Designing the Cash and Counseling demonstration and evaluation

Health Services Research, Feb, 2007 by Pamela Doty, Kevin J. Mahoney, Lori Simon-Rusinowitz

Coverage of personal assistance services for Medicaid program participants with long-term functional disabilities has been available since the late 1960s, but, during the 1980s, coverage options were expanded and more states elected to offer these services. Over the past quarter century, program participants' access to these benefits has greatly expanded. When personal care services (PCS) were first offered as an optional state plan benefit, in 1968, coverage was limited to in-home aide services and followed a "medical model" that required physician authorization and nurse supervision. Congress eliminated these federal requirements in 1993 in response to a campaign by disability-rights activists. They successfully argued that, whereas medical conditions cause disability and make PCS medically necessary, which provides the rationale for medical insurance coverage, a physician is not needed to make a disability determination and PCS themselves are not "medical" and should not be regulated as such. Nevertheless, many states continued to mandate physician authorization and nurse supervision and, as of the mid-1990s when the CCDE was being designed, approximately half of the 33 states and federal territories offering Medicaid PCS stipulated that only licensed home health care agencies could provide them.

In 1981, Congress enacted new legislative authority under which states could petition U.S. Department of Health and Human Services for greater flexibility to offer home and community-based alternatives to institutional care. Whereas state plan PCS coverage had largely been restricted to elders and younger adults in need of "hands-on" help with basic self-care (such as bathing, dressing, getting into and out of bed), home and community-based services (HCBS) provided under 1915(c) waivers allowed for a much broader range of disability-related services and supports, including services that were clearly more "social" than "medical." In addition to in-home aide services, HCBS waiver programs could offer services in other settings (e.g., day care), protective supervision for persons with cognitive impairment ("companion" services), services for family caregivers (e.g., "respite"), habilitation and "prevocational" services for persons with mental retardation/developmental disabilities (MR/DD), transportation, assistive devices, and home modifications--and virtually any other service states thought might prevent institutional placement.

In addition, HCBS waiver programs could be targeted to Medicaid beneficiaries with disabilities other than the elderly and younger adults with physical disabilities; most especially, to children and adults with MR/DD. States could also decide which services to offer to which groups. Some chose to offer many services; others limited coverage to only a few or even only one service (personal care aide services). By the mid- 1990s, every state had at least one HCBS waiver program (often several). HCBS waivers contributed greatly to the drive to "deinstitutionalize" persons with MR/DD from large state institutions. Nationally, two-thirds of HCBS waiver spending goes toward services for Medicaid beneficiaries with MR/DD. HCBS waiver programs emphasize professional case-management. "Case managers" (usually nurses or social workers) develop individualized "care plans," which means that they decide (subject to state coverage rules and limits) which services, in what amounts, from among the services the state has chosen to put "on the menu" will be authorized as appropriate for each program participant. Many states also have "provider qualifications" that require aide services to be provided by agencies or otherwise limit the providers eligible for Medicaid reimbursement. Proponents of consumer-directed PCS believe such requirements overshadow what federal law identifies as a key purpose of the Medicaid program--attaining or retaining families' and beneficiaries' "capability for independence and self-care."

This paper describes how the principal funders of the CCDE and its management team ("we" in the text that follows), which included the authors of this paper, designed an intervention that both (1) was faithful to models of consumer direction proposed by disability activists, and (2) could be "operationalized" in light of state and federal laws and political considerations. The paper covers the period from late 1994 to late 1998, when demonstration enrollment began.

THE FRAMEWORK OF THE INTERVENTION

What may now be considered the hallmarks of Cash and Counseling programs--participant choice and control, use of a monthly budget, and access to counseling and fiscal services--came into place not automatically but through the interplay of idealism, compromise, and creativity.

Choice and Control

From the start, defining the CCDE intervention as a "cash" benefit was primarily intended to give Medicaid beneficiaries with disabilities the same degree of choice and control over how to best meet their needs for home- and community-based services as private payers have. Although the CCDE model represents a paradigm shift in the delivery of long-term care, it adheres to the original intentions of the Medicaid program. When Medicaid was enacted into law in 1965, Congress chose not to create a separate service system for the poor but instead to give low-income Americans the ability to purchase services from the same health care providers (hospitals, physicians, nursing homes, etc.) that other Americans used. In the case of home and community-based long-term care, however, Medicaid financing and the program's provider qualifications created a service system primarily dependent on Medicaid funding. Thus, there developed a marked divergence between the service providers used by Medicaid beneficiaries and others. Although a majority of chronically disabled elders living in the community do not receive paid care (perhaps because they cannot afford to pay privately and do not qualify for public coverage), a higher percentage of disabled elderly who do use paid care pay privately than receive Medicaid-financed services. (According to the 1999 National Long-Term Care Survey, 52 percent of elders with paid helpers reported that they or their relatives paid out-of-pocket--as compared with 15 percent who reported having Medicaid coverage and 28 percent who received Medicare-covered home health services.) Private payers are free to make whatever arrangements they choose for hiring aides and national data also indicate that disabled elders and their families frequently invest in other goods and services (including simple technologies and home modifications, such as grab bars and railings) that reduce dependence on human help (both paid and unpaid). In contrast, Medicaid reimburses only providers that meet program qualifications, which are often "medical" (licensing, certification, professional training, and supervision, etc.). Such requirements can cause Medicaid providers to be more expensive and less available than those hired privately. However, the quality of their work may not be better, and could actually be worse, given the lack of control the consumer has over how the services are delivered.