Gov. Dannel P. Malloy’s proposed budget includes money for more people to receive long-term care at home rather than in nursing homes; a new state-funded health care program for inmates in halfway houses; a health reform effort aimed at changing the way care is paid for and delivered; payment rates for primary care doctors to treat Medicaid patients, and housing and support services for people with serious mental illness.

It does not include, as some had speculated, any breaks for hospitals, which have faced significant cuts in state funding during Malloy’s first three years in office. Budget director Benjamin Barnes said he didn’t considering aiding the hospitals because according to a state report on their finances, they’re in better financial shape that the state.

Expanded home care programs, but waiting lists would remain

The budget proposal includes funding to expand two programs that help people with serious disabilities or medical needs receive care at home.

One, known as the Katie Beckett waiver, provides funds for the care of children with significant disabilities. The program currently has room for 200 children, and there are 474 on the waiting list.

Malloy’s proposal would expand the program by 100 slots, at a cost of $1.5 million during the next fiscal year and $3 million a year after that, half of which would be reimbursed by the federal government. Malloy’s budget documents acknowledge that the expansion won’t allow the program to serve everyone on the waiting list, but said it would allow more medically fragile children to access services in a timely manner, support parents as their primary caregivers, and help prevent children from having to receive care in higher-cost institutional settings.

The other program, the Connecticut Home Care Program for Adults with Disabilities, currently serves 50 people with degenerative neurological conditions like multiple sclerosis and Parkinson’s disease who are not eligible for Medicaid but have nursing home-level needs.

There are 103 people on the waiting list. People who apply tend to wait about three years before getting into the program, according to the National Multiple Sclerosis Society’s Connecticut chapter, which has pushed for 100 new slots.

Malloy’s proposal would add 50 slots to the program, doubling its size, at a cost of $1.2 million in the next fiscal year and $1.6 million a year after that. As with the Katie Beckett program, half the funds would be reimbursed by the federal government.

Gov. Dannel Malloy delivering his state of the state address.

Deborah Migneault, senior policy analyst for Connecticut’s Legislative Commission on Aging, praised the program expansions as an important step toward giving people access to care outside nursing homes.

But she said the state needs to provide more access to home care services. Currently, one home care program that serves seniors is open to anyone who meets the requirements, while the other home care programs, including those that serve people with disabilities and acquired brain injuries, have limited slots, leaving people who need care on waiting lists, with family members often struggling to help them stay at home.

“We would like to see equal access” to the home care programs, she said.

Still, Migneault said the proposal seemed to reflect a growing understanding among policymakers that as the state tries to reduce the reliance on nursing homes and increase the number of people who receive long-term care at home, access to the home care programs must be expanded.

Malloy’s proposal also calls for the state to take advantage of the Community First Choice Option, a program available through the federal health law that allows Medicaid to cover the services of self-directed personal care assistants, who help people with disabilities. The service is considered key to allowing people to live in their homes rather than nursing homes.

States that use the option can receive a higher-than-usual federal reimbursement rate for the services.

Medicaid rate boost for primary care doctors

Last year, the state’s Medicaid program dramatically increased the rates paid to primary care doctors, a move that officials say has led to a substantial increase in the number of physicians who will see Medicaid patients.

That pay bump was required by the federal health law commonly known as Obamacare, and it was funded by the federal government. But at the end of this year, those funds are slated to expire.

Malloy’s proposal calls for using state funds to continue the payment increases (federal dollars would reimburse half of the state’s spending). The net cost to the state would be $15.1 million during the coming fiscal year, when the state money would only be needed for the final six months, and $36.2 million per year after that.

In many cases, the payment increase meant a substantial boost for doctors. Under the previous rates, primary care doctors who saw a new Medicaid patient were paid $66.40. Now they get $123.53. For an urgent care visit for an established Medicaid patient, primary care doctors used to receive $42.93. Now they’re paid $82.98.

Having doctors available to treat Medicaid patients is particularly important now because the state’s Medicaid program is expanding to cover thousands more people as part of Obamacare.

Health care for people on community release

In an effort to provide more seamless health care for inmates on community release, Malloy is proposing a state-funded medical assistance program for people in halfway houses, allowing them to receive care from community providers.

People on community release are still considered incarcerated and not eligible for Medicaid, so someone in a halfway house who needs medical care would have to go to a prison infirmary or to the UConn Health Center, which provides health care for the prison system, Barnes said. The new program would allow people in halfway houses to instead get care in the community.

Budget documents indicate that officials think that if people have better access to medications and community-based treatment, they’ll be less likely to re-offend.

Malloy’s budget proposal includes $4.3 million for the new program, but it also includes a $700,000 savings on pharmacy costs by the correction system.

The administration also plans to have people in the correction system served by Community Health Network, the administrative services organization that oversees health care in the Medicaid program, a move aimed at improving care and reducing the duplication of testing and other services.

Health care system redesign

Connecticut officials and representatives from the health care and insurance industries have been working to develop a plan to change how health care is delivered and paid for in the state. They’re seeking between $40 million and $60 million in federal funds to implement the “State Healthcare Innovation Plan,” which is aimed at improving health and containing costs. It would cover state-funded programs like Medicaid as well as people covered by private insurance plans.

Malloy’s budget proposal includes nearly $3.3 million to move the project forward, regardless of whether the federal money comes through. The state funds would go toward staff and consultants. The proposal also includes $1.9 million in capital funding for health information technology.

The health care redesign plan is aimed at reducing health disparities, improving the quality of care patients receive and slowing the growth of health care costs, which are, on a per capita basis, the third highest in the country. One part of the plan, which would change the way health care providers are paid and allow them to earn more if they save money on patient care while still meeting quality goals, has drawn intense opposition from consumer advocates, who worry that it would give providers an incentive to deliver less care.

Mental health

As Malloy previously announced, the budget includes $4.25 million during the coming fiscal year for mental health services. The money includes $1.75 million for residential, transitional and other services for high-risk groups, including young adults; $2.2 million for 110 rental assistance vouchers and supports to help people with mental illness live in the community; and $250,000 for an anti-stigma campaign aimed at making sure people do not feel ashamed seeking help.

In addition, new state and local police would be required to receive specialized training in handling situations involving people with mental illness, and active police would be required to get the training as part of their re-certification process.

The proposal also includes $2 million for the Department of Children and Families to expand community-based services for children and adolescents with complex behavioral needs.

Last year, Malloy’s budget included cuts to state grants that fund mental health services provided by private nonprofit agencies. The administration argued that the funding would not be necessary anymore because more people will be covered by Medicaid as part of Obamacare, but the providers said Medicaid would not cover the same things the grants did.

Morna Murray, president and CEO of the Connecticut Community Providers Association, which represents the human service providers, said she was pleased Malloy was making mental health a priority. But she noted that the nonprofit providers have long been underfunded by the state, and said it’s important that the system be able to serve all clients’ needs.

“It’s a good beginning, but we want to see the details,” she said.

No restoration of hospital funding

Hospitals have faced significant reductions in state funding during Malloy’s tenure, including the implementation of a tax on hospitals and cuts to the money that compensates hospitals for taking care of uninsured patients. The Malloy administration has argued that hospitals wouldn’t need the uncompensated care funding because there will be fewer uninsured patients under Obamacare, although hospitals have said that won’t make up for the cuts.

Some legislators, concerned that the cuts to hospitals could mean job losses, have sought to have some of the funding restored. Malloy’s budget does not reverse any hospital cuts or reduce the hospital tax. Asked whether he considered providing some aid to hospitals, Barnes said simply, “No.”

In a statement, the Connecticut Hospital Association praised Malloy’s mental health initiatives and plans to fund the health care redesign plan, and said it hoped to work with lawmakers to redesign Medicaid and phase out the hospital tax.

The association didn’t directly address the funding cuts, which were enacted last year, but cited the governor’s focus on creating jobs and lowering health care costs.

“Our hospitals are the cornerstones of our communities. They provide great jobs to more than 55,000 people who make sure we have access to the very best care whenever we need it,” the statement said. “Strong, stable hospitals are essential for our communities.”