Capitated Payment Approaches for Medicaid-Financed Long-Term Care Services

Health Care Financing Review, Fall, 1999 by Noemi V. Rudolph, James Lubitz

Texas STAR PLUS

Texas STAR PLUS is a Medicaid acute and long-term managed care program and was the first concurrent Medicaid 1915(b) managed care waiver and Medicaid 1915(c) HCBS waiver program to be implemented. The program integrates Medicaid funding and service delivery of long-term and acute health care. Enrollment is mandatory for Medicaid and voluntary for Medicare. As an incentive, dually eligible members who choose to receive their Medicare services from one of the three managed care organizations selected by the State receive an unlimited drug benefit. The program began enrollment in January 1998, and approximately 51,900 persons were enrolled as of May 1998.

MSHO

MSHO is a voluntary demonstration program that integrates acute care and LTC for dually eligible elderly people. The program is in seven counties in the Minneapolis/St. Paul area and offers a package of Medicaid and Medicare acute and LTC services through a choice of three managed care plans. MSHO is the first State-initiated program to function under dual Medicaid and Medicare waivers and the only program to date that provides for State management and oversight of both Medicaid and Medicare through a single contract. As of April 1998, there were 2,361 individuals enrolled in the program.

Monroe County CCNs

Monroe County (New York) CCN will be a voluntary demonstration program targeted to enroll at least 10,000 elderly Medicare and dually eligible persons in the county, including those who meet a nursing home level of care placement but who live in the community. The program will integrate primary, acute, and LTC services under combined Medicare and Medicaid capitation payments. These payments will be risk adjusted, using a methodology based on functional status. Waivers for the CCN demonstration were approved in September 1999.

DEFINING THE ELIGIBLE POPULATION

The determination of a target population is a crucial element of program design and has implications for the program's care goals (Muskie School of Public Service, University of Southern Maine, and National Academy for State Health Policy; 1997). Potential target populations may include: (1) the elderly or persons under age 65 with disabilities, or both, (2) those eligible for Medicare or Medicaid only, or for both, and (3) only those elderly or disabled who are in need of LTC services or beneficiaries who present a wide range of needs.

The PACE and ALTCS programs primarily target those at risk of institutionalization who meet the State's criteria for nursing facility level of care, i.e., nursing home certifiable (NHC). In PACE, the eligible population includes persons 55 years of age and over who live in the PACE organization's service area. Enrollees in ALTCS must have incomes less than 300 percent of the Supplemental Security Income (SSI) eligibility limits. Both the elderly and persons with disabilities are eligible for the program. ALTCS is a statewide (Arizona) program.

The eligible populations in Texas STAR PLUS, MSHO, and CCN are not limited to those who are NHC. All three programs include individuals who are impaired, residing in nursing facilities or in the community, as well as the unimpaired, and are limited to certain geographic areas. MSHO and CCN limit their eligibility to the population 65 years of age or over; Texas STAR PLUS includes the aged and the disabled age 21 or over meeting nursing facility level of care. Dually eligible beneficiaries are among the eligible population in all three programs. MSHO limits its program to dually eligible persons only; Texas STAR PLUS includes those who are eligible for Medicaid only and who are eligible for both Medicare and Medicaid; CCN includes those who have Medicare only and those who are dually eligible.