The Virginia Department of Behavioral Health and Development Services (DBHDS) contracted with Health Management Associates (HMA) to develop a comprehensive plan for the publicly funded geropsychiatric system of care in Virginia. According to Request for Proposal (RFP) # 720C-04525-17M, Geropsychiatric System of Care Virginia, as the physical plants of Virginia’s mental health hospitals age, Virginia is faced with the choice of spending for increasingly costly maintenance and repairs of existing structures, building new hospitals, investing in community services infrastructure, or some combination of these alternatives. HMA embarked on a multifaceted approach to understand: the geropsychiatric population and their care needs; services provided in state-operated psychiatric facilities with geriatric units; the policy, regulatory, and payment environment relating to inpatient psychiatric services and their collective impact on geropsychiatric service delivery; the availability of community-based geropsychiatric services; and the physical plant structure of selected state-operated psychiatric facilities. Key findings, options, and recommendations are highlighted below and discussed in greater detail throughout the report.

Service Needs and Delivery System Implications for Older Adults

Virginia’s public system of care for older adults is challenged due to the growing segment of this population and the distinct care needs of subpopulations, including those with a history of serious mental illness (SMI) or neurocognitive disorders such as dementia and Alzheimer’s disease. This reality is manifested in the over reliance on state-run inpatient psychiatric facilities that, for some individuals, are not the appropriate level of care. Specifically, state-operated psychiatric facilities have become the primary provider for many publicly funded older adult populations, even those who would traditionally not be served in inpatient psychiatric settings.

The health care needs of older adult populations are often complex as illustrated in the figure below. Pinpointing the underlying causes of symptoms and determining appropriate treatment requires an understanding of medical, psychiatric, and neurocognitive conditions. Often, social and behavioral changes such as aggressive behavior can be secondary to these conditions. In Virginia, these different sub-populations are being blended and treated as one.
Virginia’s delivery system for older adults has evolved over time and has been influenced by unintentional, yet misaligned policies that have impacted service access, treatment capacity, care transitions, and treatment costs to the state. The result is a state design with mixed levels of care within and across settings, treatment environments that can be counter-therapeutic, and a reduction of community capacity to serve older adults on Medicaid and Medicare. The sheer volume of service demand; growth and complexity of patient populations; and constraints to develop discrete models of care due to space, resources, and specialty staffing are persistent limitations for the Commonwealth.

State-operated facilities have served as an important safety net for many older adult populations. However, specific federal policies restrict payment for institutional services for some populations with mental illness in certain facilities. As a result, Virginia bears the overwhelming financial burden for services that, in some instances, are eligible for a federal share of reimbursement under Medicaid and Medicare. This is because a significant portion of care delivery and associated costs for the increasing older adult population is currently provided by the state-operated psychiatric hospitals. These hospitals are among the facilities federally categorized as Institutes of Mental Disease (IMDs) and ineligible for Medicaid funding as a nursing facility or to provide psychiatric services for adults aged 21-64.

In addition, due to the age of some of these facilities, the physical plants need repair and modernization to obtain or maintain certification and accreditation status for eligible reimbursements. The hospitals require modernization to meet patient care needs, including the redesign of facility layouts that can support the development of evidenced-based programs and staffing models. However, financial investments in building infrastructures, workforce capacity, and program redesign, would do little to remedy the underlying issue in the state: the lack of a comprehensive approach and long-term plan for addressing the care needs of publicly-funded older adults with complex conditions.

This report outlines HMA’s options and recommendations for developing an intermediate strategy for a subpopulation of older adults consistent with RFP requirements and includes suggestions for implementing a longer-term reform strategy for older adults with complex needs.

Key Drivers of Fragmented Long-Term Services and Supports for Older Adults with SMI or Neurocognitive Disorders Served in State-Operated Facilities

Key factors creating blended sub-populations within state-operated inpatient settings include state culture and statutory changes that have disproportionately impacted individuals with public insurance. In the last few years, Virginia’s focus on institutional care for older adults, limited nursing facility capacity for low-income individuals, and statutory changes (last resort law and treatment detention order) have accelerated the merging of these populations in state-operated treatment facilities as a result:

The service population in state-operated psychiatric facilities has expanded significantly due to increased number of overall admissions and decreased rates of discharges, resulting in a funneling effect (i.e., more patients coming in than can be discharged) within state-operated facilities, triggered by:

• State policy changes (Last Resort Law) related to individuals with mental health crisis;

• Increased numbers of older age patients with medical complexities such as individuals on oxygen and individuals with multiple medical conditions;

• Increased acute psychiatric admissions with more difficult to treat mental health conditions and who are difficult to discharge even when psychiatrically stable due to limited community-based placements;

• Increased admissions of individuals with neurocognitive disorders with significant co-occurring behavioral challenges who are denied care by community nursing facilities due to insurance type or because of behavior secondary to neurocognitive conditions (separate from any objective determination of appropriate level of care); and

• Increased numbers of individuals with a combination of these conditions.

In many ways, the use of state-operated facilities as the “catch all" for treatment of all older adults is a direct result of misalignment of incentives for community-based care. The community providers (Community Service Boards) responsible for admission, discharge and community placement do not have a primary responsibility for meeting the treatment needs of individuals with neurocognitive disorders, who represent a significant number of older adults served by the state hospitals. In fact, the lack of funding to CSBs for non-behavioral health related care to older adults and their current disconnect from other older adult systems of care (Area Aging Agencies, Medicaid long-term care funding, etc.) creates an overreliance and use of state hospitals rather than community placement. The time pressure created by mental health crisis statutes also intensifies a reliance on inpatient capacity and use rather than providing DBHDS and CSBs the opportunity and resources to build and utilize community-based alternatives.

Key Decisions for Designing a System of Care for Older Adults

What programs and services should be available to ensure a full continuum of services for older adults where individuals receive the right service, in the right setting, when needed? Central decisions for the state in designing a system of care for older adults are:

1) What populations should be the focus of state-operated psychiatric facilities?

2) What populations should be the focus of community-based providers? How can capacity and the willingness to serve these populations (across older adult services, not merely behavioral health providers) be improved?

3) How should resources be aligned to incentivize care based on the decisions made and the ultimate design of the system?

Need for Development of a Full Continuum of Publicly Funded Services for Older Adults with Mental Illness or Neurocognitive Disorders

The older adult system of care has evolved without purposeful design in Virginia. State-operated facilities have had little time to develop a thoughtful and planned transition of the state hospital role amid recent statutory changes. Once the funnel effect began, resulting in increasing admissions and slower rates of discharge, state psychiatric hospitals have been largely in a reactive stance rather than being able to develop and implement a proactive response. Since passage of last resort statutes, the hospitals were forced to abandon any attempt at gradual transition of care models, roles/services, and function (i.e., changes to staffing and workforce expertise such as adding more medical expertise, including neurology). Instead the facilities had to rapidly make space for individuals as the patient populations quickly transformed.

Similarly, at the broader system level, the model(s) for serving the geriatric population has not been designed to ensure the availability of a full continuum of services. Virginia is unbalanced in the system with more focus on inpatient and institutional care with minimal development of the community-based continuum of services. This has primarily been a result of resource allocation—with more funding going towards institutional care making community services development challenging. As an example, there is a lack of respite options for families, and limited nursing facility options, in part because nursing facility providers do not receive additional training and support in managing individuals with neurocognitive conditions who have behavioral challenges. Although the CSBs have been in collaboration with the state (even though individuals with neurocognitive conditions is outside of their defined population and funding focus) to pilot and experiment with new programming in multiple regions, these efforts currently remain limited.

Virginia is at a critical decision point with respect to the continuum of long term services and supports (LTSS) for publicly funded older adults. As the population is rapidly growing, the state needs to design the continuum of services needed and then build the continuum. This will likely require additional funding and resources to maintain existing services (funding of state-operated facilities) while increasing funding in the community to build provider capacity, incentivize service development for those with public insurance, and train a competent population-focused workforce. Central to this next phase of development is inclusion of all State agencies responsible for policies and reimbursement for older adult services. Although DBHDS’ participation is vital, it is important that leadership from DMAS and DARS drive the planning and design of a system of care for older adults. Even more critical is the need for DMAS to establish the requisite parameters for obtaining Medicaid policy and funding authorities, establishing roles for quality oversight and accountability, and defining outcome measures, particularly given Virginia’s movement toward a managed care model for LTSS.

Across the continuum of services, workforce is a major concern. As the demographics change in Virginia, there is a growing number of older adults combined with an exodus of workers who often lack the interest and/or competency to treat older adults. This is a primary concern for the state-operated facilities which are struggling significantly with maintaining and developing a trained workforce. The shortages across disciplines are significant, with nursing retention being at a crisis point for some facilities. This has placed significant burden on the system trying to adapt workforce and at times take on risk that may not be appropriate for the facility or clinical capacity (e.g., admission of individuals with significant medical needs that push the capabilities of a state psychiatric facility). The last resort statutes contribute to this challenge, as individuals are admitted due to time pressure rather than a clinical assessment, creating no ability for hospitals to manage appropriate versus inappropriate referrals. Admittance of inappropriate referrals only fuels workforce challenges as professional staff experience stress and face concerns that they are taking inappropriate personal risk with their licensure. These factors drive early retirement and make retention of new hires an uphill battle.

All combined, these findings point to the need for developing an older adult system of care through a two-tiered approach: an intermediate strategy that is implemented over the next five years and a long-term strategy that is put into place in the next ten years. Recommendations for a long-term strategy are initially discussed so that the State can establish a clear vision about the future system that needs to be designed. Intermediate recommendations follow and serve as milestones toward achieving the broader vision.

Long-Term Recommendations for an Older Adult System of Care

To achieve the older adult system of care described above, the State should devise a strategy that:

• Rebalances the use of institutional long-term care (i.e., state-operated psychiatric facilities and nursing facilities) in relation to community-based services to ensure that the level of care accessed by the individual served is in a setting and for a duration that is suitable for the person’s needs;

• Expands the capacity of community-based care and enables CSBs and providers of LTSS to more effectively attend to the integrated behavioral health/aging-related care needs of mutually served populations;

• Ensures timely transitions between appropriate levels of care and settings, and ensures that the receiving entity has established protocols and a prepared workforce to meet individuals’ needs;

• Optimizes funding streams to enable payments from Medicaid and Medicare in a manner that does not compromise the level of services provided to an individual and that makes flexible state funds available for non-covered services;

• Promotes and provides incentives for use of best practices and evidence-based care;

• Leverages available federal authority (e.g., waivers and state plan amendments) to develop an enhanced array of services payable under Medicaid;

• Makes effective use of the recently established, comprehensive Medicaid managed care structure to ensure that an adequate delivery system and funding is available to address population needs; and

• Advances the use of data and other information across systems to allow for improved tracking of service availability and utilization across care continuum and ensures the accountability of all providers for appropriate services to older adults.

Intermediate Term Recommendations for an Older Adult System of Care

While the state develops a long-term strategy, attention should also be paid to development of a set of interim solutions, particularly in acknowledgment of existing state-regulations and strain on capacity for institutional services. An intermediate approach should leverage the collective strengths of DARS, DBHDS and DMAS to, at a minimum, continue State funding of pilot program development aimed at increasing collaboration between State facilities and CSBs to enhance community-based options for older adults. Additionally, Virginia should revisit the role of the State-operated facilities to determine whether they should provide long term services and supports for neurocognitive disorders in addition to the traditional focus on acute stabilization of psychiatric illnesses. Finally, the roles for community-based delivery systems should be further explored to identify potential opportunities for realigning functions and funding to more effectively meet population needs.

Long-term and intermediate term recommendations are further described in the Summary of Observations and Recommendations section of this report. Cost estimates were not developed for each recommendation as it is imperative that the State make critical decisions about the role of existing systems serving older adults with mental illness or neurocognitive disorders. As such, HMA recommends that the Commonwealth continue and expand on its interagency collaboration regarding the service population, delivery system, program design, financing and payment, and system infrastructure decisions the State will need to make regarding older adults with mental illness or neurocognitive conditions.