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Focus long-term care funding on in-home services

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The Public Affairs Research Council (PAR) today released a research brief addressing issues in the state’s proposed budget for long-term care for the elderly and disabled adults. “Working Toward a Client-Centered and Cost-Effective Approach to Medicaid Long-Term Care for the Elderly” raises the red flag about shifting funding away from in-home care services and increasing funding for nursing home services.

The brief offers a primer on the continuum of long-term care funded through the state’s Medicaid program – provided in both institutional and home and community-based settings. Enrollment and spending data show that the Louisiana system lags behind other states in its progress toward providing more long-term care services in home and community-based settings outside of nursing homes. But, the state has been moving in the right direction in recent years.

“The Louisiana system has traditionally favored providing Medicaid care for the elderly in nursing homes, but has been shifting resources in recent years to provide more care at home and in the community,” said Jim Brandt, PAR president. “It is crucial that this budget not reverse those gains.”

The state has increased the share of its long-term care budget that supports home and community-based services from 1.4 percent in 2002 to 29 percent by 2010. The national average is 40 percent. However, if the Executive Budget is enacted as proposed, Louisiana will reduce the share of long-term care funding it provides for those high-demand services. The proposed share is 24 percent for fiscal year 2011.

Louisiana’s financing mechanisms for long-term care for the elderly are biased toward support of nursing home care. Yet, state-funded nursing homes have a high vacancy rate with more than 9,000 empty beds and no waiting list for nursing home care. The waiting list for in-home care services is about 18,000 people.

The state’s current budget crisis highlights the need for a more efficient mix of patient services. Not only should the state make it a high priority to continue providing a greater share of long-term care services in non-institutional settings, but cost-containment measures should also be implemented in a manner that will ensure maximum access to the full continuum of care for the state’s population of elderly and adults with disabilities.

One cost-containment measure recently implemented by the state Department of Health and Hospitals (DHH) lowered the service-hour cap in March 2009 from 56 to 42 hours per week for certain types of in-home personal care. DHH is planning to lower the cap again next year, possibly to a level between 25 and 30 hours. With Louisiana spending on these services costing more per client than the national average, this approach is reasonable as long as the new limitation does not force patients to seek necessary care in nursing homes.

The service-hour cap is linked to an estimated $62 million of savings in the Executive Budget proposal for fiscal year 2011. Combined with provider rate cuts and some additional funding for in-home services, the net reduction proposed for the non-institutional care budget is $61 million. The corresponding net increase for nursing home care is $16 million.

Since the budget was initially proposed, additional federal dollars have been made available for state Medicaid programs, and more money is likely to be approved by Congress in the weeks ahead. These funds can be used to plug gaps in the budget, especially those that are most troublesome such as the disproportionate cuts to in-home care for the elderly.

To prevent a reversal of recent gains in creating a better mix of long-term care options for the state’s elderly and disabled adults, PAR recommends the following:

Recommendation 1: Reduce the 18,000-person waiting list for in-home and community-based care by redirecting $62 million generated by cost-control measures into the Elderly and Disabled Adult (EDA) and the Adult Day Health Care (ADHC) waiver programs.

Recommendation 2: Implement a tracking and reporting system that will ensure the state continues its shift toward a better balanced continuum of long-term care for the elderly that provides more home and community-based care options.

Recommendation 3: Change the laws governing the use of the Elderly Trust Fund to allow interest earnings to be spent on services provided in nursing home and home-based settings.

Primary author of this research brief is David W. Hood, Senior Healthcare Policy Research Analyst.

Each report in PAR’s ongoing healthcare policy research series is available online. For more information, go to


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