Federal officials have initiated a highly anticipated program to help
states move long-term-care beneficiaries—including those with mental
illness—from nursing homes to community-based care.
One of the few positive developments that mental health advocates cited in
the 2005 Deficit Reduction Act (DRA), the "Money Follows the
Person" initiative will offer $1.75 billion in competitive grants to
states from the Centers for Medicare and Medicaid Services (CMS) over five
years to help shift Medicaid programs from an overwhelming focus on
institutional long-term care to systems that allow choices that include home
and community-based care for seniors and those with disabilities.
CMS will accept detailed proposals from states through November 1. States
can propose new programs aimed at sustaining people in their homes or
communities who would otherwise receive care in a nursing home or other
institution. In effect, the federal government will pay for 75 percent to 90
percent of the costs of transitioning individuals out of nursing homes and
into community settings and the associated costs of the long-term care in
The new emphasis on community care is a recommendation of President Bush's
New Freedom Commission on Mental Health.
"We've worked with advocates and states for years to end the
institutional bias in Medicaid, and now we've got the best opportunity ever to
do it," said CMS Administrator Mark McClellan, M.D., Ph.D. "We
need to move as quickly as possible to make that shift across Medicaid. With
new federal funding, there is no longer any excuse for the status
Funds also can be used for home-modification costs, respite services to
augment informal or unpaid caregivers, personal care, and assistive
Disability advocates highlight that the program encourages states to work
with local and state housing authorities to provide coordinated assistance for
community-based housing needs. Although housing for those with disabilities is
a major unmet need, many Medicaid programs have never made coordinated efforts
in this area previously, according to advocates for people with mental
CMS and the Department of Housing and Urban Development established a new
interagency liaison to support housing coordination.
Federal officials said the Money Follows the Person initiative offers"
the promise of significantly lower costs per beneficiary and reductions
in overall Medicaid spending," but acknowledged that the transition may
create some short-term costs, which the new federal program aims to help
Advocates for people with disabilities said those individuals often end up
in a nursing home or other institution because they either do not hear about
community-based support services or the waiting lists are too long. But they
maintain that people with many kinds and degrees of disabilities live well in
the community when "the right services and supports" are
Nonetheless, community care is not appropriate for all beneficiaries who
need long-term care. Helen Kyomen, M.D., chair of APA's Committee on Long-Term
Care and Treatment of the Elderly, said the patients she refers to nursing
homes are unable to function in a residential setting. Program administrators
must take care, she said to Psychiatric News, to ensure that only
those Medicaid beneficiaries suited to community- and home-based care are
moved to those settings.
"The idea seems innovative, and it's good to give people a choice,
but you don't want to put someone in the position where they move to a
community-based setting and don't have the tools to function there,"
Kyomen said. "If they are able to choose the population correctly, it
could be a good thing."
Elizabeth Clemmer, associate director of the AARP's Public Policy
Institute, said there is some concern that states may engage in
deinstitutionalization on scales similar to those in the 1970s and 1980s of
people with psychiatric illnesses, without offering suitable alternatives. She
said states need to transition people "decently" and not"
solely because they can save money."
Federal officials said each state awarded a grant under the program must
continue to provide community services after they receive a year of federal
matching funds as long as the person needs community services and is Medicaid
eligible. They emphasize that the program gives individuals control over how
to get their services, rather than requiring them to use institutional care to
get long-term care under Medicaid.
"2006 Money Follows the Person Re-balancing Initiative
Demonstration Program," including application forms, is posted at<www.grants.gov/search/search.do?oppId=10432&mode=VIEW>.▪