Nursing Home Vacancies and "Money Follows the Person"

Source: Steve Gold, Esq/

Nursing Home Vacancies and "Money Follows the Person"
Information Bulletin No. 45 from Steve Gold

MONEY FOLLOWS THE INDIVIDUAL
There have been, for the last five years, vacant nursing home beds in every state in the country. For advocates fighting for community-based services and particularly for advocates that are urging their State to use a "Money Follow the Individual" program, the nursing home vacancy rates are important to understand. HHS Secretary Thompson suggested the "Money Follow the Individual" was an innovative model to increase community services. Texas is successfully using it.

Simply stated, the "Money follows the individual" means that when an individual in a nursing home or other institution chooses to leave that facility, the funds necessary to support the individual's service needs in the community are transferred from the budget of the institution to the community.

In the federal budget for FY 2004 that will be announced next week, there will be a "Money Follows the Individual" Rebalancing Demonstration -- $1.75 billion over five years, with $350 million proposed for FY 2004. This five-year demonstration would assist states in developing and implementing a strategy to "re-balance" their long term care systems so that there are more cost-effective choices between institutional and community options, including financing Medicaid services for individuals who transition from institutions to the community.

Federal grant funds would pay the full cost of home and community-based waiver services for one year, after which the participating states would agree to continue care at the regular Medicaid matching rate. This significant demonstration would build upon existing state success stories and also provides incentives to states for increased use of home and community-based services and would help provide information on costs of different approaches.

ADVOCACY STRATEGIES
Even though this new demonstration money may be available in October 2003 you should pressure your Medicaid Director and your state legislatures to begin now to do a Texas like "money follow the individual" program so you will have a head start when the new $$$$ becomes available.

You can NOW begin to plan to implement this:

Identify persons in the nursing homes and other institutions who want to get out;
Tell your legislators that "money follows the individual" saves money;
Build a coalition of IL, DD, Aging, MH advocates that say with one voice "Let the money follow the individual"
WHY DOES IS IT SAVE $$$$$
Under Medicaid, nursing home services are an "entitlement." Therefore, any person who meets the "level of care" (disability) for your State's nursing homes has a right to receive services in the institution. Because there are vacancies in nursing homes, when a State adopts a Medicaid "money follows the person" program, there is NO ADDITIONAL COST to the State. In fact there will be a saving of money since community-based services are in the aggregate cheaper than nursing homes.

An example: Person A resides in a nursing home funded by your State's Medicaid. In your State, there is a nursing home vacancy rate. If Person A wants to live in the community and the "money follows the individual," it is irrelevant that Person B may want to move into a nursing home because (1) whether or not Person A is in the nursing home or in the community, Person B has an right to reside in the nursing home, and (2) given the vacancy rates, there are unused beds for Person B regardless where Person A lives so the State will pay for Person B wherever Person A lives.

VACANCY RATES
That nursing homes have increasing Medicaid vacancy rates is quite clear: nationally in 1996, there was a 15.2% vacancy rate; 1997, there was 16.1% ; 1998, there was 16.6%; 1999, there was17.3%; and 2000, there 17.6%. That trend has continued in 2001 when the national vacancy rate was about19%.

Nursing Home Beds Vacancy Rates by State as of January 2, 2003.
Alabama 10%; Alaska 16%; Arizona 19%; Arkansas 27%; California 16%; Colorado 10%; Connecticut 7%; Delaware 14%; D.C. 9%; Florida 14%; Georgia 8%; Hawaii 11%; Idaho 33%; Illinois 20%; Indiana 22%; Iowa 15%; Kansas 15%; Kentucky 10%; Louisiana 22%; Maine 10%; Maryland 13%; Mass.10% ; Michigan 12%; Minnesota 7%; Mississippi 12%; Missouri 24%; Montana 12%; Nebraska 14 %; Nevada 29%; New Hampshire 9% New Jersey 12%; New Mexico 18 %;New York 7 %; North Carolina 12%; North Dakota 7%; Ohio 15%; Oklahoma 30%; Oregon 28%; Pennsylvania 12%; Rhode Island 10%; South Carolina 9%; South Dakota 8%; Tennessee 11%; Texas 25%; Utah 24%; Vermont 8%; Virginia 10%;Washington 18%; West Virginia 11%; Wisconsin 15%; Wyoming 18 %. Source: OSCAR (01/02/2003).

The exact percentage is not even critical. Given vacancy rates of any size, as well as the national uproar about increasing Medicaid costs, tell your States to save money, do the right thing, give people a REAL CHOICE, and let the nursing home "money follow the person" into the community so they can live in their own homes.