Court ruling could wreck LA spending efficiency plans

Its relevance often lost to a wider audience given the complexity of the function involving it, Louisiana’s provision of health care services is an important area of reform because of the potentially huge savings that can result while service levels promise to remain undiminished or actually to improve. A legal test brings this into sharper focus in the shadow of budget cuts.

By law, through the federal Medicaid program (if a state chooses to accept money for that program), a state must provide health care for the indigent. For less-healthier individuals that have some kind of developmental disability (meaning mental and/or physical handicap) while the levels of income and wealth are somewhat higher that would permit service delivery, the concept is the same in that if they or their families qualify, the state must provide these services within a reasonable time frame of qualification.

Two outcomes are possible at qualification. One is going on a waiting list for a “waiver” to the regular program, and the waivers themselves designate different kinds of tasks to be performed in provision for different amounts of hours per week. The waiver providing services most intensely is the New Opportunities Waiver which can be 24 hours a day of services provided. The other is for the client to be placed in a facility run by or whose place in was paid for by the state which, if residential, would provide for 24 hours a day of care.

In fact, the waiver program exists only because of a pair of lawsuits, one at the federal level and one in Louisiana courts that were settled a decade ago. The plaintiffs had argued that the state’s policy of an all-or-nothing approach, institutionalization or no provision, violated clients’ civil rights. The settlement was the creation of the waiver programs to allow clients to live at home or in group homes in the community to receive services in those settings. (The settlement actually expired at the end of last year.)

However, the intake process was not well-considered and, in the time since implementation, two major problems have emerged that have ended up spending precious dollars very inefficiently. First, insufficient consideration was given to matching resources to needs. In other words, some clients got much more in the way of services than they really needed, and others got less. Second, waiting lists created by lack of funding would have individuals are far greater demonstrated need on them than many receiving services.

The first in particular spawned a related difficulty. In the waiving of the typical Medicaid spending parameters, which favored institutionalization, federal regulation permits this only when the home- or community-based provision is less costly than institutionalization. With the imbalance of services to actual needs in many cases, this artificially drove up costs to where Louisiana began to be in violation of the regulations, meaning it could be stripped of funding unless corrected.

In the past couple of years, the state has begun that process through the application of a Resource Allocation Model that theoretically should better match actual need to hours of service provided. While there have been questions over the fairness of the application of it, in that waiver program participants first went through the assessment process and only now has the state said it would get around to applying it to institutionalized clients (fought by the nursing home industry because it would lose a number of clients and therefore funding), if done fairly this realigning could save the state hundreds of millions of dollars annually in the future and/or expand services to those who truly need them.

That process is being challenged in court by the family of a 38-year-old man both physically and mentally developmentally disabled whose hours were reduced from 24 to three to seven daily. This is outside the normal appeals process conducted through the administering agency itself, the Department of Health and Hospitals, which for most individuals produced a maximum of 42 hours a week of benefits that in some cases reduced their hours by more than half. However, in some ways it has the same effect as department policy which is to continue services at the higher level until a resolution is reached.

The suit seems to rest on two bases, that the assessment was done improperly (the state contracts them out) and that the cut would necessitate a move from home- to institutionalized-based care which its argues solely is triggered by a need to reduce spending which would violate the civil rights of the man. The first issue largely is administrative but the second teeters on the fulcrum of a profound impact to state policy and spending.

Presently, clients do not have a right to be at home to receive services by the state. At present, if the state can demonstrate that the costs involved in home provision to service his needs adequately, how ever many hours up to 24 that would involve, would exceed those of his living in an institution to provide the same level of service, then he would be compelled to live in an institution or accept fewer hours outside.

Thus, the case rests on two things, whether the model itself accurately gauges need but, more broadly, it may wander to the question of whether there is such a qualitative difference in home vs. institutional provision that home provision can be the only alternative. If the court were to agree with the latter, this could dramatically increase costs of provision, not only defeating savings attempts but also perhaps increasing costs even further. That’s the broader picture; more narrowly it would stretch state resources further and give it the opportunity to continue denial of waiver services for those still on waiting lists.

Hopefully, by court decision or consent decree, the outcome will balance accurately the needs of the client with the overall obligation of the state. Health care using taxpayer resources, much less one in a preferred setting, is not a right and any standard that interjects the opposite ideology into the process risks a huge fiscal hit on a citizenry willing to pay to help the less fortunate, but which should not have to subsidize a mode of living that is not absolutely medically necessary.