California Community Choices Long-Term Care Financing Study

California Community Choices is a five-year project dedicated to increasing consumer access to home and community-based long-term care services and diverting persons with disabilities and older adults from unnecessary institutionalization through development of California’s long-term care infrastructure. A component of the Choices project is a long-term care financing study that will examine the laws, regulations, policies and payment methodologies related to long-term care financing in California. The Study will improve the State’s understanding of the financial and structural barriers to increasing consumer access to home and community-based services and will provide recommendations that will enable the State to more effectively manage the funding for long-term care supports that promote community living options.

Selection Criteria for Researcher

. Nationally recognized with a track record of publishing research, publications and presentations on long-term care related issues . Extensive knowledge of long-term care services and key issues/promising practices in other states and at the national level . Knowledge of California’s long-term care services, systems and key issues . Extensive experience involving or assuring participation of stakeholders in research, such as consumers, advocates, caregivers, families, long-term care services providers, long-term care labor workforce, policy makers, legislative staff, etc. . Experience with state-level development of service design and reimbursement systems that support community living options . Ability to build support and collaborate in team research . Knowledge and support of Olmstead Decision

Scope of Work

. By November 1, 2007, submit to the project director a detailed work plan for the time period, November 2007-January 2009, based on (but not limited to) established study elements . Using existing resources, research and analyses on long-term care in California, analyze the laws, regulations, policies and payment methodologies related to long- term care financing in California . Ensure substantial and ongoing stakeholder involvement (including consumers, advocates, caregivers, families, long-term care services providers, long-term care labor workforce, state departments, policymakers and Choices Advisory Committee) in the Study  Ensure full accessibility to individuals with disabilities . Work collaboratively with project director, Choices LTC Finance Subcommittee, and California LTC experts . Bi-monthly progress report: in writing and by conference call with project director, LTC Finance Subcommittee and designated LTC experts

LTC Financing Study Overview, Final 10/5/07 1 . Provide quarterly reports to the full CA Community Choices Advisory committee . Make recommendations in the Report that will improve the management of funding for home and community-based services in California  Recommendations should include, but not be limited to funding, payment methodology, policy, legislation, leadership and commitment, etc.  Provide justification and discussion of advantages and disadvantages of recommendations/approaches  Provide discussion of strategies for implementation of recommendations . By December 2008, complete study and submit draft Report to project director for review . By January 2009, make revisions as necessary and submit final study to project director . Function as a subject matter expert/resource for Community Choices project (until Dec. 2009) on Report and recommendations at educational forums and/or legislative briefings, etc.

Proposed Study Elements

Assumption: Researcher will identify and use existing resources, studies and analyses on long-term care in California, to minimize the amount of original research necessary to complete work under this grant.

1. Background Information a. Project future long term care needs, including demographic indicators b. Identify current long-term care (all facility-based and community-based) services including administration, funding, capacity and utilization for older adults and people with disabilities of all ages. a. Focus on publicly-funded services but make reasonable efforts to capture privately-funded services (dependent on available data) c. Identify service and funding gaps

2. A historical analysis of long-term care Medi-Cal expenditures in California, including: a. Total and per capita Medi-Cal long-term care spending on home and community- based services compared to institutional services b. The rate of change for Medi-Cal long-term care spending compared to the national average and other states for both home and community-based and institutional services c. The change in the number of institutional beds and the number of Medi-Cal waiver slots d. Number of people of served by program/provider (unduplicated); comparison of where individuals are receiving their care e. Examine feasibility of providing a cost-effective analysis.

LTC Financing Study Overview, Final 10/5/07 2 3. A comprehensive analysis of policies, laws and regulations (or lack thereof) that impact consumer access to home and community-based services  Identify key critical barriers that impede access to home and community- based services (e.g. lack of preadmission control on nursing home admissions; speed of hospital discharge process, payment/fiscal constraints prescribed by federal and state control agencies; lack of political will/legislative leadership; cost neutrality requirement, level of care requirements, lack of providers, Medicaid eligibility requirements, etc.)  Wherever possible, use tables/graphs/charts to summarize information such as major laws, regulations, policies, and funding sources for each LTC service.

4. Rates and Fiscal Incentives a. Examine rates paid for home and community-based services and to providers/vendors across programs; analyze the differences in various rates b. Identify how current rate structure impacts access to home and community- based services c. Analyze fiscal incentives that encourage institutionalization d. Analyze fiscal incentives that encourage return to community living. e. Analyze fiscal incentives that discourage return to community living, e.g., $209 allowance for household maintenance in CA, differences between how income and assets are treated for institutional and HCBS services (for example spousal impoverishment law and share of cost, county incentives for limiting IHSS)

5. Analyze potential payment strategies, incentives, mechanisms and structures that could result in more effective management of funding for long-term care supports and increased access to home and community-based services. Identify benefits and costs of each approach. Strategies may include, but are not limited to:

a. A standardized rate structure for home and community-based services across target populations and among providers (that would incorporate geographic cost of living adjustments) b. Establishment of structural and financial mechanisms that would allow presumptive Medi-Cal eligibility and fast track assessment for individuals (at risk of institutionalization) to access home and community-based services. c. Benefits and opportunities for “downsizing funding”, e.g. as has happened within Developmental Services d. Converting institutional resources to more integrated services, e.g., community-based services, assisted living, etc. e. Provider incentives for appropriate discharge to community f. Expansion of home and community-based services waiver and State Plan services (including both new services and expansion of underutilized existing services) and any potential savings from preventing or reducing hospital or nursing home stays

LTC Financing Study Overview, Final 10/5/07 3 g. Global budgeting for all LTC services (institutional and home and community-based services)

6. Make recommendations that will improve the management of funding for home and community-based services in California  Recommendations may consider, but are not be limited to: funding, payment methodology, fiscal incentives, policy, legislation, leadership and commitment . Examples include: eliminating structural barriers that impede access to home and community-based services; eliminating institutional bias in payment/reimbursement practices  Provide justification and discussion of advantages and disadvantages of recommendations/approaches  Discuss potential strategies to implement recommendations

LTC Financing Study Overview, Final 10/5/07 4