Variations in HCBS Spending, Use, and Hospitalizations among Medicaid 1915(c) Waiver Enrollees

Date01 September 2019
Published date01 September 2019
doi: 10.1002/wmh3.315
© 2019 Policy Studies Organization
Variations in HCBS Spending, Use, and Hospitalizations
among Medicaid 1915(c)Waiver Enrollees
Micah Segelman , Orna Intrator, Yue Li, Dana Mukamel, and
Helena TemkinGreener
Medicaid homeand communitybased services (HCBS)waiver programs serve a population at high
risk for hospitalization. We examined whether enrollees in HCBS programs, in 21 states representing
all regions of the United States, with higher intensity of services, measured by HCBS spending per
enrollee, have lower rates of hospitalization and potentially avoidable hospitalization (PAH).We
found no statistically significant association with hospitalization. This suggests that HCBS programs
that provide higher intensity services are not focusing effort on reducing hospitalization. We also
found that HCBS waiver enrollees in programs with greater generosity in eligibility, measured by a
higher proportion of HCBS receipt among longterm services and supports (LTSS)users, had stat-
istically significantly lower rates of hospitalization and PAH. This suggests that more generous
programs serve waiver enrollees who are at lower risk of hospitalization, which may be relevant to
policymakers in establishing the eligibility criteria.
KEY WORDS: longterm services and supports (LTSS), homeand communitybased services (HCBS),
hospitalization, potentially avoidable hospitalization, Medicaid
Medicaid is the largest payer for formal longterm services and supports in the
United States. Medicaid has several mechanisms, which fund homeand com-
munitybased services (HCBS), including 1915(c)Medicaid waiver programs. These
waiver programs are established by individual states subject to federal approval,
and provide HCBS to individuals with a certified need for nursing home
(NH)level care. Medicaid longterm services and supports (LTSS)is targeted to-
ward both older adults and younger individuals with disabilities, and about 80
percent of LTSS spending is for those aged 65 and older (Kaye, Harrington, &
LaPlante, 2010).
Historically, Medicaidfunded LTSS tended to be provided in institutions.
However, providing care within community settings has a number of advan-
tages over institutional care. These include a lower perbeneficiary cost, en-
abling individuals with a desire to remain in their homes to do so. In fact,
Medicaid spending on HCBS has grown steadily over the past few decades as
states have rebalanced their spending on LTSS to counter a socalled institu-
tional bias(Eiken, Sredl, Burwell, & Woodward, 2017; Ng, Harrington,
Musumeci, & Reaves, 2015). A key component of this expansion has been the
growth of 1915(c)Medicaid waiver programs.
Despite the overall HCBS growth, considerable variation in the extent of
rebalancing exists both across states and across counties within states (Birn-
baum, Patchias, & Heffernan, 2010; Hahn, Thomas, Hyer, Andel, & Meng, 2011),
with the percentage of Medicaid LTSS expenditures devoted to HCBS ranging
from 31 percent in Mississippi to 82 percent in Oregon in federal fiscal year 2015
(Eiken et al., 2017). This variation reflects substantial differences across HCBS
programs in the proportion of the LTSS population that receives HCBS (the
relative size of the HCBS programs), which is impacted by differences in the
eligibility criteria, targeting practices, availability of services, and in the type
and intensity of services provided.
Simultaneous with the growth of HCBS, the Centers for Medicare and Med-
icaid Services (CMS)has been increasingly focused on reducing unnecessary hos-
pital use. This reflects concerns for healthcare costs as well as concerns about the
quality of care, as hospitalizations are traumatic for patients, and often lead to
deterioration in functional status (Sager et al., 1996). CMS tracks hospitalization
and/or readmission rates for hospitals, postacute care providers including skilled
nursing facilities and home health providers (Centers for Medicare and Medicaid
Services, 2019), and accountable care organizations (RTI International, 2016). Some
of this information is then used in public reporting (such as through Hospital
Compare, Nursing Home Compare, Home Health Compare)and incorporated into
payment reform strategies such as the Hospital Readmissions Reduction Program
and the Skilled Nursing Facility ValueBased Purchasing Program. Reforms in the
Medicaid program have also focused on hospitalization. Delivery System Reform
Incentive Payment (DSRIP)initiatives provide funding for states to transform their
Medicaid programs. Some states have made reducing hospitalizations one of their
goals as part of DSRIP (Gates, Rudowitz, & Guyer, 2014). Additionally, there have
been efforts to reduce potentially avoidable hospitalizations (PAH)for longstay
NH residents including efforts to change NH care practices (Ingber et al., 2017;
Walsh & Wiener, 2011).
While some attention has been paid to hospitalization rates of HCBS benefi-
ciaries (Konetzka, Potter, & Karon, 2012), there has been no comparable attempt to
use public reporting or payment reform to encourage HCBS providers to reduce
hospitalization rates. Yet, hospitalizations are highly prevalent among the pop-
ulation receiving HCBS (Walsh et al., 2012; Wysocki et al., 2014a, 2014b)and hos-
pitalization rates vary substantially across states (Konetzka et al., 2012). Moreover,
many of these hospitalizations may be potentially avoidable (Walsh et al., 2012).
HCBS could potentially impact hospitalization by appropriately and in a timely
manner helping meet the needs of people with activities of daily living (ADL)
limitations. Studies have shown that individuals with unmet needs for assistance
with ADLs are more likely to suffer from discomfort, weight loss, dehydration,
falls, and burns (LaPlante, Kaye, Kang, & Harrington, 2004)and to experience more
hospitalization (Allen & Mor, 1997; Sands et al., 2006), including hospital read-
mission (DePalma et al., 2013). After their ADL needs are met, these individuals are
232 World Medical & Health Policy, 11:3

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