NURSING HOMES AND HOME
HEALTH
IN THE STATE
According to Wendy Fox-Grage, Senior Policy Specialist,
Forum for State Health Policy Leadership, National Conference of State
Legislatures, Louisiana has too many nursing homes beds for its population
and suggested that, like most other states, Louisiana should be moving
toward offering additional choices to its citizens in order to contain
growth in long term care costs and to address a recent United States
Supreme Court decision (Olmstead) holding that the American with
Disabilities Act (ADA) requires states to provide community based services
to institutionalized persons in certain circumstances. While Ms Fox-Grage
did not suggest in any way that Louisiana discontinue utilizing nursing
homes for its Medicaid recipients, she did recommend that the state
establish a plan for a continuum of care to serve people in the most
appropriate settings with a stronger emphasis on more home and
community-based care, family caregiving, and long term care insurance.
In 1998, Louisiana had a total population of 4,361,447
with 523,704 ages 65 and over. In 1998, Louisiana also had 365 nursing
home facilities and 29,829 nursing home beds. Long term care services were
provided to 34,403 Medicaid nursing home recipients at a cost of $490.7
million or $14,263 per recipient. This cost represented the largest
category of expenditures in the Medicaid budget. To control cost for
nursing home care, Ms Fox-Grage pointed out that many other states have
implemented certain requirements including: tightening medical
eligibility, mandatory pre-admission screening, client assessment,
referral, and evaluations, moratoriums on additional beds, and case mix
reimbursement based on a resident's needs instead of a flat rate for all
residents. Louisiana currently has a moratorium on new nursing home beds
and will implement a case mix reimbursement system for nursing homes as
provided by Act No. 143 of the First Extraordinary Session, 2000.
Many states are already moving forward in providing
alternatives to nursing home care and are establishing assisted living
programs and other home and community-based care programs through Medicaid
waivers. In fact, the Office of Civil Rights (OCR) of the United States
Department of Health and Human Services has strongly suggested that state
Medicaid programs should develop a plan to increase community based
services in order to comply with Olmstead. Due to budget restraints, the
Department of Health and Hospitals (DHH) currently provides only limited
community-based care waiver programs including:
- Elderly & Adult with Disabilities (serving 629
people)
- Adult Day HealthCare (serving 500 people)
- Personal Care Attendant (serving 124 people)
and has been unable to implement the assisted living
pilot programs for the elderly as established by Act No. 1185 of the 1997
Regular Session. DHH will include in its budget request for FY 2001
funding for additional waiver slots for each of these waiver programs and
funding for the assisted living program in an attempts to comply with
Olmstead and to settle Barthelmey vs Hood, a federal class action suit
filed alleging that Louisiana's Medicaid program violates the ADA because
it provides predominantly institutional care (nursing home) and
insufficient community-based services.
Family caregiving should also be encouraged for those
citizens in the state who need long-term care services. Statistics
indicate that 78% of long-term care services are provided by families and
friends. California, Pennsylvania, and New Jersey have implemented
comprehensive programs, and Florida has a RELIEF program. With additional
funding Louisiana would be able to expand its adult day health care
services and attendant care at home.
Louisiana must make a commitment to help meet the long
term care needs of its citizens in the most appropriate settings and must
make every effort to help provide resources and services in an effective
and cost efficient manner. It will require planning, setting priorities,
and evaluating existing approaches to long term care with some
restructuring and shifting of resources from nursing homes to home and
community-based care alternatives. As is the case with most enhancement
and policy shifting in a new direction, the issue of funding always
becomes the critical roadblock no matter how dedicated a state may be to
the new concept. Regarding funding, for once Louisiana may actually have
the possibility of obtaining new funds with passage of Act No. 143 of the
First Extraordinary Session 2000, which established the Medicaid Trust
Fund for the Elderly (intergovernmental transfer program). At present, it
is estimated that Louisiana may receive two full years of funding from the
federal government before the intergovernmental transfer program is
revamped. During these two years Louisiana could receive approximately
$800 million to $1 billion which would be placed in the trust fund in the
state treasury. This trust fund could potentially generate between $60-85
million of interest that would then be used to obtain federal matching
funds each year totaling approximately $200-$250 million for Medicaid
programs. The Act mandates several priorities including: case mix
reimbursement, re-basing, and enhancement to labor cost in Louisiana's
nursing home industry. Total projected cost for these priorities is
approximately $75-85 million annually, leaving approximately $125-175
million available for other Medicaid expenditures. However, expenditures
over and above the priorities do have certain restrictions.
PRESCRIPTION
DRUG ISSUES IN THE STATES
Louisiana Trends in Medicaid Pharmaceutical Spending
-
Medicaid's pharmacy program has grown from $85
million in FY 89 to $444 million in FY 01
-
Louisiana's average Medicaid pharmacy cost per
recipient ranked fifth (5th) in the South in FY 99
-
Louisiana's Medicaid pharmacy program could reach $925
million in FY 05
Key Reasons for the Growth in Pharmaceutical
Expenditures in Louisiana and U.S.
-
Quicker FDA approval
-
Growing utilization of pharmaceuticals
due to:
- rising number of prescriptions filled by retail and
mail-order pharmacies
- pharmaceuticals replacing surgery and other more
invasive treatments
- pharmaceuticals offering therapies not available in
the past
- greater consumer awareness of drug treatments due
in part to direct advertising
-
Increasing prices for newer, more expensive
brand name, generic, and multi-source drugs
-
Drug manufacturer rebate programs
-
Medicaid's open drug formulary
- requires Medicaid reimbursement of all FDA-approved
drugs
- prohibits use of prior authorization options
Possible Louisiana Options to Curtail the Growth in
Pharmaceutical Expenditures
-
Delay inclusion of FDA-approved drugs into
Medicaid's open drug formulary
- increased formulary restrictions may backfire,
however, resulting in more office visits, more ER visits, and more
hospitalizations
-
Allow for generic substitutions in treating
Medicaid recipients
-
Allow the use of prior authorization option
in the Medicaid program
-
Achieve better profiling of doctors who may
be abusing their Medicaid prescription-writing privileges
-
Implement a three-tiered co-payment structure
that attempts to shift more costs to the consumer by charging the
Medicaid patient:
- the lowest price for a generic drug
- a higher price for a brand-name drug when no
generic version is available
- a significantly higher price for a brand-name drug
when a generic version is available
-
Reap savings by purchasing drugs in bulk
through the state for:
- seniors who do not have drug coverage (perhaps
focusing on seniors with catastrophic drug expenses)
- medicaid and Medicare beneficiaries
- state employees
- state residents without insurance coverage for
drugs
-
Authorize price controls, using the
state's power to lower drug prices by authorizing the state to:
- act as a pharmacy benefit manager
- negotiate pharmaceutical prices with manufacturers
- purchase drugs at a discount for the residents it
wants to cover (see No. 6 above)
- set maximum prices for prescription drugs
(Note that price controls over time could have the
negative consequence of reducing the availability of certain drugs)
-
Allow for the purchase of drugs from foreign
countries where they are cheaper
-
Enact legislation allowing for private drug
buying co-ops and purchasing clubs to be regulated by the
state
-
Enact legislation allowing for collaborative
practices to allow physicians to prescribe a drug protocol and
allow pharmacists to fill prescriptions with the most cost-effective
pharmaceutical in that class or to make adjustments as necessary
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