United States General Accounting Office GAO Report to Congressional Requesters May 1999 ADULTS WITH SEVERE DISABILITIES Federal and State Approaches for Personal Care and Other Services GAO/HEHS-99-101 United States GAO General Accounting Office Washington, D.C. 20548 Health, Education, and Human Services Division B-280728 May 14, 1999 The Honorable Pete V. Domenici Chairman Committee on the Budget United States Senate The Honorable John R. Kasich Chairman Committee on the Budget House of Representatives Millions of adults of all ages have severe disabilities; are unable to perform basic daily activities such as bathing and dressing; and often require substantial financial, medical, or other supportive services. Financing for these and other long-term care services comes from both public and private sources. For example, the federal government provides cash assistance, health insurance, and other supportive services, many of which are targeted at individuals with disabilities. Historically, public funding for such individuals has consisted primarily of cash benefits or services delivered in nursing homes or similar institutions. However, the provision of long-term care has changed, as an increasing number of adults with disabilities receive services in the community. Medicaid, a joint federal/state program that provides medical care for certain categories of low-income Americans, has played a significant role in the movement toward community-based personal care and support services. Medicaid gives states flexibility in how they provide personal care services—for example, through such innovations as allowing individuals with disabilities to select and direct their own caregivers. States most frequently approach community-based services under Medicaid using one of two optional benefits, both of which give states flexibility in deciding which beneficiaries will be served and allow a wide range of services to be covered. Recently, some advocacy groups and consumers with disabilities have challenged the optional nature of community-based long-term care with its flexibility to limit both the number and categories of individuals served. The cost and policy implications of changing the current provision of community-based care are considerable and require a broad understanding of the current framework under which adults with disabilities receive services. With the goal of obtaining basic information Page 1 GAO/HEHS-99-101 Severely Disabled Adults B-280728 to enhance understanding of these issues, you asked us to (1) estimate the number and characteristics of adults with severe disabilities; (2) quantify the federal assistance available to such individuals; (3) describe Medicaid coverage of personal care and related services; and (4) discuss how a sample of selected states have implemented Medicaid policies that allow consumers to select their own caregivers, an approach called consumer direction. We used the National Health Interview Survey (NHIS) to derive estimates of the number of individuals with severe disabilities who live in the community, rather than in institutions. We also conducted interviews with research and advocacy groups on disability, identified public programs that addressed the needs of adults with severe disabilities, and visited a sample of states identified as innovators in the provision of personal care: California, Kansas, Maine, and Oregon. We conducted our review from June 1998 through April 1999, in accordance with generally accepted government auditing standards. Appendix I contains a more detailed discussion of our scope and methodology. Our analysis of 1994-95 NHIS data showed that, nationwide, 2.3 million Results in Brief adults of all ages lived in home- or community-based settings and required considerable help from another person to perform two or more activities of self-care. For such individuals with severe disabilities, obtaining personal care on what is often a daily basis is critical to avoiding institutionalization. However, without help from family, friends, or public programs, affording such assistance may be problematic, because individuals with severe disabilities were usually less well off economically than the general population. Adults with disabilities were more likely than the general population to live in a family with an income of less than $20,000 and were almost twice as likely to live below the U.S. poverty threshold. Eighty-four percent of adults aged 18 to 64 with severe disabilities were either out of work or did not participate in the workforce. In addition, adults of all ages with severe disabilities were more likely to have less than a high school education. Over 80 percent of the adults with severe disabilities in our sample reported having public health insurance, primarily Medicare, Medicaid, or both. At least 70 different federal programs provide assistance to individuals with disabilities. Having a disability is a central eligibility criterion for 30 programs that have estimated fiscal year 1999 expenditures totaling $110 billion. The majority of these funds ($79 billion) are used to pay cash benefits, primarily through the Social Security Disability Insurance and Supplemental Security Income programs. Other programs provide a Page 2 GAO/HEHS-99-101 Severely Disabled Adults B-280728 mixture of cash and services to veterans with disabilities ($28 billion) or offer other individuals educational, training, employment, social, and other services ($3 billion). For a second, larger group of 40 programs, disability is one of many potential eligibility criteria. Within these 40 programs, Medicare and Medicaid are the most significant sources of federal funds that cover nonskilled personal care services for individuals with disabilities. Medicare’s home health benefit, which cost over $17.7 billion in 1997, has become a significant source of personal care funding and over time has changed in focus from solely a short-term, acute care benefit to a longer-term, chronic care benefit. Most Medicaid personal care and related services are optional benefits that are provided at the discretion of each state. The fastest growing expenditures are for Medicaid home- and community-based services (HCBS) waivers, which grew at an average annual rate of 31 percent between 1987 and 1998—twice as much as Medicaid home health (a required benefit) and three times as much as the personal care services (PCS) optional benefit. States apply to the federal government for HCBS waivers, which, if approved, allow states to limit the availability of services geographically, target specific populations or conditions, control the number of individuals served, and cap overall expenditures. Nearly all states have HCBS waivers, and 40 states use them as the primary funding source for Medicaid community-based care. However, recent court challenges to the service and expenditure limits imposed by HCBS waivers have raised questions regarding whether states will be allowed to continue these practices. These pending cases have raised concerns in a few states that waiver costs will increase; if so, there may be additional costs for the federal government as well. The consumer direction policies of the Medicaid programs in California, Kansas, Maine, and Oregon reflected the advantages and complexities of self-direction as well as the competing concerns among states, caregivers, and consumers. While most states offered consumers choice regarding the selection and hiring of a caregiver, consumer direction varied most often in the extent to which consumers had authority to train their own caregivers and manage the payroll. Despite differences in models of consumer direction, all four states confronted similar issues regarding the quality and availability of consumer-directed services. In general, states and consumers identified two challenges: (1) ensuring a qualified pool of personal caregivers for what are usually low-wage positions that typically attract individuals with little or no training and (2) balancing states’ Page 3 GAO/HEHS-99-101 Severely Disabled Adults B-280728 concerns regarding consumer safety with consumers’ right to direct their own care. The term “disability” can be broadly applied to mean limitations that are Background physical, mental, or both and that hinder performance of everyday activities. Within this broad characterization, there are considerable differences in severity and in the need for assistance.1 For some individuals with disabilities, assistance from another person is necessary—either direct “hands-on” assistance or supervision to ensure that everyday activities are performed in a safe, consistent, and appropriate manner. For others, special equipment or training can enable continued independent functioning. Disability can be present from an early age, such as in the case of individuals with mental retardation/developmental disabilities; occur as the result of a disease or traumatic injury; or manifest itself as a part of the natural aging process. Moreover, different forms of disability can pose different challenges. For example, individuals with physical disabilities often require significant help with daily activities of self-care. In contrast, individuals with Alzheimer’s disease or chronic mental illness may be able to perform everyday tasks and may need supervision more than hands-on assistance. Personal care, a key component of community-based long-term care services, is one term used to describe “hands-on” or one-on-one assistance provided to individuals needing help with basic activities of daily life in a noninstitutional setting.2 Personal care is nonmedical and involves aiding individuals with limitations in the ability to perform activities of daily living (ADL) and instrumental activities of daily living (IADL). ADLs include bathing, dressing, eating, transferring from a bed to a chair, using the toilet, and moving around the house, while IADLs cover preparing meals, shopping, managing money, using the telephone, and performing heavy or light housework. The number of self-care tasks for which an individual requires assistance is a good indicator of severity of need, and the amount and intensity of long-term care assistance a person needs increase appreciably with the number of his or her impairments. The increase in need for assistance is especially dramatic for individuals with limitations in three or more ADLs. While there are other definitions of 1 In fact, estimates of the number of individuals with disabilities ranged from 1 million to well over 10 million, depending upon the definitions used. 2 Some people with disabilities prefer to use the terms “supports” or “services” rather than “care” and think of themselves as “consumers” rather than “clients” or “care recipients.” We use the term “personal care” because of its use by and common association with the Medicaid program. However, it is intended as a broad descriptive term for hands-on assistance to or supervision of an individual. Page 4 GAO/HEHS-99-101 Severely Disabled Adults B-280728 disability, ADL and IADL limitations can be directly linked to the need for personal care.3 Medicaid and, to some extent, Medicare are the two primary sources of public funding for personal care. Medicaid, a joint federal/state health financing program for low-income Americans who are aged, blind, or disabled, is the principal source of public funding for long-term care, with 1998 expenditures of $59.1 billion. In 1996, Medicaid accounted for 38 percent of total long-term care spending. Historically, Medicaid long-term care expenditures financed services delivered in nursing homes or other institutions, whereas home- or community-based care was predominantly provided informally by family, friends, or both, or paid for with private funds. While most community-based care continues to be provided on an informal basis, Medicaid has increased its funding of community-based services. Between 1987 and 1998, community-based long-term care expenditures increased from 10 percent to 25 percent of Medicaid long-term care spending. Medicaid offers three benefits that provide personal care: the home health benefit; the PCS benefit; and HCBS waivers, which operate under section 1915(c) of the Social Security Act. Within broad federal guidelines, states determine the amount and duration of services offered under their Medicaid programs. States may, for example, place reasonable limits on services or require authorization to be obtained prior to service delivery. Home Health Benefit States must offer home health services as a part of their Medicaid program to all beneficiaries who are entitled to nursing facility services. Under Medicaid, a physician must order home health services as part of a care plan that is reviewed periodically and includes part-time or intermittent nursing services; home health aide services; and medical supplies, equipment, and appliances suitable for use in the home. Home health aide services must be provided by a home health agency and can include personal care. PCS Benefit States may, at their option, choose to offer the PCS benefit as part of their Medicaid program. Medicaid defines the PCS benefit as services that are (1) authorized for an individual by a physician in accordance with a plan of 3 Examples of other definitions of disability include (1) measures of physical activities such as walking, lifting, reaching; (2) serious sensory impairments; (3) serious symptoms of mental illness; and (4) inability to work. Page 5 GAO/HEHS-99-101 Severely Disabled Adults B-280728 treatment;4 (2) provided by an individual who is qualified to provide such services and who is not a member of the individual’s family;5 and (3) furnished in a home or, if the state chooses, in another location.6 States may limit the PCS benefit through two mechanisms: medical necessity and utilization control. HCBS Waivers HCBS waivers provide states greater flexibility in program design, permitting the adoption of a variety of strategies to control the cost and use of services. Thus, states may “waive” certain provisions of the Medicaid statute, such as (1) “statewideness,” which requires that the services be available throughout the state (a waiver allows services to be provided only in particular geographic locations); (2) comparability, which requires that all services be available to all eligible individuals (a waiver allows states to target services to individuals on the basis of certain criteria determined by the state, such as disease, condition, and age); and (3) the community income and resource rules for the medically needy (a waiver allows states to use institutional eligibility rules—which are more generous than community rules—for individuals residing in the community).7 To receive an HCBS waiver, states must demonstrate that the cost of the services to be provided under a waiver (plus other state Medicaid services) is no more than the cost of institutional care (plus any other Medicaid services provided to institutionalized individuals). Waivers permit states to cover a wide variety of nonmedical and social services and supports that allow people to remain in the community, including personal care, personal call devices, homemakers’ assistance, chore assistance, adult day health care, and other services that are demonstrated as cost-effective and necessary to avoid institutionalization. Medicare, a federal program that provides health insurance to Americans 65 and older as well as to certain disabled individuals, offers a home health benefit that can include in-home services provided by an aide. To be eligible for Medicare home health, a beneficiary must be confined to the home, be under the care of a physician who establishes a plan of care, and 4 Under Medicaid, states may also approve “service plans,” which are similar to physician-prescribed treatment plans. 5 “Family member” is defined as a legally responsible relative (42 C.F.R. sec. 440.167(b)). This includes spouses of recipients and parents of minor recipients, including any stepparents who are legally responsible for minor children. Adult children are not included in this definition. 6 The PCS benefit is not available to Medicaid-eligible individuals who are hospitalized or reside in a nursing facility, an intermediate care facility for people with mental retardation, or an institution for mental disease. 7 For example, under institutional eligibility rules, the parents’ income is not counted when determining their child’s eligibility for Medicaid. The parents’ income is counted under the community rules. Page 6 GAO/HEHS-99-101 Severely Disabled Adults B-280728 have a need for at least one of the following: intermittent skilled nursing care, physical therapy, speech therapy, or continuing occupational therapy. Finally, the beneficiary must receive services under a plan of care that is reviewed periodically. A physician can prescribe a home health aide only if all the coverage conditions are met. Any home health aide services must consist primarily of personal care activities; chores, housekeeping, and other services must be incidental to the personal care services performed and not add to the time of the visit. Under the PCS benefit and HCBS waivers, some states have allowed consumers of personal care to direct their own services, a concept known as consumer direction. Consumer direction includes a range of potential activities. At a minimum, consumer direction entails some degree of decision-making on the part of consumers regarding their service needs, who should provide their care, and their evaluation of the quality and appropriateness of the services received. Consumer direction differs from the traditional, agency-based system of personal care in which people with disabilities have little control over the choice of caregivers, staff schedules, and policies regarding what services will be provided. At its best, consumer direction can tailor services to meet the expressed needs and personal preferences of consumers; thus, it involves helping define the services to be delivered and making important decisions about caregiving. While Medicaid enabling legislation does not authorize cash payments to beneficiaries, states can allow consumers to direct their own care through hiring, training, and supervising their personal care attendants. States with consumer direction may also establish processes that permit consumers to assist in payroll management, tax filings, and other fiscal responsibilities. We estimate that approximately 2.3 million adults living in the community Over Two Million have severe disabilities and require considerable help from another person Adults With Severe to perform multiple ADLs or IADLs. There are a variety of methods and Disabilities Live in the definitions for identifying individuals with severe disabilities. Our estimate is based on NHIS data and includes adults with both physical and cognitive Community impairments who required personal care in a home- or community-based long-term care setting.8 Adults with severe disabilities were less likely to work, had less education, and had less income than the general population. Adults aged 18 to 64 with severe disabilities were also much more likely to have public health insurance coverage, primarily through 8 We selected NHIS in part because it allowed individuals to provide an indication of the amount of assistance they required. Page 7 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Medicare and Medicaid, than those of similar age in the general population. No Consensus Definition There is no consensus on what constitutes a severe disability. Individuals of Severe Disability Exists differ in the number of functional areas in which they require assistance (expressed by ADLs or ADLs in combination with IADLs) and the level of difficulty they have in performing the activity. Using NHIS, we estimated that the number of individuals with severe disabilities ranged from 1.4 to 3.3 million, depending upon the definition of severity used (see fig. 1). For purposes of demographic analysis, we selected a definition of adults that focused primarily on individuals’ ability to perform ADLs but also included an IADL component. Specifically, we defined an adult with severe disabilities as an adult who has either a lot of difficulty with or is unable to perform either • three or more ADLs or • two ADLs and four IADLs.9 9 Our definition focuses on adults living in the community; thus, individuals with severe disabilities residing in nursing homes or other institutions are excluded from this analysis. Page 8 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 1: Estimates of Number of Adults With Severe Disabilities, 1994-95 Four or More ADLs, High Difficulty 1.4 Four or More ADLs, Any Difficulty 1.6 Three or More ADLs, High Difficulty 1.9 Three or More ADLs, Any Difficulty 2.3 Two ADLs and Four+ IADLS OR Three or More ADLs, High Difficulty Estimate Used 2.3 for This Report Two ADLs and Four+ IADLS OR Three or More ADLs, Any Difficulty 2.6 Two or More ADLs, High Difficulty 2.9 Two or More ADLs, Any Difficulty 3.3 0 0.5 1 1.5 2 2.5 3 3.5 Millions 18 to 64 65 and Over Note: We identified two levels of difficulty in performing ADLs and IADLs: (1) “any difficulty,” which means an adult reported some difficulty, a lot of difficulty, or being unable to perform a requisite number of activities, and (2) “high difficulty,” which means an adult reported a lot of difficulty or being unable to perform activities. Source: NHIS 1994-95 data. Adults With Severe Adults with severe disabilities were considerably less well off than the rest Disabilities Had Lower of the general population in several key areas, as summarized in figure 2. Employment, Education, Working age adults (18 to 64) with severe disabilities were far less likely to work, with 84 percent reporting that they were either out of work or did and Income not participate in the workforce. Additionally, adults 18 and over with Page 9 GAO/HEHS-99-101 Severely Disabled Adults B-280728 severe disabilities were more likely to have less than a high school education, live in a family with an income of less than $20,000 per year, and live with a relative that is not a spouse. Furthermore, adults 18 and over with severe disabilities were almost twice as likely to live below the U.S. poverty threshold than nondisabled individuals. Figure 2: Selected Characteristics of Adults With Severe Disabilities Compared With Those of the General Population, 1994-95 Unemployed/Not in Labor Force (Aged 18 to 64) 84 23 Less Than High School Education 43 19 Family Income Less Than $20,000 42 23 Live With Relative That Is 33 Not a Spouse 23 Below U.S. Poverty Threshold 18 10 0 10 20 30 40 50 60 70 80 90 Percentage Adults With Severe Disabilities General Adult Population Source: NHIS 1994-95 data. Page 10 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Most Adults With Severe Most adults with severe disabilities reported receiving public health Disabilities Qualified for insurance coverage, primarily Medicare and Medicaid. Of our estimated Public Health Insurance 2.3 million adults with severe disabilities, 1.9 million, or 84 percent, reported having some form of public health insurance, as shown in figure Coverage 3. Because almost everyone aged 65 or older is eligible for Medicare, age was a significant factor in health insurance coverage. While younger adults with severe disabilities were less likely to have public health coverage than those 65 and over, they were far more likely to have public coverage than those of a similar age in the general population. Because disability is one eligibility criterion for both programs, an adult aged 18 to 64 with severe disabilities was 7 times as likely to receive Medicaid coverage and over 18 times as likely to receive Medicare10 than the nondisabled general population. 10 In 1998, 5.2 million individuals below the age of 65 with disabilities qualified for Medicare, accounting for approximately 13 percent of program beneficiaries. Page 11 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 3: Adults With Severe Disabilities Covered by Public Health Insurance, 1994-95 66 All Types of Public Health Insurance 96 84 37 Medicare 92 69 35 Medicaid 20 26 0 10 20 30 40 50 60 70 80 90 100 Percentage 18 to 64 65 and Over Total Notes: Public health insurance includes Medicare, Medicaid, military, veterans’, and Indian Health Services coverage. Approximately 2 percent reported military health coverage. Medicare and Medicaid coverage categories are not mutually exclusive; a person can qualify for both programs at the same time. Source: NHIS 1994-95 data. Page 12 GAO/HEHS-99-101 Severely Disabled Adults B-280728 We identified two groups of federal programs that provide assistance to Many Federal individuals with disabilities—a term that is applied in a variety of ways.11 Programs Provide The first group uses various definitions of disability as a central criterion Assistance to Adults for eligibility and consists of 30 programs with estimated expenditures totaling $110 billion in fiscal year 1999. The second group uses disability as With Disabilities one of many potential criteria for program participation and consists of 40 programs, including Medicare and Medicaid, for which age, income, or both also serve as bases for eligibility.12 Medicaid is the most significant source of federal funds for providing personal care services to individuals with disabilities. The provision of personal care services under Medicare is limited to its home health benefit, the use of which has been growing over the past decade. $110 Billion in Federal For fiscal year 1999, the federal government will obligate an estimated Programs Is Targeted $110 billion across 30 programs and services that specifically offer benefits Exclusively for Individuals to individuals with disabilities.13 The three largest programs—Social Security Disability Insurance,Veterans Compensation for Service- With Disabilities Connected Disabilities, and Supplemental Security Income—offer cash benefits to eligible individuals and account for over 86 percent of this total. One program within the 30, the Department of Veterans Affairs (VA) Aid and Attendance program, explicitly offers personal care services through a cash allowance and provides an additional cash allowance to eligible veterans if their disabilities make it impossible to perform basic ADLs without the assistance of another person.14 Figure 4 shows the distribution of the $110 billion by budget function. 11 The eligibility criteria for federal programs are not consistent with the definition we used to estimate the number of adults with severe disabilities. For federal programs, disability can be linked to an individual’s ability to work, rather than the need for assistance with ADLs and IADLs. While these two definitions are not mutually exclusive, they are not necessarily the same. In fact, many of these federal programs are likely to serve very different populations than those represented in our estimate of 2.3 million. For example, one program offers independent living services to individuals with visual impairments, and another offers employment training to individuals with physical or mental impairments that impede employment. 12 We have not included expenditures for these 40 programs because the broader eligibility criteria did not allow us to determine the amount of expenditures that could be attributed to individuals with disabilities. 13 This estimate includes 77 percent of the expenditures of the Supplemental Security Income program, which is the percentage of individuals with disabilities served by this program. Supplemental Security Income is an income- and resource-tested cash assistance program for low-income individuals who are aged, blind, or disabled. 14 For more information on consumer-directed personal care offered under this program, see Consumer-Directed Personal Care Programs: Department of Veterans Affairs and Medicaid Experience (GAO/HEHS-98-50R, Jan. 16, 1998). Page 13 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 4: Distribution of the Estimated $110 Billion Designated Specifically for Education, Training, Employment, Billions Individuals With Disabilities, by $3 and Social Services Budget Function, Fiscal Year 1999 $22 Income Security (Includes Supplemental Security Income and Housing Assistance) $57 $28 Veterans' Benefits and Services Social Security Disability Insurance Source: General Services Administration, Catalogue of Federal Domestic Assistance (Washington, D.C.: GSA, Dec. 1998). Appendix II summarizes the 30 programs for which disability is a condition of participation, and appendix III lists the broader array of 40 programs that include disability as one of many potential eligibility criteria. Medicare Home Health Has Although Medicaid is the most significant source of federal funds for Become a Significant providing personal care services to people with disabilities, the Medicare Source of Funds for home health benefit—particularly the long-term use of a home health aide—has become an important source of nonskilled personal care for Community-Based Care individuals with disabilities and the elderly. This benefit, originally established for beneficiaries recovering from illness or injury after a hospitalization, has been used by an increasing number of beneficiaries as a source of custodial care for chronic conditions.15 This shift toward more long-term care services has been a major contributor to the 20-percent average annual growth in Medicare home health costs between 1981 and 15 See Medicare Home Health: Success of Balanced Budget Act Cost Controls Depends on Effective and Timely Implementation (GAO/T-HEHS-98-41, Oct. 29, 1997). Page 14 GAO/HEHS-99-101 Severely Disabled Adults B-280728 1997. Figure 5 shows the dramatic increases in Medicare home health expenditures.16 Figure 5: Medicare Home Health Expenditures, 1981-97 20 Billions of Dollars 18 16 14 12 10 8 6 4 2 0 82 89 96 93 81 83 91 90 84 94 87 86 97 88 85 92 95 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 Source: Health Care Financing Administration (HCFA), Office of the Actuary. Longer-term use of the home health benefit, particularly for home health aide services, has increased Medicare spending. In 1989, the proportion of home health users receiving more than 30 visits was 24 percent. In 1996, this proportion had increased to 49 percent, indicating that the program was serving a larger proportion of longer-term patients. Moreover, 55 percent of beneficiaries receiving home health care in 1997 had not been recently hospitalized, another indication that those receiving care were not in need of short-term acute care (such as following a hospital stay), but of longer-term care for chronic conditions, which are often associated with disability. For 1996, over 48 percent of all Medicare visits 16 From 1995 through 1997, the rate of growth of the Medicare home health benefit slowed, and Medicare home health expenditures declined in 1998. The amount of the decline is uncertain, however, since these expenditures have not been finalized. Page 15 GAO/HEHS-99-101 Severely Disabled Adults B-280728 were made by home health aides and, as shown in table 1, 5 percent of home health aide users received about 41 percent of those visits. Table 1: Beneficiaries’ Use of Medicare Home Health Aides, 1996 Percentage of home Number of visits per user Percentage of total users health aide visits 1-9 22.2 0.2 10-29 28.9 2.1 30-49 13.0 3.4 50-99 14.6 9.6 100-149 6.7 10.7 150-199 4.7 12.9 200-249 2.8 10.3 250-299 2.0 9.9 300+ 5.0 40.8 Total 100.0 100.0 Note: Percentages may not total 100 because of rounding. Source: Medicare Payment Advisory Commission. Under Medicaid, states have three approaches for providing personal care, Most Medicaid two of which may be offered at the discretion of the state. First, states Personal Care and must offer the Medicaid home health services benefit (including home Related Services Are health aides), which may provide unskilled personal care services. Second, states may choose to provide the PCS benefit, which offers unskilled Optional Benefits personal care services as a part of the states’ Medicaid benefit package. Offered by States Third, HCBS waivers, which were first introduced in 1981, give states the option of providing personal care and other related services if they choose to do so. HCBS services operate under markedly different rules than the home health and PCS benefits, which must be offered to all eligible individuals. In particular, HCBS waivers allow states to limit geographic availability, target specific populations or conditions, limit the number of individuals served, and cap waiver expenditures. The popularity of HCBS waivers is evidenced by their growth rate: from 1987 to 1998, expenditures under HCBS waivers grew at an average annual rate of 31 percent, compared with 16 percent for home health and 10 percent for the PCS benefit. Appendix IV summarizes the growth of each of the three Medicaid approaches to personal care and provides information on how states use them to provide community-based care. Page 16 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Finally, recent court challenges to service provision limits and to the selective nature of some personal care waiver programs have raised serious concerns about the continued viability of HCBS waivers. These pending cases have raised concerns among a few states that waiver costs will increase; if so, there may be additional costs for the federal government as well. Medicaid Home Health Has In contrast to the very rapid growth in the Medicare home health benefit Grown Modestly since the late 1980s, expenditures under Medicaid home health have Compared With Medicare increased more modestly. A physician must order Medicaid home health in accordance with a plan of care that is reviewed periodically and details the use of services required. A prescribed care plan may or may not include the services of a home health aide, but the home health benefit must make available medical services (such as nursing services), supplies, equipment, and appliances suitable for use in the home. Between 1987 and 1997, expenditures for Medicaid home health grew at an average annual rate of 17 percent, compared with 26 percent for Medicare home health. Figure 6 shows annual changes in expenditures for the two programs during this period. Page 17 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 6: Comparison of Growth in Medicare and Medicaid Home Health Expenditures, 1987-97 60 Percentage Change 50 40 30 20 10 0 -91 -95 -97 -90 -96 -88 -94 -93 -92 -89 90 94 96 89 95 87 93 92 91 88 19 19 19 19 19 19 19 19 19 19 Medicare Medicaid Source: HCFA. States are permitted to use medical necessity and utilization control methods to manage the use of Medicaid home health services. For example, California requires prior authorization for more than one visit in a 6-month period and will approve a maximum of 30 visits at a time. Florida limits visits to 60 per year, except by prior authorization.17 Other states limit the hours of service provided each day; require preauthorization if the services are not in conjunction with a recent hospitalization; or impose limits on the type of services provided, such as nurse, therapy, or home health aide visits. 17 While Medicaid services for home health can range from those of a home health aide to more skilled services (for example, physical, occupational, or speech therapy or nursing services), expenditures are not tracked by the type of home health visit made. Page 18 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Medicaid PCS Benefit Of the Medicaid approaches offering personal care, the PCS benefit is Requires Statewide Service offered by the fewest states; accordingly, it has had the slowest average Provision but Allows annual growth: 10 percent from 1987 to 1998. About three-fifths of the states and the District of Columbia had elected to use the PCS benefit Service Limits under Medicaid as of 1998, as shown in figure 7. Once elected, the PCS benefit must be provided to all eligible individuals with a demonstrable need for personal care, a factor that may prevent additional states from adopting this benefit. Page 19 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 7: States Offering the PCS Benefit, 1998 PCS Benefit (28) No PCS Benefit (23) Note: Arizona operates a personal care program as part of a separate section 1115 waiver; because HCFA includes these expenditures as part of its PCS benefit totals, Arizona is identified as a PCS state in this map. Source: Medicare and Medicaid Guide (Chicago, Ill.: Commerce Clearing House, Inc.). States offering the PCS benefit are afforded some flexibility in order to contain costs or target services to particular populations. For example, states are allowed to set their own criteria for establishing who needs the PCS benefit and may use a wide variety of assessment instruments or other Page 20 GAO/HEHS-99-101 Severely Disabled Adults B-280728 procedures to determine who receives services. Variations in the use of the PCS benefit are apparent across states, reflecting these implementation differences. For example, California relies on the PCS benefit primarily as a means of providing personal care services to individuals with long-term care needs, whereas Oregon targets this benefit toward an acute-care, more medically based service. Other states establish eligibility for the PCS benefit by identifying functional impairment. For example, Maine and New Hampshire limit eligibility to individuals with chronic or permanent disabilities, while Florida limits the PCS benefit to children. Table 2 shows PCS benefit expenditures and their proportion of each state’s total Medicaid home and community expenditures for fiscal year 1998. Page 21 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Table 2: States’ Use of the PCS Benefit, Ranked by Percentage of Total Percentage of Medicaid Community-Based community-based FY 1998 PCS benefit Expenditures, Fiscal Year 1998 State expenditures expenditures California 59.10 $324,379,099 Arkansas 49.36 63,244,424 Idaho 42.46 15,238,552 New York 41.90 1,655,085,940 Michigan 39.95 207,957,621 Texas 35.33 228,816,135 New Jersey 33.51 169,711,230 Montana 32.41 13,365,579 Missouri 28.84 91,636,182 North Carolina 28.20 135,870,664 Washington 27.79 120,122,810 Massachusetts 22.05 139,105,479 Arizona 19.98 266,642 West Virginia 18.56 27,845,161 Minnesota 18.49 98,637,571 Wisconsin 15.08 65,534,473 Oklahoma 15.03 24,184,928 Alaska 12.11 4,246,146 Maryland 10.39 24,051,519 Nevada 9.53 2,025,840 Oregon 6.77 19,961,594 Nebraska 5.58 5,381,619 Floridaa 3.82 14,136,021 Kansas 3.74 8,213,577 Maine 3.06 3,596,006 District of Columbia 2.73 366,038 Vermonta 2.15 1,527,670 New Hampshire 2.10 2,294,653 South Dakota 1.55 732,931 a South Carolina 0.81 1,177,397 Utah 0.66 431,427 a These states do not offer the PCS benefit to adults but report expenditures because of services provided to children under the Early and Periodic Screening, Diagnostic, and Treatment program. Source: HCFA. Page 22 GAO/HEHS-99-101 Severely Disabled Adults B-280728 States also control utilization of the PCS benefit by requiring prior authorization, establishing limits on the duration of services, or both. For example, of the 27 states and the District of Columbia, 7 require prior authorization for personal care services and 15 limit the hours or units of service provided.18 (App. V summarizes approaches states take to limit services under the PCS benefit through the use of assessment tools and limits on services.) States Make Use of The enactment of HCBS waivers gave states more flexibility in program Controls and Flexibility design and more control over expenditures. HCBS waivers allow states to Afforded by HCBS Waivers target services to specific populations, geographic areas, or both. HCBS waivers also allow states to set expenditure caps, limit services to a specific number of individuals, and—similar to the PCS benefit—impose limits on the number of hours of services provided. From 1987 to 1998, HCBS waivers grew at an average annual rate of 31 percent, increasing in popularity and use among states. In contrast to the PCS benefit, which 23 states did not offer, HCBS waiver expenditures were reported by almost every state in 1998, and all but 8 of these states had at least one waiver that offered personal care services (see fig. 8). Only two states used the PCS benefit for the majority of their Medicaid community-based expenditures, while 40 states channeled over half of their community-based Medicaid expenditures through HCBS waivers. (App. V summarizes HCBS waivers that offered personal care.) 18 Of the 14 states and the District of Columbia with service limits, 7 do not allow these limits to be exceeded, while the remaining 8 allow exceptions with prior authorization. Page 23 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 8: Medicaid HCBS Waivers With and Without Personal Care Services, 1998 HCBS Waivers That Offered Personal Care (44) No HCBS Waivers That Offered Personal Care (7) Source: American Public Human Services Association. Using a database compiled by the American Public Human Services Association (APHSA), we estimated that 118 of the over 200 HCBS waivers provided personal care to almost 331,000 individuals.19 The estimate of the number of recipients is likely to be an undercount, because as many as 16 waivers did not cite the number of enrollees. States had anywhere from 19 Personal care is only 1 of over 25 different types of services offered under HCBS waivers. Because data on the costs associated specifically with personal care services within each waiver are not readily available, information on HCBS waivers and spending encompasses many related services. Page 24 GAO/HEHS-99-101 Severely Disabled Adults B-280728 one to six HCBS waivers offering personal care that varied greatly in the number of clients served and per capita cost, as shown in table 3. For example, the number of clients served ranged from a high of 35,000 under one waiver to a low of 9 under another. Additionally, one-half of the waivers identified served fewer than 1,000 individuals, indicating that most HCBS waivers were relatively small. Waivers that offered personal care were most likely to provide related services, such as respite services, environmental modifications, personal emergency response systems, and adult day health programs. Table 3: Range of Attributes of HCBS Waivers Offering Personal Care Attribute Low High Average Services, 1998 Clients served per waiver 9 35,000 3,250 Per capita costs $663 $270,000 $20,769 Waivers per state 1 6 2.68 Source: APHSA. HCBS waivers are also likely to target a specific population or group of individuals. For example, over 50 percent of HCBS waivers offering personal care focused on (1) the elderly, people with physical disabilities, or both and (2) individuals with developmental disabilities; together, these two populations accounted for over 80 percent of consumers for HCBS waivers with personal care. Table 4 summarizes HCBS waivers with personal care by their target populations and number of consumers. Page 25 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Table 4: Selected Characteristics of HCBS Waivers With Personal Care, Percentage 1998 Number of Percentage Number of of Target population waivers of waivers consumers consumers Elderly, people with disabilities, or botha 30 25.4 174,969 52.8 People with disabilities 15 12.7 17,631 5.3 b People with HIV/AIDS 12 10.2 13,726 4.1 Elderly 9 7.6 11,617 3.5 People with developmental disabilities 35 29.7 112,221 33.9 People with traumatic brain injury 13 11.0 916 0.3 Other 4 3.4 387 0.1 Total 118 100.0 331,467 100.0 a States did not identify HCBS waiver populations consistently, so we created two categories of HCBS waivers for individuals with disabilities: one that identified only disability and one that served the elderly, people with disabilities, or both. b Human immunodeficiency virus/acquired immunodeficiency syndrome. Source: APHSA. State Efforts to Target Recent litigation in federal courts has raised the possibility that the use of Services Have Been functional assessments in conjunction with HCBS waivers as a basis for Challenged Legally denying services to reduce or constrain costs may no longer be legally permissible in some circumstances under the Americans With Disabilities Act of 1990 (ADA).20 These cases raise questions about whether federal matching funds would be made available to meet added costs resulting from increased services that are outside a state’s Medicaid plan. The ADA prohibits the exclusion of an individual with a disability from participating in public programs or receiving public benefits by reason of the person’s disability. Department of Justice regulations implementing this provision require that “a public entity shall administer services, programs, and activities in the most integrated setting appropriate to the needs of qualified individuals with disabilities.”21 Justice has recently reiterated that the “most integrated setting” standard applies to states, 20 42 U.S.C. 12131-12134. Sec. 12132 of the act states that “ . . . no qualified individual with a disability shall, by reason of such disability, be excluded from participation in or be denied the benefits of the services, programs, or activities of a public entity, or be subjected to discrimination by any such entity.” 21 See 28 C.F.R. 35.130(d). Page 26 GAO/HEHS-99-101 Severely Disabled Adults B-280728 including state Medicaid programs. The court cases reflect the application of this provision to specific state programs for individuals with disabilities. Courts in both Georgia and Pennsylvania have applied Justice regulations and found that institutional placement may violate the ADA if the placement does not constitute the most integrated setting appropriate to the needs of the individual. While only binding in the circuits involved, the court decisions have potentially broader implications for all states and their ability to place limits on the number of people that participate in waiver programs. On July 29, 1998, HCFA sent a letter to state Medicaid directors informing them of the following three Medicaid cases relating to the ADA and the most integrated setting standard. In L.C. By Zimring & E.W. v. Olmstead,22 patients in a state psychiatric hospital in Georgia filed suit challenging their placement in an institutional setting rather than in a community-based treatment program. The circuit court found that the placement in an institutional setting appeared to violate the ADA because it constituted a segregated environment, and that community placement could be required as a “reasonable accommodation” to the needs of the individuals. While the court emphasized that the state cannot justify the denial of community placement because of a lack of funding, it also acknowledged that the state need not provide these services if doing so would fundamentally alter the state’s program.23 This case was remanded to the lower court for a determination of whether a fundamental alteration of the state program would occur as a result of the community placements.24 On a separate issue, this case was argued before the Supreme Court on April 21, 1999. The Court limited its review to the issue of whether the ADA compels the state to provide treatment for mentally disabled people in a community placement when appropriate treatment can also be provided to them in a state institution. 22 L.C. By Zimring & E.W. v. Olmstead, 138 F.3d 893 (11th cir.), rehearing and suggestion for rehearing en banc denied, 149 F. 3d 1197 (11th cir.), cert. granted, 119 S.Ct. 617, order amended, 119 S.Ct. 633 (1998). 23 See 28 C.F.R. 35.130(b)(7). “A public entity shall make reasonable modifications . . . unless the public entity can demonstrate that making the modifications would fundamentally alter the nature of the service, program or activity.” 24 In its ruling, the circuit court put forward some issues the lower court should consider in determining if the state is meeting its burden of establishing that a fundamental alteration of the program would occur if community-based treatment was provided. One issue, among others, is whether the additional expenditures needed to treat the plaintiffs in the community would be unreasonable given the demands on the state mental health budget. Page 27 GAO/HEHS-99-101 Severely Disabled Adults B-280728 In Helen L. v. DiDario,25 a Medicaid nursing home resident alleged that the Pennsylvania Department of Public Welfare violated the ADA by requiring her to receive services in a nursing home rather than in her own home through a state-funded personal care program for which she qualified. The court held that the state’s failure to provide services in the “most integrated setting” appropriate to the individual’s needs violated the ADA. Additionally, the court found that the provision of personal care to the plaintiff would not fundamentally alter any state program because the services were already within the scope of an existing program. In Easely v. Snider,26 individuals with disabilities in Pennsylvania filed a lawsuit, through their representatives, challenging a requirement that they be mentally alert in order to participate in the state’s personal care program. The court determined that given the essential goal of the program to foster independence for individuals limited by only physical disabilities, including individuals incapable of controlling their own legal and financial affairs in the program would constitute a fundamental alteration of the program. Therefore, the mental alertness requirement was found to be valid and not to violate the ADA. Of these three cases, only the last appears to uphold states’ authority to limit the availability of Medicaid-funded services. In our interviews, state officials from both California and Maine expressed concern about the implications of these cases, as well as about Justice’s “most integrated setting” standard. State officials’ concerns center on states’ ability to limit participation in their waiver programs. Maine officials noted that it is crucial that the state have the authority to define eligibility for services and to implement programs consistently with financial budgets, especially given the large number of individuals who have ADL limitations. States have introduced consumer direction into their personal care State Approaches to programs as a means of ensuring that these services are tailored to the Consumer Direction expressed needs and personal preferences of individual consumers. Reflect Similar Goals Putting the consumer in the “driver’s seat” is challenging for both individuals with disabilities and states. Officials we interviewed compared and Challenges the skills required for consumer direction to those needed to run a small business. Overall, 31 states appear to offer some degree of consumer- directed personal care. The four states in our sample—California, Kansas, 25 Helen L. v. DiDario, 46 F.3d 325 (3rd cir.), cert. denied, 516 U.S. 813 (1995). 26 Easley v. Snider, 36 F.3d 297 (3rd cir.), rehearing and rehearing en banc denied, 36 F.3d 297, 306 (3rd cir. 1994). Page 28 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Maine, and Oregon—have extensive interest in or experience with consumer-directed personal care. Despite differences in their consumer-direction models, all four states have confronted similar issues surrounding the availability and quality of consumer-directed services: (1) ensuring a qualified pool of personal caregivers for what are typically relatively low-wage positions that often attract individuals with little or no training and (2) balancing state concerns regarding consumer safety with the consumers’ right to self-direct their own care. Consumer Direction Can Consumer direction entails some degree of decision-making on the part of Be Analogous to Operating consumers about the specific services they need and want and about a Small Business whether individual caregivers are appropriate for the job and capable of delivering those services satisfactorily. Thus, at a minimum, consumer direction means that the consumer defines the services to be delivered and makes employment decisions about caregivers. In contrast, under the traditional system of personal care delivered by a home health or other agency, people with disabilities are typically constrained by the agency’s choice of caregivers, the schedules of these staff, and agency policies limiting available services. Consumers and state officials both told us that self-direction is analogous to operating a small business, in that consumers may have to select, hire, train, and manage their own caregivers. (See fig. 9.) Page 29 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 9: Self-Direction Can Be Analogous to Operating a Small Business Select and Hire Personal Caregivers • Prepare job descriptions for the services required. • Decide how to advertise for and recruit job applicants, including through word of mouth, churches, colleges, newspapers, and bulletin boards. • Screen job applicants either by phone or in person, checking references and interviewing applicants that appear qualified. Train and Manage Personal Caregivers • Provide necessary training and management for personal caregivers to assist with self-care and daily living tasks. • Plan and coordinate schedules of possible multiple caregivers to ensure needed coverage. • Monitor absences and tardiness; collect, approve, and submit time sheets to state or local authorities for payment; in some cases, oversee deduction and withholding of payroll and income taxes; and ensure paychecks are provided. • Develop contingency plans to use when the personal caregivers are ill, have a personal emergency, or will be absent for other reasons. • Evaluate job performance, including responsiveness to consumer direction. • Discharge the caregivers if performance is not acceptable. Depending in part on the nature and degree of the disability, the consumer may have to retain the services of multiple personal caregivers to provide sufficient hours of care to meet ongoing needs as well as to respond to emergencies. For example, a consumer may need assistance in both the morning and evening, a situation that would probably result in the need for more than one caregiver. In one case, we were told that a person with quadriplegia required the services of 12 different personal caregivers over the course of a week. An employed individual with disabilities with whom we met told us that he has five different caregivers. In Maine, 479 consumers collectively employ over 2,000 personal caregivers. Over Half the States We identified 31 states, shown in figure 10, that offered consumer-directed Include Some Consumer personal care, primarily under Medicaid. A review of the literature shows Direction for Personal that states have different approaches to consumer direction. For example, consumer direction in one state may mean that a consumer participates in Care Services preparing a service plan and can assist in recruitment. In other states and programs, consumers may also screen caregivers, negotiate compensation, Page 30 GAO/HEHS-99-101 Severely Disabled Adults B-280728 and train caregivers.27 To date, little systematic evaluation of the effectiveness of and costs associated with consumer-directed personal care has taken place; a demonstration is under way, however, that should provide insights on this approach to community-based personal care services. The Robert Wood Johnson Foundation, in cooperation with the Department of Health and Human Services (HHS), is sponsoring a four-state demonstration and evaluation of the cost-effectiveness and appeal of a consumer-directed approach to personal care services in Medicaid. Appendix VI summarizes the implementation progress of this demonstration in Arkansas, Florida, New Jersey, and New York. 27 See Susan A. Flanagan and Pamela S. Green, Consumer-Directed Personal Assistance Services: Key Operational Issues for State CD-PAS Programs Using Intermediary Service Organizations (Washington, D.C.: Department of Health and Human Services, Oct. 24, 1997), app. V-1, exhibit D, pp. 8-12. Page 31 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Figure 10: Consumer-Directed Personal Care in the States Washington, D.C. Consumer-Directed Personal Care Identified (31) No Consumer-Directed Personal Care Identified (20) States in Our Sample The four states that we visited offer several different approaches to Approach Consumer consumer direction that vary in the consumers targeted and the extent to Direction Differently which consumers have a choice about self-direction. In addition, these states offered different supportive services to help consumers manage their care and oversee their caregivers, as well as different levels of consumer participation in the payroll process. California Under California’s county-based system, 96 percent of personal care (and related services) is self-directed, with consumers having various levels of access to supportive services. State officials told us, however, that regulations require that all counties evaluate consumers regarding their Page 32 GAO/HEHS-99-101 Severely Disabled Adults B-280728 ability to self-direct and, if counties determine consumers are incapable, they are referred for special assistance. Of California’s 58 counties, 16 offer service delivery models other than self-direction that are based upon county assessments of consumers’ needs. In these 16 counties, consumers may also select providers from either the contracting agency or the counties’ contracted providers. Twenty-three counties offer supported individual provider services, which use state funds to provide additional administrative and support services for consumers using independent providers. Supported individual provider services enhance service delivery through recruitment, provider list development and maintenance, orientation classes, supervision assistance, and consumer-to- independent-provider matching services. In addition, six counties have opted to form public authorities,28 which are enhanced independent provider models, and provide additional client assistance and increased compensation for providers.29 In other counties, few such services are available. Kansas The degree of self-direction in Kansas ranges from a low of 10 percent of people with developmental disabilities to a high of 70 percent of those with physical disabilities. The frail elderly fall in between, with 30 percent self-directing their care. Consumers choosing self-direction manage all aspects of their care except paying personal caregivers, which is generally the responsibility of community organizations that serve as payroll agents. Consumers are given lists of payroll agents from which they may choose. Consumers may consult with Centers for Independence for help with determining how comfortable they are with living independently in the community and with self-direction. Maine Maine gives consumers an initial choice regarding self-direction. Consumers choosing to self-direct must then decide between two models. Under one model, all consumers must agree to participate in the most extensive consumer-directed program we reviewed, which requires clients to be responsible for training and developing job descriptions for their caregivers as well as for performing actual payroll management functions. These consumers receive a voucher check twice a month from the state based on time sheets that they submitted.30 Personal caregivers are hired by the consumers and trained on the job by the consumers to assist with 28 Public authorities are relatively new; the San Francisco Public Authority first met in Oct. 1995, and Los Angeles passed its ordinance in Oct. 1997. 29 In California, counties exercise control over many aspects of personal care. Not only do they administer the personal care program, they are also responsible for 17.5 percent of costs and decide what supportive services will be available to consumers. 30 A voucher check is a two-party check that the consumer signs over to the caregiver. Page 33 GAO/HEHS-99-101 Severely Disabled Adults B-280728 daily activities. Under the second model, consumers may choose between more limited self-direction and agency provision of service. Oregon In Oregon, consumer-directed providers, over whom clients have ultimate hiring and firing authority, provide over 91 percent of in-home services. These providers are paid directly by a state agency, and, thus, consumers have minimal involvement in the payroll process. However, consumers of Medicaid in-home care do verify that the authorized hours of work were performed by signing workers’ time sheets. In Oregon, case managers play a significant role in ensuring a successful community-based placement. Consumers work with case managers to obtain the set of services that best meets their functional needs. Oregon reports a staffing standard of one case manager for each 69 in-home clients—approximately one-half of the staffing standard for nursing facility clients. Case managers can also arrange for in-home agency providers to assist in case of an emergency. Finally, Oregon has a “Client Employed Provider Guide for Employees” that helps clients select, hire, and direct caregivers. The four states’ approaches are summarized in table 5. Page 34 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Table 5: Variation in Consumer Direction of Personal Care in Four Consumer Supportive Payroll States Populations direction services done by State served available availablea consumer California People with Yes, in all 68 Yes, in at least Less than 1 physical counties; 16 23 countiesb percent disabilities and the counties have frail elderly additional service delivery modes. Kansas People with Optional Yes No physical disabilities and developmental disabilities and the frail elderly Maine People with Mandatory Yes, but limited Yes, under physical under one under one one model disabilities and the model; optional model frail elderly under other model Oregon People with Optional Yes No physical disabilities and developmental disabilities, the frail elderly, and people with mental illness a Supportive services include assistance in recruiting and hiring, training, and day-to-day management of caregivers. b California services are decentralized to the county level and thus vary in the degree of available supportive services. States Recognize Multiple Despite differences in their models of consumer direction, the four states Factors Influencing the we visited share concerns about ensuring the quality of care and Quality of Personal Care safeguarding individuals with disabilities. There is a general consensus among state officials, consumers, and advocates that working conditions—including low wage levels and lack of fringe benefits—often make it very difficult to recruit and retain qualified caregivers.31 Despite these states’ commitment to transfer authority over key aspects of personal care to the consumer, there is less consensus among these same groups on whether and how other quality control measures, such as background checks and service monitoring, should be implemented. Each 31 Additionally, state officials, consumers, and advocates reported that it is often difficult to arrange for backup when caregivers do not show up for work. Page 35 GAO/HEHS-99-101 Severely Disabled Adults B-280728 state recognizes the special challenges posed by monitoring services delivered in a home-based setting and by serving a population that includes consumers who have mental impairments. Furthermore, little consensus existed among state officials, consumers, and advocates regarding the degree to which government should actively protect consumers with disabilities. Compensation of Caregivers Among the concerns most often raised by state officials, consumers, and Has Implications for Quality of advocates in three of the four states we visited are the low wages and Care limited fringe benefits available to caregivers and the implications of these factors for the quality of care consumers receive. Any decision about caregiver compensation inevitably must be made in a context of funding limitations. The quantity of services available is related in large part to the cost of those services—and labor is by far the largest component of the cost of personal care. Three of the four states told us that they were uncomfortable with caregiver pay levels, indicating that low wages could reduce the quality and consistency of care. Only in Kansas did there seem to be general agreement that personal caregiver wage rates were adequate. At the time of our visits, the hourly wages for personal care when provided under consumer-directed (nonagency) arrangements were as follows: • California paid $5.75, • Kansas paid varying wages, • Maine paid $6.25, and • Oregon paid $6.50 to $6.72.32 In California, counties have the option of increasing the personal caregiver’s hourly wage using local revenues, without any state contribution to the increase. Only San Francisco has augmented the wage level—to $7. Several other counties are currently considering increases. In addition, California has chosen to use state revenues to pay relatives for providing personal care to people who are otherwise eligible for Medicaid reimbursement.33 One study, which found positive outcomes for consumers self-directing their caregivers, estimated that over 40 percent of consumer-directed personal care providers in California are family 32 Oregon has a tiered payment system reflective of clients’ care needs. At the time of our visit, Oregon rates were $6.50 per hour for minimal assistance with ADL and IADL care needs and $6.72 per hour for full assistance with ADL care. As of Feb. 1, 1999, Oregon increased its rates to $7.80 and $8.02, respectively. 33 HCFA generally prohibits Medicaid payments to spouses or parents of beneficiaries who provide care. Page 36 GAO/HEHS-99-101 Severely Disabled Adults B-280728 members.34 Family members are more likely to undertake such a responsibility, in part, for altruistic reasons, and thus the low compensation may be more appropriately viewed as a recognition of this fact rather than as an actual salary. In Kansas, under the HCBS waiver for people with physical disabilities, caregivers are paid between $8.25 and $13.25 per hour. The specific amount is determined by the consumer and his or her independent living counselor and reflects in part the severity of the consumer’s disability. These amounts are essentially ceilings; caregivers are typically paid at lower levels. For example, for personal care arranged through the Topeka Independent Living Center, wages range from $7 to $10. Part of the reason for the difference between these rates and the maximum allowed by the state is that the Center pays for workers’ compensation and unemployment insurance from the remainder of the state allowance. The frail elderly waiver reimburses between $12.00 and $13.25, depending on the level of care the consumer requires; the waiver for people with developmental disabilities offers a flat hourly rate of $10.40. These amounts are then subject to withholding and insurance, resulting in the caregiver’s receiving approximately $6 to $8. Few fringe benefits—such as workers’ compensation, health insurance, and paid leave—are available for personal caregivers. Of the four states we visited, only California offers workers’ compensation to all personal caregivers; Kansas offers selective coverage, depending in part on the choice of the consumer or vendor agency. In California, active consideration is being given to providing health insurance coverage; San Francisco began providing health insurance coverage in March 1999, and a few counties are also exploring health insurance options. None of the four states offers sick or vacation leave to consumer-directed personal caregivers. In two of the four states—Oregon and California—labor unions are attempting to organize the states’ personal care workforces with the goal of improving wage and benefit levels. The unions face special challenges because of the extent of consumer direction, which results in a highly decentralized workforce. Of the two states, greater organizing progress has been made in California where, as of February 1999, personal caregivers in six counties, including Los Angeles, voted in favor of representation by the Service Employees International Union. In Oregon, 34 A.E. Benjamin, R.E. Matthias, and T.M. Franke, Comparing Client-Directed and Agency Models for Providing Supportive Services at Home, report for the Assistant Secretary for Planning and Evaluation, HHS (Los Angeles, Calif.: Sept. 30, 1998). Page 37 GAO/HEHS-99-101 Severely Disabled Adults B-280728 the Oregon Public Employees Union, with the help of its umbrella organization, the Service Employees International Union, has submitted legislation to form a Home Care Providers Commission. One of the main functions of this commission would be to collectively bargain on behalf of client-employed providers. Views Differ on Monitoring State and local agencies charged with paying for and regulating personal Service Quality care confront special challenges because of the basic characteristics of self-directed personal care, including the setting in which care is delivered and the nature of both the clientele and the workforce. Moreover, state efforts to intervene to protect consumers have engendered controversy across subgroups of the disability population and their advocates, some of whom view government oversight as intrusive. As a service delivered in individuals’ homes, in diffuse settings, personal care is by nature more difficult to monitor than care delivered in a centralized setting to multiple individuals (for example, in a nursing home or adult day care center). Consumer direction further complicates the task of oversight because it leads to considerable variation and adjustment to individual circumstances, resulting in a less standardized “product.” In addition, consumer-directed personal care requires closer monitoring than services provided through agencies, which are often obligated to ensure the qualifications and performance of their employees. Finally, at least some of the adult disabled and elderly populations have degrees of mental impairment that restrict or prohibit their ability to oversee their own affairs and may require some sort of special protection. Older consumers are sometimes at special risk because of dementia and depression, which can accompany the aging process. But some younger adults with disabilities also experience limitations in mental capacity, such as those associated with mental retardation and certain other developmental disabilities. Officials, Consumers, and Recognizing their responsibility for protecting the most vulnerable Advocates See the Need to consumers of personal care—especially the elderly and mentally Balance Safety With Autonomy impaired—state and local government officials with whom we spoke were generally inclined to support broad intervention strategies to protect consumers. Other things being equal, these officials seemed to prefer erring on the side of too much rather than insufficient protection. Although none of the four states we contacted was considering imposing licensure or certification requirements or demanding credentials for personal caregivers, efforts are being made to train personal caregivers as Page 38 GAO/HEHS-99-101 Severely Disabled Adults B-280728 a quality assurance measure in some of the states we visited. The importance of training is exemplified by caregivers’ frequent need to assist consumers in rising from beds or chairs or in moving about their homes. Without training in lifting or transferring techniques, workers may injure themselves or the people for whom they are caring. To some extent, a pivotal issue in the consumer protection debate is tolerance of risk to the consumer’s personal safety. Some consumers and advocates are more willing to tolerate risk if it allows greater personal autonomy, while others believe that protection of vulnerable consumers must take priority.35 Those on both sides of the issue seem willing to concede, however, that exceptions can and should be made, and individual circumstances should ultimately govern policy. Maine officials noted concerns about the liability of caregivers who provide services in accordance with consumers’ instructions that may not meet quality or safety standards. In this regard, Maine officials stated that nurses have raised similar concerns.36 Our review of federal and state approaches to providing personal care in Conclusions home- and community-based settings suggests that the willingness and capacity to do so exist. Increasingly, states are taking advantage of the flexibility available through the use of Medicaid HCBS waivers to design and target programs to individuals with disabilities that meet unique state needs. The personal care programs we examined in California, Kansas, Maine, and Oregon reflect the diversity of approaches and can serve as useful models for other states that may wish to expand the delivery of services in noninstitutional settings and emphasize consumer participation in directing services to meet their own care needs. HCFA and the four states we visited were given an opportunity to review a Agency and State draft of this report. They generally agreed with our description of Comments individuals with disabilities and the federal programs providing services. HCFA identified several areas in which the report could be clarified. As a result, we revised language addressing (1) home health services under 35 In particular, the subject of criminal background checks for personal caregivers is a controversial issue. Advocates for younger adults with physical disabilities see this idea as unnecessary and overly intrusive, while state officials and other advocates see it as imperative to protect vulnerable consumers. Within these groups there is also skepticism about the efficacy of background checks given the incompleteness of criminal justice databases. Other difficulties surrounding the issue include the expense of such background checks as well as reluctance at the state and local levels to fund them. 36 In this case, nurses are not supervising the caregiver but are providing in-home nursing care. Page 39 GAO/HEHS-99-101 Severely Disabled Adults B-280728 Medicare and Medicaid and (2) the PCS benefit option under Medicaid. We incorporated other technical comments from both HCFA and the states as appropriate. We are sending copies of this report to the Honorable Donna E. Shalala, Secretary of Health and Human Services; the Honorable Nancy-Ann Min DeParle, Administrator of HCFA; appropriate congressional committees; and other interested parties. If you or your staff have any questions about this report, please call me at (202) 512-7118 or Walter Ochinko, Assistant Director, Health Financing and Public Health Issues, at (202) 512-7157. Other major contributors are listed in appendix VII. Kathryn G. Allen Associate Director, Health Financing and Public Health Issues Page 40 GAO/HEHS-99-101 Severely Disabled Adults Page 41 GAO/HEHS-99-101 Severely Disabled Adults Contents Letter 1 Appendix I 46 Objectives, Scope, and Methodology Appendix II 50 Federal Programs Directed Specifically at Individuals With Disabilities Appendix III 58 Other Federal Programs With Disability as a Criterion for Eligibility Appendix IV 68 Medicaid Expenditures for Personal Care and Related Services Appendix V 71 States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Page 42 GAO/HEHS-99-101 Severely Disabled Adults Contents Appendix VI 82 Cash and Counseling Demonstration and Evaluation Appendix VII 87 Major Contributors to This Report Tables Table 1: Beneficiaries’ Use of Medicare Home Health Aides, 1996 16 Table 2: States’ Use of the PCS Benefit, Ranked by Percentage of 22 Total Medicaid Community-Based Expenditures, Fiscal Year 1998 Table 3: Range of Attributes of HCBS Waivers Offering Personal 25 Care Services, 1998 Table 4: Selected Characteristics of HCBS Waivers With Personal 26 Care, 1998 Table 5: Variation in Consumer Direction of Personal Care in 35 Four States Table IV.1: Medicaid Community-Based Expenditures, Fiscal Year 69 1998 Table V.1: Limits Imposed Under the Medicaid Home Health 72 Benefit Table V.2: Limits Imposed Under the Medicaid PCS Benefit 75 Table V.3: Clients Served by Medicaid HCBS Waivers With 77 Personal Care, 1997 Table VI.1: Consumer Interest in a Cash Model 85 Figures Figure 1: Estimates of Number of Adults With Severe Disabilities, 9 1994-95 Figure 2: Selected Characteristics of Adults With Severe 10 Disabilities Compared With Those of the General Population, 1994-95 Figure 3: Adults With Severe Disabilities Covered by Public 12 Health Insurance, 1994-95 Figure 4: Distribution of the Estimated $110 Billion Designated 14 Specifically for Individuals With Disabilities, by Budget Function, Fiscal Year 1999 Figure 5: Medicare Home Health Expenditures, 1981-97 15 Page 43 GAO/HEHS-99-101 Severely Disabled Adults Contents Figure 6: Comparison of Growth in Medicare and Medicaid Home 18 Health Expenditures, 1987-97 Figure 7: States Offering the PCS Benefit, 1998 20 Figure 8: Medicaid HCBS Waivers With and Without Personal 24 Care Services, 1998 Figure 9: Self-Direction Can Be Analogous to Operating a Small 30 Business Figure 10: Consumer-Directed Personal Care in the States 32 Figure IV.1: Growth in Medicaid Expenditures for Personal Care 68 and Related Services, 1987-98 Abbreviations ADA Americans With Disabilities Act of 1990 ADL activities of daily living AIDS acquired immunodeficiency syndrome APHSA American Public Human Services Association ARC AIDS-related complex CCDE Cash and Counseling Demonstration and Evaluation HCBS home- and community-based services HCFA Health Care Financing Administration HHS Department of Health and Human Services HIV human immunodeficiency virus HUD Department of Housing and Urban Development IADL instrumental activities of daily living NHIS National Health Interview Survey PCS personal care services VA Department of Veterans Affairs Page 44 GAO/HEHS-99-101 Severely Disabled Adults Page 45 GAO/HEHS-99-101 Severely Disabled Adults Appendix I Objectives, Scope, and Methodology To estimate the number of people with severe disabilities, we reviewed several national surveys, including the Medical Expenditure Panel Survey, the Survey of Income and Program Participation, and the Medicare Current Beneficiary Survey. We selected the 1994 and 1995 National Health Interview Surveys (NHIS) for analysis in part because individuals were asked to report the level of difficulty they had in performing activities of daily living (ADL) and instrumental activities of daily living (IADL), thus providing some measure of the severity of their conditions. NHIS also provided information regarding individuals’ need for personal care and related assistance with ADLs and IADLs, as well as data on individuals’ ability to work. NHIS data report on noninstitutionalized individuals; thus, our sample excludes individuals residing in nursing homes or other institutions. By combining 2 years of NHIS data, we were able to increase the sample size and decrease the sampling standard error of our estimates. Because our estimate of the number of individuals with severe disabilities is based on a sample of the population, it is subject to sampling errors. The highest standard error (a measure of sampling error) of our population estimates was +/- 1.6 percent of total estimates. For our comparison of the demographics of individuals with severe disabilities with those of the general population, the percentage sampling error was within a 95-percent confidence interval. Finally, we did not verify the accuracy of the survey data; however, NHIS is a recognized national survey instrument with established procedures in place to ensure a reasonable level of reliability of estimates. We consulted with national research organizations and interest groups regarding a definition of individuals with severe disabilities, obtaining input on the advisability of including both ADL and IADL components. Despite the fact that NHIS specifically asks about supervision of ADLs, research and advocacy organizations believed that an IADL component was necessary to better ensure that individuals with mental or cognitive impairments were represented in our sample. On the basis of these discussions and our research, we defined an adult with severe disabilities as an individual who reported either a lot of difficulty with performing or inability to perform either (1) three or more ADLs or (2) two ADLs and four IADLs. In some cases, individuals with mental impairments, such as developmental disabilities, mental illness, and other conditions, can physically perform ADLs, IADLs, or both, but supervision or oversight is necessary to ensure that self-care is safely, consistently, and appropriately performed. Although we relied on a definition that included IADLs, our estimates maintained a predominant focus on ADLs because of Page 46 GAO/HEHS-99-101 Severely Disabled Adults Appendix I Objectives, Scope, and Methodology their close tie to personal care needs. In this regard, the definition applied for this report is more heavily weighted toward individuals with physical impairments. To identify federal programs for which people with disabilities are likely to qualify, we reviewed the December 1998 Catalog of Federal Domestic Assistance (Washington, D.C.: General Services Administration, Dec. 1998) for program descriptions containing variations of the terms “disability” and “handicap.” The catalog is a governmentwide compendium of federal programs, projects, services, and activities that provide assistance or benefits to the American public. It contains financial and nonfinancial assistance programs administered by departments and other entities of the federal government. We included in our program count cash assistance, grant, and direct service programs for which adults with disabilities are eligible. Grants and activities for children were excluded because our focus was on adults. In addition, we did not include research, affirmative action and advocacy, and architectural barriers and compliance programs because they do not involve the direct provision of cash, benefits, or other services to people with disabilities.37 We subsequently divided the identified grants and activities into two groups: (1) those for which disability was the primary condition of program participation and (2) those for which program participation did not depend solely on an individual’s having disabilities.38 We compiled estimated federal expenditures for the first group to arrive at a total federal commitment of $110 billion for fiscal year 1999. We did not determine the amount of estimated expenditures for the second group because eligibility for these programs did not depend only on disability. To identify the amount and type of personal care provided under Medicaid and Medicare, we reviewed both existing research and Health Care Financing Administration (HCFA) expenditure reports. For the Medicaid home health and personal care services (PCS) benefits, we used HCFA 64 37 Our search yielded several grants and activities that were not directly related to individuals with disabilities. For example, some programs contained a generic statement regarding the illegality of discriminating against individuals with disabilities. We did not include such programs in our count. 38 The Supplemental Security Income program provides cash benefits to individuals with disabilities or those who are aged. Because 77 percent of the participants in this program have disabilities, we included this percentage of expenditures in our calculations of federal commitments to individuals with disabilities. Page 47 GAO/HEHS-99-101 Severely Disabled Adults Appendix I Objectives, Scope, and Methodology and 2082 data sources on expenditures and recipients.39 Using the Commerce Clearing House, Inc., Medicare and Medicaid Guide, we identified states offering the PCS benefit and grouped them by the eligibility categories and service limits imposed by each state. To identify home- and community-based service (HCBS) waivers, we used an August 1998 database maintained by the American Public Human Services Association (APHSA). We then summarized available cost and recipient data on HCBS waivers. However, not all waivers in the database had cost data and recipient counts; hence, data on HCBS waivers are likely to represent an undercount of consumers and expenditures. To identify states with consumer-directed services, we reviewed the APHSA database of waivers, conducted a literature search, and contacted research and advocacy organizations. To examine how a select group of states directs personal care services to those most in need and how these states have implemented consumer direction, we conducted an extensive literature review and held discussions with research and advocacy organizations. We selected our state sample with the purpose of identifying a range of considerations, including states that • were identified as leaders in offering consumer-directed personal care; • offered HCBS waivers with personal care, with a broad range in per capita spending; • made significant use of the PCS benefit under Medicaid; and • targeted a mixture of populations, such as the aged, those with disabilities, and those with mental disabilities. Our objective was to select states representing a broad diversity of approaches to personal care and consumer direction. Thus, we selected California in part because of its extensive use of the PCS benefit, and Oregon because of its extensive use of an HCBS waiver. Maine and Kansas afforded additional variety in their use of multiple HCBS waivers and differences in their use of the PCS benefit. During our fieldwork, we met with state and local agencies, interest groups, consumers, and unions representing or seeking to represent caregivers in order to obtain a variety of perspectives on the services and programs offered in each state. In our discussions, we focused on strategies for monitoring services and 39 HCFA 64 is a quarterly Medicaid expenditure report that summarizes data submitted by the states. HCFA 2082 is an annual statistical report with data on Medicaid eligibles, recipients, services, and expenditures derived from the states and summarized by HCFA. We did not verify the accuracy of HCFA expenditure reports. Page 48 GAO/HEHS-99-101 Severely Disabled Adults Appendix I Objectives, Scope, and Methodology targeting client populations, and we asked each group and organization to highlight areas of concern regarding consumer-directed services. Page 49 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities Using a compilation of 237 programs from the Catalog of Federal Domestic Assistance, we identified 30 programs, services, and activities that target individuals with disabilities. These programs are identified below by budget function and estimated fiscal year 1999 expenditures. Three programs—Social Security Disability Insurance, Supplemental Security Income, and Veterans Compensation for Service-Connected Disability—account for 86 percent of the funds obligated. Education, Training, Employment, and Social Services Budget Subfunction Books for the Blind and Physically Handicapped ($48.1 million). 503—Research and Provides library services to the blind and physically handicapped by General Education Aids offering cassette players and books on cassettes, on disks, and in Braille. Budget Subfunction Rehabilitation Act: Independent Living Centers ($46.1 million). 506—Social Services Provides grants for establishing and operating statewide networks of centers for independent living to help people with severe disabilities function more independently in family and community settings. Core services provided must include information and referral services, training in independent living skills, peer counseling, and individual and system advocacy. The governing board and the majority of staff and individuals in decision-making positions must be individuals with disabilities. Rehabilitation Act: Independent Living State Grants ($22.3 million). Provides grants to help states promote a philosophy of independent living, consumer control, peer support, self-help, self-determination, equal access, and individual and system advocacy. Independent living funds are used to support the statewide Independent Living Council and to maximize the leadership, empowerment, independence, and productivity of individuals with disabilities, as well as the integration and full inclusion of individuals with disabilities into mainstream American society. Rehabilitation Act: Independent Living Services for Older Individuals Who Are Blind ($11.2 million). Provides project grants to authorized state agencies to provide rehabilitation services to individuals Page 50 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities aged 55 and over who are blind, or whose severe visual impairments make competitive employment extremely difficult to attain, but for whom independent living in their own homes or communities is feasible. Services provided include (1) those designed to help correct or modify visual disabilities, (2) eyeglasses and other visual aids, (3) services and equipment to enhance mobility and self-care, and (4) training in Braille. Rehabilitation Services—Vocational Rehabilitation Grants ($2.3 billion). Assists states in providing vocational rehabilitation services and goods, including assessment, counseling, vocational and other training; job placement; reader services for the blind; interpreter services for the deaf; medical and related services; prosthetic and orthotic devices; rehabilitation technology; transportation to vocational rehabilitation sites; maintenance during rehabilitation; and other goods and services necessary for an individual with a disability to prepare for and engage in competitive employment. Rehabilitation Act: American Indians With Disabilities ($17.6 million). Provides project grants to governing bodies of American Indian tribes for vocational rehabilitation services for Indians with disabilities who reside on federal or state reservations to prepare them for suitable employment. Projects funded are for services over and above those provided by the Rehabilitation Act Basic Support Program, which is administered by the states, and include on-the-job training through tribal industries; support for self-employment in food services, crafts, and other enterprises; and special vocational and academic training through tribal colleges. Projects generally require 10-percent matching funds in cash or in kind. Rehabilitation Act: Special Projects and Demonstrations for Providing Vocational Rehabilitation Services to Individuals With Severe Disabilities ($18.9 million). Provides grants to states and public and other nonprofit organizations for projects and demonstrations that expand or improve vocational rehabilitation and other rehabilitation services for individuals with disabilities—especially those with the most severe disabilities. Projects may also be conducted to meet the special needs of individuals that are unserved or underserved. Developmental Disabilities Projects of National Significance ($5.3 million). Provides grants and contracts for the development of national and state policy that enhances the independence, productivity, and integration and inclusion into the community of people with Page 51 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities developmental disabilities. Project grants have been used to educate policymakers, fund federal interagency initiatives, enhance minority participation in public and private sector initiatives on developmental disabilities, and provide technical assistance and data collection and analysis. Funded projects include the provision of personal assistance services to individuals with disabilities. Rehabilitation Act: Service Projects ($5.9 million). Provides grants to state vocational rehabilitation agencies and public nonprofit organizations for projects and demonstrations that hold promise for expanding or improving vocational and other rehabilitation services for individuals with severe disabilities over and above the services provided by the Rehabilitation Act Basic Support Program. Projects provide financial assistance for vocational rehabilitation services to migratory agricultural or seasonal farmworkers and for projects that initiate integrated programs of recreation for individuals with disabilities. Rehabilitation Act: Projects With Industry ($22.1 million). Awards grants to employers, labor unions, for-profit and nonprofit organizations, institutions, and state vocational rehabilitation agencies to create and expand job and career opportunities for individuals with disabilities in the competitive labor market by joining with private industry to provide job training and placement, as well as career advancement services. A 20-percent match is required. Rehabilitation Act: Supported Employment Services for Individuals With Severe Disabilities ($38.2 million). Provides formula grants for time-limited services leading to supported employment for individuals with the most severe disabilities. Funds are used to provide (1) services complementary to title I of the Rehabilitation Act, (2) skilled job trainers who accompany workers for intensive on-the-job training, (3) systematic training, (4) job development, (5) follow-up services, (6) regular observation or supervision at training sites, and (7) other services needed to support an individual in employment. Senior Companion Program ($35.2 million). Provides grants to state and local agencies and private nonprofit organizations to afford income-eligible people, aged 60 and older, the opportunity to provide personal assistance and companionship to other seniors through volunteer service; provide nonmedical personal support to adults who, without support, might be inappropriately placed in long-term care facilities; help people who have been discharged from health care facilities and other Page 52 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities institutions; and provide companionship to people with developmental disabilities and other special needs. The grants may be used for Senior Companion stipends, transportation, physical examinations, insurance, and meals; staff salaries, fringe benefits, and travel; equipment and space; and so on. Technology-Related Assistance State Grants ($30 million). Provides grants to states to help them develop and implement comprehensive, consumer-responsive statewide programs of technology-related assistance for individuals of all ages with disabilities. States may provide assistance to statewide community-based organizations or directly to individuals with disabilities. Income Security Budget Subfunction Shelter Plus Care ($65 million). Provides project grants to states, units 604—Housing Assistance of local governments, Indian tribes, and public housing agencies to provide rental assistance, in connection with other supportive services funded from sources other than this program, to homeless people with disabilities. Rental assistance is available for tenant-based, sponsor-based, project-based, and single-room occupancy for homeless individuals. Supportive Housing for Persons With Disabilities (also appears under subfunction 371 for mortgage credit) ($174 million). Provides capital advances to finance the construction, rehabilitation, or purchase of buildings for supportive housing for people with disabilities for use as group homes. Project rental assistance is also used to cover any part of the Housing and Urban Development (HUD)-approved operating costs of a facility that is not met from project income. Multifamily Housing Service Coordinators (also appears under subfunction 451 for community development) ($6.5 million).40 Provides project grants to owners or managers of conventional public housing projects to hire service coordinators to link elderly and disabled assisted housing residents with supportive or medical services in the general community; prevent premature and unnecessary institutionalization; and assess individual service needs, determine 40 Represents expenditures for FY 1998; estimated expenditures for FY 1999 were not available. Page 53 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities eligibility for public services, and make resource allocation decisions that enable residents to stay in the community longer. Budget Subfunction Supplemental Security Income ($21.4 billion).41 Provides cash 609—Other Income payments to ensure a minimum level of income to people who are aged 65 Security or older or who are blind or disabled. Eligibility is based on an assessment of the individual’s monthly income and resources, U.S. residency, and citizenship or alien status. Social Security Budget Subfunction Social Security Disability Insurance ($57.3 billion). Replaces part of 651—Social Security the earnings of qualified disabled workers under age 65 who are unable to engage in any substantial gainful activity because of a medically determinable physical or mental impairment that has lasted or is expected to last at least 12 months, or to result in death. The program provides monthly cash benefits to eligible disabled people and eligible auxiliary beneficiaries, such as certain family members, throughout the period of disability. Costs of vocational rehabilitation are also paid for certain beneficiaries. Veterans’ Benefits and Services Budget Subfunction Veterans Compensation for Service-Connected Disability 701—Income Security for ($15.3 billion). Compensates veterans for disabilities incurred or Veterans aggravated during military service according to the average impairment of earning capacity such a disability would cause in civilian occupations. Benefits are paid from when the injury occurred or disease was contracted as well as from the time a preexisting injury occurred or disease was contracted in the active military. Veterans Pension for Non-Service-Connected Disability ($2.3 billion). Assists wartime veterans in need whose 41 Represents expenditures for only the disabled Supplemental Security Income program population. Total program estimated expenditures for FY 1999 are $27.8 billion. Page 54 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities non-service-connected disabilities are permanent and totally prevent them from obtaining substantial gainful employment. Veterans who have had 90 days or more of honorable active wartime service in the armed forces or who were released or discharged with less than 90 days of service because of a service-connected disability are eligible. Income restrictions are prescribed, and pensions are not payable to those whose estates are so large that it is reasonable that they could be used for maintenance. Budget Subfunction Vocational Rehabilitation for Disabled Veterans ($403 million). 702—Veterans Education, Provides all services and assistance necessary to enable service-disabled Training, and veterans and those receiving treatment for a service-connected disability pending discharge to achieve maximum independence in daily living and, Rehabilitation to the maximum extent feasible, to become employable and to obtain and maintain suitable employment. Veterans’ Specially Adapted Housing ($14.7 million). Assists certain severely disabled veterans in acquiring suitable housing units with special fixtures and facilities made necessary by the nature of the veterans’ disabilities. For veterans with permanent, total, and compensable disabilities related to service, the Department of Veterans Affairs (VA) provides 50 percent of the cost to the veteran of the housing unit, land, fixtures, and allowable expenses up to a maximum grant of $43,000. The program also provides funds for certain adaptations and equipment not to exceed a maximum grant of $8,250. Automobiles and Adaptive Equipment for Certain Disabled Veterans and Members of the Armed Forces ($26.2 million). Provides financial assistance to certain service members and veterans with disabilities toward a one-time payment for an automobile or other conveyance and an additional amount for adaptive equipment deemed necessary to ensure the eligible person will be able to operate or make use of the automobile or other conveyance. Provides financial assistance to veterans with honorable service and service members on duty who have a service-connected disability due to the loss or permanent loss of use of one or both feet, the loss of one or both hands, or a permanent impairment of vision of both eyes to a prescribed degree. Budget Subfunction Veterans Outpatient Care ($8.0 billion). Provides medical and dental 703—Hospital and Medical services on an outpatient basis, including examination; treatment; certain Care for Veterans home health services; podiatric, optometric, and surgical services; Page 55 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities medicines; and medical supplies to veterans who are 50-percent or more service-connected disabled. Pre-bed care, posthospital care, and care to obviate the need for hospitalization for any condition must be furnished to veterans rated 30- or 40-percent service-connected disabled and those whose annual income does not exceed the pension rate of a veteran in need of regular aid and attendance. Several other groups of veterans also qualify for these benefits, and veterans whose eligibility falls within the discretionary category who agree to make a copayment can be furnished outpatient care, services, or both on a facilities- and resource-available basis. Veterans Prescription Service ($1.6 billion). Provides eligible veterans (that is, veterans receiving Veterans Outpatient Care benefits) and certain dependents and survivors of veterans with prescription drugs and expendable medical supplies. Veterans receiving medications on an outpatient basis from VA facilities for treatment of a non-service-connected disability or condition are required to make a copayment of $2 for each supply of medication for 30 days or less. Veterans receiving medications for the treatment of a service-connected condition and veterans rated 50-percent or more service-connected disabled are exempt from this copayment requirement. Blind Veterans Rehabilitation Centers and Clinics ($59.8 million). Provides personal and social adjustment programs and medical or health-related services for eligible blind veterans at selected VA medical centers maintaining centers for rehabilitation of the blind. Veterans Prosthetic Appliances ($395.4 million). Provides through purchase or fabrication prosthetic and related devices, equipment, and services to disabled veterans to enable them to live and work as productive citizens. This assistance includes replacement and repair of devices; training in the use of artificial limbs; and provision of artificial eyes, wheelchairs, aids for the blind, hearing aids, braces, orthopedic shoes, eyeglasses, crutches and canes, medical equipment, implants, medical supplies, and automotive adaptive equipment. Budget Subfunction Veterans Housing—Direct Loans for Certain Disabled Veterans 704—Veterans Housing (amount not available). Provides direct loans of up to $33,000 to permanently and totally disabled veterans if (1) they are eligible for a VA Specially Adapted Housing grant, (2) a loan is necessary to supplement the Page 56 GAO/HEHS-99-101 Severely Disabled Adults Appendix II Federal Programs Directed Specifically at Individuals With Disabilities grant, and (3) home loans from a private lender are not available in the area where the property is located. Budget Subfunction Disabled Veterans’ Outreach Program ($80 million). Provides 705—Other Veterans formula grants to be used only for salaries and expenses and reasonable Benefits and Services support of Disabled Veterans’ Outreach Program specialists who shall be assigned only those duties directly related to meeting the employment needs of eligible veterans—that is, developing and promoting on-the-job training and apprenticeship positions within VA programs; providing outreach assistance to local employment service offices; promoting maximum employment opportunities for veterans; and providing job placement, counseling, testing, and job referral to eligible veterans, especially disabled veterans of the Vietnam era. General Government Budget Subfunction Rehabilitation Act: Federal Employment for Individuals With 805—Central Personnel Disabilities (amount not available). Encourages federal agencies to Management provide employment opportunities to individuals with physical, cognitive, or mental disabilities in positions for which they qualify. Page 57 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility Forty federal programs include disability as one of many potential criteria for program participation. Within these 40 programs, Medicare and Medicaid are the most significant sources of federal funds that provide personal care services to individuals with disabilities. Commerce and Housing Credit Budget Subfunction Rural Rental Housing Loans. Provides loans to construct or purchase 371—Mortgage Credit and substantially rehabilitate rental or cooperative housing or to develop manufactured housing projects that generally consist of two or more family units and any appropriate related facilities suitable for rural areas. Occupants must be low- or moderate-income families, the elderly, or individuals with disabilities. Loans may not be made for nursing, special care, or institution-type homes. Mortgage Insurance Rental Housing for the Elderly. HUD insures lenders against loss on mortgages approved under section 231 of the National Housing Act to finance construction or rehabilitation of detached, semidetached, walk-up, or elevator-type rental housing designed for occupancy by the elderly or individuals with disabilities and consisting of five or more units. Mortgage Insurance Rental and Cooperative Housing for Moderate Income Families and Elderly. HUD insures lenders against loss on mortgages approved under section 221 of the National Housing Act to finance construction or rehabilitation of detached, semidetached, row, walk-up, or elevator-type rental housing containing five or more units and designed for occupancy by moderate-income families, the elderly, and individuals with disabilities. Budget Subfunction Small Business Loans. Provides guaranteed loans to low-income small 376—Other Advancement business owners; businesses located in areas of high unemployment; of Commerce nonprofit sheltered workshops; and small businesses owned, being established, or being acquired by individuals with disabilities who are unable to obtain financing in the private credit marketplace. Page 58 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility Transportation Budget Subfunction Capital Assistance Program for Elderly Persons and Persons With 401—Ground Disabilities. Provides financial assistance in meeting the transportation Transportation needs of elderly people and people with disabilities where public transportation services are unavailable, insufficient, or inappropriate. Education, Training, Employment, and Social Services Budget Subfunction TRIO Student Support Services. Provides grants to institutions of 502—Higher Education higher education for low-income, first-generation college students or students with disabilities who are in need of academic support in order to pursue a program of postsecondary education. Funds may be used to provide personal and academic counseling, career guidance, instruction, mentoring, and tutoring. Budget Subfunction Job Training Partnership Act. Provides formula grants to states for 504—Training and establishing programs to prepare economically disadvantaged youth and Employment adults facing serious barriers to employment for participation in the labor force by providing job training and other services that will result in increased educational and occupational skills, increased employment and earnings, and decreased welfare dependency. Not less than 65 percent of the recipients shall be in one or more of the following categories: deficient in basic skills, recipients of cash welfare payments, school dropouts or students 1 or more years below grade level, individuals with disabilities, homeless or runaway youth, and youth who are pregnant or parenting. Employment Service. Provides formula grants to states to support a nationwide network of public employment offices to place people in employment by providing a variety of placement-related services. These services are available without charge to job seekers and to employers seeking qualified individuals to fill job vacancies. Workers and veterans with disabilities are entitled to special employment services. Page 59 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility Veterans’ Employment Program. Provides grants to states to develop programs to meet the employment and training needs of veterans with service-connected disabilities, veterans of the Vietnam era, and veterans recently separated from military service. Budget Subfunction Social Services Block Grant. Provides formula grants to enable each 506—Social Services state to furnish the social services best suited to the needs of the individuals residing in the state. Federal block grant funds may be used to provide services for one of the following five goals: (1) prevent, reduce, or eliminate welfare dependency; (2) help individuals achieve or maintain self-sufficiency; (3) prevent neglect, abuse, and exploitation of children and adults; (4) prevent or reduce inappropriate institutional care; and (5) secure admission or referral for institutional care when other forms of care are not appropriate. Developmental Disabilities University Affiliated Programs. Provides grants to defray the cost of administration and operation of programs that (1) provide interdisciplinary training for personnel concerned with developmental disabilities; (2) demonstrate community services activities, which include training and technical assistance and may include direct services; (3) disseminate findings related to the provision of services; and (4) generate information on the need for further service-related research. Special Programs for the Older Americans Act, Title III, Part C, Nutrition Services. Provides formula grants to states to support nutrition services, including providing nutritious meals, nutrition education, and other appropriate nutrition services for older Americans in order to maintain their health, independence, and quality of life. Meals may be served in a congregate setting or delivered to the home to eligible individuals aged 60 and over and to individuals under age 60 if they are handicapped or disabled and reside with and accompany an older individual. Health Budget Subfunction Medical Assistance Program. The Medicaid program provides formula 551—Health Care Services grants to states to provide financial aid for medical assistance on behalf of cash assistance recipients; children; pregnant women; individuals who are Page 60 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility aged, blind, or disabled and who meet income and resource requirements; and other categorically eligible groups. States can elect to provide similar coverage to medically needy people who, except for income and resource limitations, would be eligible for cash assistance. Financial assistance is provided to states to pay for Medicare premiums and copayments and deductibles of qualified Medicare beneficiaries meeting certain income requirements. More limited financial assistance is available for certain Medicare beneficiaries with higher incomes. Medicare Budget Subfunction Medicare Hospital Insurance. Provides hospital insurance protection 571—Medicare for covered services to people aged 65 or older, certain people with disabilities, and individuals with chronic renal disease. Hospital insurance benefits are paid to participating and emergency hospitals, skilled nursing facilities, home health agencies, and hospice agencies to cover the prospective payment amount or reasonable cost of medically necessary services furnished to individuals entitled under this program. People under age 65 who have been entitled for at least 24 months to Social Security disability benefits, or for 29 consecutive months to Railroad Retirement benefits on the basis of disability, are eligible for hospital insurance benefits. Medicare Supplementary Medical Insurance. Provides supplementary medical insurance to all people aged 65 or older; certain people with disabilities, whether insured under Medicare Hospital Insurance or not, may voluntarily enroll for this supplemental insurance. Medicare generally pays 80 percent of the approved amount (fee schedule, reasonable charges, or reasonable cost) for covered services in excess of the annual $100 deductible. Covered services include doctors’ services, lab and other diagnostic tests, X-ray and other radiation therapy, outpatient services, therapy, ambulance services, home health services, and provision of durable medical equipment. Page 61 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility Income Security Budget Subfunction Social Insurance for Railroad Workers.42 Provides monthly Social 601—General Retirement Security benefits, rail industry pensions, permanent and occupational and Disability Insurance disability benefits, federal windfall benefits, supplemental annuities, and sickness and unemployment benefits to workers and their families. (Excluding Social Security) Longshore and Harbor Workers’ Compensation. Provides compensation for disability or death resulting from injury, including occupational disease, to longshore workers, harbor workers, and certain other eligible employees engaged in maritime employment on the navigable waters of the United States and adjoining pier and dock areas. Coal Mine Workers’ Compensation. Provides monthly cash benefits to coal miners who are totally disabled from coal workers’ pneumoconiosis (black lung disease) and to widows and other surviving dependents of miners who have died of this disease. Special Benefits for Disabled Coal Miners. Provides monthly cash benefits to coal miners who have become totally disabled by coal workers’ pneumoconiosis or other chronic lung diseases arising from coal miner employment and to widows and other surviving dependents of miners who have died of these diseases. Budget Subfunction Supportive Housing Program. Provides project grants designed to 604—Housing Assistance promote the development of supportive housing and services to help people make the transition from homelessness to living as independently as possible. Program funds may be used in part to provide for transitional housing for up to 24 months and permanent housing in conjunction with appropriate supportive services to maximize the ability of people with disabilities to live as independently as possible. Economic Development and Supportive Services Program. Provides project grants to enable public housing agencies and Indian tribes in partnership with nonprofit or for-profit agencies to (1) facilitate economic development opportunities and supportive services to assist residents to become economically self-sufficient and (2) assist the elderly and people 42 This federal program was also classified under budget subfunction 603 for unemployment compensation. Page 62 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility with disabilities to live independently and prevent premature or unnecessary institutionalization. Operating Assistance for Troubled Multifamily Housing Projects. Provides loans to the elderly and people with disabilities to restore or maintain the physical and financial soundness of eligible housing projects, as well as to assist in the management and maintenance of the low- to moderate-income character of certain projects approved for assistance under the National Housing Act or the Housing and Urban Development Act of 1965. Rural Rental Assistance Payments. Provides rental assistance to reduce the rents paid by low-income senior citizens or families, domestic farm laborers, and citizens with disabilities occupying eligible rural rental housing whose rents exceed 30 percent of an adjusted monthly income and whose income does not exceed the limit established for the state. Rural Rental Housing Section 538 Guaranteed Loans. Provides guaranteed loans to encourage the construction of new rural, multifamily rental housing and appropriate related facilities, generally consisting of two or more family units. Occupants must have low to moderate incomes, be elderly, or have disabilities. Income cannot exceed 115 percent of the median income. Guaranteed loans may not be made for nursing, special care, or industrial-type housing. Public and Indian Housing. Provides funding to authorized local public housing agencies for the operation of cost-effective, decent, safe, and affordable dwellings for lower-income families, the elderly, and families with people with disabilities. Budget Subfunction Food Stamps. Provides low-income households the ability to improve 605—Food and Nutrition their diets by increasing their food purchasing ability. Food stamp benefits Assistance vary on the basis of family size, income, and level of resources. Food stamps may be used in participating retail stores to buy food for home consumption; by certain elderly people and people with disabilities and their spouses who cannot prepare their own meals and receive meals delivered to them by authorized meal delivery services; and by people who are elderly, disabled, or both and their spouses to purchase meals in establishments providing communal dining for the elderly. Page 63 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility Nutrition Program for the Elderly (Commodities). Provides food for use in the preparation of congregate or home-delivered meals by nutrition programs for the elderly. This program is designed to improve the diets of the elderly and to increase the market for domestically produced foods acquired under surplus removal or price support operations. Meals may be served in a congregate setting or delivered to the home to eligible individuals aged 60 and over and, in certain cases, under age 60 if the individual is handicapped or disabled and resides with and accompanies an older individual. Child and Adult Care Food Program. Assists states, through grants-in-aid and other means, to initiate and maintain nonprofit food services programs for children, the elderly, and adults with impairments in nonresidential day care facilities. The program is generally limited to children 12 years old and younger, individuals with disabilities, functionally impaired adults at least 18 years old, and adults 60 years of age and older. Meals must meet minimum requirements of the U.S. Department of Agriculture. Budget Subfunction Family Support Payments to States. Provides cash payments directly 609—Other Income to eligible needy families with dependent children through the Temporary Security Assistance for Needy Families program and to needy people who are aged, blind, or disabled in Guam, Puerto Rico, and the Virgin Islands. The program also provides child care, so that individuals can participate in approved education and training activities and accept or maintain employment, and temporary emergency assistance to families with children. Social Security Budget Subfunction Social Security Retirement Insurance. Provides monthly cash benefits 651—Social Security to eligible retired workers and their eligible family members to replace part of the earnings lost as a result of retirement. Retired workers aged 62 and over who have worked the required number of years under Social Security are eligible for monthly benefits. Also, certain family members can receive benefits, including (1) a wife or husband aged 62 or older; (2) a spouse at any age, if a child who is under age 16 or is disabled is in his or her care and is entitled to benefits on the basis of the worker’s record; Page 64 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility (3) unmarried children under age 18; (4) unmarried adult offspring at any age if disabled before age 22; and (5) divorced wives or husbands aged 62 or older who were married to the worker for at least 10 years. Veterans’ Benefits and Services Budget Subfunction All-Volunteer Force Educational Assistance. Provides educational 702—Veterans Education, assistance to those who have served on active duty after June 30, 1985. Training, and This program also assists in the recruitment and retention of highly qualified personnel in the active and reserve armed forces by extending Rehabilitation the benefits of higher education to those who may not otherwise be able to afford it. Physical or mental disability that is not the result of the individual’s own willful misconduct can extend the 10 years after release from service that veterans have to complete their education. Veterans must serve 2 years before they are eligible for basic educational assistance. Participants who have not completed the required obligated service must have been discharged for a service-connected disability. Post-Vietnam-Era Veterans’ Educational Assistance. Provides educational assistance to people entering the armed forces after December 31, 1976, and before July 1, 1985, to help them obtain an education they might otherwise not be able to afford. This program was also designed to promote and assist the all-volunteer military program of the United States by attracting qualified people to serve in the armed forces. Post-Vietnam-era veterans must have served honorably on active duty for more than 180 continuous days beginning on or after January 1, 1977, or have been discharged after that date because of a service-connected disability. Survivors and Dependents Educational Assistance. Provides partial support to the following individuals who are seeking to advance their education: qualifying spouses, surviving spouses, or children between ages 18 and 26 of (1) deceased veterans or veterans who, as a result of their military service, have a permanent and total (100-percent) service-connected disability or (2) service personnel who have been listed for a total of more than 90 days as currently missing in action or as prisoners of war. Assistance in the form of monthly payments for up to 45 months to be used for tuition, books, subsistence, and so on is available Page 65 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility for 10 years from the date of the veteran’s disability rating or the date of death of a veteran classified with a total service-connected disability. Budget Subfunction Veterans Medical Care Benefits. Provides hospital outpatient medical 703—Hospital and Medical and dental services, medicines, and medical supplies to enrolled veterans Care for Veterans in a VA medical care facility. Eligible veterans include, among others, those that require treatment for a service-connected disability, have a service-connected disability rated at 50 percent or more, have a compensable service-connected disability rated at less than 50 percent, or are former prisoners of war. Budget Subfunction Veterans Housing Guaranteed and Insured Loans. Provides 704—Veterans Housing VA-guaranteed or -insured loans to assist eligible veterans, certain service personnel, and certain surviving spouses of veterans who have not remarried in obtaining credit to purchase, construct, or improve homes on more liberal terms than are generally available to nonveterans. Eligible veterans include those with a service-connected disability. Veterans Housing Manufactured Home Loans. Provides VA-guaranteed or -insured loans to assist eligible veterans, certain service personnel, and certain surviving spouses of veterans who have not remarried in obtaining credit to purchase a manufactured home on more liberal terms than are generally available to nonveterans. Eligible veterans include those with a service-connected disability. Native American Veteran Direct Loan Program. Provides direct loans to certain Native American veterans, certain service personnel, and certain surviving spouses of Native American veterans who have not remarried to purchase or construct homes on trust lands. Eligible veterans include those with a service-connected disability. Administration of Justice Budget Subfunction Public Safety Officers’ Benefits Program. Provides a $141,556 death 754—Criminal Justice benefit to the eligible survivors of a federal, state, or local public safety Assistance officer whose death is the direct and proximate result of a personal Page 66 GAO/HEHS-99-101 Severely Disabled Adults Appendix III Other Federal Programs With Disability as a Criterion for Eligibility (traumatic) injury sustained in the line of duty. The program also provides a $141,556 disability benefit to a federal, state, or local public safety officer whose permanent and total disability is the direct and proximate result of a personal injury sustained in the line of duty. General Government Budget Subfunction Federal Employment Assistance for Veterans. Provides assistance to 805—Central Personnel veterans in obtaining federal employment. A 5-point preference is given to Management veterans separated under honorable conditions who served on active duty in the armed forces of the United States during certain periods of time or who have a campaign or expeditionary medal. A 10-point preference is given to disabled veterans and certain wives or husbands, widows or widowers, and mothers of veterans. Retired members of the armed forces have not been considered eligible for preference since October 1, 1980, unless they are veterans with disabilities or they retired below the rank of major or the equivalent. Budget Subfunction Weatherization Assistance for Low-Income Persons. Provides 999—Miscellaneous formula grants to states to improve the thermal efficiency of dwellings of low-income people, particularly individuals who are elderly or handicapped, by the installation of weatherization materials, such as attic insulation, caulking, weatherstripping, and storm windows, and by furnace efficiency modification in order to conserve needed energy and to aid those people least able to afford higher utility costs. Page 67 GAO/HEHS-99-101 Severely Disabled Adults Appendix IV Medicaid Expenditures for Personal Care and Related Services Medicaid’s provision of personal care and in-home services has evolved considerably over the years, particularly as the use of HCBS waivers as a means of providing community-based services has grown. For fiscal year 1998, expenditures for Medicaid community-based services—home health, the PCS benefit, and HCBS waivers—totaled $14.8 billion. From 1987 to 1998, expenditures grew at an average annual rate of 16 percent for Medicaid home health, 10 percent for the PCS benefit, and 31 percent for the HCBS waivers (see fig. IV.1). HCBS waivers account for about 62 percent of all community-based expenditures under Medicaid, compared with 15 percent for home health and 23 percent for the PCS benefit. Table IV.1 shows each state’s total Medicaid spending for community-based care and expresses the proportion of total spending for each of the three benefits. Figure IV.1: Growth in Medicaid Expenditures for Personal Care and 10 Expenditures (Billions) Related Services, 1987-98 9 8 7 6 5 4 3 2 1 0 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 HCBS Waivers Home Health PCS Benefit Source: HCFA. Page 68 GAO/HEHS-99-101 Severely Disabled Adults Appendix IV Medicaid Expenditures for Personal Care and Related Services Table IV.1: Medicaid Community-Based Expenditures, Fiscal year 1998 Percentage of total expenditures Fiscal Year 1998 expenditures HCBS State (millions) PCS benefit waivers Home health a Alabama $141 83.72 16.28 Alaska 35 12.11 84.59 3.30 Arizonab 1 19.98 a 80.02 Arkansas 128 49.36 35.04 15.60 California 549 59.10 25.86 15.04 a Colorado 266 80.52 19.48 a Connecticut 410 72.73 27.27 a Delaware 38 80.72 19.28 a District of Columbia 13 2.73 97.27 c Florida 370 3.82 67.74 28.44 a Georgia 180 75.41 24.59 a Hawaii 27 93.61 6.39 Idaho 36 42.46 45.09 12.45 a Illinois 291 95.53 4.47 a Indiana 97 53.65 46.35 a Iowa 119 63.16 36.84 Kansas 219 3.74 90.29 5.97 a Kentucky 183 46.94 53.06 a Louisiana 89 75.18 24.82 Maine 117 3.06 84.86 12.07 Maryland 232 10.39 67.10 22.51 Massachusetts 631 22.05 63.43 14.52 Michigan 520 39.95 54.35 5.69 Minnesota 533 18.49 71.94 9.56 a Mississippi 23 46.35 53.65 Missouri 318 28.84 68.71 2.45 Montana 41 32.41 64.03 3.56 Nebraska 97 5.58 78.43 15.99 Nevada 21 9.53 55.86 34.61 New Hampshire 109 2.10 94.36 3.54 New Jersey 506 33.51 49.37 17.12 a New Mexico 117 96.58 3.42 New York 3,950 41.90 36.85 21.24 North Carolina 482 28.20 57.57 14.23 a North Dakota 39 95.53 4.47 a Ohio 321 86.25 13.75 (continued) Page 69 GAO/HEHS-99-101 Severely Disabled Adults Appendix IV Medicaid Expenditures for Personal Care and Related Services Fiscal year 1998 Percentage of total expenditures expenditures HCBS State (millions) PCS benefit waivers Home health Oklahoma 161 15.03 84.20 0.77 Oregon 295 6.77 93.09 0.14 a,c Pennsylvania 590 90.57 9.43 a Rhode Island 150 97.05 2.95 South Carolina 145 0.81c 88.34 10.85 South Dakota 47 1.55 92.18 6.27 a Tennessee 87 99.52 0.48 a Texas 648 35.33 64.67 Utah 66 0.66 95.42 3.93 c Vermont 71 2.15 92.04 5.81 a Virginia 205 96.00 4.00 Washington 432 27.79 69.56 2.66 West Virginia 150 18.56 67.10 14.34 Wisconsin 435 15.08 72.70 12.21 a Wyoming 48 91.11 8.89 Total $14,780 23.47 61.52 15.01 a State did not report expenditures in this benefit category. b Arizona offers personal care services through a section 1115 waiver demonstration program; HCFA assigned expenditures from this waiver to the PCS benefit. c State does not offer the PCS benefit to adults; expenditures under this benefit represent personal care services provided to children under the Early Periodic Screening, Diagnostic, and Treatment program. Source: HCFA. Page 70 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Under Medicaid, states have three approaches for providing personal care, two of which may be offered at the discretion of the state. First, states must offer the Medicaid home health services benefit (including home health aides), which may provide unskilled personal care services. Second, states may choose to provide the PCS benefit, which offers unskilled personal care services as a part of the states’ Medicaid benefit package. Third, HCBS waivers give states the option of providing personal care and other related services if they choose to do so. All candidates for personal care and other long-term care services are given individualized assessments, frequently coupled with environmental evaluations that take into account the candidates’ informal and community support. The objective is to ensure that (1) services are focused primarily on those with the greatest need, (2) personal care is targeted to prevent institutionalization as a first priority, and (3) only those with no feasible alternative are admitted to nursing homes. How states approach assessments can vary, primarily in the degree of professional discretion afforded to the assessor. Thus, some states use an assessment instrument that produces a numeric score, which essentially determines the level of care that the state will provide. Other states rely exclusively on the professional judgment of the individual assigned to undertake the assessment. States impose different limits on these services that are somewhat dependent on the states’ use of home health, the PCS benefit, or HCBS waivers. Under home health and the PCS benefit, states may limit services through medical necessity or utilization controls. HCBS waivers provide a much wider array of means to limit services that includes targeting populations, limiting geographic availability (statewideness), and capping expenditures. In all cases, imposing limits on services can help states to control costs. States must offer home health services as a part of their Medicaid program Home Health to all beneficiaries who are entitled to nursing facility services. Under Medicaid, a physician must order home health services as part of a care plan that is reviewed periodically and includes part-time or intermittent nursing services; home health aide services; and medical supplies, equipment, and appliances suitable for use in the home. Home health aide services must be provided by a home health agency and can include the provision of personal care. States may also choose to provide physical, occupational, and speech pathology and audiology as optional services. Page 71 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers States can elect to limit the number of visits, the number of hours, or the dollar amount of certain services provided under the Medicaid home health program. Table V.1 shows the states’ major limitations. Sixteen states specify no limitations, and most states allow established limits to be exceeded with prior authorization. Table V.1: Limits Imposed Under the Medicaid Home Health Benefit State Limits Alabama 104 visits per recipient per calendar year a Alaska a Arizona Arkansas 50 visits for any combination of home health nurse or aide services without prior authorization California More than one visit in 6 months is subject to prior authorization and to a physician-approved treatment plan requirement. A maximum total of 30 visits may be approved at any one time, valid for a period not exceeding 120 days. Colorado Covered visit is 2-1/2 hours. No more than five home health visits are covered per day. Simultaneous visits by two or more individuals count as one visit. Connecticut Prior authorization is required after the first two visits for intermittent nursing services when no home health agency exists in the area; for home health aide services in excess of 20 hours per week; and for physical, occupational, speech pathology, and audiology services. a Delaware District of Columbia 36 visits per year unless prior authorization is obtained; services of a home health aide are limited to 4 hours per day except by prior authorization. Florida 60 home health visits per year; 4 visits per day by a registered nurse; or 1 visit per day by a licensed practical nurse except by prior authorization Georgia 75 nursing or home health visits per recipient per calendar year Hawaii One visit per day during the first 2 weeks; three visits during the next 5 weeks; one visit per week for the following 7 weeks, and one visit every 60 days thereafter; additional services require prior authorization. Idaho 100 per recipient per calendar year; prior authorization is required for all medical equipment that costs more than $100 purchased by the department. Illinois Prior authorization is required except when services are provided by independently practicing physical, occupational, or speech therapists or by community health agencies. Indiana 30 hours/sessions/visits in a 30-day period unless prior authorization is obtained (continued) Page 72 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers State Limits a Iowa Kansas Home health aide services are limited to one visit per day, and physical, occupational, speech therapy, and restorative aide services are limited to 6 months from the first date of service. Kentucky Prior authorization is required for durable medical equipment that costs $150 or more. Louisiana 50 nursing and home health aide visits and 50 physical therapy services per year, except for recipients of Early and Periodic Screening, Diagnostic and Treatment program services a Maine Maryland One visit of less than 4 hours per type of service per day, eight visits per month for physical or speech pathology, four visits per month for occupational therapy, and 12 home health aide services per month; services and medical supplies that cost more than $900 per month require prior authorization. Massachusetts Prior authorization is required for home health aide services exceeding 120 hours in a calendar month when services exceeded 120 hours in each of the 2 preceding months. a Michigan Minnesota Prior authorization is required, unless a professional nurse determines an immediate need, for up to 40 visits per calendar year and for certain medical supplies and equipment. Mississippi Patients are limited to a combined total of 50 visits per fiscal year, medical equipment that costs less than $150 must be purchased, and a determination must be made whether to rent or purchase equipment that costs more than $150. Missouri 100 visits per patient per year Montana 100 home health visits and 75 skilled nursing visits per recipient per fiscal year; home health aide services are not provided for an individual receiving personal care services. Nebraska 40 hours per week and 8 hours per day a Nevada New Hampshire Prior authorization is required to purchase durable medical equipment exceeding certain cost limits as well as portable and in-home oxygen equipment. New Jersey Personal care assistant services are limited to 25 hours per week. a New Mexico a New York North Carolina Prior authorization is required for durable medical equipment. a North Dakota a Ohio (continued) Page 73 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers State Limits Oklahoma 12 home health visits per year a Oregon Pennsylvania 15 visits per month after 28 days of unlimited visits, one fee per visit regardless of services provided, and 1 visit per month for prenatal care Rhode Island Prior authorization is required for more than eight visits per month and for all medical supplies, equipment, and appliances. South Carolina 75 home health agency visits per fiscal year a South Dakota a Tennessee Texas 50 nurse and home health aide visits per recipient per year without prior authorization Utah Housekeeping or homemaking services and occupational therapy are not covered. Vermont Routine services are covered for 4 months with a physician’s certification. Virginia 32 home health agency or registered nurse visits or home health aide services and 24 rehabilitative therapy services ordered annually without prior authorization Washington Approval is required when the home health service duration or monthly payment will exceed the program’s limits. a West Virginia Wisconsin 30 visits by a registered aide, registered nurse, licensed practical nurse, or therapist without prior authorization; home health aide visits requiring more than 4 hours of continuous care require prior authorization. a Wyoming a No limitation specified. Source: Medicare and Medicaid Guide, Commerce Clearing House, Inc. Twenty-seven states and the District of Columbia offer personal care PCS Benefit under the PCS benefit, which is an optional benefit under the Medicaid program. Nine states43 provide personal care services to only the categorically needy, which include low-income children; pregnant women; aged, blind, or disabled people meeting Supplemental Security Income program requirements; and individuals who are eligible to receive 43 For three of these states (Arkansas, Oklahoma, and Washington), limiting personal care services to the categorically needy is a departure from policies on other benefits in their Medicaid programs, which are offered to both categorically needy and medically needy individuals. Page 74 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers federally assisted income maintenance payments. Such individuals must generally meet income and resource standards established for public assistance. The remaining 18 states and the District of Columbia provide personal care to both categorically needy and medically needy individuals. The latter group comprises those individuals whose income, resources, or both exceed the levels for the categorically needy, but who cannot afford to pay their medical bills. To control utilization of personal care services, states usually require prior authorization, establish concrete limits on the duration of services, or both. Table V.2 lists the control techniques used by each state. A few states have targeted eligibility for the PCS benefit by identifying a population or functional impairment for which they will provide assistance. For example, New Hampshire limits eligibility to individuals with chronic disabilities who use a wheelchair, and Florida limits personal care to children with disabilities. Table V.2: Limits Imposed Under the Medicaid PCS Benefit State Limits a Alaska One assessment and treatment plan per 12 months Arizonaa b Arkansasc Services cannot exceed 72 hours per month without prior approval. California Services must not exceed 283 hours per month. District of Columbia Services cannot exceed 4 hours per day or 1,040 hours in 12 months without prior authorization. Idahoa 16 hours per week Kansas Prior authorization is required for up to 24 hours per day. Maine Available to individuals with chronic or permanent disabilities who are able to self-direct a personal care attendant Maryland Services are provided at one of four intensity levels of care subject to prior authorization. Massachusetts Prior authorization is required. b Michigan Minnesota Prior authorization is required. a Missouri Need assessment to be completed every 6 months Montana 40 hours per week unless prior authorization is obtained Nebraska 40 hours per week unless prior authorization is obtained Nevadaa Prior authorization is required. New Hampshire Recipients must be chronically wheelchair-bound. New Jersey 25 hours per week or up to 40 hours per week with prior authorization New York 6 months for one of three levels of services with prior authorization unless exceptions are authorized for up to 12 months (continued) Page 75 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers State Limits North Carolina 80 hours per month and covered only if no home health aide services are provided on the same day Oklahomac Departmental approval is required. Oregon Prior authorization is required. South Dakotaa 120 hours per calendar quarter Texas Lesser of 50 hours per week or the rate of the average nursing facility; prior authorization is required and a plan of treatment must be reviewed. Utah 60 hours per month and covered only if no home health aide services are provided on the same day Washingtonc b West Virginia Limited on a per-unit, per-month basis; prior authorization is required for additional hours of care. Wisconsin Prior authorization is required for more than 250 hours per calendar year; housekeeping tasks are limited to one-third of the time spent in the recipient’s home. a Provide personal care services to only the categorically needy. b No limitation specified. c Provide most Medicaid services to both categorically needy and medically needy, but limit personal care services to categorically needy. Source: Medicare and Medicaid Guide, Commerce Clearing House, Inc. Forty-three states and the District of Columbia provide personal care HCBS Waivers under an HCBS waiver; 24 states and the District of Columbia offer both the Medicaid PCS benefit and one or more HCBS waivers. While HCBS waivers offer broader opportunities to limit or target services, the availability of national data on them is limited. The APHSA database of HCBS waivers, however, does track waivers by target populations and number of clients served (see table V.3). Page 76 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Table V.3: Clients Served by Medicaid HCBS Waivers With Personal Care, Waivers’ target populationsa Number of clients 1997 Alabama Mentally retarded or developmentally disabled people 3,290 Aged and disabled people 6,316 Disabled people 362 Arkansas Disabled adults who are 21 to 64 60 California Mentally retarded or developmentally disabled people who are technology-dependent 35,105 Aged and disabled people 8,314 People with HIV/AIDSb 2,792 Colorado Aged and disabled people 5,843 People with HIV/AIDS 101 Chronically mentally ill people who are over 18 79 People with traumatic brain injury 70 c Developmentally disabled people who are 18 and older Connecticut c Disabled people who are 18 to 64 and need help with 2+ ADLs c People with traumatic brain injury who are 18 to 64 Delaware People with HIV/AIDS-related conditions 174 District of Columbia Mentally retarded or developmentally disabled people who are 22 and older 75 c People who are 65 and older Florida Aged and disabled people who are 18 and older 16,943 Mentally retarded or developmentally disabled people 10,302 Aged and disabled people who are 18 and older 1,380 People with AIDS 8,000 Mentally retarded or developmentally disabled people who are over 18 116 c Elderly people Georgia Aged and disabled people 16,500 Mentally retarded or developmentally disabled people 2,109 d Disabled adults who are 24 to 64 121 (continued) Page 77 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Waivers’ target populationsa Number of clients Hawaii Mentally retarded or developmentally disabled people 512 Aged and disabled people 338 e People with AIDS/ARC 104 Iowa People with HIV/AIDS 29 Mentally retarded people (including children) 4,530 People with traumatic brain injury who are 30 to 64 30 Mentally retarded or developmentally disabled people and mentally retarded children with disabilities 374 Elderly people 2,236 Idaho Aged and disabled people 21 and older 1,429 Mentally retarded or developmentally disabled people 21 and older 415 Illinois Disabled people 12,021 People with HIV/ARC/AIDS 984 Mentally retarded or developmentally disabled adults 5,224 People who have been disabled by an acquired traumatic c brain injury Indiana Aged and disabled people 2,467 Mentally retarded people and those with related conditions 1,201 Kansas Aged and disabled people 3,150 Physically disabled people who are 16 to 64 1,880 d People with traumatic brain injury 160 Kentucky Aged and disabled people 11,500 c Adults and children with traumatic brain injury Louisiana Mentally retarded or developmentally disabled people 2,095 People with loss of sensory motor function 103 Aged and disabled people 222 Maryland Mentally retarded or developmentally disabled people 3,600 Maine Elderly people 554 (continued) Page 78 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Waivers’ target populationsa Number of clients Physically disabled people 204 Disabled people who are 18 to 60 13 c People with traumatic brain injury Michigan Aged and elderly people 2,804 Minnesota Elderly people 6,582 Mentally retarded people and those with related conditions 5,657 Disabled people under 65 2,751 People with acquired traumatic brain injury 290 Missouri Mentally retarded or developmentally disabled people 5,860 People with HIV/AIDS 140 Disabled people and developmentally disabled people who are 21 to 64d c Mississippi Disabled people who are 21 to 64 100 Mentally retarded or developmentally disabled people 325 Montana Aged and disabled people 1,158 Mentally retarded or developmentally disabled people 652 North Carolina Mentally retarded or developmentally disabled people 3,201 North Dakota Mentally retarded or developmentally disabled people 1,792 Aged and disabled people 366 People with traumatic brain injury who are 18 to 64 9 New Hampshire Mentally retarded or developmentally disabled people 1,303 People with acquired traumatic brain injury who are 22 and olderd 27 New Jersey Mentally retarded or developmentally disabled people 5,242 People 18 to 65 who incurred traumatic brain injury after age 16d 153 New Mexico People with AIDS/ARC 60 Aged and disabled people 1,200 Mentally retarded or developmentally disabled people 1,500 (continued) Page 79 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Waivers’ target populationsa Number of clients Nevada Frail elderly people 65 and older 898 Elderly people in group care 72 Ohio Aged and disabled people 17,000 Aged and disabled people under 60 3,904 Mentally retarded or developmentally disabled people 2,512 Mentally retarded or developmentally disabled people 18 and c over Oregon Aged and disabled people 19,471 Pennsylvania c Physically disabled people Elderly people 675 Rhode Island Elderly people 65 and over 600 Physically disabled peopled 80 South Carolina Aged and disabled people 7,658 People with HIV/AIDS 637 Mentally retarded people and those with related conditions 2,288 People with traumatic brain injury and spinal cord injury 161 Adults who are technology-dependent (ventilator-dependent)d 27 South Dakota People 18 and over who are quadriplegic 39 Tennessee Aged and disabled people 306 Mentally retarded or developmentally disabled people 2,200 Aged and disabled people 150 Texas Aged and disabled people 9,945 c Aged and disabled people 21 and older Utah c Physically disabled people Virginia Aged and disabled people 7,442 Mentally retarded and developmentally disabled people 1,685 c Aged and disabled people 18 and over People with HIV/AIDS who are symptomatic 636 (continued) Page 80 GAO/HEHS-99-101 Severely Disabled Adults Appendix V States’ Use of Home Health, the PCS Benefit, and HCBS Waivers Waivers’ target populationsa Number of clients Chronically ill children with traumatic brain injury and adults with traumatic brain injuryd 178 Vermont Mentally retarded people and those with related conditions 1,419 Aged and disabled people 780 Washington Aged and disabled people 17,013 c Mentally retarded or developmentally disabled people Developmentally disabled people who are inappropriately c placed People with HIV/AIDS 69 d People with traumatic brain injury 16 Wisconsin Aged and disabled people 10,670 People who are developmentally disabled 6,936 Mentally retarded and developmentally disabled people 90 Wyoming Developmentally disabled people 611 Aged and disabled people 700 Total 118 waivers 331,467 a Only HCBS waivers offering personal care or attendant care to adults were included in our state analysis of HCFA waivers and auxiliary services. b Human immunodeficiency virus/acquired immunodeficiency syndrome. c Data not reported in the APHSA Summary of 1915 (c) HCBS waivers. d HCBS waivers considered Model Waivers under the Medicaid program. e AIDS-related complex. Source: APHSA. Page 81 GAO/HEHS-99-101 Severely Disabled Adults Appendix VI Cash and Counseling Demonstration and Evaluation The Cash and Counseling Demonstration and Evaluation (CCDE) project represents one of the first systematic evaluations of consumer-directed personal care. Sponsored by the Robert Wood Johnson Foundation, in cooperation with the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation, the CCDE is expected to evaluate the advantages and disadvantages of offering consumers the choice of receiving personal care services under Medicaid via a direct cash allowance in lieu of state payments to service providers. The University of Maryland Center on Aging is directing and coordinating the demonstration, overseeing the evaluation, and providing technical assistance to the demonstration states—Arkansas, Florida, New Jersey, and New York. The CCDE has established a rigorous experimental protocol. The research Uniform questions seek to identify whether there are significant differences Requirements between interested consumers who are randomly assigned to receive cash allowances and those with agency-delivered services in the following areas: • types and amounts of services, • program and administrative costs, and • consumer satisfaction and quality of care. Additionally, the CCDE plans to identify the counseling services offered to consumers with cash payments to determine which consumers take advantage of additional supports, such as instruction in how to train providers and manage payroll. Consumers will also be asked to assess the value of the counseling services they receive under the CCDE. The evaluation will also examine the effects of the demonstration on informal caregivers and paid workers. The four states participating in the CCDE have agreed to take part in a rigorous evaluation process and to enroll at least 3,500 individuals in their programs. The manner in which individuals enter each state’s program will be the same as the current process: individuals will continue to receive an assessment (or reassessment) that takes into account existing formal and informal supports, such as care regularly provided by family members. Any unmet needs for personal assistance will be identified and will become the basis for a care plan. Once deemed eligible for the program, individuals will be randomly assigned to either a control group or a Page 82 GAO/HEHS-99-101 Severely Disabled Adults Appendix VI Cash and Counseling Demonstration and Evaluation treatment group (cash option).44 In the control group, the consumer will receive services as traditionally provided in each state’s Medicaid program. Those assigned to the cash option group will “cash out” their benefits as defined by their care plans—in effect, the cost of their service needs will be converted to a cash payment that they will be able to use to purchase services directly. Consumers in the cash option group will then pay caregivers directly or will choose to have a fiscal intermediary perform the payroll function.45 Consumers will not be required to spend all the money on personal attendants and will be able to save some of it for emergencies or costly items, such as environmental modifications or assistive devices. Additionally, the demonstration will waive Medicaid rules that prohibit the hiring of legally responsible relatives, allowing family members to become paid caregivers. Counseling services, which are an integral part of the CCDE, will be offered to meet an array of needs. For example, counseling services will help consumers decide whether to use a fiscal intermediary or obtain training and counseling on how to be an employer. Earlier on, the Robert Wood Johnson Foundation contracted with Health Services Research Institute, which prepared an employer and taxation booklet tailored to the four states. Additional counseling services may include assisting consumers with screening providers, finding emergency or substitute arrangements, managing tax forms and insurance paperwork, and even locating home modification subcontractors. There is variation in how the four CCDE states plan to implement this Variations in demonstration, including their (1) approach to personal care under Implementing the Medicaid, (2) use of a fiscal intermediary and counseling services, and CCDE (3) outreach and enrollment efforts. Arkansas, New Jersey, and New York are implementing the CCDE through their PCS benefit, for which each state has slightly different service limits 44 Consumers interested in directing all aspects of their care—including cash management—must first pass a skills test. In the event a consumer is not totally capable of self-direction, he or she has the opportunity to select a representative decisionmaker to act on the consumer’s behalf. 45 While several models exist, a fiscal intermediary generally manages any legal requirements associated with the employment of the caregiver, often through payroll management and tax filings. For a description of other intermediary models, see Flanagan and Green, Consumer-Directed Personal Assistance Services: Key Operational Issues for State CD-PAS Programs Using Intermediary Service Organizations, Final report for the Department of Health and Human Services by The MEDSTAT Group (Washington, D.C.: Oct. 24, 1997). Page 83 GAO/HEHS-99-101 Severely Disabled Adults Appendix VI Cash and Counseling Demonstration and Evaluation and authorization requirements. Florida’s personal care will be provided through HCBS waivers, including one that targets elderly individuals and those with physical disabilities and another that includes children and adults with developmental disabilities. Both waiver populations will participate in the CCDE evaluation. The other three states will include a mix of older and younger adults with physical disabilities. The four CCDE states also differ in the way they plan to implement fiscal intermediary and counseling services. Arkansas divided the state into four regions and asked each to select an entity that would provide both counseling and fiscal intermediary services. The regional selections varied and included an area Office on Aging, a rehabilitation center, and a center for developmental disabilities. New York, which will be the last state to implement the CCDE, also plans to combine counseling and fiscal intermediary services. Florida and New Jersey have selected one organization to serve as the fiscal intermediary on a statewide basis and separate entities to provide their counseling services. Outreach and enrollment efforts by states reflect the concern that all consumers have the opportunity to select a cash option.46 In New Jersey and Arkansas, the same organizations that provide personal care services under the CCDE also enroll individuals for the traditional personal care benefit. Because these organizations have a vested interest in provider-based care, states had some concern that they might steer individuals away from the cash option. To address this concern, Arkansas hired a series of nurse coordinators to assist with enrollment, while New Jersey added the enrollment activities to the contract of the organization that had successfully handled the state’s Medicaid managed care contract. In Florida, the organizations and individuals who provide care management services under the traditional system will also handle outreach and counseling under the cash option. Special care is being given to separate care management and counseling functions. New York’s plans for enrollment and outreach had not been fully developed at the time of our work. 46 Selecting a cash option does not ensure that a consumer gets to be a part of the cash option group, since half of the consumers interested in cash and counseling are randomly assigned to a control group. Page 84 GAO/HEHS-99-101 Severely Disabled Adults Appendix VI Cash and Counseling Demonstration and Evaluation The states participating in the demonstration are implementing their Progress to Date programs over time. Once receiving overall approval for the CCDE,47 Arkansas was the first to implement the demonstration and began enrolling clients during early December 1998. New Jersey, Florida, and New York plan to begin implementation later in 1999. In an effort to assess consumers’ preliminary interest in a cash approach to consumer-directed personal care, the University of Maryland Center on Aging conducted a telephone survey in the CCDE states. Consumers were asked if they would be interested in a cash option for personal care services. Results from these surveys indicated an interest among consumers ranging from 32 percent in Arkansas (from a sample of Medicaid personal care clients) to 58 percent in Florida (from a sample of participants in the state’s aging and disabled waiver program).48 Table VI.1 summarizes the extent of consumer interest in a cash model across the four states. Table VI.1: Consumer Interest in a Cash Model Percentage of consumers State interested in cash optiona Arkansas 32 Florida Physically disabled waiver 58 Developmentally disabled waiver 40 adults; 79 children New Jersey 42 New York 40 a These percentages include both consumers answering for themselves and surrogates answering for the consumers. In addition to determining consumer interest in or preference for a cash model, the survey also asked participants if they wanted assistance or 47 After the states received approval for their projects from HCFA in early Oct. 1998, states had to obtain waivers from the Supplemental Security Income program. Program waivers were necessary because the demonstration allows participants to carry funds forward month to month, which could violate resource limits under the program. 48 For more detailed information on the Arkansas survey results, see L. Simon-Rusinowitz and others, “Determining Consumer Preferences for a Cash Option: Arkansas Survey Results,” Health Care Financing Review, Vol. 19, No. 2 (winter 1997). Page 85 GAO/HEHS-99-101 Severely Disabled Adults Appendix VI Cash and Counseling Demonstration and Evaluation training for seven different tasks associated with the cash option, including • deciding how much to pay a worker, • managing payroll taxes, • conducting background checks, • arranging for backup care, • finding a caregiver, • interviewing a prospective caregiver, and • firing a caregiver. Most consumers interested in the cash option expressed a need for each of the supportive services. Overall, consumers attached the most importance to deciding worker’s pay, managing the payroll and conducting background checks, and less interest in the remainder of the tasks. Results of the telephone survey shaped some of the design of the CCDE. In particular, 80 to 90 percent of respondents expressed interest in a fiscal intermediary; thus, choosing an intermediary for payroll assistance became a critical component for states’ demonstrations. Additionally, the survey showed the need for counseling services and training, particularly among consumers who wanted assistance with the seven tasks noted above. This result underscores the integral role that counseling plays in the demonstration. To provide sufficient time for consumer enrollment and experience, the participating states will be expected to conduct their demonstration programs for at least 24 months. Final reports on the CCDE are expected to be available 3 years and 3 months after the state starts its demonstration. This period of time allows for 1 year of open enrollment, 1 year of tracking consumers, and the remaining year and 3 months for data collection and analysis. Throughout the demonstration, however, interim reports are planned and will be issued as they are completed. Additionally, researchers will conduct a series of in-depth, qualitative interviews intended to provide a snapshot of the individual’s experience with the cash option. A demonstration researcher indicated that there may be 25 qualitative interviews per state, which will primarily involve the consumer, principal family member, paid caregiver, and a counselor. Page 86 GAO/HEHS-99-101 Severely Disabled Adults Appendix VII Major Contributors to This Report Walter Ochinko, Assistant Director, (202) 512-7157 Carolyn Yocom Rashmi Agarwal Jerry Baugher Karen Doran Richard Hegner JoAnn Martinez Elsie Picyk Mary Reich (101727) Page 87 GAO/HEHS-99-101 Severely Disabled Adults Ordering Information The first copy of each GAO report and testimony is free. Additional copies are $2 each. 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Adults With Severe Disabilities: Federal and State Approaches for Personal Care and Other Services
Published by the Government Accountability Office on 1999-05-14.
Below is a raw (and likely hideous) rendition of the original report. (PDF)