The Generation Project






The Implementation of SEA 493:
A Policy Education Series from The Generations Project


Bumps in the Road
August 2006


After waiting for more than three years consumer groups are gratified to see the rollout of Senate Enrolled Act 493, the long term care reform law, finally get underway. In June, The Generations Project joined Steve Smith, the director of the Indiana Division of Aging, in announcing the start of the Options initiative (in effect, SEA 493). At that time the income eligibility standard for home and community based services (HCBS) through Medicaid waivers was equalized with the standard used for Medicaid funded nursing home care. This long overdue action is critical to the success of re-balancing Indianas long term care system from one that is based on nursing homes to a new system driven by consumer choice.

The Options initiative has the potential to transform Indianas long term care system from one that spends 75 percent of its dollars on nursing home care to a new system, as established by SEA 493, that spends the majority of its federal and state funds on HCBS. Since Indiana has an annual Medicaid budget of $1.6 billion for long term care making the transformation to a consumer driven system based on HCBS represents fundamental change. It is a change that is very achievable. Many other states have already done so in order to save money and to provide better care for their citizens.

Unfortunately, in the rush to implement Options the Indiana Division of Aging has recently run into some serious bumps in the road of its own making. These include making commitments to spend huge and unnecessary sums to buy out nursing home beds as a means to accelerate the process of transforming the long term care system. Fiscally and legally buying out licensed Medicaid beds is not necessary in order to reduce the utilization of nursing home care. Other states have avoided doing this, but in Indiana the state administration has decided bed buy outs are necessary in the LTC re-balancing process. Consumer groups fear the buy outs will consume dollars that can best be used to build HCBS capacity. (Bed buy outs are examined in more detail in the July 2006 edition of this website series.)

Another costly bump is the undue pressure brought to bear on the area agencies on aging (AAAs) by the Division of Aging and its parent agency, the Indiana Family and Social Services Administration (FSSA). The AAAs have been forced to submit to the state huge and ill defined planning reports in addition to their normal reporting requirements that have sapped the time and the morale of the agencies. AAAs budgets have been reduced by the state for SFY 2007. That has produced cuts in senior staff and critical case managers at a time when their budgets should be increased in order to meet the challenges of implementing SEA 493. The state has inexplicably taken senior citizen employment programs from the AAAs and is threatening the viability of their senior nutrition programs. Good nutrition is the canary in the mine when it comes to the health of senior citizens. The AAA nutrition programs receive high marks and should be left alone. The combined impact of these actions by the state against the AAAs places the delivery of critical nutrition and home care services for seniors and persons with disabilities at risk.

The administrative and budgetary actions directed at the AAAs do not appear related to the improvement of AAA operations. A March 2005 management briefing paper prepared by The Generations Project at the request of FSSA has largely been ignored by the Division of Aging. Under SEA 493, the 1987 CHOICE home care law, and the federal Older Americans Act the area agencies on aging are central to the administration of home and community based services. With the rollout of SEA 493 the Division should be building a partnership with the AAAs in order to optimize the benefits of that law. Taken as a whole, Indianas private not-for-profit AAAs have a proven track record of success and a positive national reputation. They are successful enterprises that are trusted by senior citizens. Taking positive steps to improve the AAAs and to establish uniform business practices would be a far better course for the state to follow. The Generations Project, AARP, and the AAAs have all offered to participate in a process to develop and improve management practices and cooperation among the AAAs with the Division of Aging. So far there has not been a response to that offer.

The Division and FSSA can and do engage in productive partnering with the AAAs. They have announced their intention to work with all sixteen area agencies on aging to establish aging and disability resource centers (ADRCs). ADRCs are designed to be state of the art information, outreach and marketing centers for HCBS and other services for senior citizens, persons with disabilities, and their families. Two AAAs have already established ADRCs and two more have the process underway.

The state is also pitching the enrollment of providers for services, such as adult foster care (AFC), in a manner that could result in care that places consumers at risk. This is a bump that could become a real hole for consumers and the state. Instead of carefully recruiting families to provide homes for seniors and persons with disabilities the state is aggressively marketing adult foster care as an entrepreneurial opportunity. Other states, such as Oregon, have discovered the latter approach can produce harmful outcomes for the vulnerable people who must use AFC.

Concurrent with the above actions the state has taken a series of steps that will harm the CHOICE program. Specifically, provider rates have been reduced below Medicaid waiver levels. CHOICE will remain a necessary home health care program in the future for persons who will still need publicly funded care but who will not qualify for the new Medicaid waivers under SEA 493. Under that law CHOICE is supposed to set the care standard for Medicaid waiver services. So even though fewer people will be using the CHOICE program in the future their care should not be compromised. Degrading CHOICE will only serve to prematurely drive persons into nursing homes.

Despite the aforementioned bumps, The Generations Project continues to take every opportunity to work with the state, consumer organizations, AAAs, professionals, and business to improve home and community based services and to re-balance the overall long term care system. Recently, this has resulted in a productive dialogue to establish a new system of long term rehabilitation for persons with traumatic brain injuries. The objective of these discussions is the restoration of independence for TBI individuals. Consumer groups, the Project, and providers are working with Steve Smith and the Division of Aging to make this dramatic and wonderful new development a reality.

In order to fulfill its mission of establishing a LTC system based on true consumer choice, The Generations Project is obligated to report on the entire journey including the bumps in the road. To re-balance Indianas system of long term care in a manner that produces better care outcomes while serving more people and saving public dollars is a huge challenge. The positive and the counterproductive elements must all be fairly evaluated and vetted. It is a challenge that requires the state to be an active, positive and transparent partner with organizations that represent the bottom line of any healthy LTC system: the consumer. If our collective efforts do less than that we will produce higher costs, poorer care and needlessly jeopardize individuals and their families.