New Era Begins for Long-Term Care in NJ as Healthcare Model Shifts

Medicaid comprehensive waiver moves state from system focused on nursing homes to more home-based and community services

Horizon NJ Health CEO Erhardt Preitauer
Today marks a key moment in the transformation of long-term care in New Jersey, as the state shifts from a system that emphasized nursing homes toward one that gives more funding to home-based and community services.

Under the Medicaid Managed Long-Term Supports and Services (MLTSS) program launching today, New Jersey will no longer pay a fee for each individual long-term medical-related service residents receive. Instead, the state will pay managed care organizations a fixed amount to coordinate all of the healthcare and other long-term services.

The managed-care program is the centerpiece of five-year Medicaid comprehensive waiver, which aims to save the state money while still improving services by focusing more on residents’ individual needs.

The complicated rule-making process — in which the state sought input from the various interest groups affected by the change — delayed the program into the third year of the waiver, which also starts today.

In addition to covering healthcare for low-income residents, the federally and state-funded Medicaid program also serves as the primary means for paying for nursing homes and other forms of long-term services for both senior citizens and people with disabilities.

Spending for long-term care is significant, amounting to $3.54 billion in the fiscal year ending in June 2012, which represented 34.1 percent of the state’s total of $10.39 billion in Medicaid spending.

Representatives of Gov. Chris Christie’s administration and the insurance industry, as well as advocates for seniors, expressed enthusiasm about yesterday’s program launch.

“For nearly two years we’ve been working with consumer groups and the managed care organizations to make any and all necessary preparations for the program and its launch,” state Department of Human Services spokeswoman Nicole Brossoie wrote in an email yesterday. “MLTSS presents New Jerseyans who are seniors or living with disabilities a choice they didn’t have before – the ability to access Medicaid services in a home setting rather than only in a nursing home or institution. It is a sea change in philosophy and practice.”

The state’s Medicaid managed care organizations (MCOs) have been hiring and training nurses and social workers in recent weeks to provide the individualized care coordination that the new state program requires.

Horizon NJ Health, the insurer’s Medicaid MCO, has hired 200 care coordinators to visit people in their homes and tailor their long-term care services to meet their needs.

Horizon NJ Health CEO Erhardt Preitauer said the care coordinators received intensive training, and that face-to-face care coordination will benefit plan members.

“To see the pills they’re taking, their living conditions … that’s when we can best understand the whole member and that’s what we’re trying to do here,” said Preitauer.

He said management of long-term services would build on the experience that MCOs already have in managing patients’ healthcare needs.

A major potential advantage of moving to managed care for long-term services is the reduction in regulatory barriers that currently exist for people who receive different healthcare services.

For example, before the comprehensive waiver was reached, separate waivers covering behavioral health services and home-based services could lead to delays in people being approved for care. The walls between such medical services are being removed as part of the comprehensive waiver.

“All of that comes together,” said Preitauer, adding: “We’re able to give and focus more on the holistic needs of the members and take out some of those barriers.”

While the state is giving more funding and attention to home- and community-based services, from home health aides to assisted living, nursing homes will still be an essential piece of long-term care in the state.

Legislators have raised concerns that the state isn’t providing enough funding for the homes, while industry advocates have noted that the MLTSS program will result in nursing homes having to care for a sicker population, as healthier people delay admission to nursing facilities.

State officials have said they monitor nursing homes closely and haven’t seen any problems with residents not having access to acceptable care.

Under MLTSS, current nursing home residents will remain in their facilities, but some residents who would previously have been likely candidates for moving into nursing homes will now receive services in their homes or in assisted-living facilities. Nursing home residents who require more specialized care will not be moved into the managed care system for another two years.

“It’s really, first of all, about where the members want to be, where they can be safely,” Preitauer said, noting that some nursing-home residents may prefer to move.

Preitauer expects the upfront cost of hiring care coordinators to be paid off over the next several years through reductions in spending in other areas, such as elimination of unnecessary trips to the emergency department.

Horizon is one of five MCOs involved in the new program, along with Amerigroup New Jersey Inc., Healthfirst Health Plan of New Jersey Inc., UnitedHealthcare Community Plan and WellCare Health Plans of New Jersey.

Amerigroup New Jersey Vice President Jennifer Langer Jacobs called the program’s launch a “huge step forward.” She said many of the nurses and social workers who her company has hired to be care coordinators have previously experience with the state’s separate waiver programs.

Jacobs said there is strong public support for shifting to home- and community-based services.

“Ninety percent of our seniors say it’s important to have the option of staying in the community and it turns out that this is a cost-effective solution,” she said, noting that despite state efforts up to this point, New Jersey is in the bottom half of states in funding areas like assisted living and home-based care.

“Many of us will need a nursing home someday,” Jacobs noted. But with better coordination of services, “you can delay or prevent that nursing home admission. That’s great for the member or their family. You get to go to more dance recitals. You get to go to more family dinners on a Sunday night.”

Jacobs said her company and the state have both learned from the experiences of other states.

For example, Tennessee required health plans to contract with any provider of residential services at state-set rates when it launched its managed long-term services program. New Jersey has adopted that approach and Amerigroup New Jersey is drawing on the experience of its Tennessee counterpart to implement it, after having visited with senior company and state officials in Tennessee, Jacobs said.

AARP New Jersey officials also said they look forward to the greater flexibility that the program will bring, allowing people to choose home- and community-based care.

“Allowing more residents to live in their homes and community is good health policy by creating new and expanded services,” said Douglas Johnston, AARP New Jersey governmental affairs manager, in a statement. “It is also good fiscal policy. The costs of home and community based services are significantly lower than institutional care and is expected to reduce costs for all taxpayers.”

Gov. Chris Christie’s office gave a vote of confidence to the program yesterday, in a statement announcing the governor’s line-item veto of some items in the state budget.

The statement noted that the budget retains $125 million for MLTSS. While Christie had requested that amount in his budget proposal, supporters of the program expressed concern to the administration after GOP members on the Senate Budget and Appropriations Committee proposed cutting funding by $82 million and delaying the transition from a fee-for-service-based system for a year.

State officials asked those who experience problems during the program’s implementation to call the Department of Health and Human Services at (866) 854-1596.

“Of course, we anticipate some minor challenges, but overall we’re confident that the infrastructure is in place for a successful program,” Brossoie said.