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F I S C A L I M P A C T R E P O R T

SPONSOR HCPAC

ORIGINAL DATE

LAST UPDATED

01/28/08

02/07/08 HM 16/HCPACS

SHORT TITLE Delay Long-Term Services Changes

SM

ANALYST Hanika-Ortiz

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$0.1

Recurring Medicaid/

Medicare

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates SM 17

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of Bill

House Consumer and Public Affairs Committee substitution for House Memorial 16 urges

continued consideration of stakeholder concerns raised regarding the design and implementation

of the coordinated long-term services program.

The Memorial provides for the following:

The HSD and the ALTSD have plans to implement a new program of managed care for

individuals receiving long-term services, known as coordinated long-term services, beginning on

July 1, 2008.

Persons receiving services provided in the disabled and elderly waiver, the personal care option

or nursing facilities will be required to receive all medical and long-term Medicaid services

through coordinated long-term services.

Concerns from stakeholders have been expressed about whether the coordinated long-tem

services program is designed and will be implemented in such a way as to achieve its stated

goals, including:

•

whether the number of home and community-based waivers lots will be adequate;

•

whether existing rules will continue to limit an individual’s access to community

services;

House Memorial 16/HCPACS– Page

2

•

how money follows the person will be implemented;

•

whether the rates paid to MCOs will be adequate to provide services;

•

whether the rate structure will provide appropriate incentives; and,

•

whether implementation will succeed in reducing the wait list and wait time for

community-based waiver services.

The Memorial further provides:

The State should take steps to insure that MCOs provide prompt and appropriate services to

individuals who need long-term services.

There has been limited involvement by the Legislature in development of the program.

Advocates for seniors and persons with disabilities have expressed serious and legitimate

concerns over whether the program, as designed, will increase access to long-term services in the

community rather than in institutions.

FISCAL IMPLICATIONS

HSD reports that federal waiver applications were submitted by the State in early July 2007, and

the Centers for Medicare & Medicaid (CMS) is currently reviewing the proposals. An

interagency implementation team has been formed to assure that once CMS approves the

waivers, the state will be ready to implement the program. Implementation is planned for July

2008 and is to be phased in geographically.

HSD reports that the CLTS rate structure will provide financial incentives to the CLTS managed

care organizations (MCOs) to keep consumers healthy. Health care consumers and advocates are

concerned because the rate structure is critical to how the program works; and, it is not known 1)

whether the rates paid to the MCOs will be adequate to provide needed services; or 2) whether

the rate structure will provide appropriate financial incentives to serve individuals in the

community. Health care consumers and advocates are also concerned that there are inherent

financial incentives for MCOs to underserve individual enrollees in order to maximize profits,

which must be addressed.

The State plans to incorporate the Money Follows the Person Initiative (MFP) into CLTS, and

has begun implementation by requesting and receiving federal approval for an increase in the

number of Disabled and Elderly waiver slots. All additional slots have been allocated to

individuals wishing to leave nursing homes to live in the community. Health care consumers and

advocates note that the MFP will not be possible if sufficient waiver slots aren’t available.

SIGNIFICANT ISSUES

CLTS is a proposed managed long-term care program that will serve an estimated 38,000

Medicaid recipients.

Enrollees will consist of several groups of people. First are those currently enrolled in, or eligible

for New Mexico’s Disabled and Elderly (D&E) waiver program; second, adults receiving

personal care services from the Medicaid Personal Care Option (PCO) program; third, residents

House Memorial 16/HCPACS– Page

3

of nursing facilities; and fourth, individuals who are fully eligible for both Medicare and

Medicaid, but who have not yet accessed the system of long-term care services in the state.

Certain qualified individuals with brain injuries who are participating in Mi Via also will be

enrolled in CLTS.

HSD further reports that the CLTS program goals are to eliminate fragmentation, emphasize

home and community-based services over institutional services, and create an opportunity to

manage the escalating costs of long-term services. The CLTS rate structure will provide

financial incentives to the CLTS managed care organizations (MCOs) to keep consumers as

healthy as possible by providing preventive services, treating illnesses early, managing chronic

diseases using best practices, and planning for and coordinating services based on the individual

consumer service and support needs and preferences. Increased access to community services is

expected for individuals in CLTS than in the current fragmented system.

Health care consumers and advocates agree with the program goals but believe the way the

program is designed will not accomplish them. The waiver slots will continue to be limited and

only people in an identified slot will have access to waiver services. Health care consumers and

advocates further believe that all current limitations on access to services will continue; long

waiting lists for community services will continue; and, the number of D&E waivers lots will be

reduced. The State has not managed to instill confidence that this new program design may prove

otherwise.

PERFORMANCE IMPLICATIONS

HSD notes the State has not finalized the number of "slots" (people to be served) in its CLTS

home and community-based waiver application. The figure is being reviewed and will be

adjusted to reflect the current number of Disabled & Elderly waiver slots in the states final

waiver application.

HSD further notes that the Department along with the Aging and Long-Term Services

Department have consulted with stakeholders and held publicly announced monthly CLTS

Stakeholder meetings to provide input on the program design for CLTS. HSD and ALTSD have

also met with individual advocacy organizations, government and health provider representatives

from tribes and pueblos, as well as, provider organizations such as the New Mexico Health Care

Association and New Mexico Home Care Association.

ADMINISTRATIVE IMPLICATIONS

The Memorial further resolves:

•

that HSD and ALTSD address the concerns identified in this Memorial prior to

implementation of coordinated long-term services,

•

that the two Departments consult in a meaningful way with representatives of providers

and consumers on the design of the coordinated long-term services program,

•

the Departments report regularly on the numbers of clients in home and community-

based waiver services, persons receiving personal care option services, the numbers of

persons in nursing homes, and describe any other services provided through the

coordinated long-term services program and the number of people receiving those

services.

House Memorial 16/HCPACS– Page

4

The memorial further resolves that copies of this memorial are be transmitted to the chairs of the

interim Legislative Finance Committee and Health and Human Services Committee and to the

secretaries of HSD and ALTSD.

ALTERNATIVES

Once the rate structure and financial incentives are known, health care consumers and advocates

may be more confident that the program will provide the needed services as intended; and,

whether the incentives will work toward the goal of serving people in the community rather than

in nursing homes.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

HSD believes that Medicaid consumers of long-term services will be able to access a coordinated

system of long-term, acute and primary care sooner, rather than later.

QUESTIONS

Will an enrollee be guaranteed that they may continue to receive care from the health providers

within their health care network under the new program.

AHO/bb