LA can deliver more without inefficient new program

It makes more sense to fix an inefficient system than to take on a new entitlement, which is why Louisiana’s decision to join three-quarters of the states in opting out of participation in a Patient Protection and Affordable Care Act spinoff program makes absolute sense.

The state recently signaled that it would not pursue participation in the Community First Choice option. This would mandate that the state through Medicaid provide home- and community-based health care services to individuals whose household income is 150 percent of the federal poverty limit. These services would have to be provided regardless of whether without their provision an individual would be at risk to require institutional care such as in a nursing home, and also are possible if that risk is present and income is above that level.

Currently, a household may receive Medicaid services in Louisiana if generally having an income at 25 percent of the FPL and having any of several other qualifications such as the household having children, the elderly, or developmentally disabled individuals. The FPL limits may be substantially higher for qualification depending upon theses statuses. The CFC option makes new services more widely available principally for the elderly because for most instances of disability there are other (Section 1915c) waiver programs that already cover individuals’ needs, at FPL levels usually much higher than the typical.

If entering into the program, states would get a six percent boost in its reimbursement rate. At Louisiana’s current 62 percent level, this would mean that the state still would pay nearly a third of all costs for new clients, on an estimated 21,000 new enrollees would have cost as much as $645 million more a year. Under the original interpretation of the law, the state thought it would cover many fewer people and services, but federal rules issued subsequent to the law’s passage expanded those.

In fact, much overlap with the waiver programs would be created, which operate under a different set of rules that give the state more control over determining eligibility and in cost control. In essence, it was the lack of this flexibility in the new program that encouraged the state to abandon the effort.

By accepting the CFC as its requirements now are interpreted, the state would have committed the same mistake it made over a decade ago when it began setting up waiver programs, when in its haste to comply with both federal (Olmstead) and state (Barthelemy) court decisions that said the state was not allowing those with disabilities the chance to receive state aid in the least restrictive setting, it poorly matched actual need to resources provided and was overgenerous in its service provision. The legacy of this is a set of waiting lists of varying lengths for various services, in part because resources are not wisely used (there are other reasons as well, such as lack of coordination in application and distribution of waiver slots). The blunt nature of the CFC would create a new entitlement that would discriminate poorly among truly needy households that don’t have much in the way of resources (many of whom can be covered under existing waiver programs) and those not so needy with many more resources.

Also a method to provide increased service provision is to steer away from the institutional bias present still in long term care provided through state resources. Too much money is shunted to nursing homes instead of to less expensive and more appropriate options. The Legislature has been reluctant to make more than marginal changes to this policy that wastes potentially a hundred million or more of dollars a year.

So the real solution is to make the existing waiver programs work better, an ongoing activity of the state since the advent of Gov. Bobby Jindal administration, and to reallocate existing funds, which both might even lead to expanding eligibility where prudent to bring greater efficiency that allows serving more and more quickly, instead of heaping on another program that does not give states adequate ability to pursue cost efficiency in implementation. Naturally, this is lost on those ideologically wedded to the expansion of government who, despite all of the empirical evidence, continue to deny that general Medicaid expansion would not produce higher state costs and worse outcomes for clients, as they blame the CFC turnaround on Jindal’s sensible rejection of the larger expansion.

But for those who put facts before ideology, it’s clear Louisiana’s better course is improvement in current delivery of services to the disabled that will lead to more services delivered to more people, rather than to throw more money inefficiently around, by beggaring other state priorities or by taking more of the people’s resources, to do the same.