March 23, 2023

Walz’s Revised Budget Addresses Hospital Back-Ups, Not LTC Funding

On March 23, 2023 by Jeff Bostic

Governor Tim Walz recently updated his budget proposal and introduced some new spending initiatives after the most recent budget forecast was released. Unfortunately, those initiatives do not include a rate increase for care centers despite the ongoing staffing and financial challenges. Despite the lack of support from the Governor, the Long-Term Care Imperative continues to work with legislators to advocate for this vitally needed funding.

Proposed hospital discharge funding

The Governor’s revised budget includes a new proposal to address hospital discharge challenges. The revised budget recommends $26.8M in the upcoming biennium to fund a premium pay program for providers that admit people with complex needs from hospital settings. A patient in the hospital is eligible for premium pay if:

• Medically complexity that requires highly specialized care coordination and treatment OR
• Serious aggressive and/or self-harm behavior OR
• Repeated denials of admission to residential settings, service terminations, placement on a waitlist, or other inability of providers to properly support the person in a community setting.

A second component of the proposal includes funding to establish an organizational endorsement system for providers who serve people with complex needs. This endorsement system is not attached or associated with the provider's license type; it is available to MA-enrolled providers across the LTSS spectrum. Providers that choose to become endorsed will have access to enhanced financial incentives through existing grant programs, free access to a consultative clinical panel, free training for positive support capacity building, and the option to participate in a statewide community of practice.

A final component is case mix rate exceptions under Elderly Waiver to allow increased funding for clients with complex support needs. This program is tied to being in a mental health hospital or on a waiting list for those services, so the population covered will have significant needs. That is likely to limit the number of providers who participate, but exceptions to the caps for EW, even in limited circumstances, are a positive step.

What’s next

The revised budget was heard in Senate Committee earlier this week. The testimony did not include any details on the amount of any additional payments for serving these populations. Meanwhile, another bill has been introduced to pay long-term care providers for taking “high acuity” hospital clients. There is no definition of what it means to be “high acuity,” so that will need to be worked out if this bill advances. That bill would pay $150 per day to settings that take these clients, and it has about ten times as much state funding as the Governor’s proposal. However, both proposals are time-limited, one-time money, not designed for providers to make long-term investments to fix ongoing staffing problems.

Our take

While we view these efforts as potentially helpful in the short run, we believe that the best solution to hospital discharge issues is to adequately fund long-term care reimbursement so we can pay caregivers a living wage.

What’s next

The Governor’s proposed budget updates are notable. However, the legislature is ultimately tasked with passing a balanced budget and sending it to the Governor for approval. Lawmakers will consider his recommendations – in fact, many have been discussed in committee – but they will decide which of the Governor’s spending proposals move forward in the legislative process.