Position Paper




POSITION STATEMENT ON FAMILY CARE,

THE GOVERNOR'S BUDGET PROPOSAL
TO REDESIGN THE LONG-TERM CARE DELIVERY SYSTEM



The Long-Term Care Provider Coalition consists of the following organizations:

Wisconsin Assisted Living Association (WALA)
Wisconsin Association of Homes and Services for the Aging (WAHSA)
Wisconsin Association of Residential Facilities (WARF)
Wisconsin Health Care Association (WHCA)



Collectively, our members provide services to a majority of the recipients of long-term care in our current system.  We have worked with Department of Health and Family Services (DHFS) Secretary Joe Leean and many others over the past three years in seeking to identify ways to improve our long-term care delivery system.


The Coalition strongly supports the Administration's long-term care goal:  To develop "a comprehensive long-term care system that maximizes an individual's choice of services, providers and care settings as long as such care is necessary and meets a minimum level of quality standards and is cost effective."


In addition, the Coalition continues to support the compelling need for Resource Centers to serve as one-stop shopping service centers for consumer information and assistance with long-term care service availability, benefits, options and eligibility.  We also support addressing the current institutional bias of the Medicaid program and replacing this bias with a system that enables care and services to be provided in the most appropriate setting, consistent with the above stated goal.  The Coalition embraces a system that fully recognizes the appropriate roles of all providers in addressing the varying and changing long term care needs of individuals.


The Long-Term Care Coalition Position on Family Care

The Coalition was encouraged by the January 11th announcement by Governor Thompson and Secretary Leean to pilot test DHFS' Family Care proposal.  We concurred with the Secretary's recommendation to the Governor that given "the significant concerns" that had been expressed by all parties affected by the proposal it was "prudent to use the pilot approach to Family Care at this time."

However, the language presented in the Governor's budget bill (1999 Senate Bill 45/Assembly Bill 133) cannot be reconciled with what we perceived as an intent to pursue and evaluate
Family Care's pilot performance prior to proceeding with any further phase-in.  Indeed, s.46.281(1)(e) of the budget bill gives DHFS full authority to proceed with statewide implementation of Family Care, without any further legislative review and irrespective of the performance, outcomes and cost of the "pilots".

Coalition members have argued consistently throughout the three-year
Family Care developmental process that a thorough and extensive evaluation of the data collected by the resource center and CMO pilots prior to statewide implementation is the only prudent approach to protect state taxpayers, county property taxpayers and, most importantly, the elderly and disabled persons who will utilize the long-term care services Family Care is intended to provide.  Consistent with that position, Coalition members seek your support for revisions to SB 45/AB 133 to address the following concerns:







Policymakers should not confuse our support for piloting Family Care, however, with either support for the proposal or belief that Family Care will work as intended.  To the contrary, Coalition members continue to believe that Family Care as proposed in SB 45/AB 133 is based on assumptions which range from unsupported by available data to out-and-out faulty.  From our perspective, the benefit of the proposed pilots is that previously unavailable data will be collected and analyzed to either confirm, refute or modify the DHFS' Family Care assumptions.  Among the DHFS assumptions we challenge and we hope the pilots will address are the following:

  1. Data is insufficient to support the claim that in-home care is less expensive than congregate care.  What may be the key tenet espoused by Family Care proponents is that given the exact same needs, preferences and health status, it is less expensive to provide long-term care services to an individual at home than it is in a congregate setting.  The Coalition strongly argues that neither the DHFS nor Family Care proponents have the data available to support that claim.  (Please see the attached "Conclusions and Recommendations" from an April 1995 study of the Community Options Program conducted by two UW-Madison professors which we believe supports our contention.)  For example, while each nursing home resident's health status is identified by a level of care  determination established by the DHFS, COP and waiver clients receive no similar health status determinations.  While the Family Care proposal will provide a uniform functional screen which should provide an apples-to-apples cost comparison between congregate care and community care, no similar comparisons can be made today because of the insufficient data compiled for COP and waiver clients.  Thus, the DHFS Family Care cost model could actually be an apples-to-oranges comparison which ultimately reflects vastly overstated savings from a shift to community care.  Coalition members believe Family Care should not be implemented fully until the data necessary to support or refute these claims is collected and analyzed.

  1. The average nursing home resident is older, more frail and in need of more costly services than his/her counterpart in the community.  In a 1996 profile of long-term care clients developed by the DHFS Office of Strategic Finance, the executive summary stated: "As a group, nursing home residents tend to show more adverse conditions, functionally or mentally, than their community waiver counterparts.  Relatively more nursing home residents are at a higher level of skilled nursing care need, have many more functional impairments in activities of daily living , and show signs of memory loss or cognitive problems.  They also are more likely to exhibit problem behaviors, show signs of mental distress, and have problems with incontinence." It appears to the Coalition that it may cost more to provide facility-based care, not because community care itself is less expensive, but rather because facility-based residents on average have greater needs and require more costly services than community-care clients.

  1. The cost implications of the "woodwork" effect are unknown.  Under the Family Care budget proposal, all persons meeting its comprehensive level eligibility standards will be entitled to expanded benefits under the Care Management Organization (CMO).  The envisioned CMO benefit package is expressly designed to attract enrollees through the promise of expanded choices and benefits.  This prospect of entitlement to more extensive publicly-financed long term care services will have a "woodwork" effect that will attract more individuals into the system and accordingly increase aggregate program costs.  The pilot projects should be utilized to measure the impact such induced demand will have in increasing program service utilization and cost.

  1. The DHFS cost model used to develop Family Care is based on questionable, if not faulty, assumptions.  The inadequacy of the DHFS database is not the only concern the Coalition has with the assumptions the DHFS identified in its Family Care cost model.  We disagree with or dispute their assumptions related to, among other issues, the cost impact of a healthier elderly population, the bias against congregate care settings, the time and cost to conduct a functional screen, the frequency of client functional/eligibility redeterminations, "outreach" funding, the reliance on "gross cost" averaging, the effect of redesign on Medicaid card costs, the projected reduction in nursing facility utilization, the permanency of initial placements, capitation rates, blended rates, applicability of the Oregon experience, quality assurance programs, cost of payments to family members and authority of care managers. 

  1. Waivers from the federal Health Care Financing Administration, which would be required under Family Care, are dependent upon a showing of "budget neutrality;" in other words, Wisconsin would have to show that within a certain timeframe (i.e., 5 years), implementation of Family Care would cost the federal government no more than the cost of continuing the current system.  The State believes it can meet this test; Coalition members disagree because we believe the State is relying on faulty cost assumptions and that the true cost of Family Care will be significantly greater than the DHFS projection.  What if we are right:  will the federal waivers be granted?   Data collected through the pilots could be the determining factor.

  1. The county property taxpayer ultimately may be asked to subsidize Family Care.  Under Family Care, CMOs eventually will be required to accept the same risk as HMOs:  a monthly capitation rate will be paid to the CMO for each enrollee and the CMO will be required to manage the care of each enrollee within that capitation rate.  If the cost of services exceeds the capitation rate, additional funds will have to be found.  Unlike the COP or waiver programs, there will be no option to create a wait list or suspend services when funds expire.  If counties are to serve as CMOs, those "additional funds" almost certainly would have to come from the local property taxpayer, unless additional state tax dollars can be found.  Are counties prepared to accept that kind of risk?  Without the ability to review the data collected by the pilot counties, we believe the answer to that question is "no".

The attached contains what Coalition members believe at the very least (pending the findings of an actuary) should be the required elements of the
Family Care pilot projects.


3/4/99





Required Elements of the Family Care Pilot Projects and Evaluation


Prior to either a phase-in or a statewide implementation of
Family Care, the following activities must be undertaken:

















WAHSA 204 South Hamilton Street Madison, WI 53703
Telephone: (608)255-7060 FAX:(608)255-7064