Impact of Medicare and Medicaid Financial Policies on Post-acute and Long-term Care for Persons Living with Dementia

Project Summary: The current proposal, developed in response to RFA-AG-24-031 (Consortium for Economic Research on AD/ADRD Prevention, Treatment, and Care) will leverage the last 15-years of Medicare claims and clinical assessment data and econometric methods to advance our understanding of how post-acute and long-term care use and health outcomes for persons living with ADRD are impacted by the

changing landscape of health care financing. The 6.7 million Americans living with ADRD are the most frequent users of long-term care services. Unfortunately, the current long-term care system is characterized by substantial barriers to access, variation in service quality, and potentially inefficient resource allocation across

community-based and institutional care settings. In nursing homes, the predominant institutional long-term care setting, persons with ADRD often experience adverse care outcomes such as falls, avoidable hospitalization, and excessive psychotropic medication use. Although home- and community-based care services (HCBS) are

an increasingly used alternative to institutional long-term care, the efficacy of HCBS for individuals with ADRD is unclear and many barriers to accessing HCBS remain poorly understood. A signature feature of the long- term care system is its reliance on post-acute care and more broadly, the involvement of multiple payers.

However, our understanding of recent significant changes to the Medicare and Medicaid financing landscape on post-acute and long-term care utilization and outcomes is limited. Aim 1 of this proposal focuses on the changing use of nursing home and home health services among persons with ADRD in the context of states’

expansion of HCBS funding and constraints on provider supply from certificate of need laws. Aim 2 focuses on the evolution of MA in long-term nursing home care, a largely ignored area despite the explosive growth of the MA program. This Aim also includes an evaluation of a potential promise of MA in long-term care: the

institutional special needs plans model. Aim 3 focuses on changes to a post-acute care revenue stream on the quality of post-acute and long-term nursing home care. Post-acute care spending has been a consistent target for saving Medicare dollars despite the importance of these funds for nursing home quality. Our study takes

advantage of federal policy that reduced cost-sharing revenues for nursing homes, but in application affected nursing homes differently based on whether their state Medicaid programs had ‘lesser-of’ payment rules. Completion of this entire project will be a significant contribution given the projected increase in the number of

people living with ADRD whose health outcomes may be sensitive to these financing and supply-side policies. In addition, all project Aims include analyses that are focused on disparities in care utilization and outcomes by race/ethnicity or Medicaid enrollment. Our results may inform future policy efforts to enhance and coordinate

the funding and delivery of post-acute and long-term care services to the ADRD population, which ultimately may improve outcomes and enhance equity.