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CellTrak Connection

Effective Care Transitions and Community Services – Tools to Reduce Healthcare Costs

A few short months ago, on September 23rd, CMS announced a new round of federal funding that is going to states to support individual transitions from institutional care to community based services. The program, known as the Money Follows the Person Demonstration (MFP), has been in operation since 2007, but at a time when new federal funding aimed at alleviating the travails of COVID-19 has reached into the billions, this relatively small grant of $165 Million got very little notice.

MFP was created during the Bush administration as an attempt to “rebalance” available care modalities for seniors and disabled persons in need of personal care assistance to enable less reliance on institutional care and more emphasis on aging in place with community based services. Even though this latest CMS grant did not make many headlines and even though MFP program transitions have receded in recent years, the opportunities that could be realized through MFP – or another program like it – deserve our attention. Based on the results thus far, this may be a program that should be revitalized and expanded as we continue to pursue person-centered, cost effective care modalities.

MFP has four objectives:

  • To increase the use of home and community based services (HCBS) and reduce use of institutionally based services,
  • To eliminate barriers found in state law and Medicaid regulations that restrict use of Medicaid funds to enable eligible individuals to receive support for appropriate and necessary long-term services and support in the setting of their choice,
  • To strengthen the ability of state Medicaid programs to provide HCBS to people who choose to transition out of institutions, and
  • To create procedures to monitor quality assurance and improve HCBS.

A rather interesting statistic that one can glean from a perusal of CMS information about MFP is that the federal government has appropriated a total of nearly $3.7 billion in funding to 44 states since 2007 even though by the close of 2019 only 101,540 individuals had qualified for and received MFP services. Initially MFP was slated to end in 2010; however, it was extended by the Affordable Care Act through 2016. Since that time, Congress has authorized a series of short-term funding extensions, the last of which is the most recent 2020 grant. Like many other demonstration projects, MFP was slow to gain momentum and, in the last couple of years, numbers of participants dropped by a double digit percentage (46%) as states grappled with diminished and/or sporadic federal funding and failed to allocate funding of their own.

For individuals who participate in the program, the average first-year support expenditure is approximately $30,000 (state allocation information is not clear as to how much funding has been used for administration of the program). While $30,000 may seem like steep price to establish an elderly or disabled person in a community based living setting, one needs only to consider the cost of long-term institutional care to understand that MFP could save Medicaid programs millions of dollars each year. The unanswered question is why the federal government – and the states – didn’t more aggressively pursue MFP in recent years given the potential for cost efficiencies, greater satisfaction with care and better beneficiary outcomes.

Who Qualifies for MFP Services?

To be eligible for MFP, a participant must first be eligible for Medicaid services and must have been a resident of a long-term care institution (which can include nursing homes, intermediate care facilities, inpatient psychiatric care or long-term care hospitals) for at least 90 days – not counting days devoted to short-term rehabilitation services. The participant must desire and be able to adapt to a more independent living arrangement with short term assistance in the form of personal care services akin to those provided under most Medicaid Waiver programs.

Participants generally leave institutional care to reside in leased homes or apartments that come with living, sleeping and cooking areas. They can also live in small group homes of four (or fewer) individuals. Assistance during the first year can cover not only personal support services but also items or furnishings that are needed for adapting quarters and/or living more independently.

What Benefits Do MFP Participants Receive?

MFP participants are eligible to receive services and support under the program for one year following their long-term care discharge. Qualified services include Medicaid Waiver personal care and support designed to assist with activities of daily living (ADLs) such as dressing and bathing or instrumental activities of daily living (IADLs) such as meal preparation and household chores. During the first year, some participants can also receive more intensive “demonstration” services that can include assistive technology and higher levels of qualified services that extend to a maximum of 24 hour care, 7 days a week.

Clearly, participants are carefully evaluated to ensure that they will be able to live more independently after a period of adjustment in the community; however, the experiment appears to be working as participants have been shown to be far less likely to require readmission to institutional care once they are established on their own with a community support network.

There is Much to Gain and Nothing to Be Lost from Supporting an Expansion of MFP

When MFP participants transition to the community, there is an immediate Medicaid cost savings which, on average for all types of participants, exceeds $20,000 a year. For every 50,000 MFP participants that translates to $1 billion in Medicaid savings a year.

Also on the positive side, quality of care indicators suggest MFP participants are less likely to be readmitted to institutional care during the first year after their transition and every year they are away from institutionalized care, their propensity to require it drops even more. Although MFP participants incur more costs as they transition to the community relative to others who transition without the benefit of MFP, it appears that transitioning with the support of MFP contributes to better post-transition outcomes and fewer returns to long-term care. One theory is that the additional services that MFP participants receive keeps them more connected to medical and social service resources and, thus more able to remain moderately independent and in the community.


MFP programs are operational in only 32 states and the District of Columbia. With states – and, certainly, their Medicaid programs – reeling after the financial impact of COVID-19, it may seem foolish to some to pursue programs like MFP, but we think in the long run it makes sense. With the need to focus care for all on the lowest cost/highest outcome alternative, MFP seems like a recipe for success especially as we look for alternatives to institutional care. As baby boomers continue to age into the system and as more and more Americans are faced with significant physical or mental disability that requires them to seek assistance with the most basic tasks associated with everyday living, we think programs like MFP offer significant hope – both for Medicaid plans across the country and the people that they serve. CMS has estimated that approximately 1.4 million people reside in nursing homes and that, at any given time, two-thirds of them are Medicaid beneficiaries. If each year, 5% of those beneficiaries were able to move out of the facility and into an independent living setting with a year’s worth of supportive assistance to help build greater independence and self-sufficiency, state Medicaid programs would be able to save upwards of $900 million in costs each year. Maybe it’s time for industry stakeholders to give MFP another look.