Abstract
Objective
To examine the relationship between the level of state funding for Home‐ and Community‐Based Services (HCBS) and state overall and dimension‐specific performances in Long‐Term Services and Supports (LTSS).
Data Sources and Study Setting
We employed state‐level secondary data from the Medicaid LTSS Annual Expenditures Reports, the American Association of Retired Persons (AARP) State Scorecards, the U.S. Census, and Federal Reserve Economic data, spanning the timeframe of 2010–2020.
Study Design
Overall state LTSS rankings, along with dimension‐specific rankings, were modeled separately against state Medicaid spending on HCBS relative to total Medicaid spending on LTSS. All models were adjusted for state covariates, secular trend, and state fixed effects.
Data Collection/Extraction Methods
The study sample included all 50 states and the District of Columbia. However, California, Delaware, Illinois, and Virginia were excluded from FY2019 due to missing data on Medicaid HCBS expenditures.
Principal Findings
Every 10 percentage‐point increase in the proportion of Medicaid LTSS spending to HCBS demonstrated 2.05 points improvement (95% confidence interval [CI]: −3.88 to 0.22, p = 0.03) in rankings for state overall LTSS system performance, 2.92 points improvement (95% CI: −4.87 to 0.98, p < 0.01) in rankings for the Choice of Setting and Provider dimension, as well as 1.73 points (95% CI: −3.14 to 0.32, p = 0.02) ranking improvement in the dimension of Effective Transitions.
Conclusions
Our study suggested promising effects of increased state funding for HCBS on LTSS performance.
Keywords: care transitions, Home‐ and Community‐Based Services, Long‐Term Services and Supports, Medicaid, quality of care
What is known on this topic
There has been a notable shift in the utilization and expenditure of Medicaid Long‐Term Services and Supports (LTSS) with a transition away from institutional settings towards more home‐ and community‐based settings.
Despite the expansion of Medicaid Home‐ and Community‐Based Services (HCBS), there is a little national evidence regarding its impact on the quality of LTSS, and the findings from existing studies are mixed.
What this study adds
Our study revealed a positive association between state funding for HCBS and overall LTSS system performance, suggesting a net social gain.
When examining specific dimensions of LTSS performance, we consistently observed a positive association between state funding for HCBS and areas such as Choice of Setting and Provider and Effective Transitions.
1. INTRODUCTION
Long‐Term Services and Supports (LTSS) encompasses diverse medical and personal care that support individuals with functional limitations and chronic illnesses. As the primary payer of LTSS in the United States, Medicaid covered at least 11 million LTSS recipients across all states in 2019. 1 Facing an aging society, this number is expected to continue growing, driving more attention to improve LTSS system performance.
Over the past few decades, there has been a transition away from institutional LTSS settings, such as nursing homes (NH), towards more Home‐ and Community‐Based Settings. According to the most recent Medicaid LTSS Expenditures Report, the proportion of Medicaid LTSS spending on Home‐ and Community‐Based Services (HCBS) has increased from 18% in 1995 to 59% in 2019. 2 This shift can be attributed to multiple factors, such as individual preference to live in their homes or communities, the relatively high cost of institutional care, the U.S. Supreme Court's landmark decision in Olmstead v. LC against the unjustified institutionalization of people with disabilities, and concerns about the inadequate care delivered in NH. 2 , 3 , 4
However, evidence suggests substantial state variations in HCBS support. In FY2019, annual Medicaid HCBS expenditures per resident ranged from $867.32 in New York to $126.87 in Florida. 2 The percentage of HCBS spending relative to total Medicaid LTSS spending varied from 33.4% in Mississippi to 83.3% in Oregon in FY2019. 2 These state variations create a natural experiment for examining the impact of varying levels of state HCBS funding on state LTSS performance.
Current evidence on such an impact is limited and mixed, with existing studies frequently focused on a single LTSS outcome. Two studies suggested a positive association between higher proportion of state Medicaid LTSS spending on HCBS and successful community discharge of NH patients, 5 , 6 whereas another study employing a different dataset found no association. 7 Additionally, Medicaid HCBS recipients in states with more generous HCBS policies had a lower risk of long‐term NH admission 8 , 9 and lower depression rates, 10 but higher rates of potentially preventable hospitalizations. 11 , 12 , 13 , 14 Since the impact of state support on HCBS may vary across outcomes and populations, further research is needed to comprehensively evaluate the effects of such policies on various aspects of LTSS.
In this study, we examined the associations between state Medicaid funding on HCBS and state overall LTSS performance, as well as performance in five specific dimensions, as defined in the American Association of Retired Persons (AARP) LTSS State Scorecard (the Scorecard) from 2010 to 2020. We hypothesized that a higher proportion of Medicaid LTSS expenditures devoted to HCBS is linked to improved state LTSS performance.
2. METHODS
2.1. Data and sample
We employed multiple state‐level datasets, including the Scorecards published on the AARP website (https://ltsschoices.aarp.org/scorecard-report/report-archive) for the years 2011, 2014, 2017, and 2020. The Scorecards aim to provide reliable and consistent state data for measuring and comparing state LTSS performance across various dimensions. 15 We also obtained the Medicaid LTSS Annual Expenditures Reports from the years preceding the Scorecards (i.e., FY2010, FY2013, FY2016, and FY2019), to calculate state percentage of Medicaid HCBS expenditures relative to Medicaid total LTSS expenditures. Lastly, we acquired the U.S. Census, Federal Reserve Economic data, and reports from the Medicaid and CHIP Payment and Access Commission to define state covariates.
Our study cohort comprises 50 U.S. states and the District of Columbia. However, for the most recent wave, California, Delaware, Illinois, and Virginia were excluded due to missing data on Medicaid HCBS expenditures in FY2019.
2.2. Variables
The Scorecards include rankings of state overall performance on LTSS, which are the average rankings of five specific dimensions: Affordability and Access, Choice of Setting and Provider, Quality of Life and Quality of Care, Support for Family Caregivers, and Effective Transitions.
Affordability and Access measures the ease of finding, affording, and receiving services, using five indicators: NH cost, home care cost, the number of people with long‐term care insurance, state coverage on the low‐income people with disabilities (PWD) with Medicaid, percentage of Medicaid beneficiaries with disabilities, and state enhancement on Aging and Disability Resource Center/No Wrong Door programs.
Choice of Setting and Provider assesses LTSS recipients' ability to select preferred settings, providers, and services, incorporating seven indicators: the percentage of Medicaid LTSS spending on aged or disabled HCBS recipients, percentage of Medicaid aged or disabled LTSS users receiving HCBS, proportion of people enrolled in “self‐directed” LTSS programs, supply of home health care workers, assisted living and residential care units, adult day service providers, and subsidized housing opportunities.
Quality of Life and Quality of Care evaluates ultimate effects on LTSS users, considering four indicators: employment rates among PWD, high‐risk NH residents with pressure sores, inappropriate use of antipsychotic medications for NH residents, and HCBS quality benchmarking. However, due to limited LTSS quality outcomes and quality of life factors, this dimension is only given half of the weight of the other dimensions when determining the overall rank.
Support for Family Caregivers acknowledges caregivers' vital role and ranks states across 12 policies grouped into four categories: supporting working family caregivers, person‐ and family‐centered care, nurse delegation and scope of practice, and transportation policies.
Effective Transitions assesses the seamless transition between providers through five indicators: the percentage of NH residents with low care needs, home health hospital admissions, NH hospital admissions, experiences with burdensome transitions, and successful short‐stay residents discharges to the community. Notably, this dimension is only available starting from the second edition, resulting in data for only three waves.
The independent variable was defined as state Medicaid spending on HCBS as a percentage of total Medicaid spending on LTSS (%HCBS/LTSS). Dependent variables are overall and dimension‐specific LTSS performance rankings, ranging from 1 to 51, with 1 representing the best performance. To avoid overlaps between the dependent variables and the independent variable, two Medicaid‐related indicators (namely, Medicaid LTSS balance indicator based on spending and Medicaid LTSS balance indicator based on users) were removed from Choice of Setting and Provider. We then re‐calculated the dimension‐specific and overall LTSS rankings using the methodology of the Scorecards. 14 In the Supplementary File, a sensitivity analysis revealed no significant differences between the original and modified rankings.
2.3. Statistical approach
We divided states into two groups based on their 2020 Scorecard overall rankings: the top 50%, comprising states ranked 1st–24th, and the bottom 50%, including states ranked 25th–47th. State characteristics were then compared between the two groups using either the independent two‐sample t‐test or the non‐parametric Wilcoxon rank sum test based on data distributions. Additionally, we categorized the states based on whether they were above or below the median of %HCBS/LTSS in FY2019, and compared the median rankings of state overall and dimension‐specific performances in the 2020 Scorecard between the two groups.
In the multivariable analyses, we employed separate linear regression models with state rankings as the dependent variable, and %HCBS/LTSS as the independent variable. Models controlled for state fixed effects, time fixed effect, state Medicaid LTSS expenditures (in billion‐dollar), state total population size (in millions), percentage of older adults aged 65 and older in the state, state average annual income per capita (in thousand‐dollar), and state adoption status on Managed Long‐Term Services and Supports (MLTSS, yes/no). Furthermore, two sensitivity analyses were conducted separately to examine the robustness of modified rankings and whether the estimated effect differed for the last three waves when all the five dimensions are available for all states. Additional details can be found in the Supplementary File. All analyses were completed using Stata Version 16.0, and reported p‐values were two‐tailed, with the statistical significance level set at 0.05.
3. RESULTS
Table 1 presents state characteristics for the latest available wave by state rankings on overall LTSS performance in 2020 Scorecard. The median percentage of state Medicaid HCBS spending relative to total Medicaid LTSS spending is 54.2%, with an interquartile range (IQR) of 46.94%–62.85%. In comparison to the bottom 50% of states ranked 25th–47th on their overall LTSS performance, states in the top 50% exhibited a median of %HCBS/LTSS that was 11.8 percentage points higher (61.03% vs. 49.23%, p = 0.03). In terms of state total Medicaid LTSS spending, the 47 states had a median of $1.90 billion (IQR: 0.86–3.90) and no statistically significant difference between the two groups (3.38b vs. 1.79b, p = 0.31) were found. Also, the two groups did not differ significantly in the percentage of older population (17.04% vs. 16.89%, p = 0.75), state total population (3.89 m vs. 4.47 m, p = 0.80), and percentage of state that have adopted Managed Long‐Term Services and Supports (45.83% vs. 39.13%, p = 0.65). States in the higher performance group tend to have higher average annual income per capita ($57.83 k vs. $48.65 k, p < 0.01).
TABLE 1.
State characteristics by overall Long‐Term Services and Supports (LTSS) performance rankings, 4th wave.
| State characteristic | All states (N = 47 a ) | Overall state LTSS system performance rankings in 2020 | p‐Value b | |
|---|---|---|---|---|
| The top 50% (N = 24, rank 1st–24th) | The bottom 50% (N = 23, rank 25th–47th) | |||
| Median (Q1, Q3) c | ||||
| Medicaid HCBS expenditures as a percent of total Medicaid LTSS expenditures (%) | 54.20 (46.94, 62.85) | 61.03 (52.03, 66.16) | 49.23 (41.39, 58.46) | 0.03 |
| Total Medicaid LTSS expenditures (in billion‐dollar) | 1.90 (0.86, 3.90) | 3.38 (0.79, 6.55) | 1.79 (1.06, 3.20) | 0.31 |
| Percentage aged 65 and older (%) | 17.01 (16.11, 17.96) | 17.04 (15.87, 17.93) | 16.89 (16.15, 17.96) | 0.75 |
| State‐average annual income per capita (in thousand‐dollar) | 52.72 (48.65, 68.54) | 57.83 (54.13, 64.47) | 48.65 (44.32, 49.34) | <0.01 |
| State total population (in millions) | 4.22 (1.79, 6.89) | 3.89 (1.20, 7.25) | 4.47 (2.91, 6.83) | 0.80 |
| Percentage of state that have adopted MLTSS, %, mean (SE) | 42.55 (7.29) | 45.83 (10.39) | 39.13 (10.41) | 0.65 |
Abbreviations: HCBS, Home and Community Based Services; MLTSS, Managed Long‐Term Services and Supports.
California, Delaware, Illinois, and Virginia were excluded due to missing data on Medicaid HCBS expenditures in FY2019.
Independent two‐sample t‐test or non‐parametric Wilcoxon rank‐sum test depending on data distribution.
Numbers in the parentheses are the first quartile (Q1) and the third quartile (Q3), except for the percentage of state that have adopted MLTSS where mean and standard error are presented.
Table 2 displays the median rankings for state overall and dimension‐specific LTSS performances based on the %HCBS/LTSS categorization. Compared to the states below the median %HCBS/LTSS, states in the top 50% were significantly more likely to achieve a higher median ranking in State Overall LTSS System Performance (Δdiff = 22 p < 0.01), Affordability and Access (Δdiff = 15.5, p = 0.03), Choice of Setting and Provider (Δdiff = 16.5, p < 0.01), Support for Family Caregivers (Δdiff = 15, p = 0.03), Effective Transitions (Δdiff = 14.5, p = 0.03), and a higher, though not significant ranking in Quality of Life and Quality of Care (Δdiff = 5.5, p = 0.16).
TABLE 2.
State overall and dimension‐specific Long‐Term Services and Supports (LTSS) performance rankings by % Home and Community Based Services (HCBS)/LTSS expenditures, 4th wave.
| AARP scorecard LTSS performance rankings in 2020 a | %HCBS/LTSS b | p‐Value c | |
|---|---|---|---|
| The top 50% (N = 24, states with relatively high HCBS support) | The bottom 50% (N = 23, states with relatively low HCBS support) | ||
| Median (Q1, Q3) d | |||
| State overall LTSS system performance | 17 (9.5, 32.5) | 39 (24, 46) | <0.01 |
| Affordability and access | 17.5 (7, 39.5) | 33 (22, 41) | 0.03 |
| Choice of setting and provider e | 18.5 (8.5, 29.5) | 35 (23, 44) | <0.01 |
| Quality of life and quality of care | 26.5 (11.5, 33.5) | 32 (17, 44) | 0.16 |
| Support for family caregivers | 18 (11.5, 33) | 33 (23, 41) | 0.03 |
| Effective transitions | 17.5 (9.5, 31.5) | 32 (23, 41) | 0.03 |
California, Delaware, Illinois, and Virginia were excluded due to missing data on Medicaid HCBS expenditures in FY2019.
%HCBS/LTSS is calculated as Medicaid HCBS expenditures as a percent of total Medicaid LTSS expenditures.
Wilcoxon rank‐sum test.
Numbers in the parentheses are the first quartile (Q1) and the third quartile (Q3).
Due to collinearity concerns, we removed the two Medicaid‐related indicators (Medicaid LTSS Balance: Spending and Medicaid LTSS Balance: Users) and re‐calculated the rankings on choice of setting and provider dimension.
Regression results from the multivariable analysis are shown in Table 3. After controlling for state fixed effects, secular trend, and state covariates, our findings indicate that a 10 percentage‐point increase in the proportion of Medicaid HCBS spending relative to total Medicaid LTSS spending corresponds to a 2.05‐point improvement in ranking of State Overall LTSS Performance (95% CI: −3.88 to 0.22, p < 0.05), a 2.92‐point improvement in ranking of Choice of Setting and Provider (95% CI: −4.87 to 0.98, p < 0.01), and a 1.73‐point improvement in ranking of Effective Transitions (95% CI: −3.14 to 0.32, p < 0.05).
TABLE 3.
Associations between % Home and Community Based Services (HCBS)/Long‐Term Services and Supports (LTSS) and state overall and dimension‐specific LTSS rankings, based on the adjusted multivariable regressions.
| Variables | State overall LTSS performance | Affordability and access | Choice of setting and provider | Quality of life and quality of care | Support for family and caregivers | Effective transitions | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Coef. | 95% CI | Coef. | 95% CI | Coef. | 95% CI | Coef. | 95% CI | Coef. | 95% CI | Coef. | 95% CI | |
| % HCBS/LTSS a (10%) | −2.05** | (−3.88 to −0.22) | −1.62 | (−4.22 to 0.99) | −2.92*** | (−4.87 to −0.98) | −1.31 | (−2.92 to 0.30) | 0.45 | (−1.56 to 2.47) | −1.73** | (−3.14 to −0.32) |
| Total Medicaid LTSS expenditures (in billion‐dollar) | −2.02*** | (−3.27 to −0.78) | −2.31*** | (−3.97 to −0.65) | −0.72 | (−2.79 to 1.24) | −0.67 | (−2.05 to 0.71) | −0.44 | (−2.11 to 1.24) | −1.29** | (−2.52 to −0.05) |
| Waves (Ref = Wave 1) | ||||||||||||
| Wave 2 (2014) | 1.40 | (−2.91 to 5.70) | −10.61*** | (−16.27 to −4.94) | −2.47 | (−8.66 to 3.91) | 0.33 | (−6.16 to 6.83) | 8.52* | (−0.13 to 17.17) | N/A | N/A |
| Wave 3 (2017) | 3.32 | (−5.18 to 11.82) | −21.91*** | (−32.62 to −11.19) | −4.86 | (−15.95 to 6.88) | 2.74 | (−10.31 to 15.79) | 18.28** | (2.74–33.83) | 0.90 | (−4.95 to 6.75) |
| Wave 4 (2020) | 5.43 | (−8. 58 to 19.44) | −35.34*** | (−53.24 to −17.44) | −7.15 | (−24.16 to 10.05) | 1.02 | (−20.32 to 22.36) | 28.71** | (4.83–52.59) | 1.48 | (−10.75 to 13.70) |
| Percentage aged 65 and older (%) | 0.29 | (−2.67 to 3.26) | 5.22*** | (1.64–8.80) | 3.34** | (0.11–6.84) | 0.53 | (−3.44 to 4.50) | −2.19 | (−6.98 to 2.60) | −1.22 | (−5.17 to 2.73) |
| State‐average annual income per capita (in thousand‐dollar) | −0.17 | (−0.80 to 0.46) | 1.29*** | (0.45 to −2.13) | −0.23 | (−1.07 to 0.61) | 0.07 | (−0.72 to 0.85) | −1.44*** | (−2.49 to −0.38) | 0.22 | (−0.41 to 0.85) |
| State total population (in millions) | −0.43 | (−4.61 to 3.75) | 3.83* | (−0.21 to 7.87) | 3.79 | (−2.15 to 9.72) | −6.70*** | (−9.62 to −3.78) | 2.33 | (−1.48 to 6.15) | 4.17 | (−4.61 to 12.95) |
| State that have adopted MLTSS | −0.45 | (−5.76 to 4.86) | 3.80 | (−3.51 to 11.11) | −2.59 | (−8.73 to 3.54) | 0.31 | (−6.17 to 6.80) | −1.23 | (−9.01 to 6.56) | −0.46 | (−3.50 to 2.59) |
Note: This table presents results from adjusted linear regression models with state and time fixed effects, utilizing four‐wave panel data in all regressions except for the Effective Transitions dimension. Due to its availability starting from the second edition of the Scorecard in 2014, data are limited to three waves for the Effective Transitions dimension.
Abbreviation: CI, confidence interval.
%HCBS/LTSS is calculated as Medicaid HCBS expenditures as a percent of total Medicaid LTSS expenditures.
p < 0.01;
p < 0.05;
p < 0.1.
Table 3 also shows that every billion‐dollar invested in Medicaid LTSS is associated with a 2.02‐point improvement in the overall ranking (95% CI: −3.27 to 0.78, p < 0.01), a 2.31‐point improvement in ranking of state performance in Affordability and Access (95% CI: −3.97 to 0.65, p < 0.01), and a 1.29 ranking improvement in Effective Transitions (95% CI: −2.52 to 0.05, p < 0.05). When compared to the baseline wave, significant time variations were observed in Affordability and Access and Support for Family and Caregivers. After regression adjustment, states with a higher proportion of older adults tend to perform worse in Affordability and Access (Coef.: 5.22, 95% CI: 1.64–8.80, p < 0.01) and Choice of Setting and Provider (Coef.: 3.34, 95% CI: 0.11–6.84, p < 0.05). Additionally, for every one thousand‐dollar increase in state‐average annual income per capita, there is a 1.29‐point decrease in ranking of state performance in Affordability and Access (95% CI: 0.45–2.13, p < 0.01) but a 1.44‐point ranking increase in Support for Family and Caregivers (95% CI: −2.49 to 0.38, p < 0.01). Finally, states with larger population are associated with better performance in Quality of Life and Quality of Care (Coef.: −6.70, 95% CI: −9.62 to 3.78, p < 0.01).
4. DISCUSSION
Using longitudinal data with an assessment of state LTSS performance overall and across multiple dimensions, our study revealed that states allocating a higher proportion of Medicaid LTSS spending to HCBS performed better in state overall LTSS system performance, and especially in Choice of Setting and Provider and Effective Transitions.
Our findings aligned with prior evidence on the increasing impact of HCBS over time. Using Medicaid long‐term care spending datasets from 1995 to 2005, Kaye et al. 16 revealed significant long‐term cost savings among the states with higher levels of support on HCBS. Other recent studies have also suggested positive effects of HCBS programs on reducing mortality risk, delaying functional decline, and lowering NH admissions among community‐dwelling older adults. 8 , 9 , 17 , 18
When looking into specific dimensions, we found positive associations between state investments in HCBS and the supply of home care workers and the extent of consumer choice of settings and providers. Despite the growth in home care workforce from 0.84 to 1.42 million workers between 2008 and 2019, an expected labor shortage looms because of the rapid growth in HCBS participation over recent years. 15 , 19 , 20 Thus, while greater insurance coverage for HCBS recipients is encouraging, more state efforts are needed (e.g., higher compensations for HCBS workers) to attract and retain a high‐quality HCBS workforce to meet the rising demand and ensure a diverse range of options available in the community. Furthermore, the finding that increased HCBS spending is related to improved performance in Effective Transitions corroborate current evidence that older adults in state with higher HCBS expenditures have a lower risk of NH admission and higher rates of successful community discharge. 5 , 6 , 8 , 9 While a higher per capita income might imply more financial support for the family caregivers, the unexpected negative association between higher state per capita income and lower ranking in Affordability and Access could be attributed to the fact that NH care costs remain unaffordable for many middle‐income Americans, even in the five most affordable states (Kansas, Missouri, Oklahoma, Texas, and Utah), representing 176 percent of the income of a typical older family. 15 With respect to the time variation, we observed significant relative ranking changes in Affordability and Access and Support for Family Caregivers due to a few states experiencing substantial LTSS improvement or worsening over time. For instance, South Carolina dropped from 15th in 2011 to 50th in 2020 in Affordability and Access; New York state jumped from 48th in 2011 to 5th in 2020 in Support for Family Caregivers.
Our study had several limitations. First, because of the nature of observational study designs, our findings demonstrate associations, not causality. Secondly, due to limitations of available data, our measures of state support on HCBS only reflects state Medicaid spending on HCBS, omitting other components such as HCBS enrollment and additional HCBS funding from other payers. Prior studies suggested that the effects might be driven by the younger disabled HCBS recipients, 11 , 21 but public Medicaid expenditure reports do not distinguish the HCBS spending by age groups. Additionally, the use of the Scorecard rankings as a proxy for state LTSS performance reflects changes in relative performance for each state compared to other states. Thus, even if a state improved its LTSS systems over time, its ranking might still get worse if other states improved more. As the performance indicators are calculated over a 3‐year period before publication, using only the last year of Medicaid LTSS spending data might not reflect the changes in the first 2 years of performance. Because the latest available Scorecards was the 2020 edition (i.e., performance indicators calculated for 2016–2019), a comprehensive assessment of the impact of the COVID‐19 pandemic was not feasible at the time study completion. However, as more recent Scorecard (i.e., the 2023 edition) is released, we suggest that future research explores the potential impact of the COVID‐19 pandemic when updated Medicaid LTSS spending data also become available. Finally, as our analysis is conducted at the state level, individual‐level inferences and potential subgroup differences cannot be determined.
In conclusion, our study suggests promising effects of state investments in HCBS on LTSS system performance. In light of these findings, policy makers can advance support on HCBS through identifying cost‐effective HCBS services that are in accordance with consumer preferences, and expand the workforce capacity to meet the increasing HCBS needs. Future studies are needed to identify the groups that may benefit the most from improved HCBS programs, and to examine such effects by types of services and by different populations.
Supporting information
Data S1. Supplementary information.
ACKNOWLEDGMENTS
We acknowledge funding for this work from the National Institute on Aging, R01AG069733, and have no other disclosures to report.
Cheng Z, Mutoniwase E, Cai X, Li Y. Higher levels of state funding for Home‐ and Community‐Based Services linked to better state performances in Long‐Term Services and Supports. Health Serv Res. 2024;59(2):e14288. doi: 10.1111/1475-6773.14288
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