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Background paper:

• Who Is Affected by Long-Term Care Issues and Iowa’s Institutional Bias?

• How do Most Older Iowans and People with Disabilities Get Services?

• What Is Meant by “Institutional Care”?

• What do We Know About People’s Preferences for Where They Get Services?

• How Does Title XIX (the federal law creating Medicaid) Tilt the Service System Towards Institutional Care?

• What Other Factors Contribute to Institutional Bias?

• Are Federal Policies Changing to Support More Choices?

• How Has Iowa Responded to New Opportunities to Promote Choice?

• What Are the Results of Iowa’s Rebalancing Efforts to Date?

• What do Home and Community-Based Service Waivers do for Older Iowans and People with Disabilities?

• Chart that outlines Home and Community-Based Service Waiver program eligibility and enrollment in Iowa

Who is Affected by Long-Term Care Issues and Iowa’s Institutional Bias?

At some point long-term care issues affect most families in one way or another, including not just the people who need the support but the family members who provide it as well.  The need for these services becomes more likely with age, for the simple reason that age is linked to the incidence of disability.            * According to the 2006 U.S. Census, Iowa ranked fourth among all states (after Florida, West Virginia and Pennsylvania) in the percentage of its population age 65 and older:  14.6% or over 435,000 people.  About 12% of Iowans of any age (including people age 65 or older), or 335,000 people, have self-reported disabilities.  One third of disabilities are reported by people age 65 or older.*

The number of people needing assistance now, or likely to need assistance in the near future, is significant.  However, many people do not realize that they are likely to be affected by long-term care in the mistaken belief that it will be paid for by Medicare when they need it.  Medicare is a health insurance program (not a long-term care insurance program) for people who worked enough in their lifetime to be eligible.  It pays for short-term rehabilitative stays in nursing homes, but not for long-term or “custodial” care.

* Rehabilitation Research and Training Center on Disability Demographics and Statistics, Cornell University: 2007 Disability Status Report-Iowa.  Analysis of American Community Survey, U.S.Census

* U.S. Census, American Community Survey 2006

How do Most Older Iowans and People with Disabilities Get Services?

Older Iowans and people with disabilities receive services through different systems, but the issues both groups face are quite similar.  People who need help with such activities of daily living as: getting out of bed and dressed, using the bathroom, and getting in and out of their house need long-term supports in order to stay at home and not go into a nursing home or other residential care facility.  Some who start out not needing a nursing home “level of care” may quickly get to that point for want of simple help in the form of a ramp, nutrition assistance, mental health services, etc.  The pressures on family members trying to keep them at home, but unable to manage the situation, can lead to a crisis.  The central issues relate to getting timely access to quality services, and being able to make reasonable choices about how and where to get them.

About half of Iowa’s nursing home occupancy is private pay-Iowa is unusual among states in this regard.* The Department of Human Services, which administers the Medicaid budget, is responsible for screening and eligibility determinations for older Iowans of limited means who need long-term care. It is Medicaid that pays for services to the other half of Iowans living in nursing homes.  Older Iowans who want to live in their own homes can get help through the Elderly Waiver, which is also funded by Medicaid.  Case managers paid through Medicaid can help older Iowans develop a service plan and get the services they need.  Case management services for Elderly Waiver participants are provided by a variety of organizations including area agencies on aging.  The Area Agencies on Aging also receive limited funding under the Older Americans Act, which helps provide some additional help to seniors wishing to stay in their own homes, including some seniors who do not qualify for Medicaid.

Iowa Code requires counties to provide services to certain disability populations:  adults with mental illness and those with intellectual disabilities (“MR”).*Many counties have also been serving people with brain injury and developmental disabilities.  These disability groups make up a significant percentage, but certainly not all of Iowa’s disability population.  People who acquire physical disabilities as adults, including people with spinal cord injuries or multiple sclerosis, often have few service options available.  In addition, Iowa’s county-funded disability service system has been experiencing a fiscal crisis for several years. Many counties have been compelled to cut services to non-mandatory populations, and have raised questions whether services (even to mandatory populations) can be maintained.  The fact that counties are not required to pay for the services of people who end up in nursing homes creates a powerful financial incentive towards institutionalization for people who neither want it nor would be appropriately served there.

Medicaid (Title XIX of the Social Security Act) is the biggest source of funding for long-term services.  Medicaid has important eligibility restrictions.  People must fall below the state’s income limits for the program, their assets can generally not exceed $2,000, and for disability services they must have a diagnosis in order to qualify.  Other funding sources for services tend to be limited, so people often fall through the cracks.

* CMS OSAR Current Survey Data 2008, quoted in American Health Care Association – Health Services Research and Evaluation: Nursing Facility by Payor.  See also http://www.ime.state.ia.us/NursingHomeCare/index.html

* Chapter 331 of Iowa Code

What Is Meant by “Institutional Care?”

Institutionally-based services are provided to particular populations such as: people with intellectual disabilities/mental retardation, people with mental illness, and the “frail elderly”- individuals who need assistance with activities of daily living.  Institutions can be large, like the state-run Resource Centers at Woodward and Glenwood, or small, like four-bed intermediate care facilities located in residential neighborhoods.  (All intermediate care facilities, regardless of size, are classified as institutions under federal regulations.)  Some examples of institutions are:

Nursing facilities provide “health-related care and services,” which may include rehabilitation services, for people who require nursing care and other services in addition to room and board. CMS statistics indicate that in 2006 about 8% of Iowa’s roughly 50,000 nursing home residents were under the age of 65.*

Residential care facilities (RCFs) provide room and board and personal assistance with activities of daily living to three or more individuals who, because of physical or mental conditions, are unable to care for themselves but who do not require nursing care except on an emergency basis.

Intermediate care facilities for persons with intellectual disabilities (mental retardation) (ICFs/MR) provide 24-hour access to health or rehabilitative services to people with a diagnosis of mental retardation or a related condition.  They provide “active treatment” to residents to help them become more independent and productive.

Intermediate care facilities for persons with mental illness provide room and board and nursing care to people with mental illness.

* Houser, Ari N. Nursing Homes Research Report AARP Public Policy Institute (October 2007)

What do We Know About People’s Preferences for Where They Get Services?

A 2002 AARP survey showed that 79% of AARP members considered it very important to stay at home as long as possible should they or a family member need long-term care.* Since then, AARP surveys around the country continue to validate people’s preferences for in-home services. According to AARP’s report in July of 2008, entitled Balancing Act, “The overwhelming majority of people with disabilities age 50 and older (87 percent) want to receive long-term care (LTC) services in their own homes. People want choice and control over everyday decisions.”*

* AARP Iowa Home and Community Based Care Long Term Care Survey 2002

* Ibid

How Does Title XIX (the federal law creating Medicaid) Tilt the Service System Towards Institutional Care?

Title XIX of the Social Security Act, passed in 1965*, created the Medicaid program to provide access to health care for low income Americans.  It also made institutionally-based long-term care for the “Aged, Blind and Disabled” an entitlement for anyone who was Medicaid eligible and required an institutional level of care. States were not then, nor are now, required to offer more than a few limited home health services.  This means that people who need extensive supports to maintain their daily living activities typically receive them through facility-based care.  A “bed” in a state institution or nursing home has to be made available to eligible people while home and community-based services (HCBS) do not.

* USC 1396-1396v, subchapter XIX, chapter 7, Title 42

What Other Factors Contribute to Institutional Bias?

The Economic Incentive to Maintain Occupancy.  Long-term care had been provided to the frail elderly and people with disabilities long before the creation of the Medicaid program* and counties operated institutional facilities, many of which were very large.  In Iowa, for example, the Glenwood and Woodward State Hospital Schools (now known as the Resource Centers) were licensed for 851 and 639 beds, respectively.  The low quality of care in large nursing homes and state hospitals began to get a lot of national media attention in the 1970′s.*  Questions were raised about whether it was possible to provide quality care in such settings.  However, finding ways to downsize institutions is a challenge; they have high overhead costs and economies of scale come into play.

Under an agreement with the Department of Justice, the State of Iowa has gradually downsized the Resource Centers.*  Current occupancy is at 255 for Woodward and 349 for Glenwood.  Eligibility for admission has been tightened and requires preadmission documentation to ensure there are no placement options available in more integrated settings.  However, many family members of Resource Center residents are afraid of the idea of moving their loved ones to community settings because they do not believe Iowa’s network of community providers is strong enough.  Community providers say that it is hard to attract and train enough support staff.

In 1971 Congress amended Title XIX to authorize the development of Intermediate Care Facilities for people with Mental Retardation (ICFs/MR).  These residential facilities provide 24 hour access to a set of comprehensive services.  Today Iowa has about 140 ICFs/MR. Community-based ICFs/MR in Iowa range in size from 4 to 128 beds.*  However, over 70% are still living in 16+ bed facilities.  Taking into account the number of people with MR/DD who reside in residential care facilities, Iowa ranks second among all states in its reliance on 16+ residential facilities.*

What Other Factors Contribute to Institutional Bias?

Inadequate Support to Families in Crisis.  According to research by the National Family Caregivers Association, family caregivers provide the majority of long-term care services in the U.S.–approximately 80%.  This includes care for the frail elderly and adults and children with disabilities.*  The inability to access services promptly–in crisis situations such as parents dealing with behavioral issues, for example, or as patients are being prepared for hospital discharge–can result in unnecessary institutionalization.

Limited availability of HCBS Services.  In 1981, Congress authorized states to seek approval of “waivers” from the institutional entitlement in order to provide services to specific populations, otherwise eligible for an institutional level of care, in their homes and communities.  States are allowed to offer waivers only to specific groups such as the elderly or people with a diagnosis of mental retardation, to specify what services would be covered, and to cap those services in terms of duration and cost.  Iowa has seven waivers (described below), and there are usually long waiting lists for these services.  People who have trouble getting a waiver “slot” may feel that institutional care is their only option.

Differences in Reimbursement Policies.  Nursing homes and ICFs/MR secure increases in reimbursements through legislative appropriations more easily than do HCBS providers.  Other differences in reimbursement policies work to the relative disadvantage of HCBS providers.  HCBS service providers are authorized to bill only for the number of specific services an individual client uses each month. Each service provided must also be part of the individual’s approved service plan and there are caps on the number of service units clients can receive.  Providers have received a legislatively authorized 3% increase in reimbursement for services in recent years, but this does not accomplish anything in situations where an individual has hit the monthly cap on their services.  Administrative costs are capped (currently at 20%) and providers may have difficulties covering such things as staff training.  ICFs/MR, on the other hand, receive reimbursements in the form of daily rates for bundled services to individual residents, whether residents access those services or not.  Staff training costs are covered in those daily rates.

Sources for section What Other Factors Contribute to Institutional Bias?:

* The Minnesota Developmental Disabilities Council’s interesting history of disabilities can be found at www.mnddc.org/parallels/index.html

* Geraldo Rivera’s expose of the Willowbrook State School in 1972 is the subject of David J. and Sheila M. Rothman’s The Willowbrook Wars (2005)

* The current status of enforcement activities can be found at http://www.dhs.iowa.gov/docs/15%20%2030%20Notice.pdf

* ID Department of Inspections and Appeals

* Bruininks, Byun, Alba, Lakin, Larson, Prouty, and Webster, Residential Services for               Persons with Developmental Disabilities:  Status and Trends Through 2006)

* Thompson, L., Long-term care: Support for family caregivers [Issue Brief]. Washington, DC: Georgetown University, 2004 and Long-Term Care Financing Project, Long-term Care Users Range in Age and Most Do Not Live in Nursing Homes. U.S. Agency for Healthcare Research and Quality, November 8 2000,

Are Federal Policies Changing to Support More Choices?

The last decade has seen important changes in long-term care.  As we have seen, national surveys have consistently shown that people prefer to receive supports in their own homes, and national research has also indicated that on average, the cost of HCBS is less than facility-based services.  Major developments at the federal level responding to these issues include:

The Olmstead Decision.  In 1999 the Supreme Court found, in its much heralded Olmstead decision, that unnecessary institutionalization of people with disabilities was a violation of their rights under the Americans with Disabilities Act, and that people had a right to receive services in the most integrated setting consistent with their needs.  This decision became a tool for advocates to promote development of state plans to ensure the real choice of community living for people of all ages with disabilities.

Federal Funding for State Initiatives to Rebalance Systems of Care.  In 1998, CMS embarked on a series of major grant announcements inviting states to build the infrastructure for transitioning people out of nursing homes, improving access, individualizing services and supports, and rebalancing the financing of long-term care systems to correct the institutional bias.  Under the Deficit Reduction Act grants have been made to states to implement the concept of “Money Follows the Person,” which refers to systems of care in which funding for services follows people to the setting where they would like to receive them.  Congress and the Administration remain interested in promoting policy change to eliminate institutional bias, but these efforts are resisted year after year by those with an interest in the status quo.

How Has Iowa Responded to New Opportunities to Promote Choice?

Following the Supreme Court’s Olmstead decision, the State of Iowa created the Olmstead Consumer Taskforce to develop recommendations for promoting independence and choice for consumers needing long-term supports.  The Taskforce, composed principally of consumers, but with the participation of state agency representatives, held public hearings and produced a Community Development Plan for Iowa.

Governor Vilsack, heeding Taskforce recommendations, in 2003 issued Executive Order 27, directing state agencies to identify the elements of their policies and programs which created barriers to community living, and to develop plans to eliminate those barriers.   The Taskforce continues to meet and provide consumer and state agency input into Iowa’s policies and programs related to long-term care.

The State of Iowa has received several grants for long-term care systems change, including a $51 million Money Follows the Person (MFP) grant to help 528 people move out of ICFs/MR. Full implementation of MFP will require the permanent addition of three new mental health services to the MR Waiver-services which advocates have long believed are critically important to helping individuals with mental illness or challenging behaviors stay in the community.  Iowa’s 2005 Real Choices grant is being used to do such things as improve access to affordable accessible housing and to make it easier for Medicaid members to get transportation to health services.  Housing and transportation are huge issues for seniors and people with disabilities who want to remain active in their own communities.  Iowa was also the first state to use a provision in the Deficit Reduction Act to include HCBS-like services in the State Medicaid Plan, intended to help people with chronic mental illness to stay in the community.

What Are the Results of Iowa’s Rebalancing Efforts to Date?

Compared to the U.S. average, Iowa allocates a greater percentage of its Medicaid long-term care spending for older people and people with disabilities to nursing homes.*  While still lagging behind most other states, Iowa has nevertheless made progress in shifting resources towards HCBS.  Although many more Medicaid participants received nursing home services than received home and community based services in 2004, from 1999 – 2004 the number of nursing home residents decreased and the number of people receiving home and community based services under Medicaid Waiver programs doubled. *

However, Iowa still has a long way to go.  Here are a few examples:  Iowa has more nursing home beds per 1,000 residents than any other state in the United States. * Few alternatives exist for adults who need a nursing home level of care but do not yet qualify for the Elderly Waiver.  Only about one fourth of ICF/MR residents live in facilities of eight beds or less, and less than 10% live in four-bed facilities.  Over 70% are still living in 16+ bed facilities.*  Taking into account the number of people with MR/DD who reside in residential care facilities, Iowa ranks second among all states in its reliance on 16+ residential facilities.*

*A Balancing Act: State Long-Term Care Reform AARP Public Policy Institute July 2008

* Ibid.

*CMS Nursing Homes Data Compendium 2005

* Bruininks, Byun, Alba, Lakin, Larson, Prouty, and Webster, Residential Services for Persons with Developmental Disabilities:  Status and Trends Through 2006

* Ibid

What do Home and Community-Based Service Waivers do for Older Iowans and People with Disabilities?

Iowa applied for its first Section 1915 (c) waiver, the “Ill and Handicapped Waiver”, in 1984, in order to allow a medically fragile child named Katie Becket to receive the services she needed at home, rather than in the hospital.  Since that time the state has applied for and secured federal approval of six additional waivers:  Elderly, Mental Retardation, Physical Disability, HIV/AIDS, Brain Injury, and Children’s Mental Health.  The common elements of these waivers are:  (1) the development of an individual service plan by the consumer and a team that usually includes the case manager or service worker and others of the consumer’s choosing; (2) the coordination of services in the plan by a case manager; and (3) a quality assurance system providing for the health and safety of the individual and ensuring that his or her goals are met.

The waivers are in high demand, and the Legislature appropriated funds in 2005 and again in 2006 intended to eliminate waiting lists. Enrollment has grown by roughly 10-12% annually since 2003. The Legislature has also added services to several of the waivers. Expenditures have grown from $176 million in 2003 to $384 million in 2007, roughly 15% annually. DHS has also developed an innovative approach that promotes independence in the delivery of waiver services. In 2007, a “self-direction option” called the Consumer Choices Option (CCO) became available to participants in six of Iowa’s waivers (all except the Children’s Mental Health waiver), providing individuals with a new level of flexibility, choice, and control to manage their own services and providers.

Over 23,000 Iowans are being served by waivers, as shown in following chart.

HCBS Waiver	Eligible Population*	NumberEnrolled
Ill and Handicapped	People determined blind or disabled under Disability Determination, and under the age of 65, requiring a Nursing Facility, Skilled Nursing Facility or ICF/MR level of care	Began in 1984; 2,377 currently enrolled
Elderly	People age 65 or older requiring a nursing or skilled level of care	Began in 1990;8,777 currently enrolled
Mental Retardation	People with a diagnosis of MR or mental disability which is equivalent of MR, requiring ICF/MR level of care	Began in 1992;9,912 currently enrolled
Physical Disability	People with physical disabilities meeting Social Security or state Disability Determinations, aged 18 to 64, requiring an ICF or Skilled Nursing Facility level of care, and not qualifying for the MR waiver	Began in 1992;690 currently enrolled
HIV/AIDS	People with a  diagnosis of AIDS or HIV, requiring a nursing facility or hospital level of care	Began in 1992;47 currently enrolled
Brain Injury	People with a brain injury diagnosis due to accident or illness, and of age one month to 64 years, and needing an ICF, ICF/MR or Skilled Nursing Facility level of care	Began in 1996;885 currently enrolled
Children’s Mental Health	Children under age 18 with serious emotional disturbance (SED)	Began in 2005;416 currently enrolled

*Complete information on eligibility requirements is on the DHS web site, at http://www.dhs.state.ia.us/dhs2005/mhdd/quality_assurance/hcbs_specialists.html#search=’iowa%20waivers‘