Source: https://aspe.hhs.gov/report/understanding-medicaid-home-and-community-services-primer-2010-edition/major-features-medicaid146s-provisions-home-and-community-services
Timestamp: 2019-04-23 20:47:04+00:00

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The remainder of this chapter presents a brief overview of the Medicaid law, regulations, and policies that give states the flexibility to create comprehensive home and community service systems for people of all ages with all types of physical and mental impairments and/or chronic health conditions. To provide context for the discussion, Table 1-1 lists the major relevant provisions of Medicaid law. This chronological summary illustrates the historical expansion of Medicaid long-term care services away from a primary focus on institutional care.
Key benefits for providing home and community services include both mandatory services such as Home Health and optional services such as Personal Care and Rehabilitation. Additional Medicaid provisions, such as the HCBS waiver authority, enable states to offer a comprehensive range of home and community services.
Federal regulations require that Home Health services include nursing, home health aides, medical supplies, medical equipment, and appliances suitable for use in the home. States have the option of providing additional therapeutic services under the Home Health benefit--including physical therapy, occupational therapy, and speech pathology and audiology services.9 States may establish reasonable standards for determining the extent of such coverage using criteria based on medical necessity or utilization control.10 In doing so, a state must ensure that the amount, duration, and scope of coverage are reasonably sufficient to achieve the purpose of the service.11 All Home Health services must be medically necessary and authorized by a physicians order as part of a written plan of care.
Mandatory coverage of SNFs for categorically eligible persons age 21 or older.
Optional coverage of Home Health services and Rehabilitation services.
States given the option to provide services not covered by their State Plans under EPSDT.
Removal, under the Balanced Budget Act of 1997, of the prior institutionalization test as a requirement for receiving supported employment services through an HCBS waiver program. Addition of first opportunity for states to create a Medicaid buy-in for people with disabilities. Establishment of the Program of All Inclusive Care for the Elderly (PACE) as a State Plan option.
Establishment of a new Medicaid State Plan authority for providing HCBS under §1915(i) of the Social Security Act, under the Deficit Reduction Act of 2005 (DRA-2005), effective 2007. The DRA-2005 also expands options for Medicaid participants to direct their services under HCBS waivers and State Plan Personal Care programs, through §1915(j) of the Social Security Act.
Establishment, under the Affordable Care Act of 2010, of a new authority under §1915(k) of the Social Security Act, effective October 2011. This authority allows states to provide Community-based Attendant Services and Supports under the Community First Choice Option.
The Federally mandated Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program for children from birth until they turn age 21 entitles Medicaid-eligible children to services found necessary to diagnose, treat, or ameliorate a defect, physical or mental illness, or a condition identified by an EPSDT screen. The original 1967 legislation gave states the option to cover treatment services not covered under the Medicaid State Plan. In 1989, Congress strengthened the EPSDT mandate by requiring states to cover all treatment services defined under §1905(a), regardless of whether or not those services are covered in their Medicaid State Plan.28 As a result, EPSDT programs now cover the broadest possible array of Medicaid services, including personal care and other services provided in the home.
When the Personal Care benefit option was created, it had a decidedly medical orientation. The services had to be prescribed by a physician, supervised by a registered nurse, and delivered in accordance with a service plan. Moreover, they could be provided only in a persons place of residence. Generally, the personal care services a state offered were for assisting individuals to perform activities of daily living (ADLs)--bathing, dressing, eating, toileting, and transferring (e.g., from a bed to a chair). Personal care workers could provide other forms of assistance (e.g., housekeeping and laundry) only on a limited basis and only if they were incidental to the delivery of personal care services.
In January 1999, CMS released a State Medicaid Manual Transmittal that thoroughly revised and updated guidelines concerning coverage of personal care services. (See the Resources section of this chapter for web links to the Medicaid Manual.) New Manual materials make clear that personal care services may include assistance not only with ADLs but also with instrumental activities of daily living (IADLs), such as personal hygiene, light housework, laundry, meal preparation, transportation, grocery shopping, using the telephone, medication management, and money management. Additionally, the guidelines clarified that all relatives except legally responsible relatives (i.e., spouses, and parents of minor children) could be paid for providing personal care services to beneficiaries.
The Manual further clarified that, for persons with cognitive impairments, personal care may include cueing along with supervision to ensure the individual performs the task properly. It also explicitly recognized that the provision of personal care services may be directed by the people receiving them. Direction by participants includes training and supervising personal care attendants. The ability of participants to direct their personal care services has been a feature of many personal assistance programs for many years (both under Medicaid and in programs funded only with state dollars). For example, participant direction was built into the Massachusetts Medicaid Personal Care program from its inception. Taken together, these ground-breaking changes in Federal policy can help pave the way for a state to broaden coverage of these services. In order to take advantage of these changes, a state must amend its State Plan. Neither the statutory provisions nor the revised Federal regulations and State Medicaid Manual guidelines dictate that a state must change the scope of its pre-1993 personal care coverage.
Until 1986, the only practical avenue available for a state to secure Medicaid funding for freestanding case management services (i.e., case management services not delivered as part of some other service or conducted in conjunction with the states operation of its Medicaid program) was through an HCBS waiver program. Coverage of case management services in HCBS waiver programs was nearly universal at that time.
The DRA-2005 added §1915(i) to the Social Security Act, which was amended by the Patient Responsibility and Affordable Care Act of 2010. The §1915(i) authority gives states the option to offer a wide range of home and community-based services without having to secure Federal approval of a waiver. The §1915(i) authority provides states an opportunity to offer services and supports before individuals need institutional care, and also provides a mechanism to provide State Plan HCBS to individuals with mental health and substance use disorders.
Unlike other State Plan services, under §1915(i), states may design service packages without regard to comparability.37 States may offer HCBS to specific, targeted populations and offer services that differ in amount, duration, and scope to specific population groups, including eligibility groups as authorized under §1915(i)(6)(c), either through one or multiple §1915(i) service packages. Services must be available statewide.
The Affordable Care Act added §1915(k) to the Social Security Act, effective October 2011, which allows states to provide Community-based Attendant Services and Supports--called the Community First Choice Option. Under §1915(k), states that provide home and community-based attendant services and supports through their State Plans under this option will receive a six percentage points higher Federal match. Individuals must be eligible for Medicaid under the State Plan and have an income that does not exceed 150 percent of the Federal Poverty Level, or, if their income is greater, they must meet institutional level-of-care criteria. CMS plans to issue a Notice of Proposed Rule Making related to this provision of the Affordable Care Act in early 2011.
When Medicaid was enacted, states were given the option of covering a wide range of services, several of which can be provided in home and/or community settings. They include rehabilitation services, private duty nursing, physical and occupational therapy, and transportation services. In 2000, every state provided at least one optional service.
The Rehabilitation option, in particular, offers states the means to provide a range of supportive services to people in home and community settings. Medicaid defines rehabilitation services as any medical or remedial services recommended by a physician or other licensed practitioner of the healing arts for maximum reduction of physical or mental disability, and restoration of a recipient to his or her best possible functional level.39 Rehabilitation services can be provided to people with either physical or mental disabilities.
The 1971 addition of the option to cover services provided by intermediate care nursing facilities, called intermediate care facilities (ICFs), and ICFs/ID, moved the Medicaid program into financing additional nursing home care and institutional services for the ID/DD population. States adding optional institutional coverage of ICFs/ID could receive Federal matching funds to help finance services for persons with developmental disabilities, which had previously been supportable only with state funds.
Likewise, states adding optional coverage of ICFs could receive Federal matching funds to help finance a non-skilled level of nursing care (which had previously been supportable only with state funds). Over the next few years, every state and the District of Columbia chose to cover ICFs and ICFs/ID in their State Plan.
The Rehabilitation option is not generally used to furnish long-term care to individuals with disabilities or chronic health conditions other than mental illness. During the 1970s and 1980s, a few states secured approval to cover daytime services for persons with developmental disabilities under either the Clinic or the Rehabilitation option. However, CMS ultimately ruled that the services being furnished were habilitative rather than rehabilitative and consequently could not be covered under either option by additional states. The main basis for the ruling was that habilitative services could only be furnished to residents of ICFs/ID under the Medicaid State Plan or through an HCBS waiver program for individuals otherwise eligible for ICF/ID services. States with existing programs serving individuals with intellectual disabilities and other developmental disabilities were grandfathered under the Omnibus Reconciliation Act (OBRA) of 1989.
A few states have maintained their State Plan coverage of these services; others have terminated them in favor of offering similar services through an HCBS waiver program.42 With the creation of the new HCBS State Plan option under the §1915(i) authority, states may now cover habilitation as a home and community-based service under the State Plan.
Neither the statute itself nor CMS regulations further specify or define the scope of the listed services. However, the law that created the waiver program expressly permits the Secretary of HHS to approve services beyond those specifically spelled out in the law, as long as they are necessary to avoid institutionalization and are cost-effective. In the 29 years since the waiver authority became available, CMS has approved a wide range of additional services.
In the early 1990s, CMS first issued a standard HCBS waiver application format for states to submit requests to operate an HCBS waiver program. The standard format included definitions of services states commonly cover in their HCBS waiver programs. The services listed in the standard format appear there because they are included in the listing contained in the statute, or are additional services that states frequently offer.
In 2005, CMS extensively modified its standard §1915(c) application to obtain greater detail about how the proposed program would operate. States must now provide specific information about how their programs comply with Federal standards, as well as detailed information about their quality improvement systems. Beginning in 2006, CMS began offering a web-based version of the application. The conversion to a web-based application streamlines the preparation of waiver applications and amendments, and improves communication between states and CMS about waiver requests.
The Katie Beckett provision is in a statute--the Tax Equity and Fiscal Responsibility Act 134--and was added to Medicaid in 1982. Katie Beckett is the name of the child whose parents petitioned the Federal Government for her to receive Medicaid services at home instead of in a hospital, and whose plight led the Reagan Administration to urge Congress to enact the provision. Prior to enactment, if a child with disabilities lived at home, the parents income and resources were automatically counted (deemed) as available for medical expenses. However, if the same child was institutionalized for 30 days or more, only the childs own income and resources were counted in the deeming calculation--substantially increasing the likelihood that a child could qualify for Medicaid. This sharp divergence in methods of counting income often forced families to institutionalize their children simply to obtain medical care for them.
TEFRA 134 amended the Medicaid statute to give states the option to waive the deeming (i.e., counting) of parental income and resources for children under 18 years old who were living at home but would otherwise be eligible for Medicaid-funded institutional care. Not counting parental income enables these children to receive Medicaid services at home or in other community settings. Many states use this option, which requires them to determine that (1) the child needs the level of care provided in an institution, (2) it is appropriate to provide care outside a facility, and (3) the cost of care at home is no more than the cost of institutional care. In states that use this option, parents may choose either institutional or community care for their Medicaid-eligible children.
The Program of All-Inclusive Care for the Elderly--authorized by the Balanced Budget Act of 1997 (BBA-97)--is a capitated program that features a comprehensive service delivery system that integrates Medicare and Medicaid financing. The BBA-97 established the PACE model of care as a permanent method for organizing service delivery within the Medicare program, and enables states to provide PACE services to Medicaid beneficiaries. Participants must be at least 55 years old, eligible for Medicare or Medicaid or both, and certified as meeting a states nursing home level-of-care criteria. For most participants, the comprehensive service package permits them to continue living at home rather than be admitted to an institution.
In 2009, 72 PACE programs were operating in 30 states. The State Plan must include PACE as a Medicaid benefit before the state and the Secretary of HHS can enter into program agreements with PACE providers. Participants must be at least 55 years old, live in the PACE service area, and be certified as eligible for nursing home care by the appropriate state agency. The PACE program becomes the sole source of services for persons dually eligible for Medicare and Medicaid who choose to enroll.
This brief overview of Medicaids statutory, regulatory, and other policy provisions related to home and community services provides a context for more detailed discussions in the chapters to come. Some of the institutional bias that remains in the program can be changed only by Congressional amendment of Medicaid law (e.g., changing home and community-based services from an optional to a mandatory benefit). But numerous provisions give state policymakers considerable freedom in designing their home and community service system to fit their states particular needs. They have the option, in particular, to eliminate use of more restrictive financial criteria for waiver services than for institutional care. They also have considerable flexibility to create consumer-responsive systems that facilitate home and community living.
In the next several decades, as already noted, the U.S. population will age dramatically. Even if disability rates among older persons decline, more people will need long-term care services than at any other time in our nations history. Institutional care is costly. Given the projected demand for long-term care, it is advisable for states to continue working to create comprehensive long-term care service systems that will enable people with disabilities and/or chronic health conditions--whatever their age or the severity of their condition--to live in their homes and community settings rather than in institutions.
The Medicaid program can be the centerpiece of such a system--allowing states numerous options to provide home and community services that keep costs under control at the same time that they enable people of all ages with disabilities and/or chronic health conditions to retain their independence and dignity.

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