Ohio budget bill helps seniors and others live in settings they prefer
Policy fast-tracks Ohio's move toward a balanced system for long-term care

The two-year state budget Governor John Kasich signed into law on June 30 includes new policy initiatives that make it a priority to enable seniors and people with disabilities to live with dignity in the setting they prefer, especially their own home, instead of a higher-cost setting like a nursing home. Building on more than five years of work by the Unified Long-term Care System workgroup, the budget "rebalances" where money for long-term care services is spent. Over the next two years, the proportion Ohio spends on institutional care will drop from 64 percent to 58 percent, while spending on community-based services such as PASSPORT, which helps ill elderly Ohioans stay in their homes, will grow from 36 percent to 42 percent.

This budget shift will allow Ohio to provide long-term care services to more older Ohioans for less. A Scripps Gerontology Center report, "Coming of Age: Tracking the Progress and Challenges of Delivering Long-term Services and Supports in Ohio," released last month, emphasizes that the shift to home and community services has lowered Ohio's long-term care Medicaid spending on older people (when adjusted for inflation) over the past 12 years while raising the average number of persons served each day by nearly 10,000.

As Greg Moody, head of the governor's Office of Health Transformation, has said in various sources, "Instead of politics picking winners and losers, this shifts to consumers choosing where they want to receive care. What the budget does is reflect the changing demand for services. Fewer and fewer people are going into nursing homes, with or without our budget."

The budget provides $532 million more for waivers for home- and community-based services over the biennium (above SFY 2011 levels), including $55.6 million more for PASSPORT. This makes it possible for 4,800 more Ohio seniors to receive home- and community-based services. The PASSPORT agreement includes a three percent provider rate reduction in 2012, flat funding per person for health care and case management services in 2012 and 2013, and an average 5 percent reduction for PASSPORT Administrative Agencies' operating expenses in 2012 and 2013.

In addition, the Ohio Department of Aging and local area agencies on aging will develop:

• Person-centered utilization management protocols;
• A program to assist individuals in transitioning from hospital to waiver services;
• An outcome-based, pay-for-performance system; and
• Consistent provider certification standards.

The budget reduces overall Medicaid spending for nursing homes from $2.7 billion in 2011 to $2.5 billion in 2013 and saves taxpayers $360 million over the next two years. In state fiscal year 2011, after being held essentially flat for several years, the average daily nursing home reimbursement rate of $177.53 per day per patient was $4.75 above the national average. The new budget cuts that rate to $167.25, a reduction of 5.8 percent average statewide in 2012. Overall, nursing home funding could decline by $340 million to $370 million over two years. The budget also eliminates guaranteed nursing home rate increases that had been put into state law years ago.

Quality of care also is a major budget focus. As reported in the Columbus Dispatch, the daily reimbursement rate will go up to $168.84 next year for homes meeting quality benchmarks that will be established by state officials in the coming months. They are likely to include such measures as staffing levels and patient satisfaction. Nursing homes that fail to meet the goals will be paid $152.40. The budget also requires that a greater share - 61 percent - of payments to nursing homes be spent on direct care, a jump of 9 percent. And to address concerns about nursing homes filling their beds with people who shouldn't be there - sex offenders and others - or people who could be better served elsewhere, such as those with mental illnesses, the budget sets a fixed rate of $130 a day for those with few, if any, ailments.

State Medicaid officials expect fewer Ohioans to go into nursing homes, and the extent of that decline will affect the total savings.

Other budget items of relevance to ODA and the aging network (from the Columbus Dispatch) include:

• Creates the Unified Long-Term Care System Advisory Workgroup, to advise on the implementation of a unified long-term care system to provide seniors cost-effective choices.
• Grants a waiver to institutionalized individuals of the Medicaid penalty imposed when assets are sold for less than market value, if the ineligibility would cause undue hardship.
• Reduces Medicaid's first-hour payments for aides and nursing services by 3 percent and 5 percent respectively.
• Allows the state to establish an incentive program to encourage certain Medicaid providers to use electronic health records.
• Creates a $130 million Medicaid reserve fund that the administration can tap if predictions about certain Medicaid policy changes come true.
• Requires state agencies to "strive" by June 30, 2013, to have at least 50 percent of Medicaid recipients age 60 and older who need long-term care placed somewhere other than nursing homes.
• Permits a nursing home to get up to two informal state reviews of any deficiencies cited that cause it to be out of compliance for participating in Medicare or Medicaid.
• Prohibits Public Health Council rules from requiring that each sleeping room in a nursing home have a bathtub or shower directly accessible from the room, but requires that privacy and dignity of residents be protected.
• Creates the Ohio Housing Study Committee for the purpose of reviewing the policies and partnerships of the Ohio Housing Finance Agency.

The current budget is a victory for Ohio's elders. The state legislature has focused on the needs of Ohio's older citizens, and not on the recommendations of powerful lobbies, to provide high quality services in the settings that people prefer.

More information about the state budget, Final Report on Medicaid Transformation in HB 153, is available from the Ohio Office of Health Transformation.

Related Links

Office of Health Transformation

Overview of the State of Ohio FY2012-13 Budget

About Aging Connection

Aging Connection, published regularly by the Ohio Department of Aging, connects professionals in Ohio’s aging network to information and resources that can help them care for and serve our older citizens. Topics include the latest resources and best pactices within the aging network, state and federal programs and benefits, pending and recent policy and legislation that may impact older Ohioans, the latest research in gerontology and aging issues and more.

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