A Broken Hammer and Bent Nails: Better Tools are Needed for Nursing Home Transition to Succeed in California

Of the approximate 100,000 patients on long-term Medi-Cal in California skilled nursing facilities (SNFs), at least 11,000 have low level care needs that could be met by community-based residential care facilities for the elderly (RCFEs) according to a legislative analysis.

The number of patients unnecessarily institutionalized could be closer to 22,000 since most long-term SNFs residents do not have ventilators, IVs, g-tubes and have identical care needs as RCFE residents. According to a study conducted by the University of Connecticut Center on Aging, among participants who moved from SNFs to community- based care settings, 80 percent reported being happy vs. 32 percent of those surveyed currently living in institutional settings.

The federal and state government share the Medi-Cal payments to SNFs ($42,000/year) and to RCFEs ($22,000/year) as part of the Assisted Living Waiver (ALW) program, the only state program which allows Medi-Cal to pay for RCFEs.  For every senior who transitions from SNF to RCFE, the Medi-Cal cost savings is approximately $20,000/year.  For every 100 nursing home transition participants, the cost savings is $2 million/annually.

Total Number of Assisted Living Waiver slots

There are approximately 4,000 ALW slots in California. Sixty percent of new ALW enrollments are reserved for individuals transitioning from institutional settings after residing in them for at least 90 consecutive days. The current ALW waitlist is about 18 to 24 months. Assemblyman Ash Kalra from San Jose introduced a bill (AB 2233), currently working its way through the legislature, to increase the ALW slots to 13,000.    An increase in future ALW slots does not guarantee rapid program expansion since the legislation does not include new funding for ALW program costs which currently has very few staff managing the ALW program.

ALW Participants Must be “Nursing Home Eligible”

ALW participants must be “nursing home eligible” as determined by the state. This criteria frequently includes requiring help with ambulation, dressing, bathing, incontinence and needing help out of bed. Many ALW participants are also non-ambulatory and/or have dementia or Alzheimer’s.

Very few ALW Participants Reside in Small 6-Bed RCFEs 

In California, there are approximately 323 RCFEs that participate with ALW of which 112 are small six-bed providers. A LW program development, which was not designed with small providers in mind, limited bed capacity, onerous program guidelines and the lack of timely payments result in more than 90 percent of all ALW participants residing in large 75-plus bed RCFEs.

Large RCFEs Usually Have Low Staff-to-Resident Ratios

High staff-to-resident ratios correlate to higher quality care.  On average, small RCFEs have two direct care staff to 4 to 6 residents. State licensing requirements for large RCFEs is “sufficient staffing” during the day and one awake staff at night with one staff available on call (within 10 minutes).

The staff-to-resident ratios for most large 75-plus bed RCFEs is one direct care staff to 20 to 30 residents during the day, and one direct care staff to 30 to 40 residents at night.  Providing adequate care is a problem when 75-plys bed providers with low staffing accept 10 to 20 ALW participants, who require substantial help with many activities of daily living.

Most Large RCFEs Do Not Have Dementia Units

According to the Alzheimer’s Association, six in 10 patients with Alzheimer’s will wander. Most large RCFEs in the ALW program do not have secured units for wanderers. State licensing allows most small RCFEs to accept wanderers as long as they have alarms on their doors and sufficient staff to monitor the whereabouts of their residents.

The California Coordinated Care Initiative (CCI)

The California Coordinated Care Initiative (CCI), begun in 2014, has two components: Managed Long-Term Support and Services (MLTSS)—where dual-eligibles have mandatory enrollment with a CCI MCO to manage their Medi-Cal services and Cal MediConnect (CMC)—voluntary enrollment with the same CCI MCO to manage their Medicare benefits as well.

The goal of shifting the care of tens of thousands of dual-eligibles to CCI MCOs was to save general funds, create a seamless service delivery experience, improve the quality of care, provide a more efficient care delivery system and to promote community based vs. institutional care whenever possible.

The ALW Carve Out from CCI Fractures the Continuum of Care 

Seniors who require too much care to remain at home at risk of premature institutionalization frequently move to RCFEs to receive care. ALW has been carved out of CCI and there is no MLTSS rate category for seniors who choose to reside in RCFEs.  ALW participants have their Medi-Cal payments managed by the ALW program and not by the CCI MCOs.  Instead of managing care transitions from one setting to another the ALW carve out fractures care delivery when seniors while at home or in SNFs have care services managed by CCI MCOs but not when they choose to reside in RCFEs.

The ALW Carve Out Creates Roadblocks Which Keep Seniors in SNFs   

States look to rebalancing long term support and services initiatives to save money and to give seniors the choice of residing in community-based settings whenever possible. The ALW carve out prevents LTSS rebalancing by creating fiscal incentives which rewards CCI MCOs that keep seniors in SNFs (where they are fully reimbursed for nursing home expenses) and punishes them when they permit SNF transition (since CCI MCOs are not reimbursed for RCFE expenses).  Instead of removing obstacles the ALW carve out creates roadblocks preventing seniors from participating with SNF-RCFE transition.

Senior and Disabled Rights Groups Have Written the State to Add a RCFE Rate Category to the MLTSS Rate Tables

More than 34 senior and disabled rights groups belonging to the California Collaborative for Long Term Support and Services have petitioned the state to add a new RCFE rate category to the MLTSS rate tables to allow CCI MCOs to use Medi-Cal to pay for RCFEs. A new RCFE rate category would provide fiscal incentives for CCI MCOs to promote nursing home transition and allow them to manage care services along the care continuum from home-RCFE-SNFs.

Without a new RCFE rate category the MLTSS rate tables are nonsensical when a beneficiary on long term care in a SNF or who requires too much care to remain at home is classified as “community-well or healthy” if he/she choose to receive care services in a RCFE. The “healthy” MLTSS reimbursement rate, currently $85/month, is far short of the average cost of a RCFE ($2,500 to $3,000/month).

A New RCFE Rate Category Will Drive Nursing Home Transition and Allow the Participation of Small Providers With High Staff-to-Resident Ratios     

A new RCFE rate category will enable CCI MCOs to develop cost efficient nursing home transition programs for thousands of participants. Sensible program components should include paying RCFEs a fair market-rate, timely payments to providers, minimal paperwork (Title 22 licensing guidelines for RCFEs is the same whether a resident is private-paid or low income) and quality control measures (e.g. contracting only with settings that have clean licensing records, follow-up calls with relatives, periodic on-site visits to RCFEs).

Incentivizing a large pool of high quality small RCFEs with high staffing to participate with innovative SNF transition programs will ensure a sufficient number of bed slots to accommodate seniors with advanced care needs, including those at risk of wandering, who choose to participate with nursing home transition. Unlike ALW, CCI MCOs also have access to more staff to manage the expansion of SNF-RCFE transition programs that grow to accommodate thousands of participants.

A Sensible Solution: Gradually Phase out ALW and Incorporate Current Participants into Innovative SNF-RCFE Transition Programs Managed by CCI MCOs 

ALW is a Medi-Cal waiver program and CCI is still in its demonstration phase. Both programs have flaws and are incompatible when they waste money, prevent SNF-RCFE transition and disrupt the continuity of care. Demonstration programs require fixes when faulty components are revealed. Adding a RCFE rate category would allow CCI MCOs to demonstrate they can be the engines of innovations for cost-efficient SNF-RCFE transition programs which eventually will replace the ALW program. Without the proper tools, however, CCI MCOs cannot rebalance long term care support and services and save state and federal general funds. Ask a roofer to repair a hole with bent nails and a broken hammer and the only result will be a roof that continues to leak.

Jason Bloome is owner of Connections–Care Home Referrals, an information and referral agency for care homes for the elderly in Southern California. More information can be found at  www.carehomefinders.com.

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