MACPAC: Medicaid spending for long-term care 'disproportionate'

Medicaid spending on long-term care is disproportionate compared to the number of beneficiaries requiring it, the Medicaid and CHIP Payment and Access Commision said Wednesday.

Medicaid is the largest payer of high-cost services like long-term care, MACPAC noted in its June 2016 Report to Congress. The program finances one-third of the country's nursing facilities; and spent $169 billion on long-term supports and services in fiscal year 2012.

That amount added up to roughly 43% of Medicaid's total expenditures for FY 2012, despite just 6.2% of Medicaid beneficiaries needing LTSS, the report found. Those “disproportionate” statistics highlight the importance of functional assessment tools — questions that gather data on beneficiaries' conditions and needs — in determining Medicaid eligibility.

“Assessment of functional status has a direct effect on eligibility determination and the services that beneficiaries use,” the MACPAC report reads. “The substantial costs associated with providing LTSS raise concerns about whether services are delivered in the most efficient manner.”

States currently use a variety of approaches to provide functional assessment, with at least 124 tools currently in use for eligibility planning and care planning. Comparable data on the needs of long-term care users in different states and populations could be useful for updating program designs and the relations between payment and services provided, MACPAC said.

“Such information could shed light on the quality of care provided to individuals with LTSS needs, allow for inclusion of the severity of LTSS needs in the development of payment rates, highlight state innovations that are effective and worthy of replication, and suggest potential changes in federal policy to incentivize adoption of effective approaches,” the report stated.

While an increase in beneficiary enrollment has been boosting Medicaid spending, it still accounts for a smaller slice of overall healthcare expenditures than Medicare and private insurance, the report found. In FY 2014, the program covered 16% of healthcare spending, compared to 20% for Medicare and 22% for private insurance.

MACPAC's Report to Congress also covers financing reforms and trends in Medicaid spending. Click here to read the full report.