Federal Matching Rate Increase for Home Based Services: Multiple Problems

January 5, 2009

The Congressional Budget Office released a Budget Options Report for Health Care in December.  (available in PDF here).  Chapter 10 surveys long term care possibilities.  These reports give a snapshot of the budget picture for particular programs.  They are neither very detailed, nor particular helpful except inasmuch as the report can be used as a kind of cheat-sheet for government budgeting options.  In this regard, the scope of the Budget Options report is far-reaching and complete.  

One of the interesting arguments presented in the report (page 182) is that states may not have the infrastructure to support many of the proposed increases in home- and community-based services.  The legislatively directed shift away from providing care in nursing homes and to care delivery in the patient’s home may be a financial and logistical impossibility. 

The report goes on to examine the option of increasing the Federal Matching Rate for home and community based services (and paying for it with a decrease in the Federal Matching Rate for Nursing Home Services).  It concludes with a convincing argument that changes in the Federal Medical Assistance Percentage (FMAP) could actually have an adverse effect on care delivery, because it would incentivize states to transfer or divert residents to the Home/Community Based Service based solely on economic reasons — and not make that decision based on clinical necessity.  

I know many Administrators see the recent push to fund the “continuum of care” from Home/Community Based Services to Nurshing Home Services as a threat to their livlihoods.  And it may very well be, but that is a debate for a longer post than this.  But, it is encouraging to see the Congressional Budget Office take such a serious look at the logistics of proposed legislative solutions to long term care delivery problems.

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