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The Money Follows the Person Act Summary

FEDERAL MONEY FOLLOWS THE PERSON

S. 528 HR 3063

The Money Follows the Person Act (MFP)

A bill to authorize the Secretary of Health and Human Services to provide grants to States to conduct demonstration projects that are designed to enable Medicaid-eligible individuals to receive support for appropriate and necessary long-term services in the settings of their choice.

Money Follows the Person Act of 2005 - Authorizes the Secretary of Health and Human Services to award grants to states for demonstration projects (MFP demonstration projects) designed to: 

1.  increase the use of home and community-based, rather than institutional, long-term care services (rebalancing) under state Medicaid programs; 
2.  eliminate barriers or mechanisms that prevent or restrict the flexible use of Medicaid funds to enable Medicaid-eligible individuals to receive support for appropriate and necessary long-term care services in the settings of their choice; 
3.  increase the ability of state Medicaid programs to assure continued provision of home and community-based long term care services to eligible individuals who choose to transition from an institutional to a community setting; and 
4.  ensure that procedures are in place to provide quality assurance for eligible individuals receiving Medicaid home and community-based long-term care services and to provide for continuous quality improvement in such services.

MONEY FOLLOWS THE PERSON: A WIN WIN PROPOSAL

States are facing major budget shortfalls. Major Medicaid cuts are being proposed at the federal level and are in the cards for most, if not all, states. One of the major barriers to Freeing Our People and complying with the Supreme Court's Olmstead decision is funding. As states look to deal with their budget crises and restrict their spending, they are limited by funds that must be spent. Since nursing homes are entitlement, states must fund these services - and with scarce dollars states will look to community services to remain at the same funding level if not take all the cuts.

The President’s New Freedom Initiatives proposals for this year included a Money Follows the Person demonstration project, to try and get states to try the idea of letting the money follow the person. Discussions of the President’s FY 2005 Budget and New Freedom initiatives sometimes confuse the Medicaid reforms that involve grants to the states and the Money Following the Individual proposal. They are separate ideas. The Money Following the Individual is not a block grant, it is a means of making existing funds more flexible.

Highlights:

• The Money Follows the Person is an initiative that is part of the President Bush’s proposal for a Money Follows the Person Program. It is included in the President 2005 budget request as a major component of the President’s New Freedom Initiative to integrate people with disabilities into the community.
• Gives people the freedom to choose where they want to live. It would allow us to take advantage of opportunities that other Americans take for granted – to take a walk when we want to, to choose what we want to eat, when we want to go to bed, to have a job, visit family and friends and be part of our communities.
• It is a win-win. People with disabilities get the choice to live in the community and states get the needed resources to rebalance their long term service systems to increase the availability of community based services. 
• The Administration’s proposal provides 350 million dollars to states per year for five years for a total of 1.75 billion dollars. It provides 100% of the cost for the first year that a person moves from an institutional setting into the community. After that, the federal government pays its regular Medicaid rate.
• This initiative will help states comply with the ADA and the Olmstead decision. The Supreme Court said in Olmstead that needless institutionalization was discrimination under the Americans With Disabilities Act.

MFP has many benefits:

• Cost in community is 2/3 on average cost of nursing homes or other equivalent institution. (compares nursing home costs to their waivers, and ICF-MR costs to their waivers.)
• There won't be backfill or woodwork because nursing homes are an entitlement and there are no waiting lists for nursing homes. ICFs-MR can close the beds when people leave.
• Doesn't bump people on waiting lists because uses funds paying for person in the nursing home or other institution, not waiver funds. 

MONEY FOLLOWS THE PERSON

• States face major budget shortfalls. Medicaid cuts are in the cards.
• Major barrier to complying with the Supreme Court's Olmstead decision: funding.
• States look to community services to remain at level funding if not take all cuts.

Money Follows the Person, MFP, to the rescue! Allow nursing home or other institutional services’ funds to be moved from that budget line item to the line item that covers community-based services if a person wants to move from the nursing home to the community.

• Texas, Kansas, Utah, Maryland and Pennsylvania all having success with MFP.
• Included in the President 2005 budget; a major component of the President’s New Freedom Initiative to integrate people with disabilities in the community.
• Gives people the freedom to choose where they want to live. 
• A win-win. People with disabilities get the choice to live in the community and states get the needed resources to rebalance their long term service systems to increase the availability of community based services. 
• MFP helps states comply with the ADA and the Olmstead decision. The Supreme Court said in Olmstead that needless institutionalization was discrimination under the Americans With Disabilities Act.