HHS 24
Create a Medicaid Consumer-Directed Care Demonstration Project
Summary
The Centers for Medicare and Medicaid Services (CMS) approved a federal demonstration that gives Medicaid beneficiaries more control over their personal care and assistance. In the program, eligible beneficiaries receive cash allowances or grants to purchase and manage their own support services, instead of receiving these services through a home care agency. Texas should create a consumer-directed care program for eligible Medicaid beneficiaries.
Background
The Cash and Counseling demonstration is a consumer-directed care program approved by the federal Centers for Medicare and Medicaid Services (CMS) in 1998. At this writing, Arkansas, Florida, New York and New Jersey participate in the program, having been selected from among 17 applicant states through a competitive process.In traditional systems, nurses and/or social workers assess clients’ disabilities and needs and develop care plans for them. These plans, however, tend to be standardized, with few available service options, so that persons needing other services must make additional arrangements. In a Cash and Counseling program, by contrast, professionals continue to assess eligibility and act as financial “gatekeepers,” establishing the amount of the cash benefit based on the client’s disability and need for assistance; the clients themselves make their own choices about the services they need.[1]
The program allows Medicaid beneficiaries who are eligible for personal assistance to receive cash allowances or grants to purchase and manage their own support services, instead of receiving them through a home care agency. They can use their cash benefits to purchase a wide range of goods and services within the limits of the fixed monthly amount each receives.
These can include transportation services, assistive medical devices, home and vehicle modifications and adult day care and respite services (short-term substitute services allowing the primary caretaker time off). All services and products purchased with Cash and Counseling benefits must address disability-related needs. Recipients also can carry over cash benefits from month to month if the funds are maintained in a special account. They can use these “emergency” funds when they need more intensive personal care or to purchase special equipment.
Consumers can use these funds to hire family members, friends or others to provide them with care, and can spend part of the money on home modifications or equipment that Medicaid otherwise would not cover. Participants receive counseling in how to use their funds.[2]
Users of Cash and Counseling often report that they use fewer services because they use only what they need, not a one-size-fits-all menu of services. This results in savings for the program.
Critics worry that consumers may spend their cash benefits inappropriately; that the quality of care provided may be less than that offered under traditional programs; and that the new program may lead to a major increase in the number of people applying for benefits. Proponents respond that potential problems such as these can be addressed in the demonstration program.
Some health care advocates are wary of introducing Cash and Counseling on a large scale before it is evaluated against more traditional models of service provision.[3] A National Program Office at the University of Maryland Center on Aging oversees the nationwide management of the program and offers technical assistance to participating states. Mathematica Policy Research, a policy research organization based in Princeton, New Jersey, will evaluate the program in conjunction with the University of Maryland Center on Aging.
Final reports on currently participating states will be available later in 2003. The Robert Wood Johnson Foundation, a private charitable organization, is underwriting the costs of this evaluation, which will follow Medicaid clients who participate in Cash and Counseling programs for one year.[4]
“Independence Plus”
The U.S. Department of Health and Human Services announced two “Independence Plus” waiver templates (guidelines to help states design a Medicaid demonstration with state-specific budget formulas and services) for Medicaid 1915(c) waivers (for home and community-based services) and 1115 waivers (for research and demonstration projects). These templates are designed to make it easier for states to apply for a waiver to use the Cash and Counseling demonstration or a similar consumer-directed model.South Carolina recently received approval of a self-directed home and community-based services program under the Independence Plus initiative.
Recommendation
State law should be amended to require the Health and Human Services Commission (HHSC) to apply for a federal waiver to establish a Cash and Counseling Demonstration project in the state’s Medicaid program.Moving eligible Texas Medicaid beneficiaries into a Cash and Counseling demonstration project would require an 1115 demonstration waiver and a rearrangement of funding streams. Cash and Counseling demonstrations projects limit the number of participants and restrict the programs to five to six years’ duration.
HHSC should report on the results of the demonstration to the 2005 Legislature.
Fiscal Impact
A Cash and Counseling Demonstration project would be cost-neutral in terms of existing services; people who move into the Cash and Counseling demonstration would be coming from another waiver and the funds for their services would move with them. Part of the purpose of the project is to study anticipated savings from more efficient and appropriate use of services and to refine procedures before more general implementation.
Endnotes
[1] U.S. Department of Health and Human Services, The Cash and Counseling Demonstration: An Experiment in Consumer-Directed Personal Assistance Services (Washington, D.C., 1998), pp. 2-3.
[2] U.S. Department of Health and Human Services, “HHS Approves Expanded ‘Independent Choices’ in Arkansas,” Washington, D.C., October 2, 2002. (News release.)
[3] U.S. Department of Health and Human Services, Administration on Aging, “Information Memorandum AOA-IM-97-22,” Washington, D.C., August 1, 1997, http://www.aoa.gov/im/im-97-22.html . (Last visited March 24, 2003.)
[4] U.S. Department of Health and Human Services, The Cash and Counseling Demonstration: An Experiment in Consumer-Directed Personal Assistance Services (Washington, D.C., 1998), p. 6.
