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Money Follows the Person Evaluation Issues First Report from the Field
Contact: Cheryl Pedersen, (609) 275-2258
WASHINGTON, D.C. (February 26, 2009)—The first in a series of short reports describing an ambitious program aimed at helping Medicaid enrollees transition from long-term care institutions to the community has been released by Mathematica Policy Research, Inc. The report on the Money Follows the Person (MFP) demonstration assesses the scope of the program, profiling the Medicaid population in long-term institutional care eligible for MFP, their rates of transition to the community before it began, and the change in the transition rates that could be achieved if states reach their program goals.
The MFP demonstration, authorized by Congress in 2005 and managed by the Centers for Medicare & Medicaid Services (CMS), is the latest federal initiative to help states reduce their reliance on institutional care for people needing long-term care. It expands options for elderly people and individuals with disabilities to receive care in the community. Authorized to provide up to $1.7 billion in support of state efforts to rebalance their long-term care systems, it is the largest demonstration program of its kind in the history of Medicaid. States use awarded funds to develop systems and services to help people who want to move back to home- or community-based settings. In 2004, the year before the MFP demonstration was authorized, the states participating in the MFP demonstration spent on average $4,663 per month for each person in long-term institutional care, or about $50 billion for the MFP-eligible population each year in the 30 grantee states and the District of Columbia.
Using data for calendar year 2004, the study’s main findings include:
- In grantee states, only about 2 percent of Medicaid enrollees had been in institutional care for six months or more, but these enrollees represented almost 26 percent of total Medicaid expenditures.
- More than three of four Medicaid enrollees in long-term institutional care were age 65 or older and living in nursing homes.
- About one in 10 were in care facilities for people with mental retardation or a developmental disability.
- State MFP programs seek to transition about 36,000 individuals over the course of the demonstration, or less than 1 percent of the approximately one million people who in 2004 appeared to be eligible for the program.
- Between 2 and 6 percent of Medicaid enrollees institutionalized for six months or more moved out of institutions during 2004.
- If the states participating in MFP are successful in meeting their transition goals over the course of the demonstration, they have the potential to raise the transition rate to the community by 15 to 40 percent annually.
MFP grantees determine which populations to target, how they will inform eligible people about the program, and the types and amounts of home- and community-based services and other benefits that will be available to participants. They also set goals for the number of enrollees they expect to transition to the community each year. In June 2008, when the 31 grantees received approval from CMS to implement their plans, MFP expected to provide transition services to about 36,000 people who have been institutionalized for six months or more in nursing homes, psychiatric facilities, or intermediate care facilities for people with mental retardation.
“Although the total number of people expected to transition through MFP remains small relative to the one million or so Medicaid beneficiaries who meet the six-month stay requirement in grantee states, many thousands would not have the opportunity to move back to the community without the program,” said senior researcher Debra Lipson, a co-author of the new publication.
In addition, MFP has the potential to increase the rate of transitions significantly. “Our analysis shows that if grantees successfully target people who would otherwise remain institutionalized, participating state Medicaid programs have the potential to raise the rate of transition to the community among long-term residents by 15 to 40 percent annually over historical rates,” explained researcher Audra Wenzlow, another co-author.
Mathematica's comprehensive five-year evaluation of the MFP demonstration for CMS is addressing how state long-term care systems change to support the transition of people from institutions to the community, whether the changes are successful and sustainable, and to what extent MFP helps change state spending on long-term care services. The evaluation is also analyzing the effects of MFP on participant health and quality of life, as well as identifying characteristics of individuals and state programs associated with success.
Subsequent reports in this new series will examine how grantees have designed their programs, 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.
“Transitioning Medicaid Enrollees from Institutions to the Community: Number of People Eligible and Number of Transitions Targeted Under MFP,” by Wenzlow and Lipson, is available at http://www.mathematica-mpr.com/publications/pdfs/Health/MFPfieldrpt1.pdf.
Mathematica, a nonpartisan research firm, conducts high-quality, objective policy research and surveys 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., Washington, D.C., Cambridge, Mass., Ann Arbor, Mich., and Oakland, Calif., has conducted some of the most important studies of health care, education, welfare, employment, nutrition, and early childhood policies and programs in the United States.