oversight

Nursing Homes: Admission Problems for Medicaid Recipients and Attempts to Solve Them

Published by the Government Accountability Office on 1990-09-05.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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Human Resources Division

B-232993

September 5, 1990

The Honorable Howard M. Metzenbaum
United States Senate

Dear Senator Metzenbaum:

This report, prepared at your request, discusses problems Medicaid recipients face when
trying to gain admission to nursing homes. It includes information on the types of reforms
that have been implemented in various states and factors that influence states’ willingness to
improve access for Medicaid recipients.

We are sending copies of this report to interested congressional committees, the Director of
the Office of Management and Budget, and the Secretary of Health and Human Services, and
are making copies available to others on request.

Please contact me on (202) 2756461 if you or your staff have any questions concerning the
report. Other major contributors are listed in appendix I.

Sincerely yours,




Janet L. Shikles
Director, Health Financing
  and Policy Issues
Elxecutive


                   To control Medicaid spending for nursing home care, states can limit
Purpose            their payment rates and restrict the supply of nursing home beds.
                   Restricting bed supply can create an excess demand for nursing home
                   care. When this occurs, nursing homes that participate in Medicaid have
                   an incentive to select the most profitable applicants-such  as higher
                   paying private payers or Medicaid recipients needing relatively limited
                   care. Medicaid recipients with greater care needs may have trouble
                   gaining access to nursing homes.

                   Responding to a request from Senator Howard Metzenbaum, GAO identi-
                   fied the types of people having problems getting into nursing homes,
                   factors contributing to those problems, the effects those problems have
                   on health care costs, and state actions to improve access.


                   Medicaid is a federally aided, state-administered medical assistance pro-
Background         gram enacted to provide the poor with access to health care. Intended
                   initially as an acute-care program for the poor, Medicaid has become the
                   principal public program financing long-term care for the elderly and
                   disabled.

                   Nursing home care is one of the largest components of Medicaid
                   spending and is likely to grow as our population ages. Federal and state
                   Medicaid spending for 1988 was $49 billion; over $14 billion of it went
                   to nursing home care.

                   GAO  reviewed research and reports on nursing home access issues, inter-
                   viewed long-term care experts, and visited nine states to obtain informa-
                   tion on the types of elderly having access problems and state actions to
                   improve access.


                   Medicaid recipients have more problems getting into nursing homes than
Results in Brief   higher paying private payers. Equalizing payment rates for the two
                   groups, or reducing the difference between their payment rates, can
                   improve access for Medicaid recipients. Establishing rates that are
                   scaled to the severity of Medicaid recipient care needs can also improve
                   access for those needing more care, that is those with “heavy” care
                   needs. Increasing Medicaid rates, however, obviously would cost more
                   money, and some states believe they cannot afford to pay more due to
                   limited financial resources and competing demands for those resources.
                   In order to avoid higher Medicaid spending, some states have restricted
                   the supply of nursing home beds, and, thereby, created a shortage.


                   Page 2                          GAO/H&Do-135 Medicaid Accessto Nursing Homes
                          Executive Summary




                          Faced with these shortages, some states have tried regulatory reforms,
                          with uncertain effectiveness, to allocate existing beds so that Medicaid
                          recipients and private payers have an equal chance of getting an avail-
                          able bed.



Principal Findings

Wide Variation in Types   Although consistent, quantitative state data on the extent and severity
and Severity of Access    of access problems and their effects on health care spending are lacking,
                          the predominant views of those GAO visited were that certain types of
Problems                  Medicaid recipients in the nine states have more problems getting into
                          nursing homes than comparable private payers. In Minnesota and Ohio,
                          for example, only Medicaid recipients with the heaviest care needs have
                          more problems than comparable private payers, but those with light and
                          heavy care needs have more problems in California, Massachusetts, and
                          South Carolina.

                          There are no generally accepted measures of access, but nursing home
                          access problems are described in some states by the length of time it
                          takes to be placed in a nursing home. A Massachusetts state office
                          found, for example, that a Medicaid recipient waited an average of 101
                          days for admission to a nursing home compared to an average 66-day
                          wait for private payers. (See pp. 14-19.)


Nursing Home Access       When Medicaid recipients unnecessarily stay in a hospital because a
Problems Can Result in    nursing home bed is not available, the care they receive is much more
                          costly than that provided in a nursing home. In California, for example,
Increased Health Care     the days that patients spent in a hospital waiting for an available Medi-
costs                     care or Medicaid nursing home bed increased 56 percent in 1 year,
                          raising the cost of care for these days from $5.7 million to $10.5 million.
                          (See pp. 19-22.)


Payment Reforms to        Minnesota required that Medicaid and private-pay rates be equal,
                          thereby improving access for Medicaid recipients by removing the finan-
Improve Access            cial incentive nursing homes had to select private payers. Reducing dif-
              I           ferences between Medicaid and private-pay rates or changing the
                          payment system from one where the same payment is made for all Medi-
                          caid recipients to one based on the level of care needed also improved


                          Page 3                            GAO/HlUWO-135Medicaid Accessto Nursing Homes
                            Executive Summary




                            access for Medicaid recipients in a number of states. For example, Ohio
                            and Florida reported significant improvement in access to nursing
                            homes for Medicaid recipients after implementation of Medicaid rate
                            increases. Likewise, New York reported that implementation of a pay-
                            ment system based on care needs improved access for Medicaid recipi-
                            ents with heavy care needs. (See pp. 23-28.)


States May Not Be Willing   For financial reasons, states may not be willing to voluntarily improve
to Improve Access           Medicaid recipients’ access to nursing homes through payment reforms
                            or other measures, such as expanding the supply of nursing home beds.
                            In an environment of tight budgets and competing priorities for
                            expanded services, some states have acted in ways that do not promote
                            improved access, South Carolina, for example, placed a moratorium on
                            new Medicaid nursing home beds in 1981, resulting in a decline in the
                            percentage of Medicaid residents from over 80 percent to about 71 per-
                            cent in 1988. California and Mississippi have imposed limits on the
                            amount of Medicaid spending, effectively restricting their ability to
                            expand the number of Medicaid nursing home beds or implement pay-
                            ment reforms. (See pp. 29-33.)


Regulatory Reforms to       Regulatory reforms that remove the source of payment as a criterion for
Improve Access              admission can improve access for Medicaid recipients. Connecticut and
                            Ohio established so called wait list laws essentially requiring nursing
                            homes to admit applicants on a first-come, first-served basis. Four states
                            (Massachusetts, New York, Ohio, and South Carolina) established census
                            requirements- admissions must be on a first-come, first-served basis
                            until a specified census of Medicaid recipients is achieved.

                            Some officials, however, considered such regulatory reforms inappro-
                            priate and ineffective. Some questioned the appropriateness of regula-
                            tory reforms because they remove nursing home flexibility to select
                            private payers over Medicaid recipients. They maintain that this flexi-
                            bility is essential for financial viability; if states want equity of access,
                            they must also provide equity of payment. Others felt census require-
                            ments institutionalized discrimination in the Medicaid program by
                            allowing nursing homes to openly discriminate against Medicaid recipi-
                            ents after the home has reached a predetermined population of Medicaid
                            recipients. Little data was available to evaluate the effectiveness of reg-
                            ulatory reforms. (See pp. 33-36.)




                            Page 4                            GAO/HRD-90-136Medicaid Accessto Nursing Homes
   1
                  J3xecutive   summary




                  This report contains no recommendations.
Recommendations

                  GAO did not obtain written comments on this report, GAO discussed the
Agency Comments   issues addressed in this report with HCFA officials. Their comments are
                  included where appropriate.




                  Page6
                                                                                        I




Contents


Letter                                                                                             1

Executive Summary                                                                                  2

Chapter 1                                                                                          8
Introduction             Medicaid
                         Many Elderly Rely on Medicaid for Help in Paying for
                                                                                                   8
                                                                                                   9
                             Nursing Home Care
                         Medicaid Is an Important Source of Revenues for Nursing                  10
                             Homes
                         Nursing Home Spending Strains State and Federal                          11
                             Medicaid Budgets
                         Objectives, Scope, and Methodology                                       12

Chapter 2                                                                                         14
The Nature and           Little Data Available on Extent and Severity of Access
                               Problems
                                                                                                  14
Effects of Problems in   Wide Variation in Types and Severity of Access Problems                  16
Getting Into Nursing     Elderly in Hospitals Awaiting Nursing Home Placement                     19
                               Increase Health Care Costs
HomesVary
Chapter 3                                                                                        23
Payment Reforms Can      States Have Considerable Flexibility in Setting Medicaid-
                              Payment Rates
                                                                                                 23
Improve Access to        Reducing Rate Difference May Improve Access for Those                    24
Nursing Homes                 Needing Light Care
                         Basing Medicaid Payments on Care Needs Can Improve                       26
                              Access for Those Needing Heavy Care

Chapter 4                                                                                        29
Factors Influencing      Medicaid Spending for the Aged Varies by State
                         Legislatively Imposed Controls Over Medicaid Spending
                                                                                                 29
                                                                                                 30
States’ Willingness to   State Financial Condition May Influence Willingness to                  31
Improve Access to             Improve Access
                         Competing Priorities May Influence Willingness to                       32
Nursing Homes                 Improve Access
Through Payment or       State Actions to Control Bed Supply Have Mixed Effects                  32
Regulatory “Reforms           on Access
                         Regulatory Reforms to Improve Access Under Medicaid                     33



                         Page 6                          GAO/HRD90-135Medicaid Accessto Nursing Homes
               Contenta




Chapter 5
Concluding
Observations
Appendix       Appendix I: Major Contributors to This Report                             40

Tables         Table 2.1: Bed Supply-Related Measures of Access in                        15
                   Selected States
               Table 2.2: Predominant Types of Medicaid Recipients                        16
                   Having Access Problems
               Table 2.3: Comparison of Average Medicaid Payment                         22
                   Rates for SNFs and ANDs
               Table 3.1: Relationship Between Access Problems and                       24
                   Medicaid Payments
               Table 4.1: Variation in State Medicaid Spending for Aged                  30
                   Recipients

Figure         Figure 1.1: Source of Nursing Home Revenues (Calendar                      11
                    Year 1986)




               Abbreviations

               AFDC       Aid to Families With Dependent Children
               AND        administratively necessary day
               DRG        diagnosis related group
               GAO        General Accounting Office
               HCFA       Health Care Financing Administration
               ICF        intermediate care facility
               SNF        skilled nursing facility
               SSI        Supplemental Security Income


               Page7                           GAO/HRD-90-116Medicaid Access to Nursing Homes
Chapter 1

Introduction


               People whose health care is paid through Medicaid-Medicaid      recipi-
               ents-generally   have more trouble getting into a nursing home than
               those who pay for their own care-private    payers. State long-term care
               ombudsmen (state advocates for the elderly who resolve complaints
               about nursing homes) have consistently identified Medicaid recipients’
               access to nursing homes as a significant problem. Moreover, we reported
               in 1988 that Medicaid recipients are among those most likely to wait for
               nursing home admission.’

               Responding to a request from Senator Howard Metzenbaum, we identi-
               fied the types of Medicaid recipients and other elderly, including those
               thought to be suffering from Alzheimer’s disease,2 who have problems
               getting into nursing homes, factors contributing to those problems, the
               effects of those problems on health care costs, and state actions to
               improve access.


               Medicaid is a federally aided, state-administered medical assistance pro-
               gram intended, among other things, to provide the poor with access to
               mainstream health care. It became effective on January 1,1966, under
               authority of title XIX of the Social Security Act (42 USC. 1396).

               Each state designs and manages its Medicaid program within broad fed-
               eral guidelines administered by the Health Care Financing Administra-
               tion (HCFA) within the Department of Health and Human Services. Title
               XIX requires states to provide certain basic services to the majority of
               Medicaid recipients; these services include inpatient and outpatient hos-
               pital, home health, physician, and skilled nursing facility (SNF) services.3
               States may also provide other “optional” services, including home and




               ‘Long-Term Care for the Elderly: Issues of Need, Access, and Cost (GAO/HRD-89-4, Nov. 28, 1988).
               Other groups likely to wait for nursing home admission include those with mental/behavioral
               problems and those whose condition requires extra nursing care.
               “Alzheimer’s is a cause of dementia. It is a degenerative disease of the central nervous system charac-
               terized by a gradual decline in intellectual functioning (memory, thought, and language) and behav-
               ioral problems, such as disruptiveness and wandering. Its diagnosis is exceedingly difficult and is
               usually made after other causes of dementia, such as alcohol intoxication, brain tumor, stroke, and
               depression have been excluded. The definitive diagnosis of Alzhelmer’s disease is made based on the
               examination of brain tissue taken at autopsy.

               “SNFs care for people whose need for daily professional nursing services is demonstrated and
               documented.



               Page g                                        GAO/HRDBO-135Medicaid Accessto Nursing Homes
                       chapter 1
                       Introduction




                       community based long-term care services and services in intermediate
                       care facilities (Ices).*

                       The federal and state government shares of Medicaid spending are
                       determined by a statutory formula that provides a minimum federal
                       share of 60 percent and a higher share to states with low per capita
                       incomes. During 1989, the maximum federal share was about 79
                       percent.

                       Medicaid eligibility criteria are among the most complex of any assis-
                       tance programs. At a minimum, states must provide Medicaid coverage
                       to all people receiving cash assistance under the federal Aid to Families
                       With Dependent Children (AFDC) program and to almost all people cov-
                       ered by the Supplemental Security Income (SSI) program.b However,
                       people in or attempting to gain admission to nursing homes can obtain
                       coverage in other ways. Thirty-one states and the District of Columbia
                       extend coverage to those whose financial resources, after deducting for
                       medical expenses, meet Medicaid income and asset limits. The other 19
                       states extend coverage to those whose income is below 300 percent of
                       the SSI payment level and assets are below state established limits. A
                       substantial portion of a Medicaid recipient’s income is applied to the cost
                       of care and Medicaid pays the remaining amount.


                       The high cost of nursing home care-approximately     $26,000 or more
Many Elderly Rely on   peryear -and the limited coverage available under   Medicare and pri-
Medicaid for Help in   vate insurance force many elderly to rely on Medicaid’s assistance in
Paying for Nursing     paying for nursing home care.” Many elderly apply for Medicaid cov-
                       erage when trying to gain admission to a nursing home. Nursing homes
Home Care              are generally reluctant to admit anyone without a guaranteed source of

                       *ICFs care for people who do not require the degree of care and treatment a hospital or SNF provides
                       but, because of a physical or mental condition, require supervision, protection, or assistance. Begin-
                       ning October 1, 1990, the distinction between SNFs and ICFs will be ellllnated and all nursing facili-
                       ties participating in Medicaid will have to meet a single set of quality standards for services,
                       residents’ rights, and administration.
                       “States can choose to limit Medicaid coverage of SSI recipients by requiring them to meet more
                       restrictive eligibility standards that were in effect on January 1, 1972, before implementation of SSI.
                       States choosing this option, however, must allow applicants to deduct SSI, optional state supplements,
                       and medical expenses from income to establish eligibility. Fourteen states use the more restrictive
                       standards option: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, Nebraska, New Hamp
                       shire, North Carolina, North Dakota, Ohio, Oklahoma, Utah, and Virginia. These states are commonly
                       referred to as 209(b) states.
                       “Medicare is a federal health Insurance program that covers most Americans 66 years of age or older
                       and certain people under 66 years of age who are disabled or have chronic kidney disease. Only
                       limited SNF services and no ICF services are covered by Medicare.



                       Page 9                                       GAO/HRD-99-136Medicaid Accessto Nursing Homes
                      Chapter 1
                      Introduction




                      payment and, consequently, access to nursing homes can be limited
                      while a state determines an applicant’s eligibility.

                      Historically, about 40 percent of elderly nursing home residents enter as
                      Medicaid recipients, about 60 percent as private payers, and the
                      remaining 10 percent under private insurance, Medicare, or other public
                      programs. Some of those who enter a nursing home as private payers,
                      however, subsequently become Medicaid-eligible. One recent study
                      found that about 11 percent of those entering as private payers spent
                      down to Medicaid-eligibility levels during their stay.7 Overall, about two-
                      thirds of nursing home residents are receiving Medicaid assistance at
                      any point.


                      Private payments from individuals and their families is the primary
Medicaid Is an        source of revenue for nursing homes, followed by Medicaid payments,
Important Source of   the primary public funding source. As shown in figure 1.1, these two
Revenuesfor Nursing   sources accounted for more than 92 percent of total national nursing
                      home revenues in calendar year 1986. Medicare financed less than 2 per-
Homes                 cent, with other sources, such as public agencies and private long-term
                      care insurers, financing the remaining 6 percent.




                      7Korbin Liu, Pamela Doty, and Kenneth Manton, “Medicaid Spenddown in Nursing Homes,” The Ger-
                      ontologist, Vol. 30, No. 1, 1990, pp. 7-15.



                      Page 10                                  GAO/HRD90-135Medicaid Accessto Nursing Homes
                                     Chapter 1
                                     Introduction




Figure 1.1: Source of Nursing Home
Revenues (Calendar Year 1986)




                                                                                            6%
                                                                                            Other




                                                                                            Medicaid




                                                                -
                                                                                            Private Payments

                                     Source: Congressional   Research Service.



                                     Medicaid spending for nursing home care is likely to grow as the popula-
Nursing Home                         tion ages8 further straining federal and state Medicaid budgets.
Spending StrainS state               Intended initially as an acute-care program for the poor, Medicaid has
and Federal Medicaid                 become the principal public program financing long-term nursing home
                                     care for the elderly and disabled. Although not foreseen when Medicaid
Budgets                              was enacted in 1965, spending for nursing home care is one of the
                                     largest components of Medicaid spending. Approximately $14.3 billion
                                     of the total $48.7 billion in federal and state Medicaid spending went for
                                     nursing home care in fiscal year 1988.

                                     Two ways that states can control increased Medicaid nursing home
                                     spending are restricting the supply of nursing home beds and limiting
                                     Medicaid payment rates for nursing home care. States can restrict the
                                     bed supply by limiting construction of nursing homes or by limiting the
                                     number of beds the states will certify for Medicaid payments.
                                     Restricting the supply of beds, in turn, can create a situation in which
                                     demand for nursing home care exceeds the supply of available beds.

                                     ‘Between 1987 and 2020, the Bureau of the Census estimates that the 66 and over age group will
                                     grow from 1 in 8 to 1 in 6 of the American population. People 86 and older, who are at the greatest
                                     risk of needing nursing home care, represent the fastest growing segment of the elderly population.



                                     Page 11                                      GAO/HRD-99-135Medicaid Accessto Nursing Homes
                            chapter 1
                            Introduction




                            When this occurs, nursing homes choosing to participate in the Medicaid
                            program have more of an incentive to select those applicants who are
                            most profitable-such   as higher paying private payers or those Medi-
                            caid recipients who need relatively limited cares9Other Medicaid recipi-
                            ents with greater care needs may have trouble gaining access to a
                            nursing home.


                            Our objectives were to identify (1) the types of Medicaid recipients and
Objectives, Scope,and       other elderly who have problems getting into nursing homes, (2) the fac-
Methodology                 tors contributing to those problems, (3) the effects of those problems on
                            health care costs, and (4) state actions to improve access to nursing
                            homes for Medicaid recipients and other elderly.

                            To meet these objectives, we

                        . reviewed, synthesized, and analyzed information from research and
                          reports on nursing home access issues;
                        l discussed factors that affect Medicaid recipients’ access to nursing
                          homes with long-term care experts, including officials from nursing
                          home industry associations, advocacy groups for the elderly, health
                          policy organizations, and federal agencies; and
                        l conducted structured interviews in nine states to gather and analyze
                          information on (1) the types of elderly having problems getting into
                          nursing homes, (2) the severity of access problems, (3) factors contrib-
                          uting to the access problems and affecting the ability of the state to
                          improve access, and (4) state actions to improve access.1o

                            In each state we interviewed Medicaid and health department officials,
                            long-term care ombudsmen, representatives from nursing home industry
                            associations, advocates for the elderly, and a judgmental sample of hos-
                            pital discharge planners and nursing home officials.

                            We did not attempt to quantify the severity of Medicaid recipients’
                            problems in gaining access to nursing homes because of the lack of (1)
                            generally accepted measures of access and (2) consistent quantitative


                            “Seventy-five percent of all nursing homes voluntarily participate in the Medicaid program.

                            “‘The nine states (California, Connecticut, Florida, Massachusetts, Minnesota, Mississippi, New York,
                            Ohio, and South Carolina) were selected to provide diversity in (1) geographic location, (2) per capita
                            income (which affects states’ ability to provide Medicaid services), (3) the number of nursing home
                            beds per 1,000 elderly over age 66, and (4) the Medicaid payments to nursing homes.



                            Page 12                                       GAO/HRDS@136Medicaid Accessto Nursing Homes
.



    Chapter 1
    Introduction




    data on access problems. Where available, however, we did obtain and
    analyze studies attempting to quantify the severity of access problems.

    We performed our work between September 1988 and May 1989 in
    accordance with generally accepted government auditing standards.




    Page 13                         GAO/HRDW-135 Medicaid Accessto Nursing Homes
Chapter 2

The Nature and Effects of Problemsin Get-tin;
Into Nursing HomesVary

                        There are no generally accepted measures of access. Frequently cited
                        data used to describe nursing home access include such measures as the
                        number of beds per 1,000 elderly over age 66, occupancy rates, waiting
                        times, and the percentage of nursing homes participating in Medicaid.
                        But evaluating access based on these measures can be misleading. Fur-
                        ther, consistent quantifiable data on the extent and severity of access
                        problems are limited.

                        During our visits to nine states, we found a wide variation in the types
                        of Medicaid recipients having access problems. Other than Medicaid
                        recipients, those having problems gaining access to nursing homes were
                        individuals awaiting approval of Medicaid eligibility and those with
                        Alzheimer’s disease or behavioral problems.

                        In some states, time spent waiting for a nursing home bed to become
                        available is used as a measure of the severity of access problems. When
                        the elderly spend that time in a hospital, health care costs increase. In
                        some cases, these increased costs, however, are absorbed by the hospital
                        or the Medicare program, giving the state little incentive to see that
                        Medicaid recipients are placed in nursing homes because the state Medi-
                        caid program does not assume liability until residents enter the nursing
                        home.


                        Although it is generally conceded that Medicaid recipients have more
Little Data Available   trouble getting into nursing homes than private payers, there are little
on Extent and           data available, either at the national or state level, on the extent and
                        severity of access problems. Further, while there is a common under-
Severity of Access      standing of what is meant by the concept of “access to care” (that is, do
Problems                those who need health care gain entry into the system?), there are no
                        generally accepted measures of access.

                        Without any generally accepted measures, nursing home access
                        problems are frequently described by such measures as

                        how many nursing home beds there are per 1,000 elderly over age 65,
                        how long is the waiting period to get into a nursing home,
                        whether the nursing home of choice or in the desired location is
                        available,
                        how many nursing homes accept Medicaid recipients,
                        how many nursing home beds are full (occupancy rates),
                        how many elderly are going without needed services that are provided
                        in nursing homes, and


                        Page 14                          GAO/HRDWl36 Medicaid Accessto Nursing Homes
                                           chapter 2
                                           The Nature and Effects of Problems in
                                           Getthg Into Nursing HomesVary




                                         . how many patients remain in the hospital because they cannot get into a
                                           nursing home.

                                           Consistent quantitative data on the extent and severity of access
                                           problems that would permit comparisons among states are limited. Fre-
                                           quently cited data relate nursing home access to bed supply, comparing
                                           beds per 1,000 elderly and occupancy rates.

                                           Evaluating access based solely on such measures can be misleading.
                                           Referring to data in table 2.1, for example, Medicaid recipients would
                                           appear to have significant access problems in Florida based on the low
                                           number of beds per 1,000 elderly. The relatively low occupancy rates of
                                           Florida nursing homes suggests, however, that beds are available. A
                                           lower ratio of beds per 1,000 elderly may be adequate if the state pro-
                                           vides a wide range of alternative care services to allow them to remain
                                           in the community. Most of the officials we spoke with in Florida thought
                                           that the supply of nursing home beds was adequate.

Table 2.1: Bed Supply-Related Measures
of Access in Selected States                                                                       Beds per 1,000   Occupancy
                                           State                                                         elderly0        rates
                                           California                                                        41.7            93
                                           Connecticut                                                       64.3        94-97
                                           Florida                                                           26.7            90
                                           Massachusetts                                                     59.4            98
                                           Minnesota                                                         89.6            94
                                           Mississippi                                                       45.8            98
                                           New York                                                          43.4            98
                                           Ohio                                                              63.7        88-90
                                           South Carolina                                                    36.5            98
                                           aHCFA, 1986 data.

                                           “As reported during visit


                                           A bed supply that appears adequate based on a high ratio of beds per
                                           1,000 elderly may not be adequate if available beds are occupied by
                                           patients who do not really need to be in a nursing home or if the beds
                                           are not Medicaid-certified or not made available to Medicaid recipients.
                                           An ample bed supply may go unfilled if Medicaid payment rates are too
                                           low to make it profitable to admit most Medicaid recipients. Finally,
                                           measuring access based on the number of facilities participating in Medi-
                                           caid can be misleading in assessing access for Medicaid recipients
                                           because participating facilities may seek Medicaid certification for only



                                           Page 15                                 GAO/HRD-O-135Medicaid Accessto Nursing Homes
                                    chapter 2
                                    The Nature and Effects of Problemain
                                    Getting Into Nursing HomeeVary




                                    part of the facility’s beds or may limit the number of Medicaid recipients
                                    admitted or both.

                                    Because of the limitations in the current measures of access, we visited
                                    nine states to obtain a better understanding of the nature and severity
                                    of access problems.


                                    Interviews with Medicaid officials, long-term care ombudsmen, hospital
Wide Variation in                   discharge planners, nursing home operators, and industry association
Types and Severity of               representatives in each of the nine states visited revealed wide variation
Access Problems                     in the types and severity of access problems for Medicaid recipients. In
                                    addition to Medicaid recipients, they frequently reported access
                                    problems for those with (1) no guaranteed source of payment (including
                                    those with Medicaid applications pending) and (2) Alzheimer’s or other
                                    behavioral problems. As shown in table 2.2, state official’s comments
                                    indicated variation among states in the predominant types of Medicaid
                                    recipients with access problems.

Table 2.2: Predominant Type8 of
Medicaid Recipients Having Accero                                                       Care needs’
Problems                            State                            Light                                        Heavy
                                    California                       Yes                                          Yes
                                    Connecticut                      No                                           Yes
                                    Florida                          No                                           Yes
                                    Massachusetts                    Yes                                          Yes
                                    Minnesota                        No                                           Nob
                                    Mississimi                       No                                           Yes
                                    New York                         Yes                                          Nob
                                    Ohio                             No                                           Nob
                                    South Carolina                   Yes                                          Yes
                                    aNursing home residents, including Medicaid beneficiaries, are usually categorized according to their
                                    care needs, ranging from light to heavy care. Contrasted with light care patients, heavy care patients
                                    are those needing more assistance in activities of daily living (eating, bathing, dressing, using the toilet,
                                    getting in or out of a chair or bed, and continence-i.e.,  bowel or bladder control) and also includes
                                    those who may need special nursing services.

                                    bAlthough heavy care patients in general did not have trouble getting into nursing homes, those with the
                                    heaviest care needs were still experiencing some access problems.


                                    In two states (Ohio and Minnesota) Medicaid recipients were said to
                                    experience few problems getting into nursing homes. Only those with
                                    the heaviest care needs, such as ventilator dependent residents, were
                                    said to be having trouble finding nursing home beds. The Ohio long-term
                                    care ombudsman said that in 1988 he received only 11 complaints


                                    Page 16                                          GAO/HRD-90-135Medicaid Accessto Nursing Homes
    cbaptm 2
    The Nature and EXfec@of Problems in
    Getting Into Nursing HomesVary




    relating specifically to nursing home admission practices. He said that in
    the late 1970s he was receiving about 260 complaints a year. Hospital
    discharge planners in Minnesota cited their ability to place a Medicaid
    recipient in a nursing home within 72 hours or even directly from the
    emergency room, if necessary, as evidence that Medicaid recipients gen-
    erally do not have access problems.

    In contrast to Ohio and Minnesota, the severity of access problems was
    expressed in terms of waiting times by officials from five states:

. The Massachusetts Executive Office of Elder Affairs found that Medi-
  caid recipients waited an average of 101 days for nursing home place-
  ment compared to 56 days for private payers. A study conducted by the
  University of Massachusetts also found longer average waiting times for
  Medicaid recipients.
l Hospital discharge planners in Connecticut said that the severity of
  access problems varies across the state. In some areas, Medicaid recipi-
  ents can be placed as quickly as private payers, while in other areas
  placement takes an average of 4 weeks for Medicaid recipients but only
  5 days for private payers.
l Hospital discharge planners in New York told us that placement takes
  significantly longer for Medicaid recipients. One said it takes 88 days to
  place Medicaid recipients, 45 days to place private payers. Another said
  the difference at his hospital was 171 days for Medicaid recipients com-
  pared to 71 for private payers. Likewise, the New York Public Health
  Council reported that it took Medicaid recipients an average of about 41
  days to find an available bed in 1984 compared to about 29 days for
  private payers.
l A 1987 report by the Florida Statewide Health Council reported longer
  placement times for Medicaid recipients, particularly those with heavy
  care needs. Hospital discharge planners and the long-term care
  ombudsman also said that Medicaid patients must wait longer for place-
  ment but did not estimate how much longer.
l Discharge planners in California reported average placement times for
  private payers of 1or 2 days and about 7 days for Medicaid recipients.
  Placement times for heavy care Medicaid recipients were said to average
  4 to 6 weeks, with some remaining in the hospital 6 to 8 months awaiting
  a nursing home bed. A study by California’s auditor general concluded
  that from 8 to 12 percent of the Medicaid population have care needs so
  extensive that they have trouble getting into nursing homes.

    Several officials described access problems in terms of the recipients’
    ability to get into the nursing home of choice. For example, in New York,


    Page 17                               GAO/HRD-90-136Medicaid Accessto Nursing Homes
chapter 2
The Nature and EfYecteof Problems In
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a representative from Friends and Relatives of the Institutionalized
Aged said that Medicaid patients can eventually find a nursing home
bed but generally cannot get into the nursing home of their choice. Fur-
ther, many nursing homes were, he said, segregating Medicaid and
private-pay residents within the nursing home. Advocates for the eld-
erly in Connecticut similarly said that Medicaid recipients generally
have fewer choices of nursing homes but, other than heavy care
patients, do not have trouble getting into nursing homes.

Elderly with behavioral problems thought to be caused by Alzheimer’s
disease or other conditions may have trouble getting into nursing homes
whether they are Medicaid recipients or not. Officials in all nine states
indicated that access problems probably exist for these people, but none
could estimate the extent of the problems. Residents with Alzheimer’s
disease often disrupt other nursing home residents. In addition, some
Alzheimer’s residents have a tendency to wander, making them difficult
to manage in nursing homes not specifically designed to allow wan-
dering in a controlled environment. Nursing homes specifically consider
behavior during the admissions process, one California advocate
explained, and determine how well the individual would fit in with the
overall environment of the home. Discharge planners from the Ohio
State University Hospital told us that they have trouble placing
Alzheimer’s patients who are combative or wander. In Mississippi,
Alzheimer’s residents are considered heavy care residents in a nursing
home market oriented toward light care. Only one or two nursing homes
in the state currently have special Alzheimer’s units.

Other elderly identified as having problems getting into nursing homes
are those who have too much income and assets to immediately qualify
for Medicaid but too little to pay for care as a private payer for more
than a few months. In states, such as South Carolina and Florida, that
do not allow the elderly to spend down “excess” income to Medicaid eli-
gibility levels, nursing homes may be reluctant to admit such patients




Page 18                                GAO/HRD-90-136Medicaid Accessto Nursing Homes
                       Chapter 2
                       The Nature and Effixta of problems in
                       Getting Into Nursing HomesVary




                       because once their assets are gone they will have no guaranteed source
                       of payment.’


                       When Medicaid recipients in need of nursing home care remain unneces-
Elderly in Hospitals   sarily in the hospital because a nursing home bed is not available, health
Awaiting Nursing       care costs increase. Although data on the number of days and costs
Home Placement         associated with such unnecessary hospital stays are limited, significant
                       problems appeared to exist in several of the states visited. Many of the
Increase Health Care   costs of such stays are, however, shifted from Medicaid to Medicare or
costs                  the hospital.”




                       ‘While most states allow the elderly whose income and/or assets exceed Medicaid eligibility limits to
                       qualify for Medicaid after spending those “excess” resources on health care, there are 19 states,
                       including 3 we visited (Florida, South Carolina, and Mississippi), that do not allow the elderly to
                       establish eligibility for nursing home care through spend down. In such states, the elderly with
                       income slightly above the Medicaid-eligibility level may have trouble getting into nursing homes
                       unless a family member is willing to guarantee payment.
                       South Carolina, for example, uses the 300-percent rule to establish Medicaid eligibility for nursing
                       home care. This means that the elderly with income above 309 percent of the SSI payment level
                       cannot become Medicaideligible regardless of how much of their income they spend on their own
                       care. For example, a person with a $1,066 per month pension during 1989 would have too much
                       income to qualify for Medicaid but too little to pay higher monthly private-pay charges for nursing
                       home care in South Carolina. Such people “fall through the cracks” unless they have a family member
                       or other person willing to guarantee payment of the difference between charges and what the person
                       can afford to pay. Included in this group, state officials said, are a number of retired teachers, state
                       employees, and civil service retirees.
                       ‘Other problems can also result. Medicaid recipients could be forced to remain in the community
                       without getting all the care they need; the availability of home- and community-based long-term care
                       was generally viewed as inadequate in each of the nine states visited. The recipients also are likely to
                       become an excessive burden on family caregivers.



                       Page 19                                       GAO/~90-136         Medicaid Access to Nursing Homes
                                Chapter 2
                                The Nature and Effecta of ProblemaLn
                                Getting Into Nursing HomeeVary




Many Patients Stay in the       Some patients cannot be discharged from acute-care hospitals as soon as
Hospital Waiting for            a physician indicates their readiness because a nursing home bed is not
                                available or their Medicaid eligibility has not been established.3 The
Nursing Home Placement          days that patients spend in the hospital waiting for a Medicare or Medi-
                                caid nursing home bed are commonly referred to as “administratively
                                necessary days” (ANDS).

                                National data on the number of patients waiting in hospitals for nursing
                                home placement and the time spent waiting are very limited. We previ-
                                ously reported, however, that ANDS are a serious problem in some states
                                and can significantly increase health care costs.” Similarly, the Congres-
                                sional Research Service reported that Massachusetts hospitals provided
                                about 260,000 ANDS in 1985. ANDS continue to be a problem in some
                                states. For example:

                            .   ANDSincreased 55 percent in California from fiscal year 1985-86 (80,340
                              days at a cost of $5.7 million) to fiscal year 1986-87 (124,903 days at a
                              cost of $10.5 million), the state’s auditor general reported. Good data on
                              the specific nature of ANDS were not available, but the auditor general
                              reported most appear to be because placement cannot be arranged.
                            . 4 12 Medicaid recipients were in Massachusetts hospitals awaiting place-
                              ment in a SNF on the day surveyed by the Massachusetts Hospital Asso-
                              ciation (April 27, 1989). In total, they had been waiting over 100,000
                              days on AND status, an average of 8 months per Medicaid recipient.
                            . Mississippi patients are in a medically unnecessary status for an
                              average of 91 days awaiting nursing home placement, a survey by the
                              Mississippi Society for Hospital Social Work Directors found.


                                :&cause they have no guaranteed source of payment, elderly who meet Medicaid income and asset
                                limits and have applied for Medicaid find it difficult to get into a nursing home until their application
                                is processed and eligibility established. Although almost all applications are eventually approved and
                                Medicaid payments made retroactive to the date of the application, nursing homes can experience
                                cash flow problems if they admit applicants who have not yet been approved for Medicaid.
                                Therefore, elderly people awaking Medicaid eligibility may remain unnecessarily in the hospital
                                because nursing homes are reluctant to admit them. For example, Connecticut officials said that the
                                elderly with pending Medicaid applications frequently remain in hospitals for as long as 90 days
                                awaiting placement in nursing homes; the cost of such care is paid by Medicare and the hospital.
                                Hospital social workers in South Carolina made similar statements. A nursing home administrator in
                                South Carolina said that, in her opinion, patients whose Medicaid applications are pending are the
                                most difficult to place. A consumer advocate in New York said that nursing homes that admit
                                patients with pending Medicaid applications arc “courting financial disaster” because of the cash
                                flow problem. He said that the application process in New York, while typically taking 45 to 60 days,
                                can take as long a9 3 years.
                                “Ohio’s Medicaid Program: Problems Identified Can Have National Importance (GAO/HRD-78-98A,
                                Oct. 23, 1978).



                                Page 20                                        GAO/HRD-90-135Medicaid Accessto Nursing Homes
                             Chapter 2
                             The Nature and Effects of Problems in
                             Getting Into Nursing HomesVary




Effect of ANDs on Health     The net effect of ANDS on health care costs is difficult to estimate
Care Costs                   because the costs may be paid by Medicare or Medicaid, absorbed by the
                             hospital, or a combination of both. In addition, the alternative cost of
                             caring for these patients in nursing homes, had they not been in hospi-
                             tals, must be considered as well. It is clear, however, that they increase
                             overall health care costs.

Medicare Payments for ANDs   Medicare covers most hospital stays for the elderly, including the stays
                             of those who also qualify for Medicaid. Medicare pays hospitals for each
                             beneficiary at a preestablished (diagnosis related group (DRG)) rate,
                             regardless of the costs actually incurred for the beneficiary. The pay-
                             ment system, however, does have a mechanism to recognize longer hos-
                             pital stays. When a beneficiary has an extraordinarily long length of
                             stay compared to other beneficiaries in the DRG, a hospital can qualify
                             for an additional “outlier” payment. For each DRG, Medicare regulations
                             establish the extent to which the hospital stay must exceed the average
                             to qualify for payment as an outlier.

                             The additional payment for a day outlier is a per diem amount based on
                             60 percent of the average Medicare per diem rate under the DRG. The
                             payment is intended to approximate the marginal cost of care beyond
                             the outlier cut-off criteria. The hospital must absorb the costs of any
                             ANDS until the criteria for outlier payments are met.

                             The number of days of outlier care can provide an approximate estimate
                             of the number and cost of ANDS. It provides, however, only an estimate
                             because (1) some patients qualifying for outlier payments still require
                             hospital care, and (2) patients with ANDS will not have outlier payments
                             associated with those days if they are discharged before reaching a stay
                             long enough to qualify as an outlier.

Medicaid Payments for ANDs   While still in a hospital, some elderly lose their Medicare coverage
                             because they (1) exhaust their Medicare benefit or (2) no longer require
                             acute care or Medicare skilled care. When this happens, and the person
                             is Medicaid eligible and needs a nursing home bed that is not available,
                             the cost of ANDS is covered by Medicaid in some states. As shown by
                             table 2.3, five states we visited pay for ANDS at rates ranging from $0 to
                             $444 higher than the rates paid for skilled nursing home care. The other
                             four states do not pay for ANDS under their Medicaid program, thus
                             forcing hospitals to absorb the costs of ANDS not covered by Medicare.




                             Page 21                                 GAO/HRD-90-136Medicaid Accessto Nursing Homes
                                                                                                                           I




                                      Chapter 2
                                      The Nature and Effects of Problems in
                                      Getting Into Nursing HomesVary




Table 2.3: Comparison of Average
Medicaid Payment Rates for SNFs and                                            Does Medicaid cover         Average Average and
ANDs                                  State                                    ANDs?                       SNF rate        rate
                                      California                               Yes                              $60       $184a
                                      Connecticut                              Yes                               97          -b


                                      Florida                                  No                                     c             c

                                      Massachusetts                            Yes                              100       235-270
                                      Minnesota                                No                                     c             c

                                      MississiDDi                              Yesd                              50       402-494”
                                      New York                                 Yes                               89’            89’
                                       - _
                                      Ohio                                      ._
                                                                               No                                     c             c
                                      .~.
                                      South Carolina                           No                                     c             c

                                      aMaximum; average not available.
                                      bNot available.

                                      CNot applicable

                                      “Limited to 30 days per hospital stay.
                                      ‘Rate depends on hospital size

                                      ‘In New York City, $114


                                      Those states that do not pay for ANDS do not always have incentive to
                                      reduce ANDS by seeing that elderly patients who have exhausted regular
                                      Medicare benefits are placed in nursing homes. By allowing patients to
                                      remain in hospitals in an AND status, many of the costs may be absorbed
                                      by Medicare or the hospital or both. For example, South Carolina, which
                                      does not pay for ANDS under its Medicaid program, allows patients to
                                      become an uncompensated care burden on the hospital unless they
                                      qualify for day outlier payments under Medicare. Once they are placed
                                      in a nursing home, however, the South Carolina Medicaid program
                                      begins to incur a liability. In South Carolina, ANDS thus reduce state
                                      spending for Medicaid but increase overall health care spending.




                                      Page 22                                       GAO/HRD-99-136Medicaid Accessto Nursing Homes
Payment Reforms Can Improve Accessto
Nursing Homes

                         States can improve access to nursing homes for Medicaid recipients by
                         establishing payment reforms. States have considerable flexibility in
                         setting Medicaid-payment rates and systems. They have used that flexi-
                         bility to establish systems where rates are set in advance. States that
                         have a wide difference between Medicaid and private-payment rates
                         have more access problems than states with a smaller difference
                         between rates. Reducing the differences between rates by increasing the
                         Medicaid rate decreases the financial incentive nursing homes have to
                         select private payers over Medicaid recipients, resulting in fewer access
                         problems. However, unless payments are also adjusted for patient care
                         needs, nursing homes have an incentive to select those Medicaid patients
                         needing lighter care. Thus, reducing the difference between Medicaid
                         and private payers may not help Medicaid patients needing heavy care.
                         Conversely, basing Medicaid payments on care needs can improve access
                         for heavy care Medicaid recipients, sometimes at the expense of light
                         care recipients.


                         Within broad federal guidelines, states have considerable flexibility to
States Have              design their Medicaid nursing home payment systems and set payment
Considerable             rates. Under provisions enacted in the Omnibus Reconciliation Act of
Flexibility in Setting   1980, states must provide for payment for nursing home care through
                         the use of rates that the state finds are reasonable and adequate to meet
Medicaid-Payment         costs. These are costs that must be incurred by efficiently and economi-
Rates                    tally operated facilities to provide services in conformity with state and
                         federal laws, regulations, and quality and safety standards. States must
                         make satisfactory assurances to the Secretary of HHS that rates meet
                         these criteria.’

                         Most states have used the flexibility provided by the 1980 act to estab-
                         lish or modify prospective payment systems. Under these systems, per
                         diem rates are set in advance and the nursing home may be permitted to
                         keep all or part of the difference between the rate and actual costs. If




                         ‘We concluded in Medicaid Methods for Setting Nursing Home Rates Should Be Improved (GAO/
                         HHD-86-26, May 9,1986), that, due to a lack of HCFA guidance and oversight, HCFA and the states
                         do not know whether payment rates are reasonable and adequate. HCFA disagreed with our recom-
                         mendation to establish guidelines for states to use in making assurances that rates are reasonable and
                         adequate. Since 1980, lawsuits have been brought in numerous states challenging Medicaid nursing
                         home rates on the basis that rates are not reasonable and adequate as required under Medicaid law.
                         The Supreme Court recently held, in Wilder v. Virginia Hospital Association that such suits are
                         proper, and expectations are that they will continue to proliferate.



                         Page 23                                      GAO/HRL%99-135
                                                                                   Medicaid Accessto Nursing Homes
                                         Chapter 3
                                         Payment Reforms Can Improve Accessto
                                         Nursing Homes




                                         the home’s costs are more than the prospective payment rate, it suffers
                                         a loss2


                                         States that have a small difference between Medicaid and private-pay
Reducing Rate                            rates generally reported fewer access problems for light care Medicaid
Difference May                           recipients. Reducing the difference can improve access by decreasing the
Improve Access for                       financial incentive to select private payers over Medicaid recipients.
                                         State actions to reduce the rate difference could include increasing Medi-
Those Needing Light                      caid rates, setting equal rates for Medicaid recipients and private payers
Care                                     or setting a limit on private-pay rates.


Relationship Between                     As shown in table 3.1, the types of Medicaid recipients having the most
Access Problems and                      trouble getting into nursing homes depends on the difference between
                                         Medicaid and private-payment rates and the extent to which Medicaid
Payment Rates and                        rates are adjusted based on care needs.
Methods
Table 3.1: Relationship Between Access
Problems and Medicaid Payments                                                                                Medicaid payments
                                                                  Types of r;okEem”sfshaving           Much lower
                                                                          P                            than private     I3~3~~~on care
                                         State
                                         --___--              Light care        Heavy care             pay?
                                         California           Yes                 Yes                  Yes                  No
                                         Connecticut
                                         __--___--.           No                  Yes                  No                   No
                                         Florida              No                  Yes                  No                   No
                                         Massachusetts        Yes                 Yes                  Yes                  No
                                         Minnesota
                                         -__-      .~_        No                  No                   No                   Yes
                                         Mississippi
                                         .____-..             No                  Yes                  No                   No
                                         New York             YeS                 No                   Yes                  Yes
                                         Ohio                 No                  No                   No                   Yes
                                         South Carolina       Yes                 Yes                  Yes                  No


                                         In each of the three states where Medicaid recipients with light and
                                         heavy care needs had problems getting into nursing homes, the state did


                                         “Although specific methods used to establish prospective payment rates vary, states generally
                                         (I) establish allowable nursing home costs for some specified base period using actual cost data sub-
                                         mitted by nursing homes on annual cost reports, (2) assign the state’s nursing homes to various sub-
                                         groups (such as urban vs. rural, SNF vs. ICF) to reflect differences in their operating costs,
                                         (3) establish a maximum or “cap” on costs to be reimbursed so that inefficient or uneconomical
                                         nursing homes will not be “rewarded” for their high costs, and (4) apply indices to the base-year costs
                                         to account for economic inflation since that year.



                                         Page 24                                      GAO/HRD-90-136Medicaid Accessto Nursing Homes
                            Chapter 3
                            Payment Reforms Can Improve Access to
                            Nurdug Homes




                            not have a payment system based on care needs, and the Medicaid pay-
                            ment was much lower than the private-pay rate. States where Medicaid
                            recipients with light care needs did not have problems getting into
                            nursing homes, the Medicaid payment was not much lower than the
                            pri vatc-pay rate.


Equal Rates Removes         Requiring that Medicaid and private-pay rates be the same removes a
Financial Incentive to      nursing home’s financial incentive to select private payers over Medi-
                            caid recipients. Advocates for the elderly generally support equal rates
Select Private Payers       as a way to eliminate access problems for Medicaid recipients, asserting
                            that the financial incentive to select private payers must be eliminated
                            before access problems can be eliminated. Industry representatives, on
                            the other hand, usually do not support equal rates because nursing
                            home revenues would then be controlled by the states because they
                            would set the payment rates nursing homes could charge for private
                            payers and Medicaid residents.

                            Minnesota equalized Medicaid and private-pay rates in 1978 at the
                            impetus of private payers, who argued that the difference between the
                            Medicaid and private payments was a form of taxation on them or their
                            families because the higher private payments were subsidizing the
                            Medicaid-payment rates. In addition, advocates favored equal rates
                            because they realized it would improve access for Medicaid recipients.
                            Most of the nursing home industry did not oppose the law primarily
                            because the difference between the Medicaid and private payments was
                            small, and the Medicaid payment was based on costs incurred. With
                            Medicaid and private-payment rates being equal, Medicaid recipients in
                            Minnesota generally do not have problems getting into nursing homes.
                            Access problems for Medicaid recipients in Minnesota, however, were
                            not significant before the adoption of equal rates.


Increasing Medicaid Rates   Two of the states included in our review (Ohio and Florida) increased
Can Improve Access          their Medicaid-payment rates in an attempt to improve access to nursing
                            homes for Medicaid recipients. Both states reported significant improve-
                            ment following the increases.

                            Ohio increased its Medicaid payment, providing a financial incentive to
                            nursing homes to admit more Medicaid recipients. The difference
                            between the Medicaid and private-pay rates was decreased from $10 to
                            $16 per day in the mid-1970s to $6 per day in 1989. The state’s long-
                            term care ombudsman said that nursing homes often chose to keep


                            Page 25                                 GAO/HRD-90-136Medicaid Accessto Nursing Homes
                            Chapter 3
                            Payment Reforms Can Improve Accessto
                            Nurshg Homes




                            nursing home beds empty rather than admit Medicaid recipients before
                            the rate increase. State officials report that since the state increased the
                            Medicaid rate, the statewide Medicaid census in nursing homes has
                            increased from 60 to 66 percent without displacing private payers; beds
                            once kept empty are now occupied by Medicaid recipients.

                            Florida, like Ohio, significantly increased Medicaid nursing home rates,
                            decreasing access problems. Before 1983, Florida had one of the lowest
                            Medicaid-payment rates in the country. As a result, Medicaid recipients
                            were having significant problems in getting into nursing homes. The
                            state increased Medicaid nursing home rates after the settlement of a
                            nursing home association lawsuit claiming that Medicaid-payment rates
                            were too low to allow nursing homes to recover the costs of caring for
                            Medicaid residents. At the time of our review, Florida’s Medicaid rate
                            was in the top 60 percent. Most state and industry officials and advo-
                            cates agree that the higher rates have improved access to the point
                            where problems are limited primarily to heavy care Medicaid patients.


Connecticut Sets Limit on   Rather than increasing Medicaid rates, Connecticut, in 1980, placed a
Rate Difference             cap on private-pay rates that limits the difference between Medicaid and
                            private-pay rates. Private-pay rates can be no more than 12 percent
                            higher than the Medicaid rate for a triple occupancy room; 26 percent
                            higher for a double occupancy room; and 60 percent higher for a private
                            room. State and industry officials, advocates, and hospital discharge
                            planners generally agreed that the Medicaid rates were adequate
                            overall. They said that the payment system, however, made it difficult
                            for heavy care patients and patients with behavioral problems, such as
                            some Alzheimer’s patients, to get into nursing homes. Problems for light
                            care patients appear to be limited to difficulties or delays in getting into
                            the nursing home of choice.


                            Frequently, the Medicaid recipients having the most trouble getting into
Basing Medicaid             nursing homes are those with the heaviest care needs. Basing Medicaid
Payments on Care            payments on the care needs of the individual can improve access to
Needs Can Improve           nursing homes for those needing heavy care. Nursing homes are not
                            likely to admit a patient if the cost of caring for the patient is likely to
Access for Those            exceed the payment received. For example, Connecticut and Florida
Needing Heavy
           *   Care         improved access for light care Medicaid recipients by decreasing the dif-
                            ference between Medicaid and private-pay rates; heavy care patients,
                            however, continued to have trouble getting into nursing homes. Minne-
                            sota, New York, and Ohio, on the other hand, minimized this problem by


                            Page 20                                GAO/HRD-90-135Medicaid Accessto Nursing Homes
Chapter 3
Payment Reform.9Can Improve Access to
Nursing Homes




setting Medicaid payments based on the individual Medicaid recipient’s
care needs.

Minnesota implemented a needs-based payment system in 1986. Under
the system, individuals are classified into 11 levels of care based on
their dependencies in the activities of daily living,3 special nursing needs
(for example, tube feeding, intravenous therapy), and behavioral
problems (for example, wandering, physically or verbally abusive).

Although the needs-based payment system has, officials told us,
improved access for most heavy care recipients in Minnesota, those with
the heaviest care needs still have trouble getting into nursing homes;
this is because the upper limit of the case mix payment is too low to
cover the cost of caring for these recipients. Likewise, discharge plan-
ners from the Ohio State University Hospital told us that, although
under the state’s needs-based payment system most Medicaid recipients
going from acute-care hospitals to nursing homes have few problems
gaining admission, those with the heaviest care needs may still have
trouble getting into a nursing home. Again, this is because the upper rate
level under the payment system is too low to cover the cost of caring for
these types of Medicaid recipients. Similar views were expressed by
state and industry officials in Ohio.

New York’s needs-based payment system was implemented in 1986 to
improve access for those with heavy care needs. Its goal was to address
access for both private payers and Medicaid recipients needing such
care, not to improve access for other Medicaid recipients. Under this
system, a nursing home’s Medicaid payment is based on the average case
mix of all the nursing home’s residents. Therefore, admitting private
payers or Medicaid recipients needing heavy care increases a nursing
home’s Medicaid-payment rate.

State officials told us that nursing homes are admitting more people
with heavy care needs since the needs-based system was implemented.
A New York State Public Health Council study reported that the number
of Medicaid recipients (expressed as a percentage of all nursing home
applicants) being admitted to nursing homes has remained the same, 50
percent. However, the Medicaid recipients now being admitted to
nursing homes are recipients needing heavier care. Like Minnesota and
Ohio, however, those needing the heaviest care were still having

“Getting in and out of bed, dressing, getting around inside the house, bathing, eating, and using the
toilet.



Page 27                                       GAO/HRJS90~13S
                                                           Medicaid Accessto Nursing Homes
Chapter 3
Payment Reformn Can Improve Accessto
Nurslng Homes




problems getting into nursing homes in New York. Reasons cited were
lack of equipment and staff to care for these types of residents.




Page 28                                GAO/IIlZDflO-136Medicaid Accessto Nursing Homes
            .

Chapter 4

Factors Influencing States’Willingnessto
Improve Accessto Nursing HomesThrough
Payment or Regulatiry Reforms
                            States’ willingness to voluntarily improve access to nursing homes for
                            Medicaid recipients through changes in Medicaid-payment rates and sys-
                            tems can be influenced by financial conditions within a state and com-
                            peting demands for limited funds. Some states have

                        l set controls over Medicaid spending that prevent states from supporting
                          an expanded bed supply or higher Medicaid payments;
                        l budget deficits that strain their ability to meet current Medicaid pro-
                          gram costs; or
                        . placed a higher priority on other programs, such as education, or on
                          other Medicaid services, such as those for pregnant women.

                            One of the primary methods states have used to contain Medicaid
                            spending is to control the supply of nursing home beds. Faced with the
                            resulting shortage of nursing home beds, severely limited financial
                            resources and competing priorities for those resources, some states have
                            attempted to improve access for Medicaid recipients through regulatory
                            reforms that are intended to give Medicaid recipients and private payers
                            an equal chance of obtaining a nursing home bed.


                            As shown in table 4.1, per capita state spending, including spending for
Medicaid Spending for       long-term care, for aged Medicaid recipients varied from $2,014 in Mis-
the Aged Varies by          sissippi to $11,303 in New York in 1986. Even though Mississippi had
State                       the lowest payment per aged recipient of the nine states visited, nearly
                            40 percent of its Medicaid payments were for aged recipients. Each of
                            the states’ Medicaid payments per aged recipient was disproportionately
                            large compared to the percentage of aged Medicaid recipients.




                            Page 29                         GAO/HRD-90-136Medicaid Accessto Nursing Homes
                                         Chapter 4
                                         Factors Influencing States’ Willingness to
                                         Improve Accessto Nursing HomesThrough
                                         Payment or Regulakx-y Reforms




Table 4.1: Variation in State Medicald
Spending for Aged Recipients                                                                   Medicaid payments
                                                                        Aged recipient as a    for aged recipients
                                                                              percent of all    a8 a percent of all     Payment per
                                                                                 recipients             payments      aged recipient
                                         California                                     13.6                   23.7             $2.221
                                         Connecticut                                    16.4                   49.3    __---- 9,366
                                         Florida                                        19.6                   43.5               3,790
                                                                                                                               -.-...-
                                         Massachusetts                                  19.6                   41.3           -- 6,649
                                         Minnesota                                      16.5                   43.2               7,923
                                         Mississippi                                    19.6                   39.8         __---2,014
                                         New York                                       15.2                   48.6   -__    -__11,303
                                         Ohio                                            8.8                   29.2          -.- 6,331
                                         South Carolina                                 17.4                   30.6               2,638
                                         Source: HCFA data for fiscal year 1986.



                                         Legislatively imposed controls over Medicaid spending can be taken as
Legislatively Imposed                    one indication of the willingness of a state legislature to improve access.
Controls Over                            These controls effectively prevent states from supporting an expanded
Medicaid Spending                        bed supply or increased Medicaid rates. A constitutional amendment
                                         limits state spending in California. Referred to as “Gann limits,”
                                         spending authority, including that for the Medicaid program, can only
                                         be increased beyond adjustments for inflation and total population
                                         growth by voter approval. State officials said that because of the
                                         spending limit, no initiative could be taken that would increase Medicaid
                                         spending. Others generally shared this view, stating that the highest pri-
                                         orities in California are currently education, law enforcement, and
                                         transportation.

                                         California’s auditor general reported that California ranked 38th out of
                                         50 states in Medicaid expenditures for nursing home care per elderly
                                         resident in 1980. A comparison completed in 1987 showed similar
                                         results; California’s Medicaid expenditures on nursing home care for the
                                         elderly averaged $423 per recipient compared to $86 1 in Massachusetts,
                                         $1,128 in Minnesota, and $1,653 in New York in 1985.

                                         Mississippi, at the time of our visit, had a limit on its Medicaid budget of
                                         $96 million. Individual components of the program, such as nursing
                                         home care, could not increase without a corresponding decrease in
                                         another component. For example, an increase in Medicaid coverage for
                                         pregnant women and infants was accomplished by cutbacks in other
                                         services.



                                         Page 30                                    GAO/HRD-90-136Medicaid Accessto Nursing Homes
                        Chapter 4
                        Factore Influenciug States’ Willingness to
                        Improve Accessto Nursing HomesThrough
                        Payment or Regulatory Reform8




                        Industry representatives cited Mississippi’s spending limits and tax base
                        (the lowest per capita income in the nation) as the primary causes of the
                        low Medicaid nursing home payment rates and the limited bed supply,
                        but recognized that there were many other programs competing for the
                        state’s available tax revenues.


                        A state’s financial condition may influence its willingness to support
State Financial         actions that would improve Medicaid recipients’ access to nursing
Condition May           homes. Connecticut and Massachusetts have among the highest per
Influence Willingness   capita incomes in the nation and long-standing commitments to long-
                        term care. Their current financial condition, however, may influence
to Improve Access       their willingness to improve access to nursing homes for Medicaid
                        recipients.

                        Connecticut’s commitment to long-term care may be waning because of
                        large budget deficits. There has been little legislative interest in
                        expanding long-term care services. Industry representatives, advocates
                        for the elderly, nursing home officials, and hospital discharge planners
                        said that at present the state’s overriding objective is cost containment.

                        Massachusetts’ budget problems affect not only its willingness to
                        improve access but also to meet existing commitments. If no new taxes
                        are imposed, the state budget for fiscal year 1991 may have to be cut by
                        $1.3 billion, with the Governor proposing that about 60 percent of the
                        cuts ($736 million) come from Medicaid. Massachusetts has also delayed
                        making Medicaid payments to nursing homes.’ The delay, industry rep-
                        resentatives, advocates for the elderly, and state officials agree, has
                        caused cash flow problems for nursing homes, making them more reluc-
                        tant to admit Medicaid applicants. The cash flow problems have made
                        banks reluctant to approve loans for nursing homes that want to main-
                        tain or expand their bed supply, industry sources said.




                        ‘Massachusetts makes nursing home payments baaed on an interim rate established at the start of the
                        rate year; it adjusts those payments at the end of the year to compensate for cost increases during the
                        year. The state has fallen behind in making these payment adjustments, and, according to industry
                        officials, owes nursing homes $260 million in final rate settlements. Although it disagrees with the
                        amount it owes (the state maintains it owes $200 million), the state agrees that it has fallen behind in
                        making payments.



                        Page 31                                       GAO/HRD90-135Medicaid Accessto Nursing Homes
                        Chapter 4
                        Factors InPluencIug Stat& Willhguees to
                        Improve Access to Nursing HomesThrough
                        Payment or Regulatory Reforms




                        Competing priorities, both within the Medicaid program and from other
Competing Priorities    state programs, such as education, can also influence a state’s willing-
May Influence           ness to improve access for Medicaid recipients. For example, officials in
                        Ohio and California said that education was a higher priority in their
Willingness to          states.
Improve Access
                        Competing priorities within the Medicaid program can also affect a
                        state’s willingness to improve access by expanding long-term care ser-
                        vices. South Carolina Medicaid officials reported that the state’s budget
                        was being stressed by federally mandated expansions of Medicaid eligi-
                        bility. The Medicare Catastrophic Coverage Act of 1988 made manda-
                        tory a previous Medicaid option that states cover pregnant women and
                        infants with family incomes at or below the federal poverty level.’ The
                        National Governors’ Association recently called for a moratorium on
                        further expansions of Medicaid, saying that the expansions have forced
                        states to make tradeoffs within the program.


                        Even though, as discussed in chapter 3, increased payment rates can
State Actions to        help improve access, state efforts to control Medicaid spending by
Control Bed Supply      restricting the supply of nursing home beds could exacerbate access
Have Mixed Effects on   problems. Each of the states visited has either directly (through mora-
                        toria on construction of new nursing home beds) or indirectly (through
Access                  the certificate-of-need programs3 or other requirements) controlled the
                        growth of nursing home beds. While excess bed supply can encourage
                        overuse of nursing homes, controls that are too strict may limit access to
                        nursing homes, especially for Medicaid recipients. Concerns were
                        expressed by some of those interviewed in South Carolina, Mississippi,
                        California, Massachusetts, Connecticut, and New York that the controls
                        over bed supply were budget driven, not based on demand, and were
                        adversely affecting Medicaid recipients’ access to nursing homes.

                        For example, South Carolina placed a moratorium on the approval of
                        certificates-of-need for new Medicaid nursing home beds in 1981 due to
                        a concern about the growth in state spending for nursing home care
                        under Medicaid. The nursing home population of Medicaid residents
                        declined from over 80 percent before the moratorium went into effect to

                        “This provision was not
                                            - repealed by the Medicare Catastrophic Coverage Repeal Act of 1989.
                        “State regulatory mechanisms for reviewing and approving or disapproving hospital-related or other
                        capital expenditures (e.g., for nursing home beds) or the provision of certain new services. In a state
                        with this program, a health care provider cannot initiate construction unless a certificate-of-need is
                        obtained from the state. Review of each project is baaed on certain preestablished planning criteria,
                        and approval requires a finding of community need.



                        Page 32                                       GAO/HRD-90-135Medicaid Accessto Numing Homes
                        Chapter 4
                        Factors Influencing States’ Willingness to
                        Improve Access to Nursing HomesThrough
                        Payment or Regulatory Reforma




                        about 71 percent in 1988. Also, data provided by the state showed that
                        the number of beds per 1,000 elderly underwent a similar decline during
                        this time. South Carolina Medicaid officials told us that the moratorium
                        was a major factor in the declines4

                        State officials in New York and Connecticut said that they use the
                        certificate-of-need program to restrict the development of nursing
                        homes and to encourage the development of alternative care services.
                        Industry representatives and advocates, however, felt that the states
                        were using the certificate-of-need program as a cost-containment tool.
                        At the time of our review, New York was projecting a shortage of over
                        11,000 nursing home beds by 1993 (based on its certificate-of-need
                        program).

                        Although California no longer has a certificate-of-need program, Cali-
                        fornia Association of Health Facilities officials said that little new con-
                        struction is taking place because Medicaid-payment rates are considered
                        inadequate, capital investment costs are high, and administrative
                        requirements for the approval of new beds are expensive. An associa-
                        tion official said that most of the newly constructed nursing homes are
                        exclusively private pay. A study by California’s Attorney General found
                        that the number of beds per 1,000 elderly declined from 63 to 40
                        between 1976 and 1986.


                        In an environment of severely limited financial resources and competing
Regulatory Reforms to   priorities for those resources, some states have attempted to improve
Improve Access Under    access to nursing homes for Medicaid recipients through regulatory
Medicaid                reforms. These reforms include (1) wait list laws that require nursing
                        homes to admit applicants on a first-come, first-served basis or (‘2)
                        census requirements that require admissions on a first-come, first-
                        served basis until a specified census of Medicaid residents is achieved.
                        By removing the source of payment as a criterion for admission, these
                        reforms are intended to give Medicaid recipients and private payers an
                        equal chance of obtaining a nursing home bed. There is disagreement,
                        however, over the appropriateness and effectiveness of such reforms.
                        Of the nine states visited, two (Connecticut and Ohio) had established
                        wait list laws. Four states (Massachusetts, New York, Ohio, and South
                        Carolina) had established census requirements.


                        4Although South Carolina lifted the moratorium in 1986, no new Medicaid-certified beds had been
                        completed at the time of our visit; 300 had been approved for construction.



                        Page 33                                    GAO/~90-136        Medicaid Accessto Nursing Homes
                             Chapter 4
                             Factors Influencing States’ Willingness to
                             Improve Access to Nursing HomesThrough
                             Payment or Regulatory Reform8




Appropriateness of Wait      There was considerable disagreement concerning the appropriateness of
List and Census              wait list and census requirements. The American Health Care Associa-
                             tion stated that wait list laws and census requirements do not allow
Requirements Disputed        nursing homes the flexibility to select private payers over Medicaid
                             recipients, which they maintain is essential for financial viability. Asso-
                             ciation officials believe that if states want equity of access, they must
                             also provide equity of payment; the Medicaid rate should be comparable
                             to the private-pay rate.

                             The National Senior Citizens Law Center, an advocacy group, supports
                             wait list laws because, in their opinion, they promote equity of access.
                             Advocacy groups for the elderly do not, however, support census
                             requirements because, in their view, these laws institutionalize discrimi-
                             nation in the Medicaid program; that is, they legitimize open discrimina-
                             tion against Medicaid recipients after the home has reached a
                             predetermined population of Medicaid residents. Further, nursing homes
                             can easily meet census requirements when, as often happens, private
                             payers convert to Medicaid and are counted as part of the Medicaid
                             census the nursing home must maintain.


Effectiveness of Wait List   In those states that had established wait list or census requirements,
and CensusRequirements       there were little data on the effectiveness of the requirements. Some of
                             those we spoke with, however, questioned their effectiveness as the fol-
Questioned                   lowing examples illustrate.

Connecticut                  A first-come, first-served wait list law was implemented in 1980, state
                             officials told us, after the state had capped private-pay rates to control
                             spending. By capping these rates, the state could effectively control the
                             time it takes private payers to spend down to Medicaid eligibility. Still,
                             the difference between the Medicaid and the capped private payment
                             provided a financial incentive for nursing homes to select private payers
                             over Medicaid recipients. To overcome that incentive, the state enacted
                             its wait list law.

                             The effect of Connecticut’s law on access is unclear. We were unable to
                             obtain data on the extent of access problems either before or after the
                             law was implemented. State officials assert that the law has been effec-
                             tive, citing the 17 nursing homes fined for violation of the law between
                             1984 and 1988. In the state’s view, these fines sent a message to the
                             industry that the law will be enforced. The state’s long-term care
                             ombudsman also stated that the wait list law has improved access for



                             Page 34                                  GAO/HRJSBO-136
                                                                                  Medicaid Accessto Nursing Homes
       .
                Chapter 4
                Factors Influencing States’ Willingnea~ to
                Improve Accessto Nurebg HomeaThrough
                Payment or Regulatory Refonw




                Medicaid recipients, citing a reduced number of complaints concerning
                nursing home admission practices for these recipients.

                The nursing home industry, however, stated that Connecticut’s wait list
                law has had little effect on access for Medicaid recipients. The per-
                centage of nursing home residents with care paid by Medicaid has not
                changed since implementation of the law, according to the Connecticut
                Association of Health Care Facilities. In addition, the association main-
                tained that nursing homes continue to attract residents from the same
                geographic area: nursing homes in poor areas predominantly admit
                Medicaid recipients. The association’s representative noted, however,
                that the law may have improved access for Medicaid recipients seeking
                admission to nursing homes located in middle-income areas.

                Hospital discharge planners and a Connecticut nursing home director of
                admissions said that nursing homes may be circumventing the intent of
                the wait list law, Nursing homes are (1) refusing to admit Medicaid
                recipients because, as they claim, they cannot provide the level of care
                needed and (2) offering assistance in completing lengthy and complex
                applications to private payers but not to Medicaid recipients. Applicants
                are not placed on the wait list until they have a substantially complete
                application.

Ohio            Ohio’s wait list law differs from Connecticut’s in that it also includes a
                census requirement; facilities with a Medicaid census of less than 80
                percent must admit all applicants on a first-come, first-served basis.
                Once a nursing home’s Medicaid census is 80 percent, it can select pri-
                vate payers while refusing admission to Medicaid recipients. With a
                statewide average Medicaid census of 67 percent, the wait list provi-
                sions apply to the majority of nursing homes in Ohio. Because the state
                increased the Medicaid-payment rate and established a needs-based pay-
                ment system at the same time the wait list law was established, its effect
                on access to nursing homes is unknown. Medicaid access problems
                decreased significantly, but the improvement has been attributed prima-
                rily to the higher Medicaid-payment rates. (See p. 26.)

Massachusetts   A census requirement was established in 1981 as part of the certificate-
                of-need program; new facilities and facilities adding more than 12 beds
                must have a 60-percent Medicaid recipient admittance during the first
                year of operation. In subsequent years, the nursing home must maintain
                a Medicaid census equal to the average Medicaid census for nursing
                homes in the community in which it is located.



                Page 36                                  GAO/HRD-99-135Medicaid Accessto Nursing Homes
                 Chapter 4
                 Factors Influencing States’ Willingness to
                 Improve Accessto Nursing HomesThrough
                 Payment or Regulatory Reforms




                 The census requirement may have had limited effect on Medicaid recipi-
                 ents’ access to nursing homes because it applies only to new or
                 expanded facilities (50 of 522 Medicaid-certified nursing homes at the
                 time of our review). The effect is difficult to determine because, as state
                 officials told us, the requirement is difficult to monitor. Finally, as long
                 as there is a shortage of beds, to the extent the requirement improves
                 access for Medicaid recipients, it merely shifts access problems to other
                 elderly.

                 Although industry officials said that the census requirement was not
                 effective, they differed on why. Representatives for the for-profit
                 industry said that the census requirement is a disincentive to developers
                 because nursing homes cannot survive financially on Medicaid payments
                 in urban areas with a high ratio of Medicaid recipients. Representatives
                 for the nonprofit industry, said, however, that the census requirement
                 does not affect access because most of the existing nursing homes
                 already have a high Medicaid census; as long as the new or expanded
                 nursing homes meet the census requirement, they are free to refuse
                 access to additional Medicaid recipients.

New York         Like Massachusetts, New York requires that new nursing homes admit a
                 given percentage of Medicaid recipients in the first year of operation
                 and maintain a specific Medicaid census after that. Because this require-
                 ment was recently implemented (Nov. 1988), its effect on Medicaid
                 access is unclear. However, state officials, industry representatives, and
                 advocates predicted that the requirement will have little effect on
                 access because it only applies to new nursing homes, lacks enforcement
                 provisions, and does not address the underlying causes of the access
                 problems, namely a shortage of nursing home beds and a difference in
                 the payment rates between private payers and Medicaid.

South Carolina   A census requirement was implemented in 1988. Under the program,
                 nursing homes must declare at the beginning of the year how many
                 Medicaid patient days they expect to provide in the coming year.
                 Nursing homes can be penalized for exceeding or coming in under their
                 approved estimates by more than 10 percent. Although the program was
                 established to improve access to nursing homes by allowing the state to
                 better plan for future funding needs and encouraging nursing homes to
                 accept Medicaid patients, concerns have been raised by HCFA and others
                 that the penalties for exceeding the anticipated Medicaid ceiling could
                 have a negative effect on access.




                 Page 36                                  GAO/HRD-!IO-136
                                                                        Medicaid Accessto Nursing Homes
Chapter 6

ConcludingObservations


              Medicaid recipients have more trouble getting into nursing homes than
              private payers. For the most part, the reasons are financial; nursing
              homes prefer private payers because they pay more. Although there are
              little quantitative data on the extent or severity of access problems for
              Medicaid recipients, our visits to nine states revealed a wide variation in
              the types and severity of access problems for these recipients. Individ-
              uals awaiting approval of Medicaid eligibility and those with
              Alzheimer’s disease also had problems getting into nursing homes.

              If a Medicaid recipient remains in the hospital awaiting a nursing home
              bed, health care costs are likely to be higher than if the individual had
              been discharged to the nursing home at the appropriate time. In those
              states that do not pay for ANDS through their Medicaid program, the
              higher costs are likely to be absorbed by the hospital or the Medicare
              program, leaving the state little incentive to see that Medicaid recipients
              get into nursing homes.

              There are no easy solutions to the access problems Medicaid recipients
              face. Many factors come into play, including the Medicaid-payment rate,
              the system used to make payments, the bed supply, and the state’s will-
              ingness or ability to increase Medicaid spending.

              Actions in some states to narrow or eliminate the difference between the
              Medicaid and private-pay rates or basing the Medicaid rate on the care
              needs of nursing home residents appear to have improved access for
              Medicaid recipients. Requiring equal rates for Medicaid recipients and
              private payers eliminates the financial incentive for nursing homes to
              select private payers. Increasing the Medicaid rate, without adjusting
              for patient care needs reduces the incentive to select private payers but
              leaves nursing homes with an incentive to select Medicaid recipients
              who are less expensive to care for (that is, those needing lighter care).
              Basing Medicaid nursing home payments on care needs improves access
              for those with heavier care needs but, unless the needs-based rate is suf-
              ficient to cover the cost of all needed care, those with the heaviest care
              needs continue to experience access problems.

              Although improving access for Medicaid recipients, payment reforms,
              such as changing the Medicaid-payment rate or system, will also
              increase Medicaid nursing home spending. A state’s financial condition,
              coupled with competing demands for services that increase costs, may
              influence the state’s willingness to voluntarily improve access through
              payment reforms. Some states impose controls over Medicaid spending



              Page 37                           GAO/HRB90-136Medicaid Accessto Nursing Homes
                                                                    b

Chapter 5
Concluding Observations




that effectively limit the state’s ability to improve access through pay-
ment reforms.

In an environment of limited financial resources and heavy competition
for those resources, state regulatory reforms, such as wait list laws or
census requirements, have been adopted as options to improve access
for Medicaid recipients. Where these types of reforms have been imple-
mented, however, there are little data on their effectiveness, which has
been questioned by some. In the case of wait list laws, some of those we
spoke to noted that some nursing homes may be taking actions to cir-
cumvent their intent. Census requirements appear to shift access
problems to other elderly in states with a shortage of nursing home
beds.




Page 38                          GAO/HRD-W-136Medicaid Accessto Nursing Homes
Page 39   GAO/~90436   Medicaid Accessto Nursing Homes
Appendix I

Major Contributors to This Report


                         Jane L. Ross, Senior Assistant Director, (202) 276-6196
Human Resources          James R. Linz, Assistant Director
Division,                Donald J. Walthall, Assignment Manager
Washington, DC.          Jacquelyn Reid, Evaluator
                         Eric Anderson, Social Science Analyst


                         Donald B. Hunter, Regional Management Representative
Boston Regional Office   Vincent J. Forte, Evaluator-in-Charge
                         Melissa P. Read, Evaluator




             Y




(101131)                 Page 40                         GAO/HRIHO-136 Medicaid Accessto Nursing Homes
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