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Proposal to cut Medicaid payments to assisted living facilities, limit in-home help advances

by Andy Davis | December 11, 2018 at 4:30 a.m.

A proposal to cut Medicaid payments to assisted living facilities and limit the help the program provides to elderly and disabled Arkansans in their homes cleared the Legislature's public health committees on Monday.

The changes, affecting the 8,800 Arkansans served by the ARChoices program and 1,200 Medicaid recipients in assisted living facilities, are part of the state's efforts to slow the growth of Medicaid spending by enough to save $835 million from the fiscal year that started July 1, 2017, through fiscal 2021.

The proposal would reduce the rates paid to assisted living facilities by nearly 22 percent and set annual, per-person caps on the in-home help provided to participants in the ARChoices program.

The House and Senate Public Health, Welfare and Labor committees' vote during a joint meeting came despite complaints from providers and beneficiaries that the changes will cause assisted living facilities to go out of business and more disabled residents to end up in nursing homes, where the cost of their care will be higher.

"I'm coming here today to beg you to have a heart and get rid of this [proposed] system, because I'm afraid it's not going to allow enough hours [of care] to meet the needs of the disabled community," said Ann Ledgerwood, reading a statement written by her son, Bradley, a 37-year-old ARChoices recipient who lives in Cash and has cerebral palsy.

ARChoices provides in-home help with daily living tasks and other needs for low-income people with disabilities severe enough to qualify for placement in a nursing home.

The Department of Human Services proposal would cap ArChoices benefits at $30,000 a year for recipients with the greatest needs -- those who require total or extensive assistance with moving from one place to another, eating and using the bathroom.

Enrollees requiring assistance with only two of those activities would be eligible for up to $20,000 of care. The annual cost for those with less extensive needs would be capped at $5,000 each.

Enrollees who are currently receiving more than $30,000 would be allowed to continue receiving their current level of care in 2019 and 95 percent of that amount in 2020.

The state would also scrap an algorithm currently used to assign recipients to "resource utilization groups" based on their medical diagnoses and answers to questions about their needs.

Instead, the hours would be calculated based on an estimate of how many minutes of assistance the recipient needs with tasks such as dressing, eating and bathing.

Mark White, deputy director of the Human Services Department's Aging, Adult and Behavioral Health Services Division, said the changes to the ARChoices proposed rules will give the department more flexibility to tailor the service allocations for each enrollee.

The current system has been the subject of lawsuits by Jonesboro-based Legal Aid of Arkansas, which contends that use of the algorithm resulted in widespread cuts in the hours of care that recipients can receive.

Legal Aid attorney Kevin De Liban said the new system would increase the hours of care that recipients can receive from about five and a half hours a day to about six and a half hours.

That would still be fewer hours than many recipients need, he said. And some recipients with severe disabilities could end up with fewer than the maximum number of hours, depending on how the new assessment system works, he added.

Before 2016, De Liban said, recipients could receive about 7 hours a day under a program serving the elderly and about eight hours a day under one that served younger recipients.

Both programs were combined to create ARChoices in 2016.

Sen. Missy Irvin, R-Mountain View, noted Monday that the proposed system attempts to address criticisms of the state's current method for awarding hours by giving Human Services Department nurses more discretion in awarding hours.

For instance, recipients would be able to request a one-year increase in the cap on services "to address exceptional circumstances."

"I'm starting to wonder if there's ever going to be a solution, or are you going to just continually be against any type of an assessment tool that we have to use?" Irvin asked De Liban. "At what point are you going to be satisfied?"

De Liban responded that the state could make adjustments, such as increasing the annual cost caps, that would provide recipients with the care they need.

"I'm the one that people call when they're lying in their own feces, when they're saying that I can't drink a sip of water after 5 o'clock at night because that means I'll have to sit in my diaper longer before my care aide comes in the morning," De Liban said. "To the extent I am critical, I'm critical because my clients are critical because they need enough care."

White said the rate cut for assisted living facilities resulted from an actuarial study commissioned by the department.

Currently the state classifies the residents into four tiers, based on the severity of their needs, and pays the facilities corresponding rates, ranging from $70.89 to $85.35 per resident per day.

Under the Human Services Department's proposal, the state would pay the same rate regardless of a resident's condition. It would start at $80.33 per resident, per day next month, then drop to $71.61 in July and $62.89 in 2020.

According to the waiver authorizing the program, the current rate was the result of negotiations between the department and providers in 2002 and automatically increased each year.

As a part of the waiver's renewal in February 2016, the department agreed to implement a new "rate methodology," White said.

The department wants to amend the waiver so that it can start using a new assessment tool to determine eligibility for the program. Federal officials are unlikely to approve that change unless the state also submits a new rate backed by an actuarial study, he said.

"This is going to hurt a lot of facilities," said Ed Holman, chairman of the Arkansas Residential Assisted Living Association. "They built their models for" the current rate.

White said some assisted living facilities have been struggling, even under the current rates. Some were built with public financing restricting them to serve only low-income residents, making it harder for them to attract residents who are not on Medicaid.

With the number of Arkansans who can receive the assistance capped at 1,200, "I don't know that it ever made sense to have a business plan that was entirely dependent on those Medicaid beds," White said.

In a voice vote, with no members objecting, the committee declared the proposed rate and rules "reviewed."

Gov. Asa Hutchinson in 2015 set the goal of slowing the growth of spending in the traditional Medicaid program by enough to cut spending by about $167 million a year, or $835 million over five years, to help pay for the cost of expanding Medicaid.

The changes reviewed by the committees on Monday would reduce spending on in-home facilities by $7.8 million and on assisted-living facilities by $4.6 million in their first full fiscal year, starting July 1, Human Services Department spokesman Marci Manley has said.

That's about 4 percent of the total spending each year on the two programs combined, she said.

The proposal will go to the Legislative Council's Administrative Rules and Regulations Subcommittee for approval on Dec. 18 and the full council on Dec. 21.

A Section on 12/11/2018

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