, to improve public well-being. Its clients include federal and state governments, foundations, and private-sector and international organizations. The employee-owned company, with offices in Princeton, N.J., Ann Arbor, Mich., Cambridge, Mass., Chicago, Ill., Oakland, Calif., and Washington, D.C., has conducted some of the most important studies of health care, education, family support, employment, nutrition, and early childhood policies and programs.