A New Option For States: Medicaid Self-Directed Plans

April 15, 2010 by Guest Blogger · 3 Comments
Filed under: Long Term Care, Medicaid 

By: Nicole Hamberger
Seton Hall University School of Law
Class of 2011

Photo by Joe Mud via Flickr

Photo by Joe Mud via Flickr

Medicaid beneficiaries often need assistance in personal daily activities such as dressing, grooming, bathing, and meal preparation.i For some of these consumers, home-care agencies can manage the care.ii But for others, the use of such agencies poses significant challenges and even perils.

When there are worker shortages at home-care agencies, when physical distance impedes access to rural consumers, and when workers are unwilling to enter high-crime urban areas where the beneficiary resides, many Medicaid beneficiaries lose access to care.iii Further, many agency workers refuse to work weekend or evening hours, making the provision of care at such times difficult if not impossible to secure.iv The inability to get needed services due to lack of access is only one potential problem arising from traditional home-care agency use.

Other problems arising from the use of home-care agencies relate to worker limitations. Restrictions on the kinds of care provided may stem from liability concerns, such as the inability for home-care agency workers to administer medications or supply transportation.v Agency workers do not provide assistance in securing or installing home modifications or assistive devices, such as wheelchair ramps or microwaves, which would allow Medicaid beneficiaries to be more independent at their homes.vi Other limitations exist when language barriers or cultural misunderstandings prevent proper and effective communication.vii Such limitations can seriously blight the efforts of even the most well-meaning providers of care.

By the 1990s, many states became aware of these and other problems that certain Medicaid beneficiaries face using home-care agencies.viii Self-directed care was proposed as an alternative method of care to Medicaid beneficiaries.ix Self-directed care is defined as “a service delivery mechanism that empowers individuals with the opportunity to select, direct, and manage their needed services and support identified in an individualized service plan and budget plan.”x The Robert Wood Johnson Foundation awarded 19 states grants to create self-determination care methods in the mid 1990s, including New Jersey, Pennsylvania, and Florida, pursuant to section 1905(a)(4) of the Social Security Act.xi Those states’ projects eventually became Medicaid-funded programs under section 1915(c) of the Social Security Act, known as the “home and community-based services waiver program.”xii Then, in the late 1990s, Robert Wood Johnson decided to offer these grants again in hopes of developing “Cash and Counseling” (C&C), a “national demonstration and evaluation project in three states” which was a form of self-directed care.xiii C&C projects became demonstration programs under Section 1115 of the Social Security Act, permitting the self-direction option.xiv Then, when the Deficit Reduction Act (DRA) of 2005 took effect, States could offer the self-directed option through section 1915(i) as well as section 1916(j) of the Act.xv Given this plethora of authority, the Centers for Medicare and Medicaid (CMS) submitted a Final Rule on October 3, 2008 to “provide[ ] guidance to States that want to administer self-directed services through their State Plans as authorized by the Deficit Reduction Act of 2005.”xvi

The Rule first explains that the Act extends to those states that wish to create a state self-directed service plan; it is purely optional.xvii If a state so chooses to create such a plan, then that state’s plan will apply only to those individuals who would otherwise receive traditional state-based care.xviii Then, “within an approved self-directed services plan and budget, individuals can purchase personal assistance and related services and hire, fire, supervise, and manage the individuals providing such services.”xix Individuals are also permitted by the Act to “hire any individual capable of providing the assigned tasks, including legally liable relatives, as paid providers of the services” and may “purchase items that increase independence or substitute for human assistance to the extent that expenditures would otherwise be made for the human assistance.”xx The regulations do not explicitly address illegal immigrants; however, one provision of the act may implicitly allow such individuals to qualify for self-directed workers; that which allows for any “legally liable relative” to qualify as caregiver. A “legally liable relative” is described below:xxi

“legally liable relatives means persons who have a duty under the
provisions of State law to care for another person. Legally liable
relatives may include any of the following:

(1) The parent (biological or adoptive) of a minor child or the guardian of a minor child who must provide care to the child.
(2) Legally-assigned caretaker relatives.
(3) A spouse.” xxii

Therefore, an illegal immigrant could potentially qualify as a caregiver by virtue of his or her relationship to a legal citizen who qualifies for Medicaid.

The Act states that a state’s “self-directed PAS ‘budget’ is not to exceed the amount that the State would pay for the services and supports if those services and supports were provided under the traditional service delivery model.”xxiii Yet while the individual state sets the budget (and informs the individual of his or her budget’s limit), it is the individual covered by the plan or his or her defined representative who may “exercise choice and control over the budget, planning, and purchase of self-directed PAS, including the amount, duration, scope, provider, and location of service provision.”xxiv Room and board is not covered by the Act, nor is the option to live in a traditional live-in care environment, unless the owner of such an entity is a spouse or blood relative.xxv In dealing with monetary allocation, the Act “indicates that states may employ a financial management entity to make payments to providers, track costs, and make reports.”xxvi. Such entities are to be compensated not on a commission basis, but “in accordance with section 1903(a) of the [Social Security] Act.”xxvii. Section 1903 of such act provides that entities are to be compensated on a percentage basis of the sums spent in accordance with the lengthy provisions of section 1903(a). xxvii.

The individualization and flexibility permissible by the Act are among its greatest potential benefits. The Act delegates to the individual the opportunity to control every aspect of his or her care, including the allocation and management of care resources. According to the studies conducted in the aforementioned Robert Wood Johnson grant programs, self-directed plans result in “fewer unnecessary institutional placements . . . higher levels of satisfaction . . . fewer unmet needs . . . higher continuity of care because of less worker turnover . . . and efficient use of community services and supports.”xxviii Further, highly personal activities such as toileting and bathing should rightly be conducted by an individual whom the beneficiary trusts and feels comfortable around. Two authors have suggested that minority patients will particularly benefit from such services, as they are able to hire and train culturally similar or understanding individuals, since “[w]ithout sensitivity to the cultural norms of the beneficiary, valuable information about the true level of need can easily be overlooked or lost.”xxvix There is also evidence that enrollees may receive more of the care that they are authorized to receive when using a self-directed plan.xxx

However, there are many concerns that arise under the Act as well. First, the ability of individuals to know what kind of care is truly best for them is questionable. “Part D” of Medicare, gives all senior citizens federal funds to buy the prescription drug plan of their choice, regardless of their sophistication or knowledge on the matter. Similarly with state-directed plans, there is concern that the caregivers chosen by Medicaid beneficiaries will be “inadequately trained” since no qualifications are necessary to be considered a caregiver, unlike traditional plans.xxxi There is also concern that “that there [will be] insufficient oversight of the care being provided beneficiaries, and that the potential for fraud, abuse, neglect, and exploitation” may increase as there is no longer direct state control over the care provided.xxii Further, there are concerns that state-directed service plans cost more than traditional agency-delivered services; something that CMS concedes may be true.”xxxiii Since the Act does not require states to limit the number of Medicaid beneficiaries who choose a state-directed plan, there could be enormous costs for taxpayers.xxxiv Further, the items participants may buy under the act which “increase independence or substitute for human assistance” and include “additional goods, supports, or services” are not further defined, allowing for potentially questionable purchases under state funds; purchases not permissible if they were using the money in the traditional home-care system.xxxv

While the Act is commendable for providing an alternative to the traditional home-care model, perhaps the flexibility in care options should be balanced by a more comprehensive set of regulations and requirements; only then will worthy individuals receive the most individualized, albeit cost-effective, care possible.
________________________________________________________________________________________________________________________
i Robert Wood Johnson Foundation, Developing and Implementing Self-Direction Programs and Policies: A Handbook (2009), www.cashandcousneling.org/resources/pdf/cc-full.pdf

ii Id.
iii Id.
iv Id.
v Id.
vi Id.
vii Id.
viii Medicaid Program; Self-Directed Personal Assistance Services Program State Plan Option (Cash and Counseling), 73 Fed. Reg. 57854, 57855 (Oct.3, 2008). Available at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480734a10
ix Id.
x Id.
xi Id., Centers for Medicare & Medicaid Services, Self Directed Services Community Services and Long Term Supports, http://www.cms.gov/CommunityServices/60_Self-DirectServices.asp (Jan.27 2010)
xii Centers for Medicare & Medicaid Services, Self Directed Services Community Services and Long Term Supports, http://www.cms.gov/CommunityServices/60_Self-DirectServices.asp (Jan.27 2010)
xiii Id.
xiv Id.
xv Id.
xvi Medicaid Program; Self-Directed Personal Assistance Services Program State Plan Option (Cash and Counseling), 73 Fed. Reg. 57854 (Oct.3, 2008). Available at: http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480734a10
xvii Id.
xviii Id.
xix Id.
xx Id.
xxi 73 Fed. Reg. 57882
xxii Id.
xxiii73 Fed. Reg. 57854, 57871
xxiv73 Fed. Reg. 57854
xxv Id.
xxvi Id.
xxvii 73 Fed. Reg.57854
xxviii The Social Security Act, Section 1903(a), Available at: http://www.ssa.gov/OP_Home/ssact/title19/1903.htm
xxvix 73 Fed. Reg. 57854, 57855
xxx Georgia Burke and Katharine Hsiao, Older Women of Color and the Challenge of Regulating Cultural Competence, 43 Clearinghouse Rev. 27, 32 May/June 2009.
xxxi 73 Fed. Reg. 57854, 57857.
xxxii 73 Fed. Reg. 57854, 57856
xxxiii 73 Fed. Reg. 57854, 57856
xxxiv 73 Fed. Reg. 57854, 57857
xxxv 73 Fed. Reg. 57854, 57864
xxxvi 73 Fed. Reg. 57854, 57870

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Comments

3 Responses to “A New Option For States: Medicaid Self-Directed Plans”
  1. Joe Mud says:
    04/26/2010 at 5:20 pm

    Hey, thanks for blogging my photo and linking back to my photostream!

  2. Jane brooks says:
    07/18/2010 at 12:04 am

    Too bad our DDD in Wyoming picks and chooses what they will put on thier “new self directed waiver” it’s still the old waiver only more confusing. I am a parent of a wonderful son who has down syndrome and other special needs. I have been a provider of services for medicaid for almost 10 years. but I have to go provide services for another parent because I have to work and I am not allowed on our new CHOICE bs to provide the quality services I can for my own. He would be so much better off because his two new providers have no experience. My previous provider just got tired of all the paperwork hassels . Like people showing up and asking for paperwork from 5 years ago and a page was missing that we all knew she worked , she had to give back 900$ at christmas time. The issue is though why give the DDD the power to pick and choose what we can recieve. I dont want 4 sessions of PT and OT every week for him but if that’s what it takes to have a experienced person …. I want to provide services for my son.

  3. Jane brooks says:
    07/18/2010 at 12:13 am

    Yes goods and services are difined. You are affraid of fraud ? Well did you know if I leave my husband and meet a computer date online I can shack up with some guy and have him get paid to be my sons provider. But familys that stay together and provide a stable christian home can’t. What’s up with that? Have you read any of the other state reports of success of the implimentation of SLS ? Have you read about the institutions that bill medicaid 4000 a DAY. The plan of care states what the participant will recieve. A person can’t run up the bill higher than the plan without providing alot of information concerning need. It doesnt happen often. It Never has for my sons plan .

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