Marcum LLP

Healthcare Alert


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Shift To Home Care Services Expected To Reduce Connecticut Medicaid Spending For Nursing Facility Services By $33 Million In Fy 2014 And $71.2 Million In Fy 2015


The Governor’s Recommended State of Connecticut Budget for the Biennium as reviewed by the Legislative Office of Fiscal Analysis, includes projected savings of $33 million in FY 2014 and $71.2 million in FY 2015 associated with lower utilization of nursing facility services due to a further shift to community services supported under the Money Follows the Person and other Medicaid and state supported programs. Based on an annual Medicaid net cost per nursing facility resident of approximately $71,500, the Medicaid program would pay for an average of 1,002 fewer nursing home residents in FY 2015 than in FY 2013. Currently, Medicaid covers approximately 16,500 individuals in nursing facilities.

On January 29, 2013, the Department of Social Services (“DSS”) presented its Medicaid Long Term Care Demand Projection report (“LTC Demand Report”) at an event kicked-off by Governor Malloy. The LTC Demand Report, developed for DSS by Mercer Government Human Services Consulting, projects that while demand for Medicaid funded long term care services, comprised of both home care and nursing facility services, will increase by 25% between 2012 and 2025, the number of Medicaid-eligible individuals in nursing facilities will decrease to approximately 11,800 with the expansion of community service alternatives and an emphasis on service choice for program recipients.

DSS has indicated that it will release a Request for Proposals (“RFP”) within the next several weeks that will make available substantial funding over the next several years for nursing facilities to change their service mix to reflect the shift to alternate long term care. The amount of funding that will be available in FY 2014 and FY 2015 is expected to be between $13.0 million and $33.0 million depending upon upcoming appropriation and bonding approvals.

Based on the plan outlined by DSS earlier this year, the department will support nursing facility development of therapy, home health, personal care, hospice, respite, memory impairment, transportation, adult day, assisted living, transitional care and other services. Facilities may propose alternate uses of existing facility space as well as reductions in licensed capacity.

Details on fund uses and conditions will be available when the RFP is issued. It is unclear whether DSS will consider Medicaid rate increases in conjunction with reductions to licensed facility capacity as part of the RFP process. DSS has indicated that it will review proposals in consideration of the town by town long term care need projections included in the LTC Demand Report.




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