Assisted Living Facilities and Federal Health Reform
Recently the much anticipated Federal Health Reform proposal HR 3200 was released in the US House of Representatives. This massive 1016 page legislative proposal is wide ranging and filled with many changes to Federal Law that are intended to help reduce costs and improve access to care.
Health Care is a complicated issue and has many varied dynamics all at work. The Federal Plan will impose many new requirements for the health care providers and consumers and just like most of these other changes to our health care system people will respond to these changes and come up with new approaches that will allow for the provision of care.
The reality is that to reduce the cost of health care we must find ways to reduce the need for institutional care. The demand and dependence on institutional care is expensive and in many instances not necessary.
While community based care COULD play a role in reducing the need for institutional care the reality is that it does not play a key role in reducing institutional costs because there is no incentive for community based care to delay, divert or otherwise avoid the need for institutional care. In many instances community based care improves consumer satisfaction and improves access to care but as it relates to reducing the need for institutional care there is no incentive for these care systems to play a central role in that goal or task.
For many years it has been well understood that licensed Assisted Living Facilities are frequently used by the Nursing Home Diversion Managed Care Program as a way of reducing long term care costs. In fact approximately 50% of the diversions in this program go to ALF care because it is effective in reducing the need for institutional care. For one monthly fee the ALF accepts the risk associated with acuity and care and provides a predictable, capitated environment that promotes healthy living routines and improves access to preventative care.
ALF care is a life style choice and in many instances the improvement of these routines and systems that surround a person whether they are social, environmental or medical and dietary have a profound influence on what happens several years down the road. These congregate living arrangements are vibrant communities with their own unique social structure and culture.
Sadly access to ALF care for the low income and state funded individuals is on the decline and is fast disappearing from the shores of Florida . Last year the Florida legislator reduced the optional state supplementation program from $25 million to $15 million. The lawmakers also reduced the Medicaid assistive care services program which pays for services in these settings from $32 million to $25 million, no other social service program suffered cuts in their budgets similar to these twin pillars that provide access to care. So why the cuts? The answer is simple; many of the beds for care of the low income are fading away as the mounting problems with the economy encompass many of the small facilities.
The reality is that many of the ALFs that care for the state funded residents have closed and gone away quietly. The state has lost over 2100 beds for low income ALF residents since 2001, in the last four years it has 980 beds for the low income adults with mental illness. The chronic substandard rate of reimbursement for care at $9.28/day coupled with the increasing costs associated with meeting the current regulatory standards has all but made the business model for continuation of this important housing link all but unsustainable.
The cost saving role of the ALF has been significant over the years in providing stable housing for persons with mental illness. On frequent instances the courts, homeless shelters, hospitals, crisis stabilization units and others will look for a good ALF to care for a complex person with mental illness, often with emerging medical needs and in many instances problems with substance abuse. The loss of these beds is now beginning to show up in the data, over the last few years in Florida the numbers of mentally ill headed to forensic mental health treatment facilities has shot up creating a crisis. In Florida that number has gone from 1200 to 1500 today and is costing taxpayers $140,000 per year for each bed.
In Florida we see that 125,000 citizens each year are arrested and charged with a crime that also has a mental illness. There are 17,000 residing in state prison beds, 14,000 in county detention facilities and another 40,000 under supervision of probation and parole. The Department of Corrections spends $68 million each year on the mental health needs of its inmates and this number continues to grow. The large percentage of crimes committed by these people were committed while the person was not taking their medications and is in part due to their mental illness.
The data shows that 12 months after discharge from a state mental health treatment facility of 1300 people discharged annually in Florida 782 end up on a correctional facility, hospital, nursing home, homeless shelter or unknown. These are not the desired outcomes that people would expect and this is the reality that feeds the revolving door because of the lack of stable housing and services.
When you look at how effective the limited mental health ALF setting is in reducing the need for forensic mental health treatment beds, the data in Florida shows that over the last four years only 26 mentally ill residents of the ALFs are sent for care in an forensic mental health institution. By contrast when you compare to the FACT team, the assertive community treatment teams, over 200 on average are sent to a state mental health treatment facility. In many instances the provision of FACT services is not enough to avoid the need for institutional care, what is needed is a combination of stable housing and stable services.
So what can federal lawmakers do to help reverse the slide toward rising costs and greater use of jails to care for the mentally ill in Florida and nationally. The development of proper incentives to care for the most functionally impaired is of broad public interest; people would like to ensure the mentally ill are cared for in an appropriate way at the lowest cost possible.
Clearly as the Nursing Home Diversion Program has learned the proper use of an ALF can help divert risk, reduce the need for expensive institutional care and improve customer satisfaction. The federal lawmakers would be well served to consider using the savings from the continuing disability review program that is funded through the social security administration to create a federal subsidy for those individuals with a serious and persistent mental illness who meet certain criteria relative to functional impairment to fund access to care in a state licensed limited mental health assisted living facility, personal care homes or other state regulated residential care facility. The federal subsidy would be expected to be from $150/month to $320/month and would be based upon the income of the resident.
The use of the savings from the SSA continuing disability review program would create an incentive for licensed residential facilities to offer care for the more functionally impaired and would help reduce the need for jails, prisons and ER visits that would otherwise arise when these individuals do not have access to stable housing and supervision. This approach would be based on the availability of funds and would be a federal subsidy that would be based on the allocation of slots for care and would include a process for recertification of eligibility and recoupment when funds are paid for persons determined to be ineligible.
The development of a federal plan to expand the access to state licensed limited mental health assisted living facilities would help reduce the cost of health care for the low income chronically mentally ill. The need for immediate attention in virtually every state is a growing crisis. The unintended consequences associated with decisions made on a federal level too many times leaves the most functionally impaired left out and struggle to find a new way just to survive the change that imposes new burdens and new struggles. The plan for federal health reform should consider changes that would offer the right incentives and work to fully utilize the care settings that help control costs and reduce the need for institutions; these are the investments and changes in federal policy that should be pursued.
Today’s decisions will impact on the results we see 30 years from now. How will the mentally ill be treated in our society in the future? The absence of changes that will offer adults with mental illness the stable housing and services they need will result in the further collapse of the limited resources now available and result in new costs for institutional care. Now is the time for change in how America provides for the chronic adults with mental illness and their need for stable housing. This one change will produce a significant change in the need for crisis care and will allow these important Americans to join the community in building a prosperous future for everyone.