oversight

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)

                  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




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                   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



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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’




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             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.



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                      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.



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               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.
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                           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.



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                                  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.



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                                                  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



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                                                    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.




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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.



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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.




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                              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).



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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).



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                                 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




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                                          19




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                                                          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.



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                                          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.




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                           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.




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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.



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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.




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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




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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.




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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.




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                           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.



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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.



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                                       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.




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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).



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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.



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                        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).



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                            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.)




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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
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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.




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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



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         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.


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         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.




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                                     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.



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                                      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).



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                               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
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                   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



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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



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                         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.



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                          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.



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                           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;



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                       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




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                        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.




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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.




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                       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.




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                           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




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                     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.




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                           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.



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                         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.




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                      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;




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                          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



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                           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
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