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An Analysis of Medicaid Private Duty Nursing for Children with Special Health Care Needs

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An Analysis of Medicaid Private Duty Nursing for Children with Special Health Care Needs AN ANALYSIS OF MEDICAID PRIVATE DUTY NURSING FOR CHILDREN WITH SPECIAL HEALTH CARE NEEDS Prepared by: Elizabeth Shenkman, PhD Associate Professor, Department of Pediatrics Associate Director, Institute for Child Health Policy OVERVIEW Home health care for children with special health care needs (CSHCN) has been called a “medical and social innovation” that has “potential risks and benefits, inevitable uncertainties, and unique ethical considerations.”1 An estimated 50,000 children use home health care services daily, with 60% of these services for skilled nursing care.2 Recent national cost estimates specific to children are not available. However, the Health Care Financing Administration (HCFA) reported overall home health care costs for all ages at $22.3 billion in 1999. In Florida, costs for the private duty nursing component of home health care is reported to be $100 million for State Fiscal Year (FY) 2000-2001. The purpose of this report is to present: • A summary of the literature on private duty nursing for children and relevant case law on private duty nursing, • A summary of interviews conducted with staff in five different states about their private duty nursing programs, • A summary of telephone survey data collected in 1997 with families whose children are enrolled in Children’s Medical Services (CMS), Florida’s Title V CSHCN Program addressing their unmet health care needs and out-of-pocket spending for home health care services; and • An analysis of current expenditures for home health care and private duty nursing among CMS enrollees and projections of future spending. REVIEW OF LITERATURE Over the past 30 years federal legislative action has greatly influenced approaches toward children with special health care needs (CSHCN). 3 For example, in 1967 Congress mandated that states must provide Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services through their Medicaid Programs. EPSDT services encompassed screening of individuals under the age of 21, “to ascertain their physical or mental defects, and such health care, treatment, and other measures to correct Private Duty Nursing Page 1 Institute for Child Health Policy or ameliorate defects and chronic conditions discovered thereby, as may be provided in regulations of the Secretary.” However, in 1989 Congress passed the Omnibus Budget Reconciliation Act of 1989 (OBRA’89). As part of OBRA’89, preventive care and disability-related services were addressed. Significantly, as it relates to CSHCN, the law required states to provide all medically necessary services that were eligible for federal financial reimbursement to children whose health care screens revealed problems. These services had to be provided even if they were not otherwise covered under the state’s Medicaid Program.4,5 This particular provision is a point of serious contention with some state agencies, which believe that it greatly limits their ability to control Medicaid spending. The recent literature on issues related to home care, private duty nursing, or personal attendant services for CSHCN is very limited. One has to turn to literature that is 10 to 20 years old to find in- depth discussions of home nursing services. In the 1980’s Lou Ann Aday conducted a national program evaluation to assess the outcomes of care for ventilator-assisted CSHCN who were transferred from the hospital to home.6 This evaluation is one of the most comprehensive assessments of pediatric home care, to include private duty nursing, available. As part of the study, Aday and her colleagues reported that home care costs were significantly lower than hospital costs for these children. Hospital care was used as a basis for comparison because this was the only other alternative for the children’s care. Others have noted that home care costs are less expensive than hospital costs only if the parent is assuming part of the caregiving responsibility. If a nurse provides the majority of home care, the home care costs approach and sometime exceed hospital care costs.7 Other early work that considered the financial aspects of children’s long-term care needs focused on the inadequacy of most benefits packages for CSHCN and the out-of-pocket spending that families often experience when caring for these children.8 Recommendations from this early work focus on ensuring that families and their CSHCN are given appropriate support and services and that benefits packages are structured to best meet their complex needs. Much of the current literature that might be applicable to understanding issues associated with the provision of private duty nursing for CSHCN fall into the category of long term care (LTC) provision. The majority of this literature focuses on adults and not children. None-the-less the LTC literature documents the rapidly escalating Medicaid expenses for these services, which include the provision of long-term physical, speech and other therapies, long-term institutional care, and long-term home care. States often use community-based waivers (1915 C waivers) to design programs to provide services for the elderly and persons with physical and developmental disabilities in the home and community.9 Home and community-based LTC arrangements continue to be seen as the best environment to deliver care as opposed to institutionalizing Medicaid-eligible individuals. In 1998, Medicaid accounted for 17% of total spending on home health care in the United States. To control these Private Duty Nursing Page 2 Institute for Child Health Policy expenditures, states are increasingly exploring options of providing a range of LTC services, including home health and personal care services, in a managed care setting. Texas and Michigan are providing such services in managed care environments under 1915(b) and 1915(c) waivers, which typically include limiting freedom of choice for the families selecting service providers.10 In a four state study of children receiving Medicaid and incurring $10,000 or more in health care charges annually, Kuhlthau et al., documented that LTC expenditures accounted for 10% to 42% of the total health care expenditures for this group of children. LTC expenditures were not well defined, but did include facility charges, such as structured nursing facilities. Home health expenditures, which was not restricted to private duty or skilled nursing, accounted for 4% to <1% of the total expenditures, depending on the state.11 The authors noted that one of the uses of their findings was to help states plan for their expenditures for these very high cost children. In summary, with the exception of considering caring for CSHCN within managed care arrangements, there is little in the current literature about how to address the rising private duty nursing costs for this group of children. Some states have attempted to obtain modifications to OBRA’89 and others are using 1915 waiver programs. Attempts to modify OBRA’89 have failed in the past and the outcomes from states using 1915 waivers to address their LTC costs in Medicaid are not known. Court cases about LTC issues have involved adults and usually also involve a unique aspect associated with program eligibility. For example, a recent court case involving LTC for adults was heard in Albany, New York (June 2000). The New York Court of Appeals upheld two lower court decisions that the state cannot refuse to provide medical coverage for people needing long-term institutional care in cases where the spouse refuses to turn the ailing person’s assets over to the government. Another recent case (1999) involved Florida’s Agency for Health Care Administration (AHCA). AHCA revoked home care nursing services for a five year-old child with autism, esophagitis reflux, and dyspahgia on the basis that the services that the child needed were not “skilled nursing services.” The family challenged the decision. The judge ruled that skilled nursing was medically necessary for this child because 1) the child’s physician ordered the services, 2) there was a medical need for a nurse to supervise the child’s feeding to avoid choking, and 3) the child needed nursing services as prescribed by the doctor to combat dysphagia. Private Duty Nursing Page 3 Institute for Child Health Policy STATE INTERVIEWS To learn more about states’ experiences with private duty nursing in their Medicaid Programs, telephone interviews were held with Title V CSHCN Program and Medicaid Program representatives in six states. Table 1 contains a summary of the states selected for interview and the rationale. Table 1. States Included for Interviews About Private Duty Nursing for CSHCN in Medicaid States Rationale Included Michigan Michigan has done extensive working assessing health care use and charges for CSHCN. They offer Medicaid fee-for-service (FFS) and capitated managed care programs for their CSHCN. Thus, it was anticipated that analysis of their approaches would provide useful information for Medicaid FFS and capitated environments. Texas Texas has a unique program to identify CSHCN for referral to specialized case management services. It also is a large and culturally diverse state with many demographic similarities to Florida. Thus it is a good state for comparison purposes and useful data in CSHCN’s health care use and charges are available. Texas has a 1915(b) and 1915(c) waiver. Oregon Oregon is well known for their work identifying “medically necessary services”. This state tends to take a more restrictive approach to health care services for all its residents, when compared to other states. Oregon provides “home follow-up services” for their CSHCN. More information from a state that has taken a more conservative approach to funding health care was determined to be helpful. Tennessee Tennessee is well known for its TennCare Program. This managed care program carefully monitors CSHCN’s health care use and charges. Some view this program as a success and others do not. This program is recommended for inclusion because it is highly managed and there are reports that it has resulted in cost savings to the state.
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