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Tennessee’s Money Follows the Person Demonstration: Supporting Rebalancing in a Managed Long-Term Services and Supports Model

The Money Follows the Person (MFP) demonstration is a Medicaid initiative designed to reduce reliance on institutional services and expand community-based long-term services and supports options. MFP, first authorized in the Deficit Reduction Act of 2005, was extended until 2016 under the Affordable Care Act. To be eligible for MFP, Medicaid beneficiaries must reside in an institution (e.g., nursing facility, intermediate care facility for individuals with intellectual disabilities) for at least 90 days prior to transitioning to a community residence (e.g., house, apartment, small group home). Under MFP, a participant receives home and community-based services for which the state receives enhanced federal matching funds during a beneficiary’s participation year. Currently, 42 states, including DC, have operational MFP programs, two states have received funding and are not yet operational, and one state’s demonstration is inactive.

In 2011, Tennessee was awarded a federal Money Follows the Person (MFP) grant, joining the now 45 states with MFP demonstrations.  MFP provides one-time and ongoing home and community-based and transition services that help Medicaid beneficiaries move from institutions to the community, with enhanced federal funding during each beneficiary’s first year home.  Funding for Tennessee’s MFP program totals $119 million and runs through September 2016.

Prior to receiving an MFP grant, Tennessee was reforming its Medicaid long-term services and supports (LTSS) system to rebalance enrollment and expenditures away from institutional care in favor of home and community-based services (HCBS).  For seniors and adults with physical disabilities, these efforts have been implemented within the context of Tennessee’s pre-existing capitated Medicaid managed care delivery system, TennCare.  TennCare was established in 1994 under Section 1115 demonstration authority and provides Medicaid medical and behavioral health services through two managed care organizations (MCOs) in each of the state’s three regions.  Enrollment in TennCare is mandatory and includes the state’s entire Medicaid-eligible population (1.2 million people).

In March 2010, the TennCare demonstration was amended to include CHOICES, a mandatory managed long-term services and supports (MLTSS) program for seniors and adults with physical disabilities administered through the MCOs.  Before the implementation of CHOICES, Tennessee’s LTSS system was fragmented with limited options for beneficiaries and heavily geared toward institutional services for both enrollment and expenditures.  The state’s primary objectives in establishing the CHOICES program included:

  • Decreasing fragmentation and improving care quality and coordination;
  • Expanding access to HCBS so that more beneficiaries can receive care in their preferred setting; and
  • Rebalancing LTSS spending by providing cost-effective HCBS and serving more beneficiaries using existing Medicaid LTSS funds.

As part of its rebalancing efforts, Tennessee focused primarily on delaying or preventing the need for institutional placements, while also facilitating beneficiaries’ transitions from nursing facilities (NFs) to community-based settings.  In its first year of operation, CHOICES transitioned over 500 beneficiaries from institutions to the community.

In 2011, one year after the implementation of CHOICES, Tennessee received its federal MFP grant to support the transition of Medicaid beneficiaries living in institutions to the community.  Tennessee’s MFP program was integrated into the state’s existing LTSS programs, including CHOICES.  Working in conjunction with CHOICES, over 600 of the seniors and adults with physical disabilities who transitioned enrolled in Tennessee’s MFP program.  Those 600 individuals represent a subset of a much larger number of people who transitioned through the CHOICES program.  The MFP program utilizes a financial incentive structure that allows MCOs to earn additional payments when a beneficiary first enrolls in MFP and when she completes the MFP participation year, as well as supplemental payments when other MFP program benchmarks are met.

This case study of Tennessee’s MFP program describes key features and highlights recent experiences focused on the state’s rebalancing efforts for seniors and adults with physical disabilities in a capitated Medicaid MLTSS delivery system.  (Although Tennessee also serves people with intellectual disabilities (ID) through its MFP program, that population does not participate in the MLTSS program and instead receives HCBS on a fee-for-service basis through a Section 1915(c) waiver.)  The case study is based on interviews of Tennessee Division of LTSS, Bureau of TennCare staff, supplemented with background information obtained from the state website and Kaiser Family Foundation’s Commission on Medicaid and the Uninsured MFP surveys conducted between 2011 and 2013.1  Data presented in this case study report are reflective of the program through June 2013; more recent data are available through the Bureau of TennCare.

Text Box 1: Highlights of Tennessee’s MFP Program
  • Tennessee integrated its MFP program into its pre-existing mandatory capitated managed LTSS program (CHOICES) for seniors and people with physical disabilities.
  • Over 600 beneficiaries transitioned from institutions to the community through Tennessee’s MFP program from October 2011 through June 2013, with an additional 77 transitions in progress as of June 2013.
  • The state provides financial incentives to MCOs that meet specific benchmarks, e.g., increasing the amount and percentage of Medicaid spending for HCBS relative to institutional spending.
  • MCO care coordinators provide outreach and transition planning and the MFP housing specialist assists beneficiaries with locating affordable community-based housing. The Memphis Center for Independent Living trains peer volunteers who assist MFP beneficiaries with their transitions.
  • MCOs must maintain an electronic visit verification system, provide provider back-up assistance, and staff a 24-7 call center to prevent a lapse in services.
  • MFP participants, and other CHOICES beneficiaries, can self-direct their services by recruiting, hiring, and supervising direct service workers.
  • The MFP Housing Steering Committee works to expand access to community-based housing; a share of MFP rebalancing funds, along with funds from the state housing finance agency, will be used for a pilot project to provide bridge rental subsidies for MFP participants.
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