A 2021 KFF analysis compared different long-term services supports, finding only adult day services cost less than the median income for a Medicare beneficiary. (Chart from KFF)
A 2021 KFF analysis compared different long-term services supports, finding only adult day services cost less than the median income for a Medicare beneficiary. (Chart from KFF)
Jade Jeffries doesn’t know what she’d do without SarahCare — an adult day program that her father, James, attends every day. Jeffries is the sole caretaker of her father, who’s in his late 80s and has dementia, and works two jobs to pay the bills. 

“I have to have somewhere I can trust,” Jeffries said. “… they really are like my other half.”

Jeffries feels lucky to have secured a place for her father where he can get socialization and specialized programming in addition to nursing services. After the toll of COVID-19, only 40 or so such adult day programs exist in Indiana — each serving 10 to 15 members.

“I struggled for a while before I could find them,” Jeffries continued. “… I think back (and) I’m not sure how I was making it.”

With SarahCare, her dad has an activities calendar, music and movement programs and more in addition to nurses and nutritionally balanced meals. 

But, like the rest of Indiana’s Medicaid landscape, adult day services face a monumental change this summer when the state transitions to managed care. For providers, that means a Managed Care Entity will handle their claims and payments rather than the state.

“We’re really kind of at a crisis right now,” said Laura Altenbaumer, president of the Indiana Association of Adult Day Services. “And I’m concerned … that when we transition to Indiana PathWays, we are going to lose additional day programs. (The small centers) are not going to be able to withstand this transition.”

Current struggles with low referrals — down 42% from last year even before the state implemented a waitlist — were pushed to a breaking point when the state briefly interrupted reimbursements for transportation services in April, a crucial service for families like the Jeffries. 

Jeffries lives near Noblesville with her father and SarahCare is on the northern Marion County border in Indianapolis. The center’s transportation service can’t quite stretch to meet her at home so they’ve arranged a pick-up spot near the highway she uses to commute to and from her Indianapolis job.

Altenbaumer, who runs her own Indiana center in Merrillville, said adult day service providers were abruptly told that transportation service would no longer be reimbursed through their referral sources, Area Agencies on Aging (AAAs).

One center, she said, would have lost $6,500 monthly in transportation revenue alone, not including the loss from members who could no longer attend. Jeffries said she wouldn’t be able to work without the transportation service for her father.

Altenbaumer and others appealed and the state has since paused implementation, though Altenbaumer said some AAAs still hadn’t changed course — further sidelining an underutilized program with an uncertain future. 

“At this point, at the end of May, we are still getting denied. I will say, probably the majority of all of the centers are continuing to provide transportation for free in the hopes that we will get reimbursed. But it’s just not a sustainable model,” Altenbaumer said. “If we lose those transportations for adult day providers, there will be more adult days that close.”

What are Adult Day Services?

The Family and Social Services Administration (FSSA), which oversees adult day services, defines them as places that “(offer) a social environment for older adults” alongside programming and professional care. Facilities must have space for group activities as well as a kitchen, bathing areas, quiet rooms, examination/medication rooms and outside space. 

One of the biggest aids to families is that many centers offer transportation services, which FSSA explicitly includes as one of three types of non-medical transportation options that are covered for elderly and disabled Hoosiers.

Supporters of such programs say they’re much more cost effective than institutional care, like nursing homes or assisted living facilities. Even one-on-one care, like a personal aide through attendant care, can be prohibitively expensive compared to an adult day program, Altenbaumer said.

2021 review of different long-term care programs from nonprofit policy analyst KFF found that adult day programs cost less than nursing homes, home health aides and assisted living facilities. 

The median private nursing home room cost $108,405 for the year, compared to $54,000 for an assisted living facility and $61,776 for a home health aide. 

Adult day health care was the sole service included that cost less than the median income for a Medicare beneficiary, at $20,280 compared to $29,650. 

None of the above expenses are covered by Medicare, the entitlement insurance program for Americans over 65. Medicaid does cover those programs but only for those whose incomes qualify. 

To Jeffries, nursing homes wouldn’t provide the same level of attentive care and socialization that her father gets at adult day services. James came to live with Jeffries in 2020, securing his spot with SarahCare a year or so later. 

Jeffries said she found SarahCare on her own, rather than through her local Area Agency on Aging. After suggesting the program to her case manager, she got into the Medicaid waiver to cover the services her dad gets with SarahCare, which includes transportation. 

“I love it because there’s not as many clients there as opposed to what it would be like in a standard nursing home setting, so I know that he’s getting more one-on-one care,” Jeffries said. “They’ve had the same staff since he started — I think they’ve added some people — but the core staff that we started with is still there. Having that consistency is so important to him.”

The other alternative would be a rotating number of in-home caretakers that Jeffries said wouldn’t have the same consistency. 

Challenges ahead

On top of transportation reimbursement challenges, Altenbaumer worries about the future of adult day services as the state transitions to managed care. She also oversees facilities in Illinois and has experience with both state’s Medicaid programs. 

Not only does Illinois have twice the number of programs in its Medicaid managed care system, it also has multiple referral systems and opens up adult day programs to residents with intellectual and developmental disabilities. In Indiana, referrals come almost exclusively from Area Agencies on Aging (AAA) — which have their own concerns about managed care. 

“It’s a larger mixture of payer sources but it also doesn’t limit the payer sources,” Altenbaumer said, naming the Veterans Administration as another potential referral source. “(Also) you do not need a special accreditation in Illinois to serve someone who has an intellectual disability… if they want to come to adult day, they can come.”

Adult day service providers cater to the Aged and Disabled Waiver population, which currently has a waitlist after hitting just over 55,500 slots last month.

“In Illinois, you have a bucket of referral sources that can help maintain your adult day programs. In Indiana, we’re waitlisted and they’ve taken transportation. So if we lose somebody, we don’t have a pocket of people waiting to come in,” Altenbaumer said.

But it’s the transition to managed care, called PathWays for Aging, that worries Altenbaumer when it comes to the future of adult day services. She said most programs are small, local businesses unaccustomed to the inner workings of being providers for the three insurance giants Indiana chose as Managed Care Entities. 

One program that served 36 people was “most likely” closing in the next month, she said. And with some AAAs pulling out of managed care entirely, Altenbaumer said there’s uncertainty for adult day service providers on who to contact for referrals after the transition. 

But even the AAAs have been imperfect and, at times, unfamiliar with adult day services — as they were with Jeffries. 

“People don’t really understand the core of what adult day does and how it can help and sustain people in the community longer. And if we are struggling with explaining and training our AAAs, it’s going to multiply in magnitude when we go to Indiana PathWays (for Aging),” Altenbaumer said. “We’re going to get lost in the transition and that’s my fear.”

Indiana’s PathWays for Aging launches on July 1 and is expected to serve roughly 120,000 Hoosiers.
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