Department of Elder Affairs

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
4000-0600	Sr. Care Plans	1,648,865,000	1,877,126,743	1,717,620,000	1,612,307,307	1,697,117,500	1,783,969,375
4000-0625	HHA Wage Incr.	--	--	--	0	4,000,000	0
4510-0720	Nurse's Aide Training	1,000,000	1,000,000	600,000	250,000	0	0
9110-0102	Asst. Living Regulation	368,000	372,385	318,292	243,463	246,447	246,160
9110-1455	Presc. Advtg.	73,684,000	81,838,049	85,859,000	96,372,765	110,000,000	90,159,453
9110-1460	Presc. Advtg. Subs.	new	new	new	new	5,000,000	0

The mission of the Department of Elder Affairs (DEA, formerly the Executive Office of Elder Affairs [EOEA]) is to meet the needs and advocate for the interests of the elderly in Massachusetts. With the exception of long-term institutional care for people who qualify for MassHealth, DEA focuses on services to elders in the community. Programs are provided through a statewide structure of 23 local organizations called Area Agencies on Aging and 27 community-based nonprofits called Aging Service Access Points (ASAPs).

The federal Older Americans Act of 1965 mandates each state to establish a structure of Area Agencies on Aging (AAAs), each of which defines elder needs for its area and compiles an "area plan on aging." The majority of services funded through DEA are administered through contracts with Aging Service Access Points (ASAPs, formerly called home care corporations).

AAAs and ASAPs form an overlapping system for planning and service coordination, with 20 of the 27 ASAPs also functioning as AAAs. ASAPs' primary responsibilities are for case management of elders participating in home care programs. ASAPs also screen elders for eligibility for MassHealth coverage of nursing home or community-based health. Their overall charge is to coordinate services and to work to keep elders in the community whenever possible. The direct care that each elder is determined to need and be eligible for is purchased by ASAPs from private home care and home health care agencies.

DEA services, some of which are targeted only to low-income persons, include:

·       Home care services-community-based care for the frail elderly including assistance with meal preparation, house cleaning and bathing;

·       Housing (primarily funded through housing authorities or the Department of Housing and Community Development [DHCD]) and homelessness services;

·       Prescription Advantage drug insurance;

·       A portion of the funding for local Councils on Aging (COAs)-that provide education, social services, health benefits counseling, information and referral, and other services for all elders in a community;

·       Regulation and certification of assisted living facilities;

·       Protective Services for elders who are victims of abuse, neglect, or self-neglect;

·       Limited financial support for cities and towns to develop and deliver local nutrition programs for elders;

·       Long-term Care Services-nursing home care reimbursed through Medicaid; and

·       Senior Care-community-based health care for elders enrolled in MassHealth.

FY05 OVERVIEW

State Spending Control Efforts Focused on Nursing Home Residents

In FY04 and FY05, the administration continued its efforts to control spending by restricting services in and eligibility for programs that serve the state's poorest seniors and persons with disabilities.

In the FY04 budget, the administration eliminated MassHealth payments for "bed-holds"-to reserve the bed of a nursing home resident who is hospitalized or out visiting family overnight. Fortunately, a more limited bed-hold was re-instated in the FY05 budget. In both FY04 and FY05, the administration proposed toughening clinical eligibility for applicants to nursing homes. These changes were delayed by language in the FY05 budget.

Good News-Several Key Gains Secured in FY05 Budget

There were a number of notable victories in the FY05 budget, including a new account for Prescription Advantage Co-Pay Subsidies (line item 9110-1460); a new account for Home Health Care Raises (line item 4000-0625); and a new account for Senior Care Options (SCOs) (line item 4000-0620) to provide a voluntary managed care plan for some seniors and persons with disabilities.

The FY05 budget also included an expansion of income eligibility for the MassHealth Home and Community Based Waiver (line item 9110-1500), so that more people might be eligible for MassHealth-reimbursed community-based health care (the state is in the process of getting federal approval for this change). Finally, there was an urgently needed $1.3 million (19.5%) funding increase for Protective Services (line item 9110-1636) in the September 2004 supplemental budget for FY05.

The Medicare Modernization Act of 2003-Impacts Unfold for Massachusetts

The federal Medicare Modernization Act of 2003 authorized a new drug benefit that will not officially begin until January 2006. However, in FY05, about 28,000 Prescription Advantage (PA) members with incomes below 135% of the federal poverty level will automatically receive a benefit of $1,200 in federal Medicare Transitional Assistance for prescription drug coverage (there is a $600 limit for 2004, and a $600 limit for 2005). When the benefit is exhausted, these participants will be automatically re-enrolled in PA. The significant state savings the provision creates allowed PA to re-open enrollment in September 2004.

People with disabilities on Medicare who are also eligible for either Prescription Advantage or MassHealth will be required to get their prescription drug coverage from Medicare after January 1, 2006.

Advocates and state officials are still deciding whether additional drug benefits of Medicare Part D,[1] to be implemented in FY06, will represent savings for the state. Of concern are the following issues:

·       Limits on the particular drugs that will be covered;

·       A benefits coverage limit that is referred to as a "doughnut hole"-it will terminate coverage when an individual has reached $2,250 in drug costs, but then reinstate it once that individual's expenses reach $2,850 in out-of-pocket costs or a total of $5,100 for the year; and

·       A clawback provision through which a portion of state savings on Medicaid and Prescription Advantage costs for elders must be returned to the federal government.

This issue will be watched closely in FY06.

H1 for FY06 OVERVIEW

H1 basically represents level-funding for DEA. There is an $86 million increase for Senior Care Plans (4000-0600), the account that pays the MassHealth costs of all eligible seniors receiving care in the community or a nursing home. This account is the largest in Elder Affairs, and its costs go up annually based on enrollment, prescription drug costs, rising health care costs, and the number of persons who enter nursing homes.

While they were pleased that the administration continued funding for the Prescription Advantage program in FY06, advocates are disappointed that H1 for FY06 failed to include funding for the Direct Care Workers Salary Reserve, for home health aide wage increases, and for worker training programs for home health aides and nursing assistants. Elder advocates say that demand for home care services will run into waiting lists next year if the governor's funding levels are not raised by the legislature.

Line Item Analysis

There are numerous budget issues outside the immediate auspices of DEA that directly affect seniors' and people with disabilities' access to nursing homes and the quality of care these facilities provide. For example, several line items that pertain directly to nursing home care involve reimbursement through MassHealth, the state's Medicaid program, while others are in additional agency budgets. There are also aspects of nursing home regulation that are determined through Outside Section language. The Outside Sections are part of each annual budget, and set standards for programs outside the regular line item language. Because of their importance to DEA services, and the close attention advocates are paying to these concerns, some of these line items from other agencies and outside sections are discussed below.

Account:      Senior Care Plans

Line Item:   4000-0600 (Office of Medicaid)

The Senior Care Plans account funds the MassHealth costs of seniors and persons with disabilities who have incomes low enough to qualify. Some participate in MassHealth while in nursing homes; others remain in the community and receive acute care or home health care, also paid for by MassHealth. Others enroll in MassHealth if they cannot afford Medicare premiums, and the state helps them pay for Medicare. Approximately 118,000 seniors are members of MassHealth, about 30,000 of whom live in nursing homes. The majority of seniors and people with disabilities on MassHealth who live in nursing homes and a portion of those who live in the community are either permanently or temporarily disabled and cannot live on their own.

MassHealth financial eligibility criteria vary based on disability status and whether a participant resides in the community or in a nursing home. Those who qualify for nursing homes have separate, less stringent MassHealth financial eligibility rules from those who remain in the community. Those in nursing homes are eligible for MassHealth when their incomes become too low to afford the price of the nursing home and they have "spent down" their excess income and savings.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
4000-0600	Sr. Care Plans	1,648,865,000	1,877,126,743	1,717,620,000	1,612,307,307	1,697,117,500	1,783,969,375

FY01-FY05 Impact

Between FY02 and FY04, the amount spent on this line item decreased by $200 million. In FY05, a partial restoration-an $84.8 million increase-was allocated.

In FY05, budget language for this line item specified an earmark of not less than $75,000 for a program to reimburse providers of dementia-specific adult day care. It was requested by the Alzheimer's Association to provide needed adult day care that allows family members to continue working while caring for a relative with Alzheimer's disease.

FY06 Needs

Advocates will be working to prevent further changes to access or eligibility for MassHealth long-term care coverage in FY06.

H1 for FY06 Recommendations

H1 for FY06 funds this account at $1.7 billion-a $86.2 million increase over FY05's projected spending levels. It includes no earmark for dementia-specific adult day care.

Account:      Home Health Aide (HHA) Wage Increase

Line Item:   4000-0625 (Office of Medicaid)

The Home Health Aide (HHA) Wage Increase account provides funds to increase the reimbursement rates that MassHealth pays for home health services. The money is intended to increase the very low pay of HHAs, home health nurses, physical therapists and occupational therapists. These workers provide essential care to elders and people with disabilities who are recovering from an illness or returning home after hospitalization.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
4000-0625	HHA Wage Incr.	--	--	--	0	4,000,000	0

FY01-FY05 Impact

In November 2004, the Massachusetts Division of Health Care Finance and Policy-which sets MassHealth rates for home health care-issued proposed regulation changes to increase reimbursement for home health nursing services by 8.8% and for restorative therapies and HHA services by 1.06% over the next two years. While the development is significant, it still sets rates for home health services at a level lower than agency costs, yielding a mere 24 cents per hour raise in the rate paid to agencies who provide home health aides to Medicaid clients.

In FY05, this account was created to fund the mandated increase and allocated $4 million. Line item language indicates that these funds can be used for the recruitment and retention of home health workers including workforce training, direct wages and benefits.

FY06 Needs

While home care advocates are supportive of rate increases for home health workers, they are also concerned about the wage rates of homemakers and personal care homemakers. Rate increases proposed to-date do not go far enough to address the severe workforce crisis faced by home care agencies throughout the Commonwealth.

H1 for FY06 Recommendations

H1 for FY06 discontinues funding for the Home Health Workforce Initiative.

Issue:           Certified Nursing Assistant (CNA) / Home Health Aide (HHA) Scholarship Program

Line Item:   4510-0720 (Massachusetts Department of Public Health)

The Certified Nursing Assistant (CNA) / Home Health Aide (HHA) Scholarship Program provided funding to train and provide professional development opportunities for CNAs and HHAs. The money has been located in the Massachusetts Department of Public Health (MDPH), line item 4512-0720. Training and retention of these workers is crucial to a quality system of care for frail elders and younger people with disabilities in nursing homes and in the community.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
4510-0720	Nurse's Aide Training	1,000,000	1,000,000	600,000	250,000	0	0

FY01-FY05 Impact

In FY01, the CNA/HHA scholarship program received $1 million. In FY03, it was slashed by 40%. In FY04, it was cut down to just $250,000, funding just under 400 scholarships.

In FY05, this program was eliminated.

FY06 Needs

In the FY06 budget debate, advocates will be working to reinstate the CNA/HHA scholarship program.

H1 for FY06 Recommendations

H1 does not include funding or language to restore the CNA/HHA scholarship program.

Account:      Assisted Living Regulation

Line Item:   9110-0102

The Assisted Living Regulation account funds limited state regulation and certification for assisted living facilities, to guarantee some common forms of care across facilities. Residents who live in assisted living are usually seniors or younger people with disabilities who need supportive services of some kind.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
9110-0102	Asst. Living Regulation	368,000	372,385	318,292	243,463	246,447	246,160

FY01-FY05 Impact

In FY03, the allocation for this account was cut by 14.5%. In FY04, another cut of $74,829 (24%) was made, at a time when the agency was working to expand the number of such facilities. In FY05, the account was level-funded. The loss-and lack of restoration-of funds makes assuring quality of care in assisted living facilities all the more challenging.

FY06 Needs

Because of the volume of assisted living facilities in the state and the need for a minimum standard of care for seniors and people with disabilities who choose this option, the regulation of these facilities is essential. This account is one of the only methods available to the state to monitor quality of care in those facilities that are not nursing homes.

H1 for FY06 Recommendations

H1 proposes level funding for this line item.

Account:      Prescription Advantage

Line Items:  9110-1455 and 9110-1460

The Prescription Advantage (PA) account (line item 9110-1455) funds drug insurance coverage for about 90,000 elders and people with disabilities in Massachusetts. All Massachusetts seniors are eligible. Each participant pays sliding-scale premiums, deductibles and co-payments based on income. PA offers unlimited prescription drug coverage that is combined with an out-of-pocket spending limit to provide drug coverage with financial protection.

Currently the program allows all elders to enroll between the day they turn 65 and the day they turn 66. Others who are disabled, under 65 years old, and have incomes below 188% of the federal poverty level (fpl) can enroll at any time. The program also accepts people over 65 who have just lost pharmaceutical insurance coverage. Those elders who are 66 or older must apply during open enrollment periods set by either the Secretary of Elder Affairs or the legislature.

The Prescription Advantage Co-Pay Subsidies account (line item 9110-1460, created in FY05) funds a co-pay reduction plan for members of Prescription Advantage with incomes at or below 188% of the federal poverty level (fpl), whose co-payments for medications are $2-5 less than other members.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
9110-1455	Prescription Advantage	73,684,000	81,838,049	85,859,000	96,372,765	110,000,000	90,159,453
9110-1460	Prescription Advantage Subsidies	new	new	new	New	5,000,000	0
Totals:		73,684,000	81,838,049	85,859,000	96,372,765	115,000,000	90,159,453

FY01-FY05 Impact

In FY05, Prescription Advantage (line item 9110-1455) was fully-funded at $110 million. DEA expects the program to assist at least 85,000 elders and 4,000 persons with disabilities in FY05. Because of the introduction of a federal Medicare prescription drug benefit on January 1, 2006, eligibility for the program and its package of benefits will be changing. The DEA has not yet specified these program changes.

In FY05, Prescription Advantage Co-Pay Subsidies (line item 9110-1460) was funded at $5 million.

FY06 Needs

During the FY06 budget debate, advocates will be working with DEA and the legislature to craft a new "wrap-around" benefit to provide additional prescription drug coverage when the federal Medicare Modernization Act drug benefit is implemented in January 2006. At that time, all Prescription Advantage members will be required to enroll in the Medicare Part D drug plan. The idea is to proactively provide current Prescription Advantage members with back-up drug coverage, in case the Medicare benefit does not cover some necessary prescription drugs.

H1 for FY06 Recommendations

Advocates are pleased that H1 for FY06 fully funds the Prescription Advantage program (line item 9110-1455) at $90.1 million. Prescription Advantage is expected to operate in its current form for the first six months of FY06. After January 1, 2006 it will serve primarily as a wrap-around benefit for enrollees who are eligible for the new federal Medicare drug benefit.

Outside Section 163 of H1 states that Prescription Advantage will allow limited enrollment during the second half of FY06 for individuals with disabilities who have low-incomes and for certain elders. It will not accept new enrollees who are 66 or older during that period. Individuals who are not eligible for Medicare will continue to be eligible for Prescription Advantage benefits.

The governor proposes to discontinue Prescription Advantage Co-Pay Subsidies (9110-1460) in FY06. It remains to be seen whether this elimination is a problem, because Prescription Advantage may help Medicare recipients pay for new drug plan co-payments or premiums. Additionally, a federal subsidy will be available for low-income individuals who have enrolled in a Medicare drug discount card program in 2004 and 2005.

Issue:           Nursing Home Clinical Eligibility Standards

Section:       Outside Section 257 (FY05)

The Clinical Eligibility Standards are rules used by ASAPs to determine if an income-eligible senior, or a person with disabilities who is under 65, physically meets the criteria for MassHealth coverage in a nursing home.

FY01-FY05 Impact

In the governor's FY04 and FY05 budget proposals, he proposed to tighten these clinical standards by requiring that individual seniors demonstrate greater degrees of frailty in order to access MassHealth benefits. These changes were delayed by language in Outside Section 257 of the FY05 budget that maintains the regulations, criteria and standards in effect as of FY04.

FY06 Needs

Advocates will be monitoring this issue in FY06, to ensure that clinical eligibility standards for nursing home care do not become stricter. Maintenance of the existing standards will enable more persons who need intensive nursing care to receive it.

H1 for FY06 Recommendations

H1 for FY06 does not mention any changes to clinical eligibility standards for nursing homes.

Issue:           Certified Nursing Assistant (CNA) Wage Pass-Through

Section:       Outside Section 409 (FY05)

The Certified Nursing Assistant (CNA) Wage Pass-Through has been in the budget for several years, funded through different budget line items and outside section language. It provides wage increases for the lowest paid direct service workers in nursing homes, with the intent to reduce turnover and staffing shortages. The ratio of staff to patients and the quality of staff attracted to these jobs directly affect the care that nursing home residents are getting.

Line Item	Description	FY01	FY02	FY03	FY04	FY05	H1 for FY06
Outside Section	Nursing Home Wage Pass-Thru	35,000,000	In 4000-0600	O.S.	O.S.	O.S.	O.S.

FY01-FY05 Impact

In FY05, this initiative was funded at $50 million under the Nursing Home User's Fee revenue-generating mechanism in Outside Section 409.

FY06 Needs

In FY06, advocates will be working for continued inclusion of money to fund raises for these crucial front-line workers.

H1 for FY06 Recommendations

H1's Outside Section 156 continues the wage pass-through for direct care staff in nursing homes with an earmark of $50 million. The language specifies that this money may be spent on wages, benefits or training; recruitment and retention of staff; or increasing the staff-patient ratios at nursing homes.

Issue:           Nursing Home Bed-hold

Sections:      Outside Sections 533 and 701 (FY04) and Outside Section 409 (FY05)

The Nursing Home Bed-hold regulation has served to literally hold the bed of a nursing home resident when they are away from the facility for a limited period for hospitalization or non-medical family visiting. This bed-hold provision provides for continued MassHealth reimbursement to the nursing home of the cost of that bed. Advocates have struggled for years to maintain and expand the length of time a bed may be held, so that the needs of seniors who must be away from their nursing home residence may be adequately met.

FY01-FY05 Impact

The FY04 budget passed with an administration money-saving plan intact-it eliminated MassHealth reimbursement for nursing home bed-holds. In FY05, Outside Section 409 re-instated a 10-day bed-hold with a $9 million allocation. A more generous 20-day bed-hold was included in the Senate budget proposal, but did not make it into the final budget.

FY06 Needs

Advocates would like to see the bed-hold retained or expanded in FY06. At stake is the ability of nursing home residents to have stable living arrangements.

H1 for FY06 Recommendations

The nursing home bed-hold was neither mentioned nor funded in H1 for FY06.