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Medicaid transformation will help aging N.J. residents stay in their homes longer

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Erhardt Preitauer, CEO of Horizon NJ Health.
Erhardt Preitauer, CEO of Horizon NJ Health. - ()

New Jerseyans will have an easier time remaining in their homes as they age, instead of moving to a nursing home, under a major transformation of the Medicaid program the state launched this summer. And experts say the changes combine the best of both worlds: Most seniors want to continue living in their communities — and they will cost Medicaid less money if they do.

Erhardt Preitauer is chief executive of Horizon NJ Health, the largest of the five managed care companies that operate the state’s Medicaid program under contracts with the state Department of Human Services. He said Horizon is staffed up and ready to carry out the state’s mandate to help seniors remain at home, and out of institutions, for as long as they can.

“New Jersey has done a good job of bringing together a program that is innovative, that is member focused and something that in the end is going to be nationally recognized,” he said.

Today, more than 40,000 people live in nursing homes in New Jersey, according to DHS, and about 28,000 of those individuals are on Medicaid, the state/federal program that provides medical care to low-income citizens. Another 13,000 New Jersey Medicaid members get long-term care while remaining at home, rather than in a nursing home, of which about 6,000 are members of Horizon NJ Health, a subsidiary of Newark-based Horizon Blue Cross Blue Shield of New Jersey.

Preitauer said his company has hired about 200 clinical care coordinators who “are out in the communities and going to people’s homes, meeting them where they are.” The idea is to design a care plan “focused on what the family needs. What type of services exist in the community? It’s really a holistic view of the member that we’re bringing together.”

Until now, some seniors have gotten long-term Medicaid services at home under various “waivers” in the program, but not everything they needed was covered. With the new program, “The barriers to the different services between different waivers essentially disappears and we can focus more on what the members need,” Preitauer said. If the senior needs a wheelchair ramp, an aide to do household chores, a visiting nurse or meals delivered in order to continue living at home, the program covers it; behavioral health services are included. “We remove the fragmentation and the barriers to care,” he said.

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Horizon is the largest provider of Medicaid in New Jersey, with a total of about 700,000 members.

As they age, “Many of our members are progressing toward long-term care and we believe that we will be able to help them stay safely and comfortably in the community longer,” Preitauer said.

The new Medicaid Managed Long-Term Supports and Services program ushers in a major change in how Medicaid funds long-term care, which accounts for more than $3.5 billion a year, or more than a third of the New Jersey Medicaid budget. Eventually, the state will stop paying fees for each medical service and procedure; instead, managed care companies like Horizon will get a fixed monthly fee to provide all the services the individual needs.

The new capitation payment system is being phased in over the next two years. As Medicaid members become long-term care candidates they will enroll in the program and, eventually, nursing home residents will sign up as members of Horizon or another managed Medicaid company.

About a third of New Jersey’s long-term care Medicaid members are living in the community, and Preitauer said other states have a larger percentage of their Medicaid seniors out of nursing homes: “I can tell you based on national numbers New Jersey certainly has a great opportunity to move more people into the community.”

He said Horizon has hired 200 care coordinators, who are nurses and social workers, that visit the home for several hours to develop the care plans.

“When you're in somebody’s home, you can look at their environment and really understand what kind of medication they are taking, what kinds of modifications may be needed to their home, what’s in their refrigerator for food. You get a much better view of the member’s family and really what their needs are if you are there with them.”

And, Preitauer said, “There may be people in nursing facilities who should not be there or could be better served in the community.”

Care coordinators will visit nursing facility residents and, if a patient wants to return to the community, “We will do research and talk to their families about how do we get them back in the community.”

Michele Kent is chief executive of LeadingAge NJ, the association for nonprofit nursing homes and other senior care organizations. She said the state eased the transition to managed care by budgeting an additional $12.5 million for nursing homes in the new fiscal year that began July 1, and by mandating that nursing homes continue getting paid rates set by the state for the next two years, after which nursing home patients will transition to managed care.

Kent said: “We support the goals of this program, specifically to the extent that it will keep people in their homes longer by expanding home- and community-based care. And there is nothing wrong with saving money, because you have to bend the cost curve in terms of health care expenditure.”

But she said the state has to ensure a viable nursing home industry, which she said will continue to be needed.

“If people are able to stay in their homes safely longer, by the time they do ever need facility-based care they are older, sicker and frailer and more costly to care for.”

Some have suggested that nursing homes will close if more seniors remain at home, but Kent said it’s too soon to tell, and the aging of the baby boomers could continue to increase demand for all types of long-term care.

DHS spokeswoman Nicole Brossoie said the new program “is an incredibly significant and welcome shift.”

Medicaid is funded 50/50 by the state and federal governments and, previously, “There was a federal reimbursement incentive for individuals to receive long-term Medicaid services in a nursing facility. Now there is a recognition of and appreciation for people’s desire to remain at home.”

Amerigroup New Jersey is a Medicaid managed care company with about 170,000 members, including 1,600 who are now receiving long-term care service while living in the community.

Jenifer Langer Jacobs, vice president of Amerigroup, said the new program will give seniors far more options. “This is what 90 percent of seniors tells us, that they want the opportunity to stay in the community longer with their family and friends.”

Jacobs said, “when we do our job best, we relieve stress for our members and we relieve stress for the family and friends who support them. Every story I hear is telling me that.”

She cited the case of an Amerigroup member who is a paraplegic who lives alone. She was admitted to the hospital in June and, when she was discharged, was fearful she would have to move to a nursing home. The woman told the Amerigroup nurses that she “really needed more home care and was stressed out being alone during the day,” Jacobs said.

So, instead of a nursing home, Amerigroup arranged for her to attend an adult day program; provided more home care; and made modifications to her apartment. Jacobs said the patient had been depressed in June and “last week I got an update from the nurses who talked to her on her birthday, and she was laughing at jokes. She felt she had some support for her life. She wants to live with independence: That is what our members want and our job is to give them that support.”


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