FSSA says a proposed bill could hinder its effort to reform long-term care

The Indiana Family and Social Services Agency and state lawmakers are at odds about how to best reform the state’s in-home care for the elderly population.

In Indiana, only about half of elderly Hoosiers eligible for Medicaid are aging at home. FSSA has been working to help increase that, but the state agency is worried its plan could be disrupted by a bill that’s making its way through the legislative process.

Over the past year, FSSA has been working on a plan to help elderly people in need of long-term care receive those services — like physical therapy or a home health aide — at home, instead of in a nursing home.

The plan the FSSA initially proposed consisted of five elements: make eligibility faster; link the payments health care providers receive to patient outcomes; move long-term services and supports from a fee-for-service system to a risk-based managed care system; create an integrated data system that connects providers, patients and facilities with the state; and grow and sustain the workforce.

The agency says the state’s current system is hard to navigate. In a managed care system, a long-term care provider has to navigate different health services for patients. A moratorium that had been in place to prevent Indiana from moving to risk-based managed care ended last year. The FSSA worked with stakeholders, presented a plan during the summer to lawmakers and prepared a report for state officials.

But now, a spokesman for the FSSA says a bill proposed – Senate Bill 407 – will render efforts to reform the system useless.

SB 407, which is authored by Sen. Mark Messmer (R-Jasper), would create a pilot program for 10 counties in northwest Indiana and establish safeguards FSSA must follow, like not letting insurance companies set reimbursement rates and a requirement to provide patients adequate time to make a decision about providers or services.

It would apply to Medicaid recipients who are either eligible for Medicare, over age 60, blind, disabled or receiving services through either the aged and disabled Medicaid waiver, a risk-based managed care program for aged, blind or disabled individuals who are not eligible to participate in the federal Medicare program, or the state Medicaid plan services.

Participants in the pilot program would have to live in one of these counties: Fulton, Jasper, LaPorte, Lake, Marshall, Newton, Porter, Pulaski, St. Joseph or Starke.

The bill also contains a provision that FSSA secretary Dr. Dan Rusyniak says would make it hard to expand the reforms statewide.

“By limiting any reform to a narrow part of the northwest corner of the state, by limiting it to only specific types of organizations, by limiting it to 2027, and by adding new, and not previously discussed safeguards, this bill makes meaningful reform impossible,” Rusyniak said in a hearing on Feb. 10.

Rep. Mike Karickhoff (R-Kokomo), who is sponsoring the bill in the House, said reform of Indiana’s current system for long-term care is needed, but it should be done in “smart and locally-driven ways.”

“This bill, in its current form, would slow down the reforms that are being proposed, would affect
those counties and would give us the opportunity to study how this is going to affect nursing homes,” Karickhoff said. “And hopefully, drive more residents into in-home care, because we know in Indiana, we have far more people going to nursing homes that would prefer to be — and should be — in their homes.”

But Rusyniak said a pilot program would be hard to navigate.

“We'd have to run … a managed care program in one part of the state, [while] keeping the rest of the state in the traditional fee for service programs,” Rusyniak said. “We'd have to run them simultaneously.”

Proponents of SB 407 say the bill would be a step in the right direction. They support and acknowledge the need for reform but do not agree with FSSA’s plan for a managed care system. They’re willing to explore it on a pilot basis before considering a complete overhaul of the statewide program.

Indiana Health Care Association president Zachary Cattell said his organization collaborated with FSSA and agreed with most of FSSA’s plan. However, Cattell said switching entirely to a managed care system would “put recipients of care and providers under the direct control of insurance companies and [create] financial uncertainty with our Medicaid financing program.”

FSSA’s statewide plan “would contract with a certain type of insurance company at a cost of hundreds of millions of dollars per year for those few insurance companies to decide what care is provided, where it can be provided, and who provides it,” Cattell said.

Rusyniak said costs will rise no matter what.

“The difference, though, is the steepness,” Rusyniak said. “If we leave it on a fee-for-service system, the costs are going to grow much more deeply, because more people are going to be in nursing facilities. If we go to our system, more people will be at home. So the costs, you know, are going to not rise as steep.”

Eric Essley is president of LeadingAge Indiana, a lobbyist organization for nonprofit nursing facilities. Essley said his organization recognizes the need for reform, but believes it must be done at an appropriate pace and with appropriate safeguards. He says SB 407 will do that.

“It provides an opportunity to properly study the effects of a shift toward managed care without ending care for Hoosiers all at once,” Essley said in his testimony on Feb. 10. “Further, it establishes the safeguards that protect the interests of caregivers along the way, especially at a time when they are struggling to properly staff the existing infrastructure.”

The House Public Health Committee could amend and vote on the bill Wednesday. It would take effect upon passage, but it’s unclear how fast the pilot program could be established. The program would expire in July 2027.

Contact reporter Darian Benson at dbenson@wfyi.org. Follow on Twitter: @helloimdarian.