OBJECTIVES: To compare the cost to the Medicare and Medicaid programs between a community-based long-term care program called “Aging in Place” (AIP) and nursing home care.

DESIGN: A retrospective cohort design where AIP participants were matched to nursing home residents on admission quarter, age, ADL, and cognitive status and followed for 12 months. SETTING and PARTICIPANTS: A total of 39 nursing home residents in the same and neighboring counties in the Midwest were matched with 39 AIP participants.

INTERVENTION: The AIP program consisted of a combination of Medicare home health, Medicaid home and community-based services (HCBS), and intensive nurse care coordination.

MEASUREMENT: Total cost to payor using Medicare and Medicaid claims databases.

RESULTS: Controlling for high inpatient Medicare cost in the six months prior and the 10 most frequently occurring chronic conditions, multiple regression was used to estimate the relationship of the AIP program on Medicare and Medicaid costs. Total Medicare and Medicaid costs were $1591.61 lower in the AIP group (p < .01) when compared to the nursing home group over a 12 month period.

CONCLUSION: The provision of nurse coordinated HCBS and Medicare home health services has potential to provide savings in the total cost of health care to the Medicaid program while not increasing the cost of the Medicare program.

Key words: older adults, long-term care, care coordination, home and community-based care, Medicaid costs, Medicare costs