SB1534

Report Title:

Long-Term Care; Principles and Policy

Description:

Requires State, in addressing long-term care issues, to adopt certain general principles as a matter of state policy.

THE SENATE	S.B. NO.	1534
TWENTY-FIRST LEGISLATURE, 2001
STATE OF HAWAII

A BILL FOR AN ACT

relating to long-term care.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the future of long-term care for Hawaii's senior and adult disabled population is one of the most critical health issues facing Hawaii in the twenty-first century. The rapid growth of the elderly and disabled populations will result in extraordinary demands on the delivery of long-term care services. While the majority of persons receiving long-term care are older adults, entire families are affected by the psychological, financial, and social costs of long-term care provided to those who are limited in the activities of daily living. To accommodate the demands of caregiving that grow as dependency increases over the years, caregivers reduce work hours, adjust or abandon career and personal goals, and retire earlier than intended, lowering their own pension and retirement benefit levels. More apt to be in poorer health than members of the general population, caregivers often find that they place their own advanced years at risk. Caregivers must be assisted by creating a network of support services including respite care and other support to alleviate the grinding responsibility of providing daily care for those who require it.

When nursing home care is necessary, Hawaii's families confront average annual nursing home charges that exceed their ability to pay. In the case of elderly families, these charges are twice their average annual disposable income, threatening with impoverishment those who are otherwise self-sufficient. Thus, it is not surprising that approximately eighty per cent of all nursing home residents are dependent on Medicaid, an entitlement program for persons with limited income and assets.

Persons sixty years of age and older presently account for almost one-fifth of the adult population in the State. By 2020, they will constitute more than one-fourth of Hawaii's adult population. Nearly one-third of this segment alone is expected to have functional disabilities. Although families have expressed a preference for home- and community-based care, existing supplies of these services and nursing home beds are already below requisite levels. The average cost for one year of nursing home care has been estimated eventually to reach more than $200,000 per person.

However, nursing home care is but one component of the array of long-term care services that has been developed. Due to cost factors, it is likely that home- and community-based services will become more predominant. These services are provided in and outside the home and are appropriate for those who do not need to be institutionalized. In fact, an important function of home- and community-based services is to prevent institutionalization. Home- and community-based services consist of a number of different modalities, some or all of which may be used by the individual. These services include adult day health services, case management services, environmental modifications, homemaker services, personal care services, personal emergency response systems, respite care services, skilled nursing services, transportation services, and similar services.

While home- and community-based services can provide care that is less costly than institutional care, it is still expensive. Although the legislature believes in a free market economy, the private sector has not been able to develop adequate financing mechanisms that appeal to the general population. The insurance industry needs to be encouraged to provide home- and community-based services options in their long-term care coverage. Purchasers of such insurance also need to be informed of home- and community-based services options as an alternative to nursing home care. The general public must be effectively educated and encouraged to purchase long-term care insurance, possibly by offering tax incentives in the form of deductions or credits.

The legislature further finds that there is an urgent need to establish a single entry point system for those who need long-term care services. The current delivery system is fragmented and uncoordinated. A single entry point system will be more conducive to enhanced and improved coordination of long-term care services and supports, and to easier and simpler access to the long-term care system.

Act 301, Session Laws of Hawaii 1996, mandated the department of human services to design and develop a unified single entry point system for persons to obtain access to a full range of appropriate long-term care services, and to present a detailed plan to implement the system by December 20, 1996.

A report to the legislature submitted by the coordinating committee convened by the department of human services recommended the adoption of a single entry point system that includes a long-term care coordinating agency, an advisory council, and certain other provisions. However, a measure to implement these recommendations in H.B. No. 478, H.D. 1, 1997, were not enacted.

The legislature further finds that in a National Conference of State Legislatures 1997 report entitled The Task Force Report: Long-Term Care Reform in the States, at least nineteen states formed long-term care task forces between 1993 and 1997. The report compiles recommendations made by these task forces which are distilled into a set of five overriding principles.

The purpose of this Act is to address a problem of compelling state interest, the current and future long-term care needs of the people of Hawaii, as guided by the principles contained in this Act.

SECTION 2. Long-term care; guiding principles. In addressing the issue of long-term care in Hawaii, the State shall adopt the following general principles as a matter of state policy:

I. REDUCING FRAGMENTATION: The long-term care system should be seamless, with coordinated funding and administration. The State may consider the following:

(1) Consolidate multiple state agencies that administer long-term care services into one long-term care agency, whether in an existing department or by creating a new department or agency;

(2) Provide a "one-stop shopping" model through which clients would easily be able to obtain information, rather than having to maneuver through a maze of state offices. The State was required to design, develop, and implement a single-entry point system into the long-term care system by Act 301, Session Laws of Hawaii 1996. Recommendations made pursuant to Act 301 were introduced in subsequent legislation which were not enacted. The long-term care agency should be given the authority to implement such a system;

(3) Base eligibility on clients' functional needs rather than on their categorical diagnoses. Rather than providing certain services to a client because of the client's age or other categorical criteria, the long-term care agency should base provision of services on what the client actually requires due to specifically identified functional needs;

(4) Integrate acute and long-term care delivery systems. The elderly and disabled use services offered by both acute and long-term care systems. The long-term care agency may explore designing benefit packages in which acute medical care is combined with nonmedical home- and community-based services. Such combinations may be able to take advantage of different funding streams, such as Medicare for medical care in acute facilities and Medicaid for nonmedical home- and community-based services;

(5) Create demonstration projects to experiment with managed long-term care. The legislature has considered several measures to establish or fund such Medicaid long-term care managed care demonstration projects, which were not enacted. The long-term care agency should explore creating new or expanding existing projects;

II. CREATING A CONSUMER-CENTERED SYSTEM: The long-term care system should encourage consumer information, choice, quality of care, and safety. The State may consider the following:

(1) Use one assessment tool-–regardless of the client's age, disability, geographic region, or services needed-–to measure medical and functional needs. Assessment is an integral part of a single-entry point system. During intake, clients are screened, assessed, and as a result of the first two processes, provided with case management to implement individual service plans. The use of a uniform assessment tool for all population categories has been discussed informally. The long-term care agency should formally adopt such a tool;

(2) Collect outcomes and patient satisfaction data to ensure that the needs of consumers are met. The long-term care agency should be responsible for this task;

(3) Develop and disseminate user-friendly materials to inform consumers about their choices. The long-term care agency should be responsible for this task; and

(4) Ensure the safety of older and disabled populations. The elderly and disabled are the least able to defend themselves. The long-term care agency should review whether the current system adequately protects this vulnerable population from abuse and exploitation in all long-term care settings;

III. EXPANDING HOME- AND COMMUNITY-BASED SERVICES: The long-term care system should accommodate the preferences of consumers, most of whom wish to remain independent in their own homes and communities for as long as possible. The State may consider the following:

(1) Expand Medicaid coverage for home- and community-based services. The long-term care agency should explore expanding existing Medicaid waiver programs and creating new waiver programs, directing more Medicaid moneys to home- and community-based services, changing Medicaid eligibility standards, removing Medicaid waiver caps on home- and community-based services, and expanding spousal impoverishment rules;

(2) Encourage informal networks of caregivers by expanding respite care, adult day care, and personal care services to assist family and friends to care for loved ones. The long-term care agency should assume this responsibility;

(3) Ensure that consumers know about home- and community-based options before entering institutions. The long-term care agency should assume this responsibility;

(4) Encourage long-term care insurance companies to include a home- and community-based services policy option;

IV. PROMOTING PERSONAL RESPONSIBILITY. The long-term care system should ensure greater reliance on private funding rather than on Medicaid. The State may consider the following:

(1) Encourage people to purchase private long-term care insurance by offering tax deductions. The long-term care agency should assume the responsibility of proposing tax credits or deductions for the purchase of long-term care insurance;

(2) Allow families of Medicaid recipients and middle-income people to contribute toward long-term care services. The long-term care agency should examine the feasibility of disregarding contributions from families of adults eligible for Medicaid as assets or income of the Medicaid-eligible adult;

(3) Develop demonstration projects that permit low-income senior citizens and the chronically ill to be eligible for extended Medicaid coverage. Act 294 Session Laws of Hawaii 1998, created the Medicaid home and community-based waiver programs. The long-term care agency should continue to support these programs and consider their possible expansion;

and

V. LIMITING LONG-TERM CARE EXPENDITURES: The long-term care system should offer a balanced array of services that are cost-effective and meet consumers' needs. The State may consider the following:

(1) Reduce payments by moving from cost-based reimbursement toward case-mix and prospective payments. The long-term care agency should examine the feasibility of reimbursing on a flat rate basis for a bundle of various services or on a prospective rate;

(2) Provide incentives for nursing homes to convert to alternative, community settings. The long-term agency should consider modifying the licensing requirements, if necessary, to allow institutions to provide nonmedical levels of care; and

(3) Lease public lands at nominal cost for ninety-nine years to any private entity that constructs and operates a long-term care facility in Hawaii.

SECTION 3. This Act shall take effect on January 1, 2003.

INTRODUCED BY:	_____________________________