DEPARTMENT OF HEALTH & HUMAN SERVICES

Health Care Financing Administration 
Center for Medicaid and State Operations 
7500 Security Boulevard 
Baltimore, MD 21244-1850 
SMDL #01-007 
Olmstead Update No: 5 
Subject:  New Tools for States 
Date: January 10, 2001 
Dear State Medicaid Director: 
This is the fifth in a series of letters designed to provide guidance and support to States in 
their efforts to enable individuals with disabilities to live in the most integrated setting 
appropriate to their needs, consistent with the Americans with Disabilities Act (ADA). 
In the attachments to this letter, we outline a number of additional tools available to 
improve State health and long term service systems so as to fulfill the promise of the 
ADA. 
Federal agencies have certain responsibilities to enforce the nation's laws prohibiting 
discrimination on the basis of disability.  Equally important, however, is our additional role of 
partnering with States to achieve the goals of these laws.  We have therefore committed 
ourselves to examining federal policies, practices and procedures that may present obstacles to 
fulfillment of the goals of section 504 of the 1973 Rehabilitation Act, the Americans with 
Disabilities Act (ADA), and the U.S. Supreme Court's decision in Olmstead v. L.C. We are also 
committed to providing active assistance to States in their conscientious efforts to build better 
health and long term service systems that enable integrated, community living. 
In this spirit of partnership, we are very pleased to convey a brief overview of some new tools 
you may find exceptionally useful.  They include: 
Health Coverage Options Under Section 1902(r)(2): We promulgated on January 10, 2001, a 
final rule that removes barriers that previously prevented States from providing effective health 
and long term care coverage to selected groups of individuals.  Examples of some ways that 
section 1902(r)(2) of the Social Security Act may be used are summarized in Attachment 5-A. 
Nursing Facility Transition Grants and "Access Housing: The U. S. Department of

Housing and Urban Development (HUD) is collaborating with us to assist States (and partnering

organizations) in the appropriate transition of people from institutional to community settings.

About $12-$15 million in grant funds will be awarded in State program grants for eligible

individuals of all ages.  In addition, about 400 HUD section 8 vouchers will also be available for
 State Medicaid Director  2 
eligible non-elderly individuals who have a disability.  These opportunities are described in 
Attachment 5-B. 
Real Choice Systems Change Grants: These systems change grants represent a major new 
initiative to promote the design and delivery of home and community-based services that support 
individuals with a disability or chronic illness to live and participate in their communities. 
Congress and the Administration have made $50 million available for this initiative. 
Medicaid home and community-based services play an increasingly critical role in enabling 
individuals of all ages who have a significant disability or chronic illness to live fuller, more self-
directed lives in their own homes and communities than ever before.  Despite continuing 
progress on this front, however, States wishing to improve the availability and quality of these 
services still face significant challenges in this regard.  Accordingly, Congress and the 
Administration have envisioned a new grant program to assist States and the disability and aging 
communities to work together to find viable ways to expand such services and supports.  The 
new grant funds are meant to be used to bring about enduring system improvements in providing 
long term services and supports, including attendant care to individuals in the most integrated 
settings appropriate to their needs.  These opportunities are outlined in Attachment 5-C. 
Community-Based Attendant Services with Consumer Control: Grants totaling $5-8 million 
will be available in 2001 to support State efforts to improve community-based personal 
assistance services that are designed to ensure that people who have a disability or chronic illness 
have maximum control over their lives.  Additional information is provided in Attachment 5-D. 
We appreciate your efforts to improve our nation's health and long term service system. More 
details regarding these and other initiatives relevant to Medicaid and the ADA will be posted on 
the ADA/Olmstead website at http://www.hcfa.gov/medicaid/olmstead/olmshome.htm.  In 
addition, a technical assistance Primer for ways Medicaid may assist with Home and Community 
Based Services is available online at http://aspe.hhs.gov/daltcp/whatsnew.htm. 
Sincerely, 
Timothy M. Westmoreland 
Director 
Enclosures 
Attachment 5-A  New State Health Coverage Options Under Section 1902(r)(2) 
Attachment 5-B  Nursing Facility Transitions and Access Housing 2000 
Attachment 5-C  Real Choice Systems Change Grants 
Attachment 5-D  Community-Based Attendant Services with Consumer Control  State Medicaid Director - 3 
cc:

HCFA Regional Administrators

HCFA Associate Regional Administrators for Medicaid and State Operations

Lee Partridge

Director, Health Policy Unit

National Association of State Medicaid Directors

Joy Wilson

Director, Health Committee

National Conference of State Legislatures

Matt Salo

Director of Health Legislation

National Governors Association

Robert Glover

Director of Governmental Relations

National Association of State Mental Health Program Directors

Brent Ewig

Senior Director, Access Policy

Association of State & Territorial Health Officials

Lewis Gallant

Executive Director

National Association of State Alcohol and Drug Abuse Directors, Inc.

Robert Gettings

Executive Director

National Association of State Directors of Developmental Disabilities Services

Virginia Dize

Director, State Community Care Programs

National Association of State Units on Aging.
 Attachment 5-A

Subject:  New State Health Coverage Options Under Section

1902(r)(2) of the Social Security Act

Date:  January 10, 2001

A recent administrative rule change permits additional State options for using 
section 1902(r)(2) of the Social Security Act to provide health and long term 
service coverage to selected groups of individuals. 
Under normal eligibility rules, States are required to use the processes (methodologies) of the 
cash assistance programs (SSI and the old AFDC program) in determining eligibility for 
Medicaid.  However, section 1902(r)(2) of the Social Security Act (the Act) allows States to use 
less restrictive income and resource methodologies in determining Medicaid eligibility for most 
groups than would normally be permitted under the cash assistance program rules.  In other 
words, section 1902(r)(2) permits States to disregard (i.e.,"not count") additional kinds and 
amounts of income and resources beyond what is allowed under the cash assistance programs. 
However, until now, a HCFA administrative interpretation of how section 1902(r)(2) applies to 
income effectively prevented States from taking advantage of the full flexibility that section 
1902(r)(2) would otherwise permit.  The final rule fixes this problem.  The rule change means 
that the full flexibility offered by section 1902(r)(2) is now available to States.  The final rule 
change was published in the Federal Register on January 10, 2001. 
Following are some examples of how States can use section 1902(r)(2) to improve their health 
and long term service systems for elderly or people with a disability.  Please note that section 
1902(r)(2) may be used to make similar improvements in health coverage for children and their 
families.  Those examples are very important but are not addressed here in the context of 
Olmstead/ADA. 
Medically Needy Income Limits 
Under a medically needy program, States can choose to provide health coverage under Medicaid 
to individuals with income that is above the SSI limits but whose medical expenses so erode their 
income that little is left to pay for personal living expenses.  If, after subtracting incurred medical 
expenses from income, an individual's remaining income is less than the State's medically needy 
income limit, then the person may obtain health coverage through Medicaid provided all other 
program requirements are met.  This process is known as spending down excess income or 
spenddown. 
However, in many States the medically needy income standard is very low.  In at least 22 States 
the medically needy income standard is actually lower than the income standard for SSI benefits 
($530 a month for an individual in 2001).  In four States, the medically needy income standard is 
less than $200 a month.  This means, for example, that an elderly person with just $531 in 
countable income would need to incur $331 or more per month in medical expenses before 
obtaining health coverage under Medicaid.  This would leave only $200 for food, clothing, 
4
 shelter, and other personal expenses.  Ironically, if the person had just $1 less in income and met 
all other program requirements, the person would meet the SSI eligibility test and secure 
Medicaid health coverage and have more income to meet the cost of basic living expenses. 
Section 1902(r)(2) may be used by States to fix this problem. 
Under the Medicaid statute, States cannot simply increase their medically needy income levels to 
deal with this problem.  However, a State could use section 1902(r)(2) of the Act to disregard 
specified amounts of income under its medically needy program, effectively reducing the large 
"spenddown" liability described in the example above.  It is largely a matter of State discretion to 
specify the precise amount and type of income that would be excluded.  States use section 
1902(r)(2) by amending their State plan.  No Medicaid waivers are required. 
Helping People Move from Institutions to the Community 
The medically needy spenddown problem described above can also have adverse effects for 
people in medical institutions who prefer to live in community settings.  By "medical institution" 
we refer to such institutions as hospitals, nursing facilities, and Intermediate Care Facilities for 
the Mentally Retarded (ICFs-MR). Since Medicaid will pay for room and board expenses in a 
medical institution, the individual needs to retain relatively little income after application of the 
medically needy spenddown requirement.  However, Medicaid will not pay for room or board 
expenses in a community setting.  Few individuals will be able to move from a medical 
institution to the community if they are permitted to retain only $200-$400 after meeting 
Medicaid spenddown requirements. 
The practical effect of this is that many people residing in institutions who would like to move to 
the community, and who would normally be able to manage in a community setting, remain in 
the institution because they literally cannot afford to leave.  The final rule gives States 
opportunities to correct spenddown problems so that more people could leave institutional 
settings and live in the community. 
Encouraging Paid Employment 
Legislation enacted in the last few years (e.g., the Ticket to Work and Work Incentives 
Improvement Act - "TWWIIA") has given States new options to provide or continue health care 
coverage via Medicaid for individuals with disabilities who work.  The section 1902(r)(2) rule 
change provides States with additional options.  For example, section 1902(r)(2) may be used to 
disregard earned income on the part of people who may qualify as medically needy while 
treating unearned income in the normal manner.  States may select the amount of earned income 
to disregard.  By allowing people to keep more of the income they earn without forcing them to 
spend more for medical care under a medically needy spenddown, States can enable more 
employment on the part of people with disabilities.  Section 1902(r)(2) may be used in the same 
way to encourage employment on the part of any other group that does not readily fit into one of 
the new TWWIIA work incentives groups. 
States may also permit special savings accounts established from the proceeds of employment. 
Both the interest earned and the principle may be disregarded, so that workers with a disability 
5
 may save toward a more desirable and independent future without fear of losing vital health care 
coverage. 
Administrative Simplification 
Under normal eligibility rules, States are required to count many kinds of income.  Some of these 
types of income are administratively burdensome (e.g., the cost of administering them may 
exceed the benefit).  Others may be so small that they do not materially affect the outcome of the 
eligibility determination in most cases.  Examples include the value of food or shelter provided 
to an applicant (called in-kind support and maintenance) and low amounts of income such as 
interest earned on very small savings accounts.  Under the final rule, States can use section 
1902(r)(2) to disregard this kind of income to simplify the process of determining eligibility by 
not counting types of income that primarily impose an administrative burden. 
We plan to develop more detailed explanations of these matters and to post them on our website. 
You can assist us by sending your questions and comments via e-mail to Roy Trudel at 
rtrudel@hcfa.gov and copying Aimee Ossman at aossman@hcfa.gov.  For issues concerning 
coverage to children and their families, please send your comments and questions to Judy 
Rhoades at jrhoades@hcfa.gov. 
6
 Attachment 5-B

Subject:  Nursing Facility Transitions and Access Housing

Date: January 10, 2001

In this attachment, we describe grants available to enable individuals to move 
from institutional to community-integrated living. Approximately $12 - $15 
million in grant funds will be available from HCFA.  In addition, approximately 
400 or more HUD section 8 vouchers will be available for eligible non-elderly 
individuals with a disability. 
For a number of years the Health Care Financing Administration, in association with the 
Department of Health and Human Services Assistant Secretary for Planning and Evaluation, has 
sponsored grant initiatives to help transition people from institutional living arrangements to 
community settings. We appreciate the pioneering work of those States that successfully 
implemented these research and demonstration efforts, as well as the interest of those States that 
applied in the past but were not funded. 
We have learned a number of lessons from the nursing facility transition initiative. First, many 
additional States are seeking this type of support, particularly in the current context of the 
Olmstead v. L. C. decision and the Americans with Disabilities Act (ADA).  Second, the lack of 
affordable and accessible housing in the community often represents a substantial barrier to 
success.  For many people with a disability, market rent in the community exceeds all available 
income.  For others with mobility impairments, existing housing units are often not physically 
accessible.  Third, there has not been an effective means by which people in the different States 
can learn from each other, share effective practices, actively assist one another on-site, and 
disseminate the lessons learned. 
We have therefore made a number of improvements in the initiative based on experiences from 
the pioneer States.  First, Congress and the Administration increased the funding level to permit 
more States to participate.  Second, the Department of Housing and Urban Development (HUD) 
and the Department of Health and Human Services began collaborating in a more active manner 
to address the housing challenges.  We call our overall effort "Access Housing."  As part of that 
effort, HUD will make available 400 section 8 rent vouchers for use in association with the 
nursing facility transition efforts of States, with the possibility of additional vouchers in future 
years.  Third, we expanded on the independent living partnership concept from previous years 
and added a technical assistance exchange. 
We hope you will begin now to engage with your many partners in planning for these grants.  To 
aid your thinking and planning, we offer the following preliminary information about the grants. 
We reserve the right to adjust the terms for the final grant solicitation. 
Purpose: To enable people of all ages who reside in nursing facilities to transition to community 
residence and participate in community life to the extent possible and desired by the individual. 
7
 Eligible Applicants: The District of Columbia, Puerto Rico, Guam, the United States Virgin 
Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, Independent 
Living Centers recognized under State law, and any of the 50 States or their instrumentalities 
(including State universities). 
Time Period of the Grant Awards: We expect grant awards to be made by September 14, 
2001, with an effective date before September 30, 2001, and continuing for up to 36 months 
depending on the proposal and the availability of appropriations.  No State match is required, but 
States and other entities are expected to contribute in-kind assistance and additional financial 
resources to maximize the potential benefits of the grant award. 
Standard Components: There are two components of the initiative that we expect most States 
will want to combine: 
State Program Grants: These grants provide resources to States to design, implement, 
and/or provide outreach for the transition and the on-going support system that will 
enable identified individuals to transition to a community arrangement.  We expect the 
State program grants to range from $300,000 to $1,000,000 for the grant period. 
Examples of activities that States have found particularly useful in the past include: 
  Staff Resources: basic staffing for the design and implementation of the initiative; 
	 Transitional supports, such as housing access support, temporary rent payments; furniture 
and clothing; special equipment; direct cash payments to the individual and/or his/her family 
to ensure that direct services are provided; 
	 Self-direction and consumer management infrastructure, such as the development of support 
systems that help people with a disability or chronic illness to direct and manage as much of 
their supports or services in the community as is desired and appropriate; 
	 Improvements to on-going supports, such as transportation, psychosocial supports, personal 
assistance services, employment supports, crisis intervention to prevent loss of housing 
during periods of hospitalization, consumer-run services (such as self-help and peer support 
services), etc.  Grant funds may not be used to pay for on-going supports or services, but they 
may be used to design and implement the improvements.  An important part of each grant 
application will be an assurance that the agency will make available the on-going supports 
necessary to sustain each individual in the community after the initial transition has been 
accomplished. 
	 Interagency collaboration, especially the collaboration between human service agencies, the 
disability and aging communities, State and federal housing finance agencies, and/or public 
housing authorities to make the most effective use of housing options, including the use of 
HUD section 8 rental vouchers for individuals who make the transition. 
HUD Section 8 Rent Vouchers: The U.S. Department of Housing and Urban 
Development (HUD) will make up to 400 rent vouchers available for use by eligible non-
8
 elderly individuals who have a disability who make the transition from a nursing facility 
to the community, with a goal of reaching 2000 vouchers in the future depending on 
appropriations.  The rent vouchers will be allocated to the local public housing authority 
that is partnering with the responsible human service agency in this initiative.  We expect 
that States will apply for both the State Program Grant and the HUD section 8 rent 
vouchers as elements of a single application.  However, States may apply for just one of 
the two.  For example, a State that has received a program grant in the past may wish to 
apply for just the HUD section 8 rent voucher component.  States applying for only HUD 
section 8 rent vouchers will apply through their housing authorities and must assure that 
the necessary human service supports will be available through Medicaid and other 
human service programs.  States can, as always, access nursing home transition funds 
without a partnering housing authority also applying for the HUD vouchers. 
In addition to the above rent vouchers coordinated specifically with the nursing facility 
transitions, HUD also provides substantial rent assistance to low-income elderly and 
people with a disability through its regular programs.  We expect that States that 
successfully seek a State Program Grant will effectively coordinate with both state and 
local housing authorities to achieve superior results through collaboration between all 
human services and housing programs. 
Additional Opportunities: In addition to the standard program components, States and 
Independent Living Centers may be interested in the following companion elements of this 
national endeavor: 
Independent Living Partnerships: Independent Living Centers recognized under State or 
federal law may apply for partnership grants.  The purpose of the grants is to develop 
outreach, technical assistance, specific aspects of the infrastructure needed to make the 
nursing facility transition initiatives successful.  We expect to award 5-7 such grants that 
range from $120,000 to $350,000 over the total project period.  Successful independent 
living centers will include multiple age and disability groups within the scope of their 
activities and will evidence effective partnerships with other consumer-directed 
organizations to create cross-disability competence.  Applications from Independent 
Living Centers must have the support of the State Medicaid Agency or the State agency 
administering the relevant home and community-based waiver(s) under section 1915(c) 
of the Social Security Act. 
National Technical Assistance and Evaluation Exchange ("The Exchange"): The 
purpose of the Exchange will be to provide an effective means by which people in the 
different States can learn from each other, share effective practices, and disseminate the 
lessons learned so that all States may benefit.  The Exchange will be particularly helpful 
in assisting State human service agencies and public housing authorities to work together 
to assure access to both affordable housing and necessary community-based services. 
We expect to fund this technical assistance function with a grant ranging from $1.2-$1.8 
million, and an additional $150,000-300,000 to collect and analyze data needed for the 
national evaluation of the program.  Only States or their instrumentalities (such as State 
universities) may apply. 
9
 Please refer any questions concerning this attachment to Tammi Hessen via e-mail at thessen 
@hcfa.gov. 
10
 Attachment 5-C

Subject:  Real Choice Systems Change Grants

Date:  January 10, 2001

Congress and the Administration have made $50 million available for grants that 
will assist States in working with their disability and aging communities to 
improve their health and long term service systems so that people with a disability 
or chronic illness will have better choices and support to live in the community, 
consistent with the ADA. 
Across the country States are actively working with their citizens to strengthen our 
communities.  This includes efforts in most States to strengthen the capacity of our communities 
to enable people of all ages with disabilities to reside in their own homes and take part in all 
facets of family and community life.  This work is vital to implementing the principles of the 
ADA and the preferences of most children and adults to live in their own home in the 
community. It constitutes a very substantial agenda.  Creating the service options that make 
community and job participation possible, such as effective personal assistance services, is one 
example of the challenges that States face.  Creating the infrastructure that will protect the 
health, well being, and life choices of such individuals is another example.  Creating the service 
designs that mesh with and support family caregiving, such as adult day services, respite 
services, and other family supports, is a third example. 
Adequate infrastructure and service options are vital if we are to succeed in making community 
systems truly capable of fulfilling the promises made to our citizenry under State and national 
laws that hold forth the prospect of community-integrated living, such as the Americans with 
Disabilities Act. 
As a result of the bipartisan efforts of Congress and the Administration, we will now be 
dedicating specific grant funding to support State efforts to improve community long term 
service systems.  Approximately $50 million will be awarded to States and partnering 
organizations.  The grants will assist States to partner with the disability and aging communities 
to design or implement effective and enduring improvements in systems that support people 
with a disability or chronic illness to live in the community.  Although the grants will be 
awarded through competitive application, we strongly encourage all States, the District of 
Columbia, Puerto Rico, Guam, the United States Virgin Islands, American Samoa, and the 
Commonwealth of the Northern Mariana Islands to participate. 
We plan to issue a full grant solicitation in March-April 2001.  Applications would then be due 
in July 2001.  We are providing advance notice now because it will take time to develop 
effective proposals and involve people of all ages who have a disability or chronic illness in the 
planning process.  The bipartisan sentiment reflected in the conference report from Congress for 
these grants, co-sponsored by Senators Specter and Harkin, places strong emphasis on the 
meaningful and effective participation by people who have a disability or chronic illness in all 
aspects of the initiative.  Such participation must include a Consumer Task Force, as described 
below. 
11
 We hope you will begin now to engage with your many partners in planning for these grants.

To aid your thinking and planning, we offer the following preliminary information about the

grants. We reserve the right to adjust the terms for the final grant solicitation.

Purpose: To assist States to partner with their disability and aging communities in designing or

implementing effective and enduring improvements in customer-responsive long term service

systems that support people of all ages who have a disability or chronic illness to: (a) live in the

most integrated community setting appropriate to their needs and strengths; (b) exercise

meaningful choices about their supports; and (c) have quality services arranged in a manner as

consistent as possible with their community living preferences or priorities.

Eligible Applicants: Eligible applicants are the District of Columbia, Puerto Rico, Guam, the

United States Virgin Islands, American Samoa, the Commonwealth of the Northern Mariana

Islands, and any of the 50 States or their instrumentalities, including State universities.  Each

individual State application must be developed in collaboration with a Consumer Task Force

comprised of a broad range of individuals who have a disability or chronic illness, as described

below.

Consumer Task Force: To receive a grant, each State must develop its proposal in

collaboration with a Consumer Task Force comprised of a broad range of people of all ages who

have a disability or chronic illness and rely on long term services and supports.  The Consumer

Task Force should also include representatives of families of children with disabilities and other

advocates. Additional members may include people representing a broad range of organizations

publicly recognized as promoting the interests of people with a disability or chronic illness as

their primary purpose.  Examples of such organizations include State Independent Living

Councils, Commissions on Aging, Developmental Disabilities Councils, State Mental Health

Planning Councils, Statewide consumer organizations, etc. The State must make a commitment

to continue active participation on the part of people of all ages who have a disability or chronic

illness throughout the duration of the initiative.  While gubernatorial appointment is the

preferred method of selection, it is not required.  We appreciate the time constraints under

which States will labor.  Therefore, we will accept any other method of appointment the State

devises.  Grant funds may be used to support the continued operation of the Consumer Task

Force.

Other Stakeholders: While providers, professional associations, and others are not part of the

Consumer Task Force, grant funds may be used for activities that would enable effective

participation by such key stakeholders.

Size and Time Period of Grant Awards: We expect grant awards to be made by

September 14, 2001, with an effective date before September 30, 2001, and enduring for up to

36 months thereafter depending on the proposal and the availability of appropriations.  We

expect the funding for a State to range from $250,000 to $2.5 million for the project period.  No

State match will be required, but in-kind match is expected.  Funding for an applicant that

successfully competes for a grant to provide national technical assistance, as described below,

will not count against the above dollar limits.  Finally, we expect that the size of the grant award

12
 will correlate with the significance of the proposed endeavor rather than simply correlate with 
the size of the State. 
Technical Assistance and Learning Collaborative: We will fund one entity to host a national 
technical assistance and learning collaborative for the purposes of (a) fostering on-site State-to-
State technical assistance; (b) developing technical assistance materials and expertise for States 
and people with a disability or chronic illness; (c) working with consumer organizations, States, 
the National Governors' Association, the National Council of State Legislatures, and national 
associations of State agencies to collect, refine, and disseminate information that aids the 
effective administration of programs for  community living; and (d) gathering and analyzing 
information needed for a national evaluation.  We expect total funding to range from $1.8 - $2.4 
million for the technical assistance, and an additional $400,000-$750,000 for the data collection 
and analysis necessary to support a national evaluation. 
States Receiving More Than $750,000: All States must develop and implement their proposals 
in a manner that includes effective consumer participation.  In addition, any State receiving 
more than $750,000 must include the first two initiatives that are described below; that is: (a) 
improvements in personal assistance services, and (b) improvements in quality assurance or 
quality improvement systems for home and community-based services. 
Examples of Activities: The list below represents only a few examples of activities that States 
might consider.  The list is not intended to limit State creativity.  The key question applied to 
any proposed activity should be: does this activity promote an enduring systems improvement 
that will significantly advance the purpose for which these grants were made?  However, it is 
not the intent of this initiative to fund direct services to individuals. 
Development of Infrastructure to Improve Personal Assistance Services: Develop the 
infrastructure to improve the availability, reliability, and adequacy of the State's personal 
assistance services under Medicaid. 
Quality Assurance and Quality Improvement: Improve the systems by which the State 
assures that: (a) quality will characterize its home and community-based services and will 
be designed into each aspect of the system; (b) frequent and accurate customer feedback 
and other information from the sites of service delivery are obtained and used effectively 
to correct or prevent problems; (c) quality problems are systematically identified and 
remedied; and (d) the capacity to improve is built into the service delivery system 
through competent quality improvement functions. 
Comprehensive Long Term Service System Reforms: Design, demonstrate, or 
implement reforms for one or more target groups that create an effectively working 
system of comprehensive long term care services that (a) enable flexible long term 
service funding to follow each individual across the sites of preferred and appropriate 
living arrangements; (b) maximize the opportunities for community participation and 
ensuring the most integrated community living possible; and (c) support self-direction 
and the exercise of personal responsibility. 
13
 Coherent and Timely Access: Design, demonstrate, implement, or evaluate reforms that 
offer "one-stop shopping" for all long term care services, characterized by (a) timely 
access to clear information about options for long term care services; (b) prompt 
eligibility determinations for any relevant service program; (c) effective referral and 
follow-up service; (d) emergency or crisis intervention services, including temporary 
support to individuals or their families while they are on a waiting list for on-going 
services; (e) improved access to on-going services if needed; and (f) effective grievance 
and ombudsperson support to fashion solutions in response to conflict or problems in 
services. 
Training: Provide support to public or private entities to train and provide technical 
assistance activities for individuals of all ages with disabilities, attendants, providers, and 
other personnel (including professionals, paraprofessionals, volunteers, and other 
members of the community). 
Community Planning: Actively engage with elderly individuals and people with 
disabilities to plan for improved systems of community long term care services and to 
develop comprehensive, effectively working plans and systems for serving people in the 
most integrated settings appropriate, as suggested by the U.S. Supreme Court.  Support a 
Consumer Task Force for the overall systems change effort. 
Infrastructure Development That Supports Consumer-Directed Services: Enhance 
system operations to support development and purchase of services that is organized 
around the individual and is outcome-based.  Develop and implement mechanisms to 
further consumer-directed services, such as flexible home and community-based waiver 
service definitions, assistance in purchasing services (e.g., support brokerage), assistance 
in acquiring housing through rental or home ownership, development of provider 
qualifications tied to the consumers needs, implementation of emergency back-up 
systems for personal assistance or other services, and involvement by people of all ages 
who have a disability or chronic illness (and their families) that includes personal 
responsibility for one's plan and budget. 
Infrastructure for Cost-Effective, Non-Medical Solutions: Develop and implement 
strategies to modify policies or practices that eventuate in unnecessary provision of 
services by highly-credentialed professionals when other persons, with adequate support 
or training and consumer direction, might be able to perform the requisite functions 
competently and at less public expense. 
Demonstrations: Demonstrate more effective systems of providing long term support 
that (a) generate more and improved options for people, and then (b) support the exercise 
of real choices with regard to the location of services, manner of delivery, quality, and 
degree of self-direction involved. 
Please refer any questions concerning this attachment to Jean Tuller via e-mail at 
jtuller@hcfa.gov. 
14
 Attachment 5-D

Subject: Community-Based Attendant Services with Individual

Control

Date: January 10, 2001

Grants totaling $5-8 million will be available to assist States in developing or 
improving community-based attendant service systems that offer individuals with 
disabilities maximum control. 
As States have sought human service strategies that are more cost-effective and also resonate 
with the American people, they have increasingly turned to concepts of individual self-
direction and self-management of services.  These concepts are also very consistent with 
Medicaid.  The Medicaid statute is premised on the principle that each beneficiary of service 
has the right to choose his or her own health care provider. 
Over the past 20 years federal and State governments have worked together to expand the 
ways in which Medicaid practice can support the principle of individual choice and control. 
This is most clearly evident in State-initiated demonstrations that are aimed at increasing 
consumer choice and control with respect to Medicaid services, supports, and individual 
budgets over which consumers exercise responsibility and discretion.  Examples of such 
demonstrations in recent years include Self- Determination for People with Developmental 
Disabilities, Cash and Counseling, and the Independent Choices initiatives. 
Demonstrations conducted by States have identified certain essential elements of a self-
determined or self-directed approach to organizing and delivering services.  Key elements 
include: (a) consumer authority and responsibility over decisions regarding the development 
of an individual budget that supports implementation of the individual's plan of care; (b) 
control over ones own individual planning process and, in particular, decisions affecting the 
nature of the services/supports one receives and how they are delivered; and (c) the support 
necessary to ensure that the individual is able to personally manage services received and to 
make informed choices, based on comprehensive information about available options, 
including individually customized services and supports. 
We believe that the concepts of self-direction or self-determination can help States to offer 
services that are cost-effective, and offer eligible individuals the opportunity, support, and 
authority to exercise more choice and more responsibility over key decisions in their lives. 
For such approaches to succeed, however, the individuals (and their legal representatives, 
when appropriate) must be equipped with the information, tools, and supports needed to 
manage the selection and provision of services or supports that meet their unique needs. 
The legislative authorization focuses these grants on community-based attendant services. 
Nonetheless, we believe most of the infrastructure issues involved in attendant care are also 
relevant to the larger question of self-directed services in general. 
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 Much of the attention in national self-determination discussions has centered on ways in 
which consumers may gain control of key service decisions that help weave the fabric of their 
lives.  Less clarity is present with regard to the continued responsibility of public programs to 
provide an environment within which individual choice and individual responsibility may 
flourish.  Examples of some of the difficult questions that may be informed by State 
infrastructure grants include: how do we ensure that self-direction does not mean 
abandonment; how do we ensure that quality assurance includes the assured presence of an 
infrastructure that makes consumer satisfaction and timely problem resolution a probability 
rather than a possibility; by what means do we appropriately balance safety with choice and 
the dignity of risk; how do we ensure that consumers have an adequate supply of capable and 
committed attendants from which to choose and are supported by emergency back-ups; how 
do we best assure that consumers (as new supervisors of an employee) have the information 
and back-up needed to carry out their supervisory duties effectively? 
We hope you will begin now to engage with your many partners in planning for these grants. 
To aid your thinking and planning, we offer the following preliminary information about the 
grants.  We reserve the right to adjust the terms for the final grant solicitation. 
Purpose:  To assist States in the development and implementation of the infrastructure 
necessary to support an effective system of community-based attendant services that are 
consumer-directed or that offer maximum consumer control. 
Eligible Applicants: The District of Columbia, Puerto Rico, Guam, the United States Virgin 
Islands, American Samoa, the Commonwealth of the Northern Mariana Islands, Independent 
Living Centers recognized under State law, and any of the 50 States or their instrumentalities 
(including State universities). 
Size and Time Period of Grant Awards: We expect grant awards to be made by September 
14, 2001, with an effective date before September 30, 2001, and enduring for up to 36 months 
thereafter depending on the proposal and the availability of appropriations. We expect the 
funding for a State to range from $150,000 for the grant period to $1.0 million.  No State 
match will be required, but in-kind match is expected.  We expect the size of the grant to 
correlate with the significance of the proposed endeavor. 
Examples of Activities: The list represents only a few examples of activities that States 
might consider.  It is not the intent of the initiative to fund direct services except during an 
initial start-up period for one-time expenses. 
Support Brokerage: Develop capacity to assist consumers in implementing their plans of 
care and purchasing services identified in the plan of care. 
Management of Personnel Tasks: Create mechanisms to assist consumers with 
administration of personnel tasks (e.g., tax withholding, workers compensation, criminal 
record checks, and health insurance). 
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 Recruitment and Management of Attendant Care Services: Provide training in 
recruitment and supervision of workers, hiring and firing workers, and understanding 
fiscal and legal responsibilities as an employer of record. 
Consumer Controlled Providers: Create consumer-directed service delivery approaches 
such as personal assistance cooperatives, micro-enterprises, and similar ventures, owned 
and controlled by people with disabilities, families of children with disabilities, and 
community services workers. 
Community Living Specialist: Create a cadre of paraprofessionals with and without 
disabilities who would help persons identify and access necessary services and supports to 
transition into and/or continue to live in their own communities. 
Risk Management: Implementation of procedures that allow and enable consumers to 
exercise individual choice without exposing them to undue liability or risk. 
Back-up Support: Create mechanisms whereby consumers are able to access back-up 
workers should a scheduled worker become unavailable. 
Consumer Education and Support: Identify the knowledge and skills required for 
meaningful change toward consumer-directed service planning and delivery.  Develop 
and provide training and educational forums that assist consumers in moving to being 
self-directed. 
Provider Qualifications: Create mechanisms to make it more straightforward to qualify 
individuals who have been identified by the consumer to furnish home and community-
based services while simplifying payments to such individuals. 
Provider Training and Technical Assistance: Develop curricula and training programs to 
assist provider agencies to improve consumer voice and control even when the consumer 
is not functioning as the employer of an attendant.  Provide technical assistance to such 
provider agencies to advance each individual's dignity, choices, and participation in the 
community.  Provide technical assistance to provider agencies in listening to consumers, 
designing effective feedback mechanisms, and supporting workers in their learning and 
continued growth in their attendant care.  Assist provider organizations in fostering a 
culture of respect and systematic learning from the individuals they serve. 
Nursing Delegation: Strengthen ability to delegate certain tasks to personal assistants, 
family members, and the consumer while maintaining conformity with the States nurse 
practice act. 
Job Bank: Develop job banks to facilitate match-ups between workers seeking jobs and 
consumers seeking to hire consumer-directed attendants.  Conduct certain kinds of pre-
employment background checks (such as immigration status checks or criminal 
background checks). 
17
 Please refer any questions concerning this attachment to Mary Jean Duckett via e-mail at 
mduckett@hcfa.gov. 
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