Twisted Logic

Why is Designing Smart Public Policy to Keep Our Frail Elderly Out of Nursing Homes Such a 15-OTHER-NEWS-JASON-BLOOMEProblem for California?

By Jason Bloome, Connections–Care Home Referrals

Do Coordinated Care Initiative Managed Care Organizations (CCI MCOs) have to provide assisted living waiver (ALW) services?

No. CCI MCOs do not have to offer waiver services. The CCI MCOs have the option to offer services similar to waiver services, but are not required to offer these benefits. Plans might choose to offer services similar to waiver services in order to assist the beneficiary in residing in their home or community safely.

The CCI/ALW Fact Sheet, May 2014, page 2, Question #4


A CCI MCO may develop their own program(s) to pay for residential care facilities for the elderly (RCFEs) and are not dependent on ALW.

The Department of Health Care Services, July 2015


The [CCI] criteria do not include residing in an RCFE.

The Department of Health Care Services, August 2015


Imagine the following scenarios:

Mr. Johnson, age 83, is in the hospital due to numerous falls; Ms. Adams, 93, is at home with failing eyesight; and Ms. Davis, age 75, is newly arrived at a skilled nursing facility (SNF) for short-term rehabilitation services due to a broken hip.

All three are dual-eligible (on Medicare and Medi-Cal) and require 24-hour custodial care assistance with dressing, bathing and help out of bed. Mr. Adams has trouble walking and Ms. Davis requires a wheelchair. All lack family caregiver support at home and need more care than the maximum allowable IHSS hours (283 hours/month).

A social worker discusses with each of them the care housing options, which include residing at a SNF or in a residential care facility for the elderly (RCFE).

In Olmstead vs. L.C. (2009) the federal government reaffirmed the rights of the low-income elderly and disabled to live in a community based vs. institutional setting whenever possible. So what is California actually doing to comply with Olmstead for the frail low-income elderly with custodial care needs who would like to receive their care in RCFEs?

The assisted living waiver (ALW) is the only program in California that allows Medi-Cal to pay for RCFEs. ALW has many intractable problems: limited providers, long waitlists and, since ALW was not designed with small four- to six-bed RCFEs in mind, more than 90 percent of all ALW participants end up in large 100-plus RCFEs with one staff to 20 to 30 residents.

The ALW waitlist for SNF diversion to RCFE is approximately eight to 10 months. For SNF transition to RCFE, the ALW criterion is that a patient must be on long-term support and services (LTSS) requiring a minimum 90-day continuous SNF stay.

Mr. Johnson (who is at the point of hospital discharge) and Ms. Davis (struggling with inadequate care at home) cannot wait eight to ten months for an ALW slot to become available. Ms. Adams, who only requires a few weeks of rehabilitation, does not meet ALW’s 90-day continuous stay criteria.

Could Medi-Cal funding for RCFEs come via California’s Coordinated Care Initiative (CCI)?

California began CCI in 2014 and has already enrolled tens of thousands of dual-eligibles with state contracted Managed Care Organizations (MCOs) to manage Medi-Cal (Managed Medi-Cal Long Term Support and Services — MLTSS) and in some cases Medicare expenses as well (Cal MediConnect — CMC).

According to the website: CCI MCOs “will be responsible for providing their enrollees all Medicare [CMC] and Medi-Cal benefits [CMC or MLTSS] and services, including medical care, long-term care, behavioral health care and social support” and “strong consumer protections grounded in personal choice and continuity of care are key to the program’s success.”

Managing long term care, providing strong consumer protections, personal choice and continuity of care are noble objectives that should allow CCI MCOs to develop cost-efficient SNF Diversion/Transition to RCFE programs that save Medicare and Medi-Cal dollars and allow community-based vs. institutional settings whenever possible.

Ideally, CCI MCO care coordinators would work with Mr. Johnson to transfer him directly from the hospital to a RCFE; Ms. Adams could transfer from home to a RCFE; and Ms. Davis could transfer to a RCFE once she completes her rehabilitation. By managing the rehabilitation days in the SNF (for Ms. Davis), Medicare dollars are saved and since LTSS in a SNF is avoided for Mr. Johnson, Ms. Adams, and Ms. Davis, Medi-Cal dollars are saved as well.

MCOs that integrate RCFEs into the care continuum for the frail low-income elderly who could benefit from those settings makes prudent sense for CCI MCOs. Care expenses in a RCFE (average cost: $2,500/month) is far lower than care expenses in a SNF (reimbursed by Medi-Cal: $5,300/month). For every 100 people that benefit from SNF diversion/transition to RCFE, the annual Medi-Cal cost savings is approximately $3,360,000.

Allowing CCI MCOs to design cost-efficient SNF diversion/transition to RCFE programs that encourage a large network of high-quality RCFEs to participate (e.g., by conducting monthly quality check surveys with patients and their families, paying the RCFE a fair market rate, streamlining billing and payment) will minimize waitlists and put into place fast-track Olmstead measures that promote RCFEs rather than SNFs.

Except, CCI does not allow this to happen. CCI was not designed to accommodate RCFEs. Instead, the emphasis is to avoid institutionalization by coordinating care to keep dual-eligibles at home as long as possible with Multipurpose Senior Services Program (MSSP), Community-Based Adult Services (CBAS) and In-Home Supportive Services (IHSS). While CCI is beneficial for the frail elderly, who could remain at home with better coordination of social service programs, it does not help seniors who need too much care to remain at home to stay out of SNFs.

The four CCI acuity levels are:

  • Long-term care or skilled nursing facility (SNF) — residing in a SNF for 90 consecutive days or longer;
  • HCBS High — on MSSP, CBAS or IHSS with an indicator of severely impaired
  • HCBS Low — on IHSS with an indicator of non-severely impaired and;
  • Healthy — community well or does not meet any of the above criteria.

There is no CCI acuity category for dual-eligibles who choose to receive their care in RCFEs. The default category when there is no CCI acuity category is “healthy.”

Patients who require no care are classified the same as those who require too much care to remain at home.

It is absurd to think that a dual-eligible on HCBS High considered “severely disabled” suddenly becomes “healthy” when he or she transfers to a RCFE, but such is the byzantine nature of CCI.

The “healthy” CCI capitated payment is $83/month. Paying CCI MCOs such a little amount for RCFE care while fully reimbursing them for SNF expenses is a sure-fire way to force the frail elderly into SNFs when they require too much care to remain at home.

The 2014 AARP/SCAN LTSS California report card estimates 11,785 new users of LTSS in SNFs could first receive LTSS services in the community (SNF diversion) and 10,727 SNF residents with low level care needs could instead receive LTSS in the community (SNF transition).

Shouldn’t our policy makers be tearing down the barriers to Olmstead instead of erecting new ones that make it more difficult for our frail elderly to live in the care settings of their choice?

The only silver lining — if you could call it that — is that by pushing the care for tens of thousands of dual-eligibles into MCOs, eventually those organizations will be able to truly “manage the care” for their patients. Unfortunately, this change will not happen until 2017 when the capitated payments for the four CCI acuity levels disappear to become a single, capitated payment irrespective of where the dual-eligible resides. Only then will CCI MCOs have fiscal incentives to promote SNF Diversion/Transition to RCFEs whenever possible.

What happens to patients like Mr. Johnson, Ms. Davis and Ms. Adams in the meantime? The state cruelly, nonsensically forces them to live in SNFs even when they do not want to be there.

Jason Bloome is owner of Connections–Care Home Referrals, an information and referral agency for care homes for the elderly in Southern California. For more information, please visit