Research Study: Money Follows the Person Texas Pilot Program

Money Follows the Person

In 2012, Dena Stoner, a senior policy advisor to the Texas Department of State Health Services, and Marc S. Gold, a special advisor for the Texas Department of Aging and Disability Services, published an article in the Journal of the American Society on Aging featuring the Texas pilot of the Money Follows the Person (MFP) Demonstration Project.

The MFP demonstration is a national initiative authorized by Congress to provide states with matching federal funds for Medicaid beneficiaries who are transitioned from institutional settings to community-based settings (Watts, Reaves, & Musumeci, 2014). Texas implemented its pilot program in 2001 as a state initiative, and again in 2008, focusing on integrating mental health and substance abuse services into home and community-based services (HCBS).


Shift to Nursing Facilities

De-institutionlization policies transitioned mental health care away from state-run psychiatric hospitals in the 1960s and 1970s (Rahman, et al., 2013). As a result, nursing facilities and other residential centers experienced an increase in the number of individuals with mental illness under their care. The creation of Medicare and Medicaid provided financial incentives for private nursing facilities to admit patients in order to receive federal reimbursements between 50-80% of the cost of treatment, a practice that subsequently led to several reform measures in the 1980s (McGrew, 2008).

Even with reforms, it is estimated today that 1 in 4 newly admitted nursing facility residents have a mental health diagnosis (Rahman, et al., 2013). Stoner and Gold (2012) purport that although nursing facilities are providing care for people with mental illnesses, by marginalizing individuals away from the community, they are not offered the opportunity to be supported as they make efforts to recover and regain control of their lives. The physiological impact of social isolation has been greatly underestimated and under-investigated. Furthermore, “older adults also face an increased ‘poverty of low expectations’ associated with the twin societal prejudices against aging and severe mental illnesses (Stoner & Gold, 2012). Below are stark statistics regarding individuals with mental illnesses in residing nursing facilities:

MFM Stats Infographic 1

A Texas-Sized Situation

In 2007, the Texas public mental health system was ranked 49th in terms of funding (Lutterman et al., 2009). More than 7,000 Texans were held at Medicaid-funded nursing facilities, many of whom were clients of the state’s public health system. At the time, Texas Medicaid did not cover HCBS services for individuals with psychiatric or substance use disorders. Expanding Medicaid funding matches and flexibility, the national MFP demonstration offered Texas an opportunity to reassess its mental health care system (Stoner & Gold, 2012).

Partnership, Collaboration, & Pilot Program

In 2006, the Department of State Health Services (DSHS) partnered with the Department of Aging and Disability Services (DADS). Together, these agencies oversaw the Texas MFP demonstration pilot program, which started in 2008.

The goal of the program is not to “cure” mental illness, but it seeks to empower people to be in charge of their lives and to strive to achieve their full potential (Stoner & Gold, 2012).

With the coordinated efforts of Medicaid managed care organizations (MCOs), relocation specialists, and trained pilot program staff supervised by the state, a team works directly with a person in a nursing facility to help participants define and achieve their goals. Through working with eligible participants individually, the program provides transition services up to 6 months prior to discharge from their institution-based setting, as well as a year of services once the person is established in their community.

The pre-transition services offers opportunities for individuals to establish relationships with therapists, identify personal triggers for substance abuse of psychiatric episodes, and to develop strategies for addressing needs and crises with community resources.

The DSHS reports that of the program participants who were relocated into the community:

  • 87% of these individuals have successfully maintained independence  in the community
  • 74% of program participants who named sobriety as a goal have successfully maintained their sobriety
  • Participants improved on standardized scales measuring independence in daily life, ability to manage money, medication, and other factors
  • The average Medicaid expense for program participants during the first year appeared to be lower than expenses before discharge from nursing facilities (Stoner & Gold, 2012)

Meet Janie

business-woman-2A woman in her mid-fifties, Janie was admitted into a nursing facility where she was described to have “alcohol-induced dementia.” Janie suffered from several severe chronic illnesses due to her alcohol abuse — cirrhosis, Hepatitis C, and anemia — which made her ability to live independently outside of the facility unlikely.  Through the Texas MFP demonstration pilot program, a Cognitive Adaption Training (CAT) therapist helped Janie take on daily tasks, such as taking medication, keeping medical appointments, and managing her money. At the same time, a relocation specialist arranged for housing, furniture, and household supplies, and a substance abuse counselor offered Janie individual services. As a result of her transition into the community and increasing independence, “Janie’s physical health has improved significantly, she takes pride in her independence, and she has begun attending a computer class” (Stoner & Gold, 2012).

From Pilot to Permanence? 

The program is currently funded through 2016. DSHS (2015) states, “If successful, Texas may consider statewide implementation through its Medicaid-funded long-term services and supports system.” One of the most critical issues that will impact the program is the shortage of affordable housing options in Texas (Stoner & Gold, 2012).

Currently, the Texas Health and Human Services Commission (HHSC) is receiving comments from the public on a proposed amendment to the Statewide Settings Transition Plan to be submitted to the federal Centers for Medicare and Medicaid Services (CMS) by March 15, 2015. The Statewide Settings Transition Plan details the state’s compliance, remediation strategies, and timeline for home and community based services provided by the Community First Choice state plan option and the 195(i) state plan services, as well as STAR+PLUS HCBS program within the 1115 waiver. This amendment specifically requires STAR+PLUS providers to follow the HCBS procedures as outlined by the CMS. (Comments must be submitted by 30 days after January 30, 2015 to


Bagchi, A. D., Verdier, J. M., & Simon, S. E. (2009). How many nursing home residents live with a mental illness? Psychiatric Services, 60(7), 958-964. Retrieved from:

Lutterman, T. C., et al. (2009). Funding and Characteristics of State Mental Health Agencies, 2007. Rockville, MD: Substance Abuse and Mental Health Services Administration.

McGrew, K. B. (2008). Residents with severe mental illnesses. Journal of Gerontological Social Work, 31(3-4), 149-168. Retrieved from:

Rahman, M., Grabowski, D. C., Intrator, O., Cai, S., & Mor, V. (2013). Serious mental illness and nursing home quality of care. Health Services Research, 48(4), 1279-1298. Doi: 10.1111/1 475-6773.12023

Stoner, D., & Gold, M. S. (2012). Money follows the whole person in Texas. Journal of the American Society on Aging, 36(1), 91-95

Texas Department of State Health Services. (2014). Money Follows the Person (MFP) Behavioral Health Pilot. Retrieved from:

Watts, M. O., Reaves, E. L., Musumeci, M. (2014).Money Follows the Person: A 2013 State Survey of Transitions, Services, and Costs. The Henry J. Kaiser Family Foundation. Retrieved from:


2 thoughts on “Research Study: Money Follows the Person Texas Pilot Program

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