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

The Money Follows the Person (MFP) demonstration, authorized by Congress as part of the 2005 Deficit Reduction Act, provides states with enhanced federal matching funds for 12 months for each Medicaid beneficiary who transitions from an institutional setting to a community-based setting.  Qualified community settings include a house, apartment, or group home with less than four non-related residents.  The enhanced federal funding is designed to encourage state efforts to reduce reliance on institutional care for individuals needing long-term services and supports (LTSS) and expand options for individuals with disabilities and seniors who wish to receive services in the community.  The Centers for Medicare and Medicaid Services (CMS) initially awarded MFP grants to 30 states.  Thirteen additional states were awarded funding in February 2011, and another three states received planning grants in March 2012.¹  With Florida recently withdrawing, there are currently 45 states, including the District of Columbia, participating in the demonstration.

Under the Affordable Care Act (ACA), MFP was extended by five years through September 2016, and an additional $2.25 billion in federal funds ($450 million for each federal fiscal year from 2012-2016) was allocated for the demonstration.  Funding is available to states for the fiscal year they receive the award and four subsequent fiscal years.  Any unused grant funds awarded in 2016 can be used until 2020.  The ACA also modified the MFP length of stay eligibility criterion.  Under the ACA, individuals who reside in an institution for more than 90 consecutive days are now eligible to participate.  The previous criterion for the institutional residency period was six months to two years.²  This policy change acknowledges that earlier intervention is often critical to prevent long-term nursing facility (NF) stays that make transitioning to the community more difficult.  Most states anticipated that this policy change would increase the number of future MFP participants.

The Kaiser Family Foundation’s Commission on Medicaid and the Uninsured (KCMU) surveyed state MFP project directors in 2008 and 2010-2012 to gauge states’ progress with transitions.  The 2012 KCMU survey found that 36 states had transitioned over 25,000 beneficiaries back to the community.³  While some state MFP demonstrations became operational in 2007, the majority of initial transitions occurred between 2010 and 2011 because states needed several months or years to get their programs up and running and begin transitioning beneficiaries.  States with pre-existing transition programs, such as Texas and Washington, were almost immediately able to transition individuals once their programs were funded and implemented, but other states needed significantly more time and resources to launch their MFP demonstrations.  Overall, the reach of the MFP demonstration is growing; participants include seniors, children, adults with intellectual/developmental and physical disabilities, persons with mental illness, and persons with disabling chronic conditions.  The number of participants has increased annually with the expansion of outreach efforts and the availability of technical assistance to help grantee states meet annual transition goals.⁴  States reported ongoing efforts to improve access to housing, a critical component of successful community placements.