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Money Follows the Person: A 2015 State Survey of Transitions, Services, and Costs

There are currently 44 states, including the District of Columbia, participating in the Money Follows the Person (MFP) demonstration.  MFP provides states with enhanced federal Medicaid matching funds for 12 months for each Medicaid beneficiary who transitions from an institution to the community.  The current funding allocation for MFP is set to expire in 2016, leaving some questions about whether states will be able to continue to offer all of the services that MFP funds if the program is not re-authorized.  Nevertheless, states will continue to rely on the lessons learned from the MFP demonstration to help shape the future of long-term services and supports (LTSS) as well as broader health system reforms.  This report is based on a survey of MFP states conducted by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured in the spring and summer of 2015.

Key Findings

As of mid-2015, 52,140 Medicaid beneficiaries had enrolled in MFP and another 10,265 transitions were in progress.  The majority of MFP participants are individuals with physical disabilities (38%) and seniors (37%), while one in five MFP participants is an individual with an intellectual/developmental disability (I/DD).  On average, MFP participants were 57 years old, took four months to transition, and most often moved to an apartment.  States reported an eight percent average reinstitutionalization rate across all target populations.

States are steadily increasing transitions among individuals with mental illness, realizing a 77 percent increase in cumulative transitions for this population in less than two years. Just under half (19) of MFP states reported trying to increase the number of transitions for people with mental illness, relying on a number of strategies to do so.  These include outreach to nursing facilities; adding new demonstration services such as substance abuse treatment, peer support, and enhanced adult foster care; working with managed care organizations to coordinate services and prioritize transitions for this population; and leveraging financial incentives by using enhanced funding from MFP and the Balancing Incentive Program (BIP).

States identified service coordination/case management as the most critical service for MFP beneficiaries both pre- and post-transition.  Just over half of the states reported making changes to MFP benefits over the past year, with 16 states expanding services and seven states eliminating services or reporting a neutral change.  Forty states are offering self-directed services, but only an estimated 16 percent of MFP participants chose this option in 2015, with self-direction participation rates varying widely across the states.

The average monthly per capita cost of serving an MFP participant in the community was $3,609 in 2015, down from an average of $3,934 in 2013 and $4,432 in 2012.  Average monthly MFP costs were highest for people with I/DD ($7,899) followed by individuals with mental illness ($3,476), individuals with physical disabilities ($3,221), and seniors ($2,660).  No state reported that institutional care was less expensive than HCBS for MFP participants.

States are focused on helping MFP beneficiaries find housing, administering MFP within the context of managed LTSS programs, and leveraging MFP funds and experience to strengthen other rebalancing efforts.  Twenty-five states reported finding affordable, accessible housing to be the number one barrier to transitions.  Housing has remained a consistent challenge since the inception of MFP, and 31 states use MFP funds to employ one or more housing coordinators.  States also are focused on coordinating MFP with managed LTSS programs, with 23 states operating or planning to operate such a program and five states reporting challenges coordinating a managed LTSS program with MFP.  States also credit MFP with creating or expanding nursing facility diversion or transition programs by increasing the availability of HCBS and the number of state staff in such programs.  Eighteen states participate in both MFP and BIP and report using MFP funds to build on the LTSS delivery system infrastructure changes required by BIP.  States also are using lessons learned from MFP in designing the service package included in the Community First Choice (CFC) attendant care benefit.

While MFP has helped states make progress in LTSS rebalancing, the impending expiration of the program in FY 2016 creates some questions about the sustainability of transition activities going forward.  Loss of enhanced federal funds for pre- and post-transition services and the loss of administrative funding for staffing, such as outreach and housing coordinators, were the most frequently cited concerns about MFP’s expiration.  A number of states reported plans to add key demonstration services, such as transition coordination, to their Section 1915(c) waivers and the CFC option to continue transitions when MFP expires.  States also noted that some demonstration services will terminate when MFP expires.  States were hopeful that they could sustain MFP staff positions through their legislative processes; however, all future funding commitments are subject to administration and budgetary priorities once MFP funding ends.

Conclusion

MFP states have collectively transitioned over 52,000 Medicaid beneficiaries from institutions to a community home over the course of the last eight years with the help of enhanced federal funding under MFP. MFP has given states a foundation upon which to improve existing transition programs, launch new strategies, and continue to rebalance LTSS in favor of community-based services. Despite steady growth in the number of transitions, states also face transition challenges related to lack of safe, affordable, and accessible housing, low participation rates in self-directed service options, and sustainability of the demonstration as federal funding expires. MFP funding runs through September 2016, and although states can continue to transition individuals through 2018 (with CMS approval) and have through 2020 to use their remaining funding, states may be pressed to continue funding at current service levels and with existing staffing once MFP expires. MFP Project Directors reported working to sustain successful elements of the demonstration, such as strong transition coordination and continued inter-agency coordination, to continue to support transitions beyond MFP and to strengthen ongoing LTSS rebalancing efforts.

Introduction

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Filling the need for trusted information on national health issues, the Kaiser Family Foundation is a nonprofit organization based in Menlo Park, California.