Department of Human Services | Christie Administration Gains Federal Approval for Medicaid Reforms to Bring More Compassionate Care to Most Vulnerable New Jerseyans

Reforms Will Provide Better Care to Seniors, Children and Adults with Disabilities, Individuals with Mental Illness and Low-Income Families, While Reducing State Costs Over Long Term

TRENTON – The Christie Administration today announced that it has received approval from the federal government to move forward with bold and innovative Medicaid reform that will result in more compassionate and effective care to the most vulnerable New Jerseyans, while at the same time reducing long-term costs to the state. These reforms, contained in what is known as the Comprehensive Medicaid Waiver application, were initially outlined by the Administration in September 2011, and are in line with the policies and goals of Governor Christie to positively and sensibly change the way government programs and services support those who need them the most. Now with the federal government’s approval, New Jersey will continue to move forward with broad-based reforms to deliver smarter, more effective services with a strong focus on transitioning from institutionalized settings to home and community-based care.“We are showing once again that New Jersey is a national leader when it comes to reforming Medicaid to serve our most vulnerable residents in a more compassionate, effective and complete manner,” said Governor Chris Christie. “With federal approval of our reforms, we are now able to build on the strong record we’ve established in New Jersey of providing care to as many people as possible in home and community-based settings so they can live and thrive as independently as possible among family, friends, and loved ones. These reforms not only strengthen the focus on treating and serving the individual first, but do so in a way that is cost effective and sustainable for our state over the long run.”

Among the most significant reforms approved were New Jersey’s proposals to deliver better care, efficiency and coordination of services with a strong focus on providing community-based and in-home services rather than institutionalization. This is being accomplished through three key reform elements: expanding existing managed care programs to include managed long-term services and supports for seniors and individuals with disabilities; simplifying eligibility for long-term care services; and implementing programs for children and adults with developmental disabilities.

Governor Christie has been leading the way in efforts to ensure that New Jersey’s seniors, children and adults with disabilities, and individuals with mental illness are able to live and receive care in comfortable and independent environments that provide the greatest level of familiarity and quality of life as possible – whether it’s their own homes or communities, among family, friends, and loved ones.

•         Governor Christie has provided greater resources to serve people with home and community-based care and realign program and service delivery across state government to sensibly focus on holistic care for the individual.
•         The Governor moved forward with a bold, expansive and commonsense reorganization and realignment of state services, implemented in the Fiscal Year 2013 Budget, to better serve vulnerable New Jerseyans.
•         The Administration’s policy and budget commitments to community-based programs, rather than institutions, include more than $34 million in increased funding for community placements; the Administration also created the Division of Aging Services in the Department of Human Services, a single point of entry and service for senior long-term care services.

With the approval, the cost sustainability of New Jersey’s safety net FamilyCare program is now more sustainable with greater federal support for enrollees. These federal dollars help secure the availability and access to Family Care for low-income families and save the state money by securing higher reimbursement levels from the federal government for enrollees after 2014.

“New Jersey is one of very few states across the country that is on the road to achieving Medicaid reform without affecting eligibility, imposing co-pays or cutting optional services,” said Department of Human Services Commissioner Jennifer Velez. “We presented a thoughtful plan that we crafted specifically to New Jersey’s population with a lot of input from our stakeholders and the people we serve.”

The Comprehensive Medicaid Waiver included recommendations that would: streamline the program by consolidating multiple waivers across state government; maximize federal reimbursement for programs currently funded by state-only dollars; and advance New Jersey’s efforts to redirect care for seniors and individuals with disabilities to the community, rather than to institutions. The Centers for Medicare and Medicaid Services (CMS) also approved the state’s request to deliver behavioral health services through an Administrative Services Organization.

In addition, the waiver makes changes to the hospital delivery system of care by transitioning funding from the current Hospital Relief Subsidy Fund to an Incentive Payment model that will increase competition, increase the quality of care, and lower costs through greater efficiency. Under the new performance-based reforms to the funding pool, federal funding levels for New Jersey hospitals will be secured moving forward, and hospitals will compete for funding based on their strengths in delivery of care. Overall, costs will be lowered through a more competitive, performance focused funding process.

“Our goal to preserve federal matching dollars for New Jersey’s hospitals will be achieved by reforming certain subsidy programs to incentivize quality improvement. This reform provides an opportunity to align hospital’s planning efforts and service delivery models with important public health needs of the community," said New Jersey Health Commissioner Mary E. O’Dowd. “We will continue to partner with hospitals in the implementation of these changes.”

Another emphasis in the waiver involved increasing community-based services for children who are dually diagnosed with developmental disabilities and mental illness by providing case management, individual supports and respite for caregivers.

“Through this waiver, New Jersey has built upon the success of the State's child behavioral health system of care to improve efficiencies and increase access to behavioral health services for children throughout the State,” said Department of Children and Families Commissioner Allison Blake. "In addition, we were successful in obtaining approvals that will result in increased services for children with intellectual and developmental disabilities.”

CMS did deny certain reform proposals outlined in the application including: New Jersey’s request to no longer provide retroactive Medicaid eligibility for applicants; consolidation of all nine state waivers into one, and the state’s appeal for an estimated $107 million in Medicare Part B retro payment for Medicare services erroneously billed to Medicaid. The federal government also determined that approval of future programmatic changes and that the Community Care Waiver will remain outside the comprehensive waiver.

“As approved, we can now move forward with a 5-year demonstration of these reforms that will fundamentally reshape and improve the care we give to seniors, individuals with developmental disabilities, individuals with mental illness, and low income families,” continued Commissioner Velez. “We will continue to work with our partner agencies and stakeholder groups to advance our reform goals in a responsible, thoughtful way.”

Upon formal acceptance notification being made to the federal government, New Jersey will begin implementing these reforms. Once published, a copy of CMS’ approval letter can be found online at: www.medicaid.gov.