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Money Follows the Person: A 2013 State Survey of Transitions, Services, and Costs

As of August 2013, over 35,400 institutionalized Medicaid beneficiaries had transitioned to the community through the federal MFP demonstration.  Currently, 45 states (including DC) participate in this demonstration, which has helped provide an alternative to institutional care for many seniors and people with disabilities and/or chronic conditions who need of LTSS to live independently.  Through a combination of pre- and post-transition services as well as access to housing supports, transition coordinators, durable medical equipment, and transportation services, MFP participants have been able to leave institutions and successfully return to their homes and communities.  Increased independence, regained freedom, and community integration were all important factors repeatedly cited by MFP participants.  These quality of life improvements cannot easily be measured in dollars; however, all states reported that the cost of serving Medicaid MFP participants who reside in the community is lower than serving Medicaid beneficiaries in institutions.

Despite progress moving Medicaid beneficiaries back home, MFP states are facing ongoing challenges related to lack of safe, affordable, and accessible housing and difficulty coordinating multiple LTSS initiatives alongside MFP.  Many states are experiencing a period of transformation in their LTSS delivery systems as they take on new LTSS options and MLTSS at relatively the same time.  The current challenge is continued collaboration among the various initiatives and determining how MFP fits into and can be a part of these new programs.  Specifically, states reported working with CMS to better understand the challenges and issues associated with enrolling MFP participants in the new dual eligible demonstrations.  Additional challenges reported included reaching the targeted number of MFP participants and obtaining adequate staffing and provider recruitment to ensure that those who want to transition can do so in a timely manner, especially in rural areas.

Looking ahead, 2014 will be a transformative year for the Medicaid program, as millions of individuals become newly eligible for Medicaid, and states adjust to the new scope and volume of eligibility and enrollment changes related to the implementation of the ACA.  Payment and delivery system reforms as well as ongoing Medicaid cost containment will create opportunities and increased pressures on state Medicaid programs. Managing multiple competing demands will be a challenge for MFP program staff, especially those simultaneously involved in implementing BIP and other new ACA LTSS options.   The lessons learned from MFP will help states prioritize resources and build upon the existing rebalancing efforts and innovations started under MFP.  For example, states are leveraging MFP funds to support start-up costs required for BIP and building on outreach strategies established under MFP.  States will draw from lessons learned under MFP to improve the delivery and financing of Medicaid LTSS.  States repeatedly cited the importance of appropriate housing options in ensuring successful transitions.  Meanwhile, increased outreach by ADRCs and other local entities, training and supports for HCBS providers, flexible transition support benefits, and enhanced federal funding all contribute to the success of the MFP demonstration and in turn, helping thousands of Medicaid beneficiaries return home.

This Kaiser Commission on Medicaid and the Uninsured brief was prepared by Molly O’Malley Watts with Watts Health Policy Consulting and Erica L. Reaves and MaryBeth Musumeci from the Kaiser Family Foundation.  Special thanks to Rebecca Sheplock for her research assistance.

Key Findings