# Presentation: 270512

## Sandra Barrett

- Assistant Director

**Notes:**
Independent Choices: An Experiment in Consumer Direction, a presentation by Sandra Barrett, Assistant Director, Arkansas Division of Aging and Adult Services. Presented at the AHRQ-NGA meeting, State Long Term Care Systems: Reducing Cost, Quality and Access, held in Indianapolis, IN May 6-8, 2002.

## THE CHOICE

- An Opportunity
- to Exchange
- Agency Personal
- Care Services for
- A Monthly Cash
- Allowance

**Notes:**
I am a program person not a policy person, so I know the nuts and bolts of how the program works. I am also biased as I see consumer direction as the answer to all the questions that have been raised so far in this meeting.  For me, the term consumer directed care describes a system that is not doing all the services, but having the person in control of the services that are available.  The time has come for consumer direction and States can afford to implement these services.  In 1990’s we knew young people with disabilities wanted the program and thought that would translate into savings, but we did not know the program would generate savings. We did not know whether elders were interested and if they were more susceptible to fraud, etc.  We joined with the Robert Wood Johnson Foundation, CMS and ASPE to develop a real social experiment with a research design. Arkansas, New York, New Jersey, and Florida applied. Arkansas was the first to implement an 1115 demonstration and evaluation waiver from CMS.  The waiver was received in October of 1998 and included waivers, in addition to Medicaid, of HUD and food programs that normally count income received by the family.

## THE SOCIAL EXPERIMENT

-    Classic experimental design with an experimental group receiving the allowance and a control group continuing to receive agency services – both groups are part of the evaluation

**Notes:**
Arkansas offers people opportunity to exchange services for a personal allowance.  

## THE SOCIAL MARKETING

- Open Enrollment
- Direct Mail
- Letters from the governor
- Letters to participants requesting referrals
- Notes with copies of news clippings

- Letters from participants with information about their experience
- Public Service Announcements
- Television
- Radio
- News Releases

**Notes:**
In this research design, half the people were enrolled in the cash program and half in the regular agency services system.  It was a hard sell.  Clients were offered an opportunity to participate in the cash assistance program, yet only had a 50/50 chance of receiving the cash assistance instead of agency services.  

## THE PLAYERS

- Need personal care
- New to continuing ratio is 30.5%
- Willing to participate
- Able to make responsible care decisions or have a representative decision-maker
- 43% use a representative

- 18 Years Old or Older
- 72% age 65 or Older
- 64% White/33% Black/3% Other
- 77% female/84% unmarried
- 62% live in rural area/68% live with others
- Receiving Medicaid

**Notes:**
Enrollment is voluntary and an interested person must call to express their interest in participating in the program. The value of having the governor involved is invaluable – Arkansas’ governor participated in the RWJ site visit.  With his early buy-in, he sees it as his program and has been willing to include his name on information about the program.  We were able to implement quickly. We gave wrote individual letters to participants of the regular personal care program. We also used news releases, copied published articles and sent them with personal notes to potential participants.  We sent a letter from a younger person with a disability as well as an elder successfully participating in the program. Both gave their telephone number and offered to discuss the program with anyone interested.  We also did public service announcements on radio and television.  

## CLOSING THE DEAL

- Request information
- Enter into database
- Telephone contact by enrollment staff
- Enrollment home visit
- Completed signed consent form

**Notes:**
Participants must be at least 18 years old, but 72% are 65 or older. The program is very senior oriented.  Participants tend to be  female, single and rural. Participants must already be Medicaid beneficiaries and we did not expand eligibility. As for the woodwork effect, I don’t believe there was a woodwork effect. The budget neutrality calculation required that we analyzed program growth over five years and would not allow the program to grow faster than traditional Medicaid. Participants had to be interested and call the office for more information.  They had to be able to make responsible decisions or have a caretaker to do so – the member does not have to be the primary decision-maker.  The use of decision-maker services had been an effective tool. Direct contact is essential to ensuring that consumer understands what they are getting into. Enrollment is always done with a home visit. We hired staff and had registered nurses make home visits to complete the enrollment. 

## SHOW ME THE MONEY!

- Allowance
- Based on personal assistance needs
- Approximately $8.00 per hour
- Average allowance is $405.00 a month

- Uses of Cash
- To meet personal care needs
- Hire personal care assistant
- Purchase items and services related to personal Care

**Notes:**
Participants receive an allowance based on their personal assistance needs, $8 an hour is the average wage allowed, up to $405 per month. That is not a lot but that addition to family income by hiring a family member is significant.  We determined cost neutrality by comparing the allowance persons received to the costs of using agency providers.  We did studies before implementation to determine how much services people were already receiving. Consumers getting cash are getting 100 percent of their service plan at the beginning the month.  Clients of agencies at the mercy of staffing shortages, willingness to drive miles down rural roads and other variables that reduce actual utilization below what is authorized.
Program participants have used their cash allowance to hire a personal care assistant, build ramps, and modify vehicles. Participants like the independence and opportunity to use the allowance to purchase personal care supplies.

## THE PAY OFF

- 82% of the allowance is used to hire a PSA
- 74% hire a family member
- Friend/neighbor

- 16% of the allowance is used to purchase items traditionally unavailable through Medicaid
- Personal care items; assistive devices; health and safety items
- 2% is saved

- Attractive*** ***Program*** ***Features

**Notes:**
Eighty two percent of program participants hire someone as an assistant and 74% hire a family member. Although the waiver allows participants to hire legally responsible family members, this is not allowed in Arkansas due to the resistance of some agencies.  Most people are hiring people they know.  One side benefit is the development of a non-traditional workforce.

One of the best examples was a person who needed transportation to a laundry which wasn’t in a safe area. He used the attendant to go but that was expensive. Over time, he saved money and bought a used washer and dryer which gave him more control, saved money and increased his independence.  

## THE SUPPORTING CAST

- Bookkeeping
- Accept cash allowance
- Disperse cash according to plan
- Serve as employer agent
- Maintain employee files
- Pay payroll
- Withhold/pay taxes

- Counseling
- Training
- Reassessments
- Monitoring
- Support Resource
- Develop cash Plan/answer questions

**Notes:**

There were no pre-existing models of cash and counseling so we had to develop a new service type.  Each demonstration state is doing something slightly different and each has different outcomes.  To help clients manage the cash benefit, we issued an RFP for an agency to serve as the fiscal intermediary. When a participant hires a worker, they become the employer of record and are responsible for paying all the Social Security taxes. A fiscal intermediary handles these bookkeeping services at no charge to the consumer. New Jersey also initially offered it at no charge. Then they offered participants an extra dollar an hour if they would become their own intermediary. What we found is that people are not interested in getting money in hand, they want choice and control and the opportunity to do something besides hire a personal care attendant.
The Counseling portion designates a person who makes a home visit to help them learn about the program and ask questions about the use of the benefit.  A written expenditure plan is required.  It is essential to develop a written budget, though it may be changed at any time.  The budget is flexible, and non-restrictive but on paper. In Arkansas, participants are exempt from workers compensation and liability laws for personal care attendants. The fiscal intermediary is also not liable, as the IRS recognizes the distinction of fiscal intermediary. 
We pay $75 a month for the counseling and the bookkeeping functions.  

## THE OBSERVATIONS*Quantitative Evaluation

- Participants and family members express a high level of satisfaction with this program.
- 81% say the Program has improved their lives/No one says they are worse off
- 99.76% are satisfied with their caregiver relationship
- 96% would recommend the program to others.

- 97% are happy with the time help is provided
- 50% receive help before 8 AM
- 65% receive help after 6 PM
- 77% receive help on weekends
- Participants have more unpaid help than paid help
- *Preliminary Information Provided by MPR based on 9-month consumer survey – 885 Respondents

**Notes:**
Mathematica Policy Research is conducting an evaluation and they reviewed information from a nine month survey of people in the cash program. They found the level of satisfaction is really high. Ninety nine percent of the participants are very satisfied with the service. Eight one percent say it improves their lives – no one is less satisfied.  99.76 % are satisfied with their caretaker.  Marketing is now primarily through word of mouth, and the program is snowballing. One result highlights the responsiveness of the program to people’s preferences. Fifty percent of the cash participants are getting help before 8am, 65% after 6pm, and 77% on weekends, whereas most agencies provide services during normal working hours.  People don’t need more hours of service. They need those hours in smaller segments during the day while agencies go in once a day for a longer period of time.  This program has attracted more than 15% of the eligible beneficiaries receiving Medicaid personal care services.

## THE OBSERVATIONS*Qualitative Study

- Interviews were semi-structured, open-ended, face-to-face with consumers/reps, paid workers, counselors
- Cross-cutting themes
- Family context of care
- Meaning of independence
- Community context of care
- Skills and qualities of caregivers
- Alternate uses of cash
- Previous agency experience

- Widely shared values
- Flexibility/freedom
- Control/responsibility
- Getting out more
- Securing services from someone who cares about you
- Securing help that fits the rhythms of life
- Being about to hire family
- *Preliminary information based on 27 case studies completed by the University of Maryland Baltimore County

## THE OBSERVATIONS*Cost Evaluation

- Arkansas Medicaid has spent no more per month on the Treatment Group than on the Control Group
- Based on per hour of care delivered, IndependentChoices costs are nearly 10% lower than traditional agency-delivered services.
- A higher percentage of each service dollar pays for direct service rather than administrative costs

- Treatment Group receives more of the personal care service ordered by the MD
- Control Group Beneficiaries did not receive personal assistance services in 40% of the months in which they were eligible compared to 9% for the Treatment Group
- Institutional Costs were 18% higher for the Control Group
- *Comparison of Treatment and Control Groups Randomized During the First 2 Years of Operation

**Notes:**
The legislature’s interest is in the cost evaluation.  Most of us only have access to Medicaid information, but Mathematica has access to Medicare costs as well. Mathematica found that the program is not costing Medicaid more to operate for any group.  Personal care service is provided up to $10 per hour vs, the Medicaid cost of $12.36/hour for agency provided services.
Administrative costs are lower for the treatment group. They also found that a lag time between enrollment and starting the program contributed to the initial dropout rate, so we now pay a flat fee of $100 to go out and do enrollment and developing a cash management plan. But it’s payable when the person begins self-directing due to the lag between enrollment and actual self-directing. Forty percent of the eligible months, the control  group did not receive services versus 9 percent of the treatment group, mostly due to hospitalization. We pay the allowance for five days if a person enters a hospital in order to preserve the relationship between the consumer and the caregiver.
Institutional costs are 18% higher for the control group over the treatment group. 

## THE LESSONS

- Estimating Counseling/Fiscal Agency Reimbursement
- Consumers are less interested in cash than previously believed
- Consumers want choice and control over who, when and how care is provided
- Disenrollments occur in the first few months

- Lag time between enrollment and beginning self-direction vary
- Consumer-directed models provide better access to authorized service
- Consumers in Arkansas have been managing cash budgets responsibly WITHOUT ANY MAJOR INSTANCES OF FRAUD OR ABUSE

**Notes:**
We have found no major instances of fraud and abuse. Generally there are other agencies in the home who are wonderful watchdogs for this program.  Home visits and follow-up visits give our agency feedback on what they find. It keeps lines of communication open between agencies. Participants are reassessed every six months, and this help identify changes that warrant further action. We also require a monthly phone call to each home. Church members are also visiting. After being obsessive and over-visiting at the beginning of the program, they visit less often as their concerns or fears were not warranted. 
The money is not income to the consumer, but when it is paid to a family member hired into the program, it does become income to the family and may reduce eligibility for services such as food stamps when total household income changes.

## THE VERDICT

- Consumer Direction Works
- Consumer Direction is Not For Everyone
- This Model Will Not Replace the Traditional Model
- Respect for Preferences Should Be a Major Consideration in Program Design and Training

**Notes:**
We believe consumer direction works although it is not for everyone. We will always need the traditional agency model but this program highlights the importance of recognizing consumer preferences. 

## THE FUTURE

- Arkansas is currently negotiating with CMS to amend the 1115 demonstration waiver terms and conditions to operate the program without randomization

- The Cash and Counseling Program is proposing that CMS modify their definition of personal care to include goods and services in addition to human assistance

**Notes:**
We may be able to eliminate the control group this summer. We are now working with CMS to redefine personal care under the State plan. The definition of personal care is not in legislation. The definition requires human assistance impairments with ADLs. We never used the ability to pay legally responsible relatives (which required an 1115 waiver) and the other two states are willing to give it up. We want to use the allowances for services beyond personal assistance. 

## IndependentChoices

- Sandra Barrett
- Arkansas Division of Aging and Adult Services
- PO Box 1437 Slot 1412
- Little Rock AR 72203
- 501/682-2441
- www.independentchoices.com

**Notes:**
Our website has the operations manual as well as the enrollment manual.  The enrollment manual was designed with simple writing and graphics and is left at every enrollment interview to remind new participants of the program’s details.  We also post personal stories of participants to the website.