“Money Follows the Person” Programs Increase Transition Rates into Community While Reducing Overall System Spending

“Money Follows the Person” programs (MFP) are becoming increasingly popular across the country, and for good reason. A recent study by H. Stephen Kaye, Ph.D. of the University of California at San Francisco’s Community Living Policy Center, shows that states with strong MFP programs are able to transition patients receiving long-term services and supports (LTSS) in institutions back into the community at higher rates.

In fact, in Kaye’s “Evidence for the Impact of the Money Follows the Person Program,” the numbers 

actually quite staggering. In 2017, Kaye found that states with high MFP transitioned 50.5 residents per 100,000 back into the community[1]. When compared to states with medium and low or no MFP transitioning 27.4 and 16.3 residents per 100,000, respectively, it’s easy to see the value of these programs.

Furthermore, looking at nursing homes, states with high MFP are vastly more successful in reducing occupancy rates. Since 2007, those with robust MFP programs experienced a 7.1% decline in nursing home occupancy rates, compared to 4.5% and 1.7%, respectively, in states with medium and low/no MFP.

One reason for this success is that MFP programs provide access to federal funds specifically designated to help transition individuals from nursing facilities back into the community. The MFP program doesn’t provide individuals with grants, instead, it provides states with grants that enable them to create these programs. The goals are twofold, to transition eligible nursing home residents back into the community, and to encourage states to expand their current home-and-community-based services (HCBS).  

Far-Reaching Benefits of MFP Programs

Through these programs, more than 10,000 people were transitioned back to the community every year from 2012 to 2017. In total, as of June 2018, 91,540 institutional residents had transitioned back to the community in 44 states and the District of Columbia. While the results of Dr. Kaye’s research show the significance of MFP programs, it’s also important to understand the far-reaching impact of them.

First and foremost, MFP programs enrich the lives of those who qualify for the program. A recent AARP study shows that 80% of those 50 years of age or older want to remain in the community and their homes while they age[2]. These programs increase the likelihood of that happening.

Staying at home increases comfort level, allowing individuals to use their own bathroom, sleep in their own bed, and continue with their typical daily routines. Not only is aging in place more comfortable for these individuals, but it is also healthier. Being in familiar surroundings is beneficial for those with progressive cognitive conditions like dementia. Bryan James, an epidemiologist at the Rush Alzheimer’s Disease Center in Chicago, examined over 1,100 seniors without dementia, frequently testing their cognitive functioning and recording their social activity levels. James found that the rate of cognitive decline in individuals with frequent social activity was 70% less than those with low social activity[3]. Remaining at home and in the community allows individuals to keep their current social network and enable greater family involvement, which slows the decrease in cognitive function.

In addition, studies show that patients recover from surgery and illness more successfully and faster when they’re recuperating in the comfort of their own home. The same Journal of the American Geriatrics Society study found that rehospitalization was less likely with home care, when compared to a nursing home or assisted living center, which reduced total medical bills by approximately 35%[4].

While returning those receiving long-term services and supports (LTSS) in institutions back into their homes and the community has numerous health and emotional benefits, there are benefits beyond that. Transitioning these individuals back into the community also creates significant cost savings to Medicaid and Medicare by shifting the need to rely on institutional services to HCBS. A report from Medicaid.gov examined the cost of transitioning one older adult from a nursing home to HCBS and found an average cost savings of $22,080 during the first year. Overall, that could result in $275 million in LTSS medical cost savings[5].

However, it’s important to consider all of the costs associated with aging at home. Aging at home, which the U.S. Centers for Disease Control and Prevention (CDC) defines as “the ability to live in one’s own home and community safely, independently and comfortably, regardless of age, income or ability level,”[6] often requires home alterations.  These modifications are required to make a space comfortable, and most importantly, safe to live in.

Simple modifications, which include grab bars, lever-handled doorknobs, non-slip shower mats, replacement rugs, sturdy handrails, and better lighting, can cost up to $10,000[7]. If more extensive renovations are required, like widening hallways, adding an accessible ramp, lowering cabinets, installing no-step showers, and a generator in case of power loss, costs can rise drastically to the low six figures.

These costs might seem prohibitive to allowing individuals to transition back into the community, but some states are utilizing MFP programs to respond to the challenge by paying for home modifications. While this varies by state, some MFP programs provide up to $45,000 for home modifications like lowering cabinets, widening doorways, and adding wheelchair ramps[8].

Uncertain Future

While there have been significant results showing the benefits of MFP programs, the program expired at the end of fiscal year 2016[9]. While states can continue to claim funding through 2021, some have already exhausted their allotment. In an attempt to prolong the program, the Medicaid Services Investment and Accountability Act became law on April 18, 2019, adding an additional $20 million in short-term funding to the program. Since then, a few other short-term extensions have passed, but the program remains only funded through 2019[10].

On June 29, 2019, the House passed H.R. 3253, the Empowering Beneficiaries, Ensuring Access and Strengthening Accountability Act.  H.R. 3253 bill would fund the Money Follows the Person program through Fiscal Year 2023.  However, the Senate has yet to approve the long-term funding for MFP by passing H.R. 3253 or EMPOWER Care Act.  With funding for the program exhausting itself in September 2019, the time to act is now if the goal remains to transition a higher rate of individuals receiving long-term services and supports (LTSS) in institutions back into the community.

[1] Dr. H. Stephen Kaye: Evidence for the Impact of the Money Follows the Person Program (https://clpc.ucsf.edu/publications/evidence-impact-money-follows-person-program)

 

[2] AARP: 2018 HOME AND COMMUNITY PREFERENCES SURVEY: A NATIONAL SURVEY OF ADULTS AGE 18-PLUS (https://www.aarp.org/content/dam/aarp/research/surveys_statistics/liv-com/2018/home-community-preferences-survey.doi.10.26419-2Fres.00231.001.pdf)

 

[3] Bryan James: How Social Connections Keep Seniors Healthy (https://greatergood.berkeley.edu/article/item/how_social_connections_keep_seniors_healthy)

 

[4] Journal of the American Geriatric Society: Transitional Care of Older Adults Hospitalized with Heart Failure: A Randomized, Controlled Trial (https://onlinelibrary.wiley.com/doi/full/10.1111/j.1532-5415.2004.52202.x)

 

[5] Medicaid.gov: Money Follows the Person (https://www.medicaid.gov/medicaid/ltss/money-follows-the-person/index.html)

 

[6] Centers for Disease Control and Prevention: Healthy Places Terminology (https://www.cdc.gov/healthyplaces/terminology.htm)

 

[7] CNBC: Aging in place vs. assisted living … It’s complicated (https://www.cnbc.com/2018/06/14/aging-in-place-vs-assisted-living-its-complicated.html)

 

[8] Paying for Senior Care: Miscellaneous Resources to Help Seniors Pay for Home Modifications (https://www.payingforseniorcare.com/home-modifications/misc-home-modification-resources.html)

 

[9] Home Health Care News: House Lawmakers Pass Short-Term Money Follows the Person Extension (https://homehealthcarenews.com/2019/04/house-lawmakers-pass-short-term-money-follows-the-person-extension/)

 

[10] Center for Public Representation: MFP Bills (https://medicaid.publicrep.org/empower-care-act/)

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About the Author

Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).

His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.

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