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Federal Rebalancing Demonstration Report Released: Improved Quality, Reduced Costs

December 06, 2017

The Centers for Medicare & Medicaid Services (CMS) released its report to the President and Congress regarding the Money Follows the Person (MFP) Rebalancing Demonstration, a program established by the Deficit Reduction Act of 2005.

Pennsylvania is one of 44 grantee states that were awarded nearly $3.7 billion to help states rebalance their Medicaid long-term care systems and transition individuals with chronic conditions and disabilities in institutions back into their communities.

The goals of the demonstration are to:

  • Increase the use of home and community-based services (HCBS) and reduce the use of institutionally-based services
  • Eliminate barriers in state law, state Medicaid plans, and state budgets that restrict the use of Medicaid funds to let people get long-term care in the settings of their choice
  • Strengthen the ability of Medicaid programs to provide HCBS to people who choose to transition out of institutions
  • Put procedures in place to provide quality assurance and improvement of HCBS

More than 63,000 Medicaid beneficiaries were transitioned from long-term institutional care to community-based care. The report indicates success of the program including:

  • Reduction of the cost of care:  Cost of care was reduced by $978 million for participants transitioned through 2013 during the first five years after their transition
  • Quality:  Analysis indicates that MFP participants are less likely to be readmitted to institutional care during the first year after transition and there is indication that quality of life increases after transition

Pennsylvania is currently in the process of transitioning its Medicaid long-term care services and supports system (LTSS) to managed LTSS, where services will be managed by companies contracted by the Department of Human Services. Community HealthChoices is slated for a geographically phased-in implementation beginning with the Southwest part of the state during January 2018.

For additional information, contact Jolene Calla, HAP’s vice president, health care finance and insurance.

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