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

• Author: Yue Li,Dana Mukamel,Helena Temkin‐Greener,Micah Segelman,Orna Intrator
• DOI: http://doi.org/10.1002/wmh3.315
• Date: 01 September 2019
• Published date: 01 September 2019

231

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 Temkin‐Greener

Medicaid home‐and community‐based 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 long‐term 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: long‐term services and supports (LTSS), home‐and community‐based services (HCBS),

hospitalization, potentially avoidable hospitalization, Medicaid

Introduction

Medicaid is the largest payer for formal long‐term services and supports in the

United States. Medicaid has several mechanisms, which fund home‐and com-

munity‐based 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 long‐term 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, Medicaid‐funded 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 per‐beneficiary 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 so‐called “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 health‐care 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, post‐acute 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 Value‐Based 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 long‐stay

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