What the New Congress Means for Adult Day Services

Members | January 28, 2015

Republicans now have control over both houses of Congress, meaning that they will chair key committees. New committee chairs will have new priorities, and many of these priorities will impact the future of adult day services.

Republicans have taken control of both houses of the 114th Congress, and that means its members will chair key committees, such as the House Ways and Means, Senate Finance and Senate HELP Committees. 

The new U.S. Senate consist of 53 Republicans, 44 Democrats and 2 Independents. The U.S. House of Representatives consists of 244 Republicans and 186 Democrats. 

New committee chairs will have new priorities, and many of these priorities will impact the future of adult day services. Below is a potential impact summary.

Medicaid Per-Capita Cap

Medicaid waivers are the main payer source of Adult Day programs. The new Congress is focused on reducing the U.S. budget deficit, and Medicaid is on the top of the hit list. 

About 34% of the Medicaid budget funds long-term care services and support, which includes Adult Day Services. 

At this time, the federal government’s share of Medicaid spending for the states is based on the Federal Medical Assistance Percentage (FMAP) that ranges from 50% to 75% of the states funding for Medicaid. 

Some members of Congress believe that this system does not encourage states to save Medicaid dollars. We may see the new Congress consider legislation to reform the Medicaid program. 

In the last Congress, President Obama, Rep. Bill Cassidy (R-LA), who introduced the Medicaid Accountability and Care Act, Sen. Orrin Hatch (R-UT), the Senate Finance Committee and House of Representatives Energy and Commerce Committee considered the implementation of a Per-Capita Cap system to reduce Medicaid costs.

Having a per-capita cap on Medicaid would limit the federal government’s financial liability by capping the federal funding, on a per beneficiary basis. 

Per-capita caps would leave the state financially responsible for any additional costs above and beyond the cap. Unlike a block grant, per-capita caps are indexed to the number of enrollees. 

There are many avenues for implementing per-capita caps that would achieve the desired policy and budget outcomes, but the bottom line is that implementation of a per-capita cap could result in states cutting rates to adult day providers, reducing the number of older adults that are eligible for Medicaid and adult day services paid by Medicaid waiver and state plans. 

LeadingAge opposes the implementation of per-capita caps. 

We believe that there are other ways of increasing the efficiency of the Medicaid program, such as Health Homes, the dual's demonstration and expanding Programs of All Inclusive Care for the Elderly.

Social Services Block Grants

Over the past 5 years, funding for Social Services Block Grants (SSBG) in the federal budget was reduced from $2.1 billion a year to $1.7 billion a year. 

Some members of Congress want to eliminate Social Services Block Grants because they believe that states are not accountable on how they use the SSBG funding. 

Social Services Block Grants are used for state programs that assist the most vulnerable individuals, especially older adults and children. 

They are used at times to fund adult day services. Further cuts to SSBGs could result in reduced access to adult day programs funded through state non-Medicaid programs.  

LeadingAge opposes additional cuts to Social Services Block Grants

Older Americans Act Reauthorization Funding

On Jan. 20, 2015, members of the U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee introduced the Older Americans Act Reauthorization Act of 2015 (S. 192). The proposal includes a compromise to address the Title III grants formula. 

The compromise would begin to slowly shift the funding formula to correlate with the number of older adults in the state, instead of the program and limit states not experiencing the same senior population growth to losses of no more than 1% of their funds each year for 3 years. 

Beginning in fiscal 2019, the minimum allotment would be frozen at fiscal 2018 levels.  

In 23 states, the change in the funding formula could result in either level funding or reduced Older Americans Act funding for Older Americans Act Title III funding including funding for adult day service contracts through your local Area Agency on Aging. 

Other states could see increase funding for services covered through Title III of the Older Americans Act. 

LeadingAge is pleased the Senate OAA Reauthorization bill includes the development of a consumer tool that would help older adults and caregivers find the appropriate home and community-based services. We have been advocating for more choices for consumers. 

There are times when older adults and caregivers are only given contact lists of one provider type, such as home care. 

The Aging and Disability Resource Centers need to have detailed information on service options for consumers. For fiscal year 2015 sequestration (across the board 2% cut on OAA programs) will not apply. 

President Obama has discussed eliminating sequestration, but Congress will have to find an offset to ensure budget neutrality. 

Funding for Older Americans Act has not increased despite the increase in the number of older adults needing these important services.

Veterans Administration Provider Agreements

On Feb. 13, the U.S. Department of Veterans Affairs (VA) issued, "Use of Medicare Procedures To Enter Into Provider Agreements for Extended Care Services," a proposed rule that would authorize the VA to enter into agreements with adult day health care. 

It also would establishes new regulation to implement the VA’s authority on using Medicare procedures to enter into provider agreements. 

The proposed rule states that the VA’s payment under the agreement with the highest rates would serve as an incentive to encourage providers to enter into agreements with VA for the care of veterans. 

The problem is that the VA was not given the approval to release a final rule on provider agreements by the U.S. Department of Justice. 

Congress will have to introduce and pass legislation to change existing laws that determine the federal contracting process. Many adult day members are not receiving additional referrals of Veterans, have limits on utilization of adult day services and/or cannot obtain a VA agreement to serve Veterans. 

The final rule could have a positive impact on improving access for veterans to adult day services programs. We need to encourage Congress to pass legislation that will enable the VA to finalize the Provider Agreement Proposed rule.

Charitable Deduction

To carry out their mission of serving frail and low-income elders and people with disabilities, LeadingAge Adult Day Services members rely heavily on private philanthropy. 

In the last Congress, the chair of the U.S. House Ways and Means Committee introduced legislation to reduce the allowable charitable deduction

Fortunately, the new committee chair, Rep. Paul Ryan (R-WI), has expressed opposition to any upper limit on the charitable deduction. 

For the six years of his presidency, President Obama included a 28% cap on all itemized deductions for individuals with income above $200,000 ($250,000 for joint filers). 

LeadingAge urges Congress to preserve tax incentives for charitable giving for taxpayers at all income levels.

Alternative payment models

Many health policy experts believe that any attempt to permanently replace the Sustainable Growth rate ( fix the Physician payment system) will include a pathway that transitions most providers into alternative payment models such as medical homes or accountable care organizations. 

Rep. Paul Ryan (R-WI), the new chairman of the U.S. House Ways and Means Committee, and Sen. Orin Hatch (R-UT), U.S. Senate Finance Committee chairman, may change previous bipartisan proposals from the last Congress. 

Adult Day Services providers will be operating under a payment system that includes incentives and penalties based on quality. 

This change brings both opportunities for increasing utilization and payment as well as challenges in not receiving adequate reimbursement to provide quality services and not receiving referrals from organizations that determine the services that the patient receives.

Medicare Adult Day Services Act

Rep. Linda Sanchez (D-CA) had introduced the Medicare Adult Day Services Act in the 112th Congress and in the 113th Congress, but it failed to pass both times, and it is unlikely that the bill would pass in this Congress. 

LeadingAge has been meeting with congressional staff to introduce a bill that would allow Adult Day Services to be paid for skilled intermittent care.

Ultimately, members of Congress serve their constituents, but they need to hear from you to know what issues should be addressed by the 114th Congress. 

LeadingAge encourages members to Contact Congress on the issues that are barriers or opportunities for adult day services and the older adults and persons with disabilities that we serve. 

Your work as an advocate is crucial to motivating legislators and other policymakers.