States ramping up efforts to shift care out of SNFs to control Medicaid costs

Nearly every state is pushing to move more long-term care services to home or community-based settings as an effort to rein in Medicaid spending, a new report from the Kaiser Family Foundation shows.

Many states that expanded the program under the Affordable Care Act anticipate a reduction in federal money starting next year. That means there’s pressure to reduce the amount of Medicaid dollars spent in skilled nursing facilities.

Medicaid spending among all states is expected to grow 4.4% in fiscal year 2017, compared to 2.9% in 2016, according to Kaiser, while total Medicaid spending is forecasted to grow 4.5%. Medicaid enrollment is projected to grow 3.3% for FY 2017.

The report surveyed individual states, and found that 42 took actions in fiscal year 2016 to move and keep more people who require long-term care services in home or community settings, including 23 states that opted to expand their Program of All-Inclusive Care for the Elderly.

In fiscal years 2016 and 2017, a total of 23 states said they planned to close or downsize a state institution, and move those residents into community settings to reduce Medicaid costs.  Two states, Indiana and Massachusetts, implemented a moratorium on new skilled nursing beds in FY 2016, the report says.

Additional efforts states reported using to control Medicaid dollars include using private managed care companies, reducing preventable readmissions, and cutting or freezing reimbursement rates.

Despite the report’s findings that states are turning away from a four-year patterns of increasing provider payment rates, 32 states, including California, have adopted rate increases for skilled nursing facilities in FY 2017. Nineteen states placed rate restrictions on nursing facility providers. Inpatient hospitals ranked as the provider category most likely to experience a rate freeze or cut in the coming year.

Click here to read Kaiser’s full report “Implementing Coverage and Payment Initiatives: Results from a 50-State Medicaid Budget Survey for State Fiscal Years 2016 and 2017.”