DEPARTMENT OF HEALTH & HUMAN SERVICES 
Health Care Financing Administration 
___________________________________________________________________________ 
                                                                                Center for Medicaid and State Operations 
                                                                                             7500 Security Boulevard 
  MAY 2 8 1998                                                    Baltimore, MD 21244-1850 
 
 
Dear State Medicaid Director: 
 
This past fall the President met with representatives from the disability community to 
discuss increasing access to home and community-based services under Medicaid, 
including personal care services. In response to the President's meeting, Secretary 
Shalala established a workgroup which I co-chair with Bob Williams, Deputy Assistant 
Secretary for Disability, Aging, and Long Term Care. The general goals of the group 
are to study and make recommendations about how to reduce the institutional bias in 
Medicaid long-term care spending and service delivery to promote home and 
community-based care, with a particular emphasis on consumer directed services. This 
letter is to inform you of some of the initiatives that are underway as a result of the 
workgroup's direction. Copies of this letter also will be sent to other persons and 
organizations that have assisted the workgroup in its efforts. 
 
The Health Care Financing Administration (HCFA) contracted with the University of 
California at San Francisco to study institutional bias in the Medicaid program. A draft 
report on that study was recently received. We are reviewing all of the 
recommendations, many of which seek to clarify existing law related to personal care 
services. The report also contains other recommendations which would require 
statutory or regulatory changes and we will be sharing these with you once we receive 
the contractor's final report. 
 
In the meantime, I want to give you a preview of several points which will be among 
those clarified in the forthcoming State Medicaid Manual (SMM) guidelines related to 
personal care: 
 
-  First, we plan to define personal care services in terms of Activities of Daily Living 
(ADLs) and Instrumental Activities of Daily Living (IADLs). ADLs (activities 
which may include such things as assistance with eating, bathing, dressing, bladder 
and bowel requirements. etc.) and IADLs (activities which may include assistance 
with food preparation, medication management, money management, and 
community safety skills, etc.) will be defined to clarify to States that personal care 
services can go beyond physical tasks to include assistance with cognitive tasks as 
well as services to prevent an individual from harming him or herself.  We   Page -2- State Medicaid Director 
 
-    Anticipate that this clarification in SMM guidelines will help States better meet the needs 
of special populations who may require physical and cognitive impairment support in 
their daily lives.     
 
-  The guidelines also will indicate that payment may be made for housekeeping, chore, and 
domestic services performed under the personal care State plan option when those 
services are incidental to the provision of personal care services. 
 
-  In addition, the guidelines will explain how the personal care services State plan option 
can be used to implement consumer-directed attendant care programs which foster 
individual empowerment and independence and allow individuals to hire, train, and 
manage their personal care attendants. 
 
We expect that the SMM guidelines containing the above clarifications will be published in the 
fall of this year. 
 
The Department also is planning to contract for development of a "primer" to help States better 
use the options they have available to them under current law. This primer will be written in 
layman's language and will explain and provide examples of what States  can do and where there 
are flexibilities to be creative under the Medicaid program. In addition to its use as a tool for 
States, we envision it being of great value to consumers and advocates as well. 
 
On May 1, HCFA released a Program Announcement to Centers for Independent Living about a 
new demonstration (Consumer-Directed Durable Medical Equipment (CD-DME) 
Demonstration) for Medicare beneficiaries with physical disabilities. The CD-DME 
demonstration is intended to test a new method of paying for wheelchairs and related medical 
devices that will give disabled and elderly beneficiaries a greater say in the selection of 
equipment suited to their needs. Informational copies of this announcement were mailed to State 
Medicaid Directors. If you have not received a copy, and would like one, copies are available 
from Mr. Richard Getrost, Project Officer, by calling (410) 786-3211. 
 
Lastly, I want to alert you that HCFA is in the process of finalizing a solicitation for a grants 
program to assist States develop mechanisms to work with individuals and their families prior to 
admission to a nursing facility to consider community-based alternatives and/or to develop 
mechanisms to transition individuals currently in nursing facilities to the community if that is 
their choice. I expect to send this solicitation to you shortly under cover of a separate "Dear State 
Medicaid Director" letter. The participation of consumers and organizations representing them is 
important in the design and implementation of such a program and I urge you to seek their active 
involvement and support. Proposals from interested States will be due within 60 days of the 
solicitation and we anticipate making grant awards by September 30.  Page -3- State Medicaid Director 
 
While we will continue to foster States' efforts in developing home and community-based 
supports, including consumer-directed personal assistance services, we recognize that we will 
not be able to achieve all our goals at once. I assure you, however, that we will continue to work 
aggressively to make real progress toward them. I will keep you informed about the initiatives of 
the workgroup in the months ahead. 
 
Sincerely, 
 
 
Sally Richardson 
. 
Director 
 
cc: 
All HCFA Regional Administrators 
 
All HCFA Associate Regional Administrators 
for Medicaid and State Operations 
 
Lee Partridge 
American Public Welfare Association 
 
Joy Wilson 
National Conference of State Legislatures 
 
Jennifer Baxendeli 
National Governors' Association