Prepared for PSCI 12: Public Policy and Administration A community-Based Learning Course at Drew University In Partnership with the United Way of Northern NJ, Morris County Research Conducted by: Adrianna Hardaway, Anargiros Mitropoulos, Brittney Coleman, Lauren Longfield, Noran Elzarka May 2012 Research Question Our research question comes to us from the United Way of Northern NJ, Morris County Research Question: What will the proposed state changes to Medicaid (through the 1115 waiver) have on Medicaid recipients? In particular, what impact is the transition to Medicaid managed care/HMO’s having on our vulnerable population, i.e. seniors in nursing homes and mental health consumers. Introduction In September 2011, the State of New Jersey applied for the 1115 waiver which would allow the state to attempt to find a more innovative and sustainable way to provide health services to Medicaid recipients and rein in costs. The State of New Jersey sought to improve the quality of health care and its deliverance by moving Medicaid recipients into HMO/ managed care plans. Historical Background In 1996, President Bill Clinton signed the Personal Responsibility Work Opportunity Reconciliation Act (PRWORA) which represents the most recent rearrangement of poverty-directed welfare programs (Johnston, 124). PRWORA was heralded by some as an important piece of legislation because it was the first instance of devolution of power from the federal government to the state government PRWORA’s legacy lies in the fact that the federal government essentially used this piece of legislation to create a level of independence from reliance on welfare and left it to the states to achieve this objective (Johnston, 140). PRWORA’s Legacy PRWORA’s legacy can be seen in the objectives of New Jersey’s 1115 waiver; the 1115 waiver represents a shift from institutional and emergency services to preventative and community based care. This shift represents an attempt by the state to focus the care of Medicaid recipients from institutionally based to community based; this shift can be considered an attempt by the state to cut costs. Medicaid Section 1115 Waiver Current Policy Landscape Medicaid is the largest source of federal revenue for states States on average pay 43% of Medicaid costs Primary Medicaid Community Care Waiver does not pay for behavioral health for adults Current Policy Landscape Cont. Children and parents make up 75% of Medicaid enrollees Account for less than a third of the spending Elderly and disabled make up 25% Account for two-thirds of the spending (Key Questions) Organizational Landscape New Jersey Department of Human Services Medicaid Director: Valerie Harr Balancing resources Nursing Home/institution to Community based The Arc of New Jersey Director of Public Policy and Family Advocacy: Denbigh Shelton Intellectual and developmental diseases Advocate for disabilities, major part of 1115 waiver Diagnosis of Policy Currently, New Jersey serves more nursing homes/institutions than every other state but Texas (Shelton). Behavioral health for adults under 1115 Waiver, July 2013. 2009, Medicaid spending per capita: -Families (parents & children): $3,442 -Elderly/disabled: $17,763 (Key Questions) Policy Alternatives Shift to long-term care Community based living versus nursing home/institutional Administrative flexibility Child Care From Dept. of Developmental Disabilities to Dept of Children and Families Pros and Cons $300 million will be saved under the 1115 comprehensive waiver Behavioral health for adults under 1115 Waiver will be covered Community Care Waiver 1915c Supports Waiver Promote competition between HMOs for efficient services Downside can also be lost of services 1115 Waiver: Proposed move to Managed Care Managed care systems rely on HMOs to act as an intermediary between the physician and the patient by setting up the patient with a primary care provider and arranging for the lowest out of pocket cost possible for the patient (Povar, et. al, 2004). 4 main HMO groups Amerigroup, Horizon, Health First, and University Health Plan (Department of Health, 2012) Move to HMO is to make the companies more competitive and more accountable for the care of their patients (Department of Health, 2012). Changes that may occur Change of provider Not covered if patient travels outside of the network of HMO providers Limited reliance on adult day care centers Reassessment of needs and services Role of home health aides cut Policies in place to alleviate burden of change Any willing provider Opportunity to appeal HMO decision after assessment of needs Capitation Reality of Policy implementation Physicians not willing to join managed care Absence of service for 60 days can be dire Capitation lessens quality of care Enrollment in HMOs increased from 24 percent of the Medicaid population in 1996 to 40 percent in 2002 (Thompson et. al, p. 1000, 2007).The increase in use of commercial and Medicaid HMOs did not correspond to either a decrease in medical costs or an increase in access to care. The Elderly and The 1115 Waiver As part of the 1115 Medicaid waiver, the waiver gives a preference to community and home based health care options are given preference over institutional forms of care. However, if they did not qualify or are unable to, nursing homes are available for them This preferred move from nursing homes to community- based care is because of the costs of nursing homes The comprehensive waiver would provide a home-health aid, a nurse, or different workers for the senior citizen to ensure they are given the proper treatment and assistance in their own communities. [Keyser & Dept. Human Services] Organizational Landscape Home health services are provided by licensed home health agencies (HHAs). HHAs provide skilled nursing intervention, home health aide services, physical therapy, speech therapy, occupational therapy, and medical social services and can be hospital based or freestanding. About 25 percent of HHA patients are Medicaid beneficiaries, 60 to 70 percent are Medicare beneficiaries, and 5 to 10 percent are self-paying. Independent Elder Advocate Nursing Homes vs. Home Care Nursing Homes: Pros: Full attention provided for individuals Trained staff that are comfortable and used to the nursing home atmosphere Cons: 24 Not always the highest quality of staff Extremely expensive Medicaid does not always cover all costs Sometimes there are cases of neglect or physical abuse Home Care: Pros and Cons Pros: The elderly will be more comfortable in their homes Will not feel confined or uncomfortable Will be able to be around their family and friends more often Not as costly Preferred by Medicaid, most likely to be covered Cons: The staff that care for the individuals in their homes may be receiving wage cuts, thus less hours and less care May not have the assistance they need at all times which can result in emergencies and hospitalization Staff will not be familiar with the atmosphere in which they would be now working in Consequences of the Waiver? Many senior citizens may not receive adequate help because many workers and nurses would not be given too many hours of work, thus resulting in less care for the senior citizen. Trade-off between work hours and federal money which would result in less care and focus on the senior citizens “Who is going to pay?” in regards to care and the covering of medical costs will be constantly asked. In regards to managed care and health care programs (such as AmeriGroup or United Healthcare) there is much confusion within the administration of these managed care programs. Consequences Cont. Changes in provider rates. Many of the rates may decrease because they are trying to help more people but only have X amount of money. This supply and demand would affect the elderly in the long run because of the lack of money and cuts in wages and rates, there would be less employees, thus resulting in less assistance. When an elderly individual is not receiving the aid they need immediately because of shortage of staff, instability could occur and senior citizens may have to be admitted into hospitals because of health complications The waiver is intense but is meant to be gradual and help in the long run. If one wanted to prepare for the changes and understand what would happen, they would have much trouble in figuring out the required information, because unfortunately, not all workers are aware of the changes/proposed changes. Communication is crucial for individuals to understand what is going to change or what they should expect These trade offs are very common and usually unavoidable, it is important for individuals receiving these benefits to understand what is expected to happen so they can plan ahead. Without understanding what they are eligible for, the home care policies, changes in eligibility requirements, and the proposed changes, confusion will be an end result Organizational Landscape The Mental Health Association in NJ, Coalition of Mental Health Consumer Organizations of New Jersey, and NJ psychiatric rehabilitation association were the organizations that came together to try and help improve the education for mental health consumers referring to the Medicaid drug coverage. The Division of Mental Assistance and Health the leading advocacy organization addressing the full spectrum of mental and substance use conditions and their effects nationwide, works to inform, advocate and enable access to quality behavioral health services for all Americans. (www.nmha.org) Affects of the 1115 waiver According to Corvino, the new 1115 waiver will affect people with disabilities by state benefit from additional federal money. He said the improvements needed as the waiver suggests, “there is a war between what are the individual needs vs. what happens when people are served in groups” Results of the 1115 waiver An enhanced, more flexible community based service menu Customized care coordination New methods of assessing individuals needs and using those assessments to allocate resources A new quality assurance and oversight system Transition of more individuals from campus based institutional settings to community settings with enhanced support Creation of Medicaid-funded safety net services A funding platform that supports flexible, community based supports and services (NYSARC) Problem Need to be aware of the benefits available Educated on the particular topic Ability to understand strategies to cope with potential problems Family members are forced to quit jobs to take care of loved ones High costs and people are forced to be put on waitlists Agencies/Groups/Organizations Mental Health American is the leading nonprofit organization in the country and its purpose is to help all people live mentally healthier lives (www.nmha.org) Administration on Developmental Disabilities This program exists in every state and United States territory and it provides funding, monitoring, and policy guidance to its programs Nationwide (www.acf.hhs.gov) National Association of State Directors of Developmental Disabilities Services The goal of this association is to promote and aid state agencies in developing effective service delivery systems that push for high quality supports to people with developmental disabilities (www.nasdds.org) Proliferation of Medicaid Waivers In an era of devolution, the federal government has advocated the use of Medicaid waivers because they could be used to control program efficiency and control expenditures; 1115 waivers are designed to allow states to experiment with Medicaid formation and implementation. The State of New York and Oklahoma both implemented Medicaid waivers and can be seen as a foundation for the New Jersey waiver. New York v. Oklahoma Waivers The New York waiver seeks to restructure its long-term care system by shifting the reliance on institutional forms of care to at home services. Target groups includes the elderly and the disabled; preventative care is advocated to keep this group healthy and thus decrease the chance of them getting sick. The Oklahoma waiver was implemented to address the growing imbalance between need and availability of services for Medicaid recipients. Target groups include young children, preventative care is advocated to keep these kid healthy so they don’t get sick. What Can New Jersey Learn From This? The New York and Oklahoma Medicaid waivers can show New Jersey the importance of identifying a target population who will benefit from Medicaid reform. New Jersey can also learn that HMOs/ managed care plans are the most cost-effective way of implementing Medicaid reform. Caregivers Under The 1115 Waiver The 1115 waiver and Caregivers The 1115 waiver is intended to maximize the role of the caregiver in the community. Given the fact that 65.7 million Americans (29% of adults) are caregivers, maximizing their role would be beneficial in promoting preventative care (National Alliance of Caregiving). Caregivers however have had some trouble adjusting to the recent Medicaid reforms. Caregivers Grievances Information about Medicaid reforms have not been distributed to the public, and when information is given to Medicaid recipients and caregivers, it is done so in language that is difficult to understand. Caregivers are particularly frustrated about the shift to managed care plans; the HMOs offer very little coverage and sub-par quality care. Caregivers are afraid that once the managed care plans go in affect, they will lose the personal touch they once had with their Medicaid case worker. Caregivers Grievances (continued) An additional burden will be placed on the caregiver as a result of the new Medicaid changes. “The typical caregiver will receive less help under this new Medicaid system because institutions such as nursing homes and adult daycares will no longer be available for the sick.” –Jim Hackett By maximizing the role of the caregiver, the caregiver may find that additional stress is placed upon them; caregivers may too find that their ability to work and provide for themselves may change as they become the primary caregiver for their loved ones. How do we solve this problem? One way to alleviate this stress is to keep funding home health agencies which allow caregivers some time off from caring for their loved ones. Make the transition to managed care plans smoother by giving out information to Medicaid recipients and caregivers. Provide caregivers with a salary to compensate them for the time they put in, caring for their loved ones. Recommendations Watchdog programs to monitor HMOs and make sure high quality services are being implemented. Effectively monitor funds and work at communication between advocacy groups and the state. Physicians should be held more accountable by allowing patients to file malpractice suits. Also HMOs should focus on course of care instead of cost of care when it comes to need assessment. This way patients care that they are accustomed to could be continued. Home health aides should be able to provide for their patients without having to subscribe to the HMO. Recommendations New Jersey should be responsible for informing & educating senior citizens about the changes proposed in the waiver. The State needs to provide better access of information for people with developmental disabilities. Keep the caseworker-caregiver relationship or make the shift to managed care an easier transition for caregivers. Conclusion The state of New Jersey has found that its current health care system was too costly so it chose to deviate from its national standards and adopted the 1115 waiver. The 1115 waiver represents a major shift in how health care is administered throughout the state, particularly amongst vulnerable populations like the elderly and those with disabilities. The 1115 waiver seeks to reduce costs while providing quality care – which will be fully seen in 2014. The shift to managed care plans has Medicaid recipients and caregivers infuriated and confused because this new system is difficult to figure out and many recipients are losing coverage. Conclusions Cont. The 1115 waiver will have a huge impact on the elderly and the disabled because of long-term care changes and preference to community-based living. The 1115 waiver comes with its own set of advantages and disadvantages; however it must be realized that the 1115 waiver is a policy alternative to the previous form of health care that was in place in New Jersey. Although caregivers, Medicaid recipients and even Congressmen have aired their grievances about the waiver, the 1115 waiver is an attempt by the state to provide quality health services to a wider range of Medicaid recipients at a fraction of the costs. Special Thanks A special thanks to our United Way liaison, Carol DeGraw, to professor McGuinn, and to all the people we interviewed that provided us with great research and a newfound understanding of Medicaid in New Jersey.