A Glaring Omission: Inadequate Funding for RCFEs will defeat many of Cal MediConnect’s policy goals.


Goals of the Cal MediConnect program from Calduals.org:

  • Coordinate state and federal benefits and access to care across care settings, improve continuity of care, and use a person-centered approach.
  • Maximize the ability of dual eligible beneficiaries to remain in their homes and communities with appropriate services and supports in lieu of institutional care.
  • Increase the availability and access to home- and community-based alternatives.
  • Preserve and enhance the ability for consumers to self-direct their care and receive high quality care.
  • Optimize the use of Medicare, Medi-Cal and other State/County resources.

Social workers, case managers and other health care professionals should be aware of big changes coming to California in 2014 when the state implements Cal MediConnect (CMC). CMC is a three-year demonstration project in eight counties: Los Angeles, Riverside, San Bernardino, Orange, San Diego, Alameda, Santa Clara and San Mateo which will test the efficiency of enrolling an estimated 456,000 Medicare and Medi-Cal beneficiaries (dual-eligibles) with contracted health care plans (HMOs) to receive care services.

CMC is expected to improve quality outcomes, streamline health care delivery and contain Medicare/Medi-Cal costs. CMC goals include rebalancing initiatives (also called nursing home diversion/transition) which shift long term support and services (LTSS) from skilled nursing facilities (SNFs) to home- and community-based care settings and allowing consumers the choice to self direct where they would like to receive their care.

A critical component of California’s care continuum are Residential Care Facilities for the Elderly (RCFEs). Eighty percent of the 7,500 RCFEs in California are small homes where two staff assist four to six residents who require 24-hour custodial care (e.g., help with dressing, bathing, incontinence, are non-ambulatory, have wheelchairs and/or have dementia or Alzheimer’s).

The CMC California Memo of Understanding allows HMOs to pay for RCFE care services for elderly dual-eligibles (more than 7 out of 10 dual-eligibles are 65 years and older). Patients migrating to these settings will come from home (e.g., when their care needs exceed the maximum allowable IHSS hours: 283 hours/month or nine hours/day), from hospitals (i.e., at the point of discharge, when they require too much care to return home but do not need skilled nursing care) and from SNFs (e.g., for the many long term care patients who are eligible for nursing home transition back into the community).

The CMC capitated rates are: Institutionalized — for patients currently in SNFs; HCBS High —for individuals identified as high level users of home- and community-based services, including participants on IHSS who are considered “severely impaired”; HCBS Low — for individuals recognized as low level users of HCBS classified as “not severely impaired”; and Community Well — all other individuals living in the community with no Medi-Cal covered HCBS services.

One glaring omission in the CMC rate structure is the capitated rate paid for dual-eligibles with high level care needs who choose to live in RCFEs.

According to CMC HMO representatives, the Department of Health expects a patient who transfers from a SNF (Institutionalized) or from home (on HCBS High) to drop from the highest CMC rates: $4,500/month and $1,800/month, respectively, to the very lowest (Community Well): $40/month.

Dual-eligibles residing at home considered “community well” are not the same as “severely impaired” dual-eligibles at the “institutionalized” or “HCBS high” levels who choose to live in RCFEs. Applying the same capitated rate to these two distinct populations is a critical design flaw at the heart of CMC and thwarts many of its goals. Inadequate RCFE funding will restrict consumer choice and prevent LTSS rebalancing when HMOs paid the highest rate to keep patients in SNFs lack fiscal incentives to promote nursing home transition/ diversion for patients who no longer can live at home.

The current CMC rate structure is also misaligned with California’s Assisted Living Waiver (ALW) which pays RCFEs $1,500 to $2,400/month for each patient on the program. ALW participants are identical to CMC dual-eligibles institutionalized or at “risk of institutionalization.”

CMC design flaws will perpetuate California’s dismal record in regards to nursing home transition. Since 2008, California has spent more than $41 million in grants awarded by the Centers for Medicaid and Medicare Services and, as of 2012, has only transitioned 828 patients.

Many SNF patients, if given the choice, would prefer to receive their care in community-based settings rather than in institutions. The 2008 California Pathways study found in two of the participating SNFs a large percentage of eligible patients (25 percent and 56 percent respectively) expressed a strong preference for transition.

The AARP/SCAN 2011 Long Term Care State Report Card predicts, if California improved its performance to the level of the highest performing state, 11,000 new users of Medi-Cal LTSS would benefit from nursing home diversion and 9,800 current SNF residents with low level care needs would be eligible for nursing home transition. 

According to CMC HMO representatives, the state intends to switch from the four capitated rates to a single blended rate in August 2015 after which Medi-Cal cost savings will encourage HMOs to offer nursing home transition/diversion. Eligible seniors should be allowed this option once CMC beings (starting in April 2014) not be forced to wait 1.5 years.   

Hospital social workers and other health care professionals see every day patients ending up in SNFs who do not need to be there. Our frail elderly deserve better. The state urgently needs to fix CMC before it begins in 2014 by considering its policy goals: “LTSS rebalancing,” “consumer choice” and “community based living” for the dual-eligibles who would like to receive their care in RCFEs. Ensuring HMOs receive, at a minimum, the HCBS High rate for these patients would be a step in the right direction.

 Jason Bloome is the owner of Connections. For more information, please call (800) 330-5993 or visit www.carehomefinders.com. He can also be reached at carehomefinders@gmail.com.