Managed Long Term Services and Supports (MLTSS) programs provide long-term care primarily to aging adults and people with disabilities. This care is provided not via the fee-for-service model but through managed care organizations. These contractors deliver benefits, which include community, home, and institution-based services, and receive payment through Medicaid. Unlike the fee-for-service system many states are moving away from – MLTSS programs pay managed care organizations  a fixed rate per patient, per unit of time – and in advance of service delivery.  That is, a capitated rate.

The use of MLTSS has been associated with cost savings for Medicaid and patient-centered care for beneficiaries.  By providing long-term supports and services in an integrated, coordinated fashion, MLTSS programs are intended to lower the costs of services, support integrated delivery, prevent hospitalizations and nursing home admissions, and extend the amount of time beneficiaries can live in their communities – and as independently as feasible.  They provide comprehensive services, regardless of whether the individual lives in an institutional setting such as a nursing home, in his or her own home, in a community residential facility, or in a facility that delivers assisted living or similar services. Placing long-term services and supports in a single managed program is also intended to improve coordination with other services, particularly primary and specialty physician care, prescription drug therapy, and behavioral health services.

In the past, states typically used unmanaged, fee-for-service programs, but over the last decade or so, that trend has changed. Since 2004, state implementation of MLTSS has more than doubled, growing from 8 to 16 states from 2004 to 2012. By 2014, that number had reached 26 states, with continued growth expected.

Who Are the LTSS Beneficiaries?

According to a Centers for Medicare & Medicaid Services (CMS) report, elderly adults and adults with disabilities are the primary beneficiaries of MLTSS programs. Of the disabled group, the majority of beneficiaries have physical disabilities. However, many states include disabled children and individuals with mental health or intellectual disabilities in their programs. Across the country, about 25 percent of those enrolled in MLTSS programs require institutional-level care, while the other 75 percent have a wider range of needs, which can include types of personal care or supportive services that need not be institution based.

How Do MLTSS Arrangements Work?

Using three different federal authorities and with the approval of the Centers for Medicare and Medicaid Services (CMS), states can develop and operate MLTSS programs. States may use for-profit and non-profit contractors in the private sector as well as public contractors, or a combination of the three, to deliver services. Typically, states use managed care organizations (MCOs) to provide services but limited care plans and primary care case managers are options as well.

MLTSS program contractors receive payment from Medicaid based on the number of people enrolled for a specific time period.  MLTSS plans receive the fixed payment amount even if some enrollees do not seek care during the designated time period. This payment approach is referred to as capitation.

Fixed Payments

Fixed payment amounts vary by state, contract, and services provided. The number of patients receiving care, average service utilization rates, and state-specific costs influences the fixed amount a contractor receives for each patient. Often, efforts to lower costs include providing financial incentives to contractors that keep beneficiaries in community-based care settings, avoiding the typically higher costs associated with institution-based long-term care, including that provided by nursing homes.

State Plan Versus Waiver Option in Medicaid

States have the option of implementing an MLTSS program through an amendment to the State Plan (the contract between the state and the federal government) or by using a waiver authority. Using a State Plan Amendment (SPA) means documenting and sharing the details of the program and its implementation with agencies of the federal government. The waiver option allows the state to waive some federal regulations, such as to include participants that do not meet typical requirements for Medicaid eligibility.

“Managed long-term services and supports programs provide tremendous value for frail seniors, persons with disabilities, their families, taxpayers, and states.  Medicaid MLTSS is indispensable to improving health outcomes, supporting independent living, improving cost effectiveness, and ensuring these essential services are available to future generations.”
Maureen Long, RN, MBA, Senior Consultant, Sellers Dorsey

Re-Balancing Care Settings

A key goal, on the state level, is the re-balancing of care offered through institutional settings, including nursing homes, with that provided via community-care options. According to the Center for Health Care Strategies, the Affordable Care Act is partially responsible for this shift, affording states new opportunities to evaluate and develop their LTSS delivery systems, eligibility processes, and access plans. Among these opportunities are the following:

How Do States Handle MLTSS?

MLTSS programs can vary widely from state to state. Differences exist not only in terms of enrollment and levels of integration but also in types of contractors used and payment details. Here are some facts that illustrate the diversity of MLTSS programs:

  • The most common enrollment types are mandatory and voluntary enrollment. As of 2012, one state used both types.
  • In the majority of states, MLTSS program contractors are at risk for at least a portion of institutional-level costs.
  • The majority of states include some consumer-directed features and incorporate Money Follows the Person services.
  • Diversity is evident in state approaches to Medicare capitation. Some make full capitation mandatory while others require it as an option.
  • The majority of states include some LTSS measures in their approach to quality management.
  • Most states use member panels and various types of surveys to obtain feedback from consumers.
  • The majority of contractors, over 40 percent, are private-for-profit.
  • The majority of those enrolled receive Medicare and Medicaid benefits.

What Are the Key Issues States Face with MLTSS?

Planning, establishing, and implementing a high quality, cost effective MLTSS program is a complex process.  State Medicaid agencies face many key issues, including the following:

  • Lack of Federally Endorsed Approaches: One of the most pervasive issues affecting state implementation of MLTSS is the lack of federally endorsed approaches. Few quality standards exist.
  • Lack of Experience and Evidence: MLTSS is a relatively new approach, implemented by 26 states as of 2014. While research suggests that MLTSS programs improve access to community-based care, increase the use of home services, and decrease the use of institutional-care services, clear-cut evidence is lacking in terms of monetary savings and positive results for beneficiaries,
  • Coverage: Coordination of services, effective implementation, and cost reduction require careful evaluation and planning of coverage approaches and limits for not only medical care and behavioral health services but also institutional care and community-based LTSS.
  • Enrollment: States must consider whether to make MLTSS program enrollment mandatory or voluntary.
  • Funding: Budgetary deficiencies can interfere with the funding available for not only planning and developing program initiatives but also implementing and monitoring them to ensure effectiveness and quality.
  • Timing: Overly short startup periods can interfere with collaboration among state agencies. Collaboration is not only necessary for program planning and development but also for communicating with stakeholders, including end users, and obtaining CMS approval for initiatives. On behalf of CMS, Truven Health Analytics prepared a timeline for developing an MLTSS program.
  • State Oversight: States cannot give managed care organizations all of the responsibility for managing MLTSS programs and providing guidance. State-operated program monitoring, stakeholder feedback, and systematic review of program performance are necessary.


Ten Guiding Principles for Medicaid MLTSS

Through the review of published findings and consultation with states, advocates, and subject matter experts, the Centers for Medicare and Medicaid Services (CMS) developed 10 principles essential for maximizing MLTSS effectiveness and positive outcomes for beneficiaries.

  1. Adequate Strategies: Careful planning is required to develop an effective program and allow for smooth transitioning from fee-based to MLTSS.
  2. Engagement of Stakeholders: Engaging and collaborating with stakeholders, including consumers and providers, helps ensure smooth transition to managed care.
  3. Enhanced Integrated Service Provisions: Medicaid recipients are entitled to receive care in the most integrated setting possible. The Americans with Disabilities Act (ADA) and the Olmstead decision of the U.S. Supreme Court provide for this protection.
  4. Payment Alignment With Program Goals: Contractor payments should align with program goals, including reducing costs, providing high-quality care, increasing community integration, and improving beneficiary health.
  5. Beneficiary Support: MLTSS beneficiaries need support, including advocates to explain their rights and responsibilities, assistance with enrolling and disenrolling, and help with understanding program choices.
  6. Beneficiary-Centered Services: Beneficiary-centered processes help ensure patients’ quality of life and independence. Such processes can include involving the beneficiaries in the planning of services, providing service alternatives, and offering holistic choices.
  7. Comprehensive and Integrated Services: Including covered services in the managed care plan allows for improved development, planning, and delivery of beneficiary-centered, integrated services.
  8. Adequate Provider Network: An MLTSS program’s qualified provider network must be adequate enough to meet its beneficiaries’ needs.
  9. Adequate Beneficiary Protection: Monitoring and safeguards are necessary to avoid abuses, including physical and mental abuse, misuse of finances, and neglect.
  10. Quality Strategies and Oversight Standards: Extensive quality strategies, care standards, and oversight processes should incorporate all covered services and may differ from those used for fee-based services.


States are trending toward Medicaid managed long-term services and supports (MLTSS) and supports to replace traditional, unmanaged fee-for-service models. However, as they move towards the goals of lowering costs, improving quality, and increasing community-based care for frail seniors and persons with disabilities, state Medicaid agencies face many challenges, including the lack of federal guidance and resistance to change among traditional players. Still, states can improve the results of their MLTSS programs by employing these 10 essential elements.

To learn more or if your state or organization needs assistance, the team at Sellers Dorsey includes several of the nation’s top experts in managed long-term services and supports. You may reach the team on the web, by email, on LinkedIn, or on Twitter.