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Submitted URL: https://www.mcknightshomecare.com/?p=17857&utm_source=newsletter&utm_medium=email&utm_campaign=NWLTR_MHC_DailyPulse_06...
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News


NEW STUDY FINDS LOWER NURSING HOME USE, SAVINGS FOR STATES THAT EXPAND MEDICAID
HCBS

Liza Berger


June 29, 2023
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A new study dispels the notion of the “woodwork effect” — that states that
expand access to Medicaid home- and community-based services (HCBS) experience
new Medicaid enrollees who just want to access those services.

“We actually don’t find evidence supportive of that,” David Grabowski, PhD, one
of the authors of the study, told McKnight’s Home Care Daily Pulse.





By contrast, those states that opened up Medicaid HCBS benefited from reductions
in nursing home populations and accompanying savings offsets. Specifically, a 1%
increase in HCBS spending was associated with reductions in the state nursing
home population of 47.1 residents and institutional Medicaid long-term services
and supports (LTSS) spending of $7.3 million. And a $1 increase in HCBS spending
was linked to a $0.74 increase in total LTSS spending. This suggested that each
dollar directed to HCBS was offset by $0.26 savings from decreased nursing home
use.

“If you spend a dollar on nursing home care, it’s just a dollar,” Grabowski
explained. “Whereas if you spend a dollar on home- and community-based care,
you’re both getting that dollar’s worth of home- and community-based care. But
you’re also getting that offset of savings from lower nursing home use.”





The study, which was published in the Journal of the American Geriatrics
Society, used state-year data for 1999-2017 from various sources. It examined a
range of outcomes including Medicaid enrollment, nursing home census, Medicaid
institutional LTSS spending, total Medicaid LTSS spending and Medicaid HCBS
waiver enrollment. Results included 45 states and the District of Columbia.
Brian E. McGarry, PhD, co-authored the study.

The so-called woodwork effect — the idea that increasing access to Medicaid HCBS
will bring people who only want these services “out of the woodwork” — has been
a part of the long-term care discussion for 200 years. It has resulted in
holding back states from growing their Medicaid HCBS programs. The latest study
results, which put that theory to rest, can help inform state Medicaid programs,
Grabowski said.  

“I think it’s a really important policy lesson to states that there’s an
opportunity here to get more older adults receiving long-term care services
through expanding home- and community-based care,” he said. “And I think the
most important part isn’t just cost. This is where people want care … There’s
also some potential savings associated with that.”

The rebalancing of LTSS dollars to HCBS has only been growing. In 1995, HCBS
accounted for 18% of overall Medicaid LTSS spending. By 2019, state Medicaid
programs spent 57% of their LTSS budget on HCBS. The shift began in 1981.
Section 1915(c) of the Social Security Act, which was part of the Omnibus
Reconciliation Act of 1981, encouraged the provision of LTSS at home and in the
community.

Still, the growth in HCBS has not been consistent across the country, the study
notes. And it takes an investment by states to grow their HCBS programs,
Grabowski said.

“There’s no free lunch there,” he said. “It’s still gonna take new money on the
part of these states.”

The study outlines several major policy efforts in recent years that have
supported expansion of Medicaid HCBS. In 2021, the American Rescue Plan Act
included a one-year 10 percentage point increase in the Federal Medical
Assistance Percentage (FMAP) for Medicaid HCBS. Also, in 2021, the Biden
administration proposed the American Jobs Plan, which included $400 billion to
expand access to Medicaid HCBS.


RELATED ARTICLES

 * People with disabilities need more access to HCBS, researchers say




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