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Home and Community Based Services – the Future of Healthcare?

In January 2014, the Centers for Medicare & Medicaid Services (CMS) announced the publication of an important final rule about home and community-based services (HCBS) provided through Medicaid’s 1915(c) HCBS Waiver program, the 1915(i) HCBS State Plan Option, and 1915(k) Community First Choice. The rule enhances the quality of HCBS, provides additional protections to HCBS program participants, and ensures that individuals receiving services through HCBS programs have full access to the benefits of community living.

Home and community-based services (HCBS) is a specific term for Medicaid’s waiver services intended to provide opportunities for beneficiaries to receive support within their home or in the community, allowing states to provide non-institutional and non-clinic-based services. The program will serve patients who traditionally have received care in institutional settings. HCBS provides treatment for a variety of targeted populations groups, such as people with mental illnesses, behavioral, intellectual or developmental disabilities, and/or physical disabilities.

Medicaid’s HCBS regulations seek to enhance the quality of HCBS by expanding personal care, home health, adult day care, respite care, and by providing additional protections to individuals that receive services under these Medicaid authorities. Mobility limitations, brain injury, intellectual disabilities, and developmental disabilities often limit the individual to their home. Through its client focused services, the location of the treatment is determined by looking at the needs of the individual and what best supports the client’s treatment plan.

HCBS allows Medicaid to provide health care coverage to individuals with the greatest treatment and support needs as well as provides more tangible treatment options. As Medicaid costs continue to increase, due to expanded coverage and longer life spans, HCBS is quickly gaining favor as it reduces Medicaid costs by providing service to clients outside of the traditional treatment setting, reducing costs for traditional office and institutional needs. Of course, there are concerns that patient (client) needs may not be fully addressed in the HCBS setting.

In a study of 26 states over a period of 7 years (2005-2012), which reviewed the cost effectiveness of HCBS services, AARP Public Policy Institute notes “The studies consistently provide evidence of cost containment and a slower rate of spending growth as states have expanded HCBS.” As more states become aware of the cost effectiveness of HCBS, the number of state Medicaid plans expanding HCBS waiver programs grow. Between 2009 and 2011, state and federal spending on Medicaid waiver HCBS for people with intellectual and developmental disabilities increased by 10.7%, from $25.1 billion in 2009 to $27.8 billion in 2011. Medicaid paid $134.1 billion for institutional care or HCBS in 2012. In 2014, CMS released their rule defining settings eligible for Medicaid reimbursement for HCBS. As a result, 41 states implemented HCBS waivers or SPA expansions, and 46 had adopted plans to do so in fiscal year 2015. States are focused on closing state hospitals and moving consumers to the community.

Along with the fiscal benefits, providers, payers and health plans are looking to HCBS as a means of providing accountable and quality care in hand with treatment based, client centered services. New remote monitoring tools (released by CMS this past March) enable those providers offering transitional, supervisory, and rehabilitation services the ability to continue to support and work with clients following their discharge from a formal facility. These community supports help the client reacclimatize and the treatment progress to be monitored indefinitely, reducing readmissions by transitioning from facility to community and increasing overall success rates.

Currently, there are three different HCBS health home models:[1]

  1. The most popular (chosen by 11 states) amongst state Medicaid programs are those which contract directly with providers. These programs certify, pay, and monitor providers of health home services directly.
  2. Four states have opted to contract directly with health home providers in addition to contracting with a separate agency that only provides care coordination services, both receiving payment from the state. Care coordinators offer support to provider organizations, provide additional care coordination to enrollees, identify high-risk patients and are expected to support and strengthen the health home network.
  3. The remaining health home model, utilized by four states, is a Medicaid program that contracts with lead entities responsible for paying providers and making sure the core health home competencies are achieved. These providers assume many of the state’s duties related to health homes and manage the program, health plans, or behavioral health organizations that manage the network of health home providers.

For more information regarding Medicaid’s HBCS rules click here.

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[1] Mandros, Athena, “Who is Actually Managing Home Health Services?”, OpenMinds, March 14, 2015.