This section provides information on Medical Assistance (MA) covered services and the managed care system under which most elderly MA enrollees receive services. This section also describes home care, personal care assistant services, Elderly Waiver, and nursing facility services in more detail.

Medical Assistance Covered Services

MA enrollees who are elderly receive coverage for the standard MA covered services available to all other MA eligibility groups. MA benefits include federally mandated services and services provided at state option. In addition to covering standard medical services such as physician, inpatient hospital, dental, and therapy services, MA also covers many services used heavily by elderly persons. These include the following:

  • Nursing facility services
  • Home health care
  • Personal care assistant services
  • Home care nursing
  • Prescription drugs

Medicare serves as the primary payor and MA as the secondary payor, for elderly (and disabled) MA enrollees who are also enrolled in Medicare. As secondary payor, MA pays only for those services not covered by Medicare and also for any Medicare cost-sharing obligations.

Service Delivery Through Managed Care

MA enrollees who are elderly are required to receive health care services from prepaid health plans through Minnesota Senior Care Plus and have the option of receiving services through Minnesota Senior Health Options (MSHO).

Minnesota Senior Care Plus has provided services to elderly enrollees enrolled in county-based purchasing initiatives since June 1, 2005. Minnesota Senior Care Plus covers all MA state plan services, elderly waiver (EW) services, and 180 days of nursing home services for enrollees not residing in a nursing facility at the time of enrollment.

Elderly enrollees in Minnesota Senior Care Plus must enroll in a separate Medicare plan to obtain their prescription drug coverage under Medicare Part D. However, elderly enrollees also have the option of receiving managed care services through the MSHO, rather than Minnesota Senior Care Plus. MSHO includes all Medicare and MA prescription drug coverage under one plan. Since 1997, MSHO provided a combined Medicare and MA benefit as part of a federal demonstration project; the program now operates under federal Medicare Special Needs Plan (SNP) authority.1 DHS also contracts with SNPs to provide MA services. Enrollment in MSHO is voluntary. As is the case with Minnesota Senior Care Plus, MSHO also covers EW services and 180 days of nursing home services. Most elderly MA enrollees are enrolled in MSHO rather than Minnesota Senior Care Plus because of the integrated Medicare and MA prescription drug coverage. For state fiscal year 2016, average managed care enrollment of elderly enrollees was 49,200 and average monthly enrollment in EW fee-for-service was 2,403.

Home Care Services

Home care provides medical and health-related services and assistance with day-to-day activities to people in their homes. Home care can also be used to provide short-term care for people moving from a hospital or nursing home back to their home and can also be used to provide continuing care to people with ongoing needs. Home care services may be provided outside a person’s home when normal life activities take the individual away from home.

Home care services provided to MA enrollees must be:

  • medically necessary;
  • ordered by a licensed physician;
  • documented in a written service plan;
  • provided at a recipient’s residence (not a hospital or long-term care facility); and
  • provided by a Medicare-certified agency.

A registered nurse from a Medicare-certified home health agency completes an assessment to determine the need for service. The assessment identifies the needs of the person, determines the outcomes for a visit, is documented, and includes a plan. Most home care services must be prior authorized. The maximum benefit level is one visit per day for home health aide services, one visit per discipline per day for therapies (except respiratory therapy), and two visits per day for skilled nurse visits.

Home care services include the following:

  • Intermittent home health aide visits provided by a certified home health aide
  • Medically oriented tasks to maintain health or to facilitate treatment of an illness or injury provided in a person’s place of residence
  • Personal care assistant (PCA) services
  • Home care nursing
  • Therapies (occupational, physical, respiratory, speech)
  • Intermittent skilled nurse visits provided by a licensed nurse
  • Equipment and supplies

About 65 percent of PCA and home health agency service recipients over the age of 65 are also on the EW. This does not include people on other waivers.

Home health agency program statistics (does not include managed care enrollees) for fiscal year 2016:

  • Total MA expenditures: $16.5 million
  • Monthly average recipients: 3,204
  • Average monthly cost per recipient: $430

Home care nursing statistics for fiscal year 2016:

  • Total MA expenditures: $121.3 million
  • Monthly average recipients: 765
  • Average monthly cost per recipient: $13,218

Personal Care Assistant (PCA) Services

Personal Care Assistants provide assistance and support to the elderly, persons with disabilities, and others with special health care needs living independently in the community.

In order for a person to receive PCA services, the services must be:

  • medically necessary;
  • authorized by a licensed physician;
  • documented in a written service plan; and
  • provided at the recipient’s place of residence or other location (not a hospital or healthcare facility).

In addition, recipients of PCA services must be in stable medical condition, be able to direct their own care or have a responsible party who provides support, and have a need for assistance in at least one activity of daily living or a Level I behavior.2

The determination of the amount of service available to a person is based on an assessment of needs. PCA services provided include the following:

  • Assistance with activities of daily living (e.g., eating, toileting, grooming, dressing, bathing, transferring, mobility, and positioning)
  • Assistance with instrumental activities of daily living (e.g., meal planning and preparation, managing finances, and shopping for essential items)
  • Assistance with health-related procedures and tasks
  • Intervention for behavior, including observation and redirection

PCA program statistics (does not include managed care enrollees) for fiscal year 2016:

  • Total MA expenditures: $607.7 million
  • Monthly average recipients: 20,795
  • Average monthly cost per recipient: $2,435

Elderly Waiver Services

The Elderly Waiver (EW) provides home and community-based services not normally covered under MA to MA enrollees who are at risk of nursing facility placement. In addition, EW recipients are eligible for all standard MA covered services.

In order to receive EW services, an enrollee must:

  • be age 65 or older;
  • need nursing facility level care as determined by the long-term care consultation process, and choose community care; and
  • meet the EW income standard.

In addition, the cost of EW services cannot exceed the estimated cost of nursing facility services.

The EW uses an income standard that is higher than the income standard used by the regular MA program. Individuals with incomes that do not exceed a special income standard of 300 percent of the Supplemental Security Income (SSI) level ($2,199/month3) are able to qualify for EW and regular MA services. These individuals must contribute any income above a maintenance needs allowance ($988/month4) towards the cost of EW services. This is referred to as the individual’s waiver obligation. If the amount of income above the maintenance needs allowance is greater than the cost of EW services, individuals can retain any excess income that remains after the waiver obligation is met. No contribution is required toward the cost of regular MA services.

Individuals with incomes that do not exceed the maintenance needs allowance are eligible for EW and MA services without meeting a waiver obligation. Individuals with incomes that exceed the special income standard must spend down to the regular MA spenddown standard for the elderly of 80 percent of FPG ($792/month) to qualify for EW and MA services.

Services available through the EW include the following:

  • Adult day service
  • Assisted living
  • Training for informal caregivers
  • Case management
  • Chore, companion, and homemaker services
  • Licensed community residential services
  • Extended home care services
  • Home-delivered meals
  • Home and vehicle modifications
  • Nonmedical transportation
  • Respite care
  • Specialized supplies and equipment
  • Telehomecare
  • Transitional supports

Consumer Directed Community Supports (CDCS) is an option available under the EW (and other home and community-based waivers and the Alternative Care program) that gives enrollees greater flexibility and control in developing a service plan, managing a budget, paying for services, and hiring and managing direct care staff.

EW program statistics for fee-for-service enrollees for fiscal year 2016:

  • Total MA expenditures: $45.4 million
  • Monthly average recipients: 2,370
  • Average monthly cost per recipient: $1,609

EW program statistics for managed care enrollees for fiscal year 2016:

  • Total MA expenditures: $356.4 million
  • Monthly average recipients: 20,935
  • Average monthly cost per recipient: $1,340

Nursing Facility Services

Nursing facility services under MA are a package of room and board and nursing services. Acute care services such as hospitalization are paid for separately under MA; this is also usually the case for therapy and other ancillary services.

In order to be eligible for nursing facility care, an MA enrollee must:

  • be screened by a long-term care consultation team; and
  • be determined by the team to need nursing facility-level care.

The screening team assigns each nursing facility resident one of 48 case-mix classifications under the Resource Utilization Groups (RUGs) case-mix system.5 Each classification is assigned a weight that represents the amount of care needed. This weight is used in calculating reimbursement rates for nursing services.

MA recipients receiving care in nursing facilities are required to contribute most of their income towards the cost of care, except for a personal needs allowance of $97 as of January 1, 2016, and other allowed exclusions.

Nursing facilities are reimbursed by MA on a resident-per-day basis. The nursing home reimbursement levels are adjusted under the RUGS case-mix system to reflect the varying care needs of residents.

MA rates and private pay rates do not vary within a facility. This is due to Minnesota’s equalization law, which prohibits nursing facilities from charging private pay residents more than residents whose care is paid for by MA.

The 2015 Legislature authorized a new system for nursing facility reimbursement rates, which DHS calls the value-based reimbursement system. The 2016 rate year, which began on January 1, 2016, is the first year that DHS reimburses nursing facilities under the new system. Under the value based-system, DHS sets facility reimbursement rates based on the cost of providing care to residents. A nursing facility’s rate has five components: direct care, other care, other operating, internal fixed costs, and property. Although the new system ties a facility’s rate to its costs, DHS will not reimburse the facility for unlimited costs; a facility’s rate will only reflect its care-related costs up to a limit. If a facility’s care-related costs are greater than its limit, the facility’s rate would not reflect the portion of the costs in excess of the limit. As with previous systems, facilities’ rates are case-mix adjusted—facilities receive higher rates to care for more-resource intensive patients.

At a minimum, there is a 15-month lag between when a facility accrues a cost and when the cost is reflected in the facility’s rate. This is due both to the differences between the rate year and the reporting period, and the time it takes DHS to calculate facilities’ rates.

Nursing facilities in Minnesota must file a cost report with DHS by February 1 of each year. A facility’s cost report covers the previous reporting year, which runs from October 1 to September 30.DHS uses these cost reports to calculate a facility’s rate for the following rate year. The rate year runs from January 1 to December 31.

Because of this reporting cycle, a facility’s reimbursement rate will always reflect its historical costs, rather than its present costs. If a facility’s costs increase from one year to the next, its rates will lag behind the facility’s costs.

Under previous cost-based reimbursement systems, DHS adjusted facilities’ rates to account for this lag between reporting and rate setting. Rates were increased by multiplying a facility’s payment rate by the rate of inflation between when it submitted a cost report and when its rate took effect. The current value-based system does not include such an inflationary adjustment.

MA nursing facility statistics for fiscal year 2016:

  • Total MA expenditures: $807.7 million
  • Monthly average recipients: 14,625
  • Average monthly payment per recipient: $4,602
  • Average payment per day: $167.27

The content of this and any related posts has been copied or adopted from the Minnesota House of Representatives Research Department’s Information Brief, Long-Term Care Services for the Elderly, written by legislative analyst Danyell Punelli.


1 A Medicare Special Needs Plan is a Medicare managed care plan that is allowed to serve only certain Medicare populations, such as institutionalized enrollees, dually eligible enrollees, and enrollees who are severely chronically ill and disabled. SNPs must provide all Medicare services, including prescription drug coverage.

2 Level I behavior means physical aggression towards self, others, or destruction of property that requires the immediate response of another person (Minn. Stat. § 256B.0659, subd. 1, para. (c)).

3 The special income standard is adjusted each January 1. The dollar amount specified is effective for calendar year 2016.

4 The maintenance needs allowance is adjusted each July 1. The dollar amount specified is effective for the period July 1, 2016, through June 30, 2017.

5 RUGS classifies nursing facility residents into 48 groups based on information collected using the federally required minimum data set. There will also be penalty and default groups for a total of 50 RUG levels. The RUGS case-mix reimbursement system for nursing homes is described in Minnesota Statutes, sections 144.0724 and 256B.438.