A new Case management proposal will cost more and will provide fewer services to elders.

Gema G Hernandez, Secretary Elder Affairs (1999-2001)

The idea of capitating the cost of case management services is not new. It has been around since the days of Secretary Bentley Lipscomb. Despite extensive and expensive analysis that lasted one year by a famous accounting firm, the capitation idea has never generated a higher quality of life or more services for elders.

There are several reasons why the capitation of case management costs as a way to save dollars from the state and federal budgets is an Urban Legend. First, Community Care for the Elderly programs have managed to include in the hourly cost of case management services a number of expenses that are not truly related to the activity of case management services. A report by a legislative watch dog OPPAGA (2001) and a memo from me to the Governor (11/14/2000) lists all the unrelated expenses and asks for those expenses to be excluded from the hourly cost To my knowledge, no one has bothered to investigate the numbers not even the new consultant hired last year to come up with new contract language and new numbers. Negotiating a capitated rate per hour of case management services before first "cleaning" the non related expenses built into the hourly unit cost will do a disservice to Florida&Mac226;s elders because more financial resources will go to pay for an activity that is full of unrelated expenses. Trimming the fat needs to come first, but the trimming should be done by an outside party like OPPAGA; otherwise, the capitated rate will be a well orchestrated compromise to give more money to friendly agencies while telling legislators this is a cost saving measurement.

Second, unless state government also capitates the maximum number of hours per elder consumer that case management agency can bill their respective Area Agency on Aging. The case management entities have already figured out a way to over bill for hours. If they are not able to fatten the cost they will definitely fatten the hours. This creates a financial windfall for the agency and not for the frail elders.

Three years ago we heard testimony of a case management entity that evaluated the effectiveness of their case managers not by the number of elders that were still in the community a year later or by demonstrating increases in their quality of life but by the total number of hours they billed both the Medicaid and the state Community Care for the Elders Program. One of these agencies was so successful in making sure their case managers met their monthly "case management quotas" that their case managers were billing the equivalent of 47 hours per week just doing case management services and nothing more. One wonders 47 hours of just doing case management services with a work schedule of 8 to 5, 5 days a week leaves no room to do anything else. One also wonders what 47 hours per client per week times an inflated capitated cost can do to the state budget. My humble prediction is that it could absorb the entire Department of Elder Affairs budget in just seven months, leaving no money to pay for other services like personal care, home delivered meals, home health or adult day care.

Third, capitation goes against market forces. If we truly want to control costs, open the process to competition. For example, allow the senior centers to also become case management entities. Have more than one case management agency providing services to Volusia, Flagler and St John&Mac226;s Counties or any other county for that matter. Open the process to faith based entities and allow intergenerational organizations or Alzheimer&Mac226;s associations to take a shot at the funding.

In a budget year that appears to be challenging we need to make sure we don&Mac226;t create the equivalent of an Enron accounting practice in our state system. Aggressive accounting could precipitate a budget fiasco sooner rather than later. The idea of capitation without verification for justifiable costs is setting the stage for more demands for the shrinking dollars. Add the fact that there are just a limited number of case management entities "allowed" to provide this service exclusively. The intriguing part of this proposal is that when elders and caregivers are asked which services they need and value the most, case management is not listed among the top ten favorites. As a matter of fact, many elders and their caregivers would rather use the money the Area Agency on Aging gives these providers to buy diapers, obtain home delivered meals or transportation instead of case management.

Let us ask our elected officials to study the issue before we jump into a sinking ship head first. Cheers