Malloy to add funds to private human service providers, nursing home “right-sizing”

The health and human services portions of Malloy's proposed budget adjustments include money to support an effort to move people out of nursing homes, fund nursing homes that consider providing long-term care to people leaving prisons and state institutions, add three childhood vaccines to the state's program and offer the first funding boost in five years to private human services providers.

The administration also intends to move ahead with plans to seek permission from the federal government to add enrollment restrictions and scale back benefits in a Medicaid program for low-income adults without minor children, a move that has drawn criticism from advocates and some key lawmakers.

Of about $120 million in savings built into the budget adjustments, more than $40 million come from changes to Medicaid.

Expanding access to home care

Several elements of Malloy's budget adjustments are aimed at making it easier for people to receive long-term care at home or in community settings. State officials are already working to expand the use of home- and community-based long-term care as alternatives to nursing homes, which tend to be more costly.

Ben Barnes

Ben Barnes after Wednesday's budget briefing

"We believe that care for our elderly and disabled citizens is best provided in the community context," said Office of Policy and Management Secretary Benjamin Barnes, Malloy's budget director. He called it "best for the recipients of that care and best for the state's budget."

One change is aimed at reducing the waitlist for one of the state's home care programs, the Personal Care Assistance Waiver. The program provides Medicaid funds to hire attendants for people who need hands-on assistance and are at risk of institutionalization. But spaces in the program are limited and there's a waiting list, which critics say leaves people who need assistance to choose between living unsafely at home or going to a nursing home. The administration's proposal would free up spots in the program by requiring people who turn 65 to move from that program to a separate home care waiver program for seniors, which is not capped and would provide the same services. It's estimated to affect 76 participants and cost $600,000; it would take effect in April 2013.

The administration also aims to use $12.5 million in bonding to build 50 units of elderly congregate housing. It would also require $450,000 in operating subsidies. Barnes said congregate housing costs a tenth of what nursing homes do.

Malloy's plan would also allow unlicensed home care workers to administer medications to people receiving home care, something not currently allowed under state law. Last fiscal year, the state spent $128.28 million for nurses to administer medications to about 8,500 Medicaid clients, and the administration projected that four policy changes related to medication administration would save $20.5 million in the coming fiscal year while making it easier for people to receive long-term care at home.

The changes proposed include allowing home health aides who are trained and certified to administer oral and topical medications and eye drops; nurses would still be required to organize the medications and give instructions to the aides. In addition, personal care attendants who work for agencies would be allowed to administer medications; those who are hired by clients directly through a Medicaid waiver program are already allowed to do so. Medicaid coverage would also expand to include the use of assistive technology such as medication reminders and automatic pill dispensers. And the rates paid to nurses for administering medication would be cut by 10 percent.

Supporters say the state's restrictions on who can administer medication have made it too costly for many people to move out of nursing homes, but critics have argued that the expertise of nurses are needed to safely administer medication to vulnerable patients.

Nursing home "right-sizing"

Estimates being used by state officials suggest that if the home care expansion efforts succeed, nearly 1 in 4 nursing home beds in the state won't be needed within the next two decades, although some in the nursing home industry have questioned those projections.

To help nursing homes "right-size" or diversify their business models, Malloy's proposal includes $10 million in bond funds and $3 million in operating funds. The $3 million would be fully reimbursed by the federal government.

Another $2.6 million would go toward nursing homes looking to take on one possible alternative role: Caring for people moving out of prisons or state institutions. The money would fund nursing homes developing capacity for "state clients who are traditionally difficult to place." According to the administration, this would prevent the state Department of Correction from having to operate its own nursing homes and would free up 25 beds at the state-run Connecticut Valley Hospital. A budget document notes that many states are grappling with aging institutional populations, and says that Connecticut has more than 450 inmates aged 55 to 59 and almost 400 over 60.

The governor's proposal also includes $400,000 to retrain nursing home staff for home care work, which can be significantly different. It also calls for spending $250,000 for a web-based tool to identify options for hospital discharges, a major way that people end up in nursing homes.

Matthew Barrett, executive vice president of the Connecticut Association of Health Care Facilities, which represents nursing homes, applauded the $2.6 million proposed for "difficult to place clients," saying it reflected a recognition that it takes a greater effort to care for them in nursing home settings.

But Barrett said he had hoped the budget would also include funds for nursing homes to make infrastructure improvements like replacing boilers or getting backup generators. He said he hopes to work with the administration and legislators to address ways to fund such efforts in a way that's consistent with the state's broader long-term care plan.

Private provider funding boost

Human service providers have not seen an increase in state funding in the past four years and weren't slated to get one for the upcoming fiscal year, but Malloy's proposal would give many a 1 percent cost-of-living adjustment, effective next Jan. 1. It would cost the state $8.5 million. The money would be targeted to the wages and benefits of employees of the providers. Many agencies have frozen wages and cut back benefits to make up for rising costs as their state funding remained flat in recent years.

The increase would go to human service providers funded with state money and through federal social service and substance abuse block grants, rate-based providers and families paid by the Department of Children and Families, and providers of boarding homes for the aged, blind and disabled.

Barnes called the boost "perhaps the piece of this that makes me most proud."

Nora Duncan, executive director of The Arc of Connecticut, which serves people with intellectual disabilities, said the 1 percent increase won't make up for years of underfunding, but nonetheless shows the governor's commitment to the safety net. "It's not a solution," she said. "It's better than zero, and it's better than more cuts."

Ron Cretaro, executive director of the Connecticut Association of Nonprofits, said he hoped the cost-of-living adjustment would be the "first of many steps that will address long-term underfunding" of the nonprofits that contract with the state. He also urged the administration to make the adjustment take effect at the start of the upcoming fiscal year in July.

Some private providers that serve seniors and people with disabilities will see reductions in other areas. The proposal calls for cutting $5.2 million in payment rates for group homes and intermediate care facilities for people with developmental disabilities that have had a significant decrease in land and building costs. A significant number of those facilities paid off their mortgages last year, according to a budget document.

Duncan said the cut was expected, although providers had hoped that by paying off their mortgages, they would have some extra money to use on capital improvements that had been put off because of a lack of funds.

The proposal would also close three publicly run group homes and consolidate two residential settings at the state's Southbury Training School, part of a larger effort to reduce the reliance on public facilities to serve people with developmental disabilities. The move is forecasted to save $2.29 million.

Medicaid eligibility, benefit changes

The administration is forecasting saving $22.5 million in the coming fiscal year by adding enrollment restrictions and scaling back benefits in the Medicaid program for Low Income Adults, known as LIA. The changes include requiring enrollees to have assets below $25,000 -- excluding a house and car. For people under 26 who live with their parents or are being claimed as dependents by their parents, family income and assets would also be taken into account in determining eligibility for the program. Barnes said coverage would also be adjusted "in a limited way."

The changes would require a waiver from the federal government. The state Department of Social Services has already begun discussions with federal officials about the concept.

"We think it's important that we target funds to those most in need," Barnes said Wednesday.

Barnes said it appears that some people in the program are young adults who could be on their parents' insurance and people with limited income but high levels of assets.

"Those folks who have more than $25,000 in the bank should not be relying on the state to provide them health insurance," he said. "They should go out and buy it themselves."

Enrollment in the program grew faster than officials anticipated when it was created in 2010, although more recently, enrollment has leveled off. In a "concept paper" about the proposal submitted to the federal government, officials called the program financially unsustainable.

The potential changes have drawn criticism from advocates for low-income residents, who say it would increase the number of uninsured residents. It also drew skepticism from key legislators. During a recent meeting, Appropriations Committee co-Chairwomen Sen. Toni N. Harp and Rep. Toni Walker questioned if the changes were necessary. And in a Jan. 11 letter to DSS Commissioner Roderick L. Bremby, Walker, Harp and the co-chairs of the Human Services and Public Health committees said they had "very serious reservations" about the potential changes to the program and suggested that the waiver request would not be necessary since DSS did not appear to be overspending its budget.

Their committees would have to approve any waiver request DSS plans to submit.

Under federal health reform, coverage for people in LIA will be fully funded by the federal government beginning in 2014, and will eventually drop to 90 percent. Currently, the state receives federal reimbursement for half the program's costs.

New childhood vaccines

The proposal includes spending $11.7 million to add three new vaccines to the state's childhood vaccine purchase program: pneumococcal conjugate, influenza and hepatitis A. It also calls for evaluating potential policy changes, such as including other vaccines recommended by the Centers for Disease Control and Prevention, establishing a mandate for health care providers and looking at how the program is financed and assessed.