Medicaid Self-Directed Plans

In recent years, some state Medicaid programs have been experimenting with the idea of providing a cash payment to elderly Medicaid recipients. This money can be used to hire family or friends to provide care at home. Also, the amount of money available may not always be enough to compensate a family member to provide full-time care in lieu of maintaining employment.

But the attitude of government is quickly changing and as these programs prove more and more worthwhile, we will see an increase in this type of funding for eldercare. It makes more sense for people who need the care to make the decisions themselves as to how the government money for care services should be spent. It also reduces a great deal of overhead cost due to the bureaucracy created where Medicaid would pay the bill directly but must also supervise and maintain control over those companies that it uses.

The deficit reduction act of 2005 gave states the authority to permit Medicaid home based and community services plans to implement self-directed payments for care beneficiaries. The Centers for Medicare and Medicaid Services (CMS) came up with final rules in October 3, 2008 to provide guidance to those states that wanted to implement self-directed plans.

Here are some of the provisions of the Deficit Reduction Act pertaining to the administration of these plans:

• The Act sets out that a state's "self-directed PAS 'budget' is not to exceed the amount that the State would pay for the services and supports if those services and supports were provided under the traditional service delivery model."
• Yet while the individual state sets the budget (and informs the individual of his or her budget's limit), it is the individual covered by the plan or his or her defined representative who may "exercise choice and control over the budget, planning, and purchase of self-directed PAS, including the amount, duration, scope, provider, and location of service provision."
• Room and board is not covered by the Act, nor is the option to live in a traditional live-in care environment, unless the owner of such an entity is a spouse or blood relative.
• In dealing with monetary allocation, the Act "indicates that states may employ a financial management entity to make payments to providers, track costs, and make reports" Such entities are to be compensated not on a commission basis, but "in accordance with section 1903(a) of the [Social Security] Act." Section 1903 of such act provides that entities are to be compensated on a percentage basis of the sums spent in accordance with the lengthy provisions of section 1903(a).

The Requirements of Self-Direction

Person-Centered Planning Process
CMS requires that a person-centered planning process and assessment be used to develop a person-centered plan. The process is directed by the individual, with assistance as needed or desired from a representative of the individual's choosing. It is intended to identify the strengths, capacities, preferences, needs, and desired measurable outcomes of the individual. The process may include other persons, freely chosen by the individual, who are able to serve as important contributors to the process. The planning process must also include planning for contingencies such as when a needed service is not provided due to the worker being out sick. The contingency or "back-up" plan must become a part of the individual's person-centered plan. As part of the contingency planning process, an assessment of the risks to the individual must be completed and a discussion about how the risks will be addressed must be held.

Service plan
A service plan is the written document that specifies the services and supports (regardless of funding source) that are to be furnished to the meet the preferences, choices, abilities and needs of the individual, and that assist the individual to direct those services and supports and remain in the community.

Individualized Budget
An individualized budget is the amount of funds that is under the control and direction of the individual. It is developed using a person-centered planning process and is individually tailored in accordance with the individual's needs and preferences as established in the service plan. States must describe the method for calculating the dollar values of individual budgets based on reliable costs and service utilization, define a process for making adjustments to the budget when changes in participants' person-centered service plans occur and define a procedure to evaluate participants' expenditures.

Information and Assistance in Support of Self-Direction
States are required to provide or arrange for the provision of a system of supports that are responsive to an individual's needs and desires for assistance in developing the person-centered service plan and budget plan, managing the individual's services and workers and performing the responsibilities of an employer. Examples of self-directed supports include, but are not limited to, information regarding system processes, individual rights and responsibilities, and available resources; counseling; training; assistance, such as the use of a supports broker/consultant and financial management services (FMS); and access to an independent advocacy system available in the State. The amount and frequency with which an individual uses the available supports varies from person-person and circumstance to circumstance.

A supports broker/consultant/counselor must be available to each individual who elects the self-direction option. The supports broker/consultant/counselor supports the individual in directing their services, and acts as a liaison between the individual and the program, assisting individuals with whatever is needed to identify potential personnel requirements, resources to meet those requirements, and the services and supports to sustain individuals as they direct their own services and supports. The supports broker/consultant/counselor acts as an agent of the individual and takes direction from the individual.

Financial Management Services must be available to assist individuals in exercising budget authority. FMS include helping individuals:

1) understand billing and documentation responsibilities;
2) perform payroll and employer-related duties (e.g., withholding and filing Federal, State, local and unemployment taxes; purchasing workers' compensation or other forms of insurance; collecting and processing worker timesheets; calculating and processing employee benefits; and issuing payroll checks);
3) purchase approved goods and services;
4) track and monitor individual budget expenditures; and
5) identify expenditures that are over or under the budget. (Note: An individual who elects to receive a prospective cash disbursement pursuant to a section 1915(j) State plan option can perform some or all of the FMS functions themselves. Typically, however, individuals prefer that the FMS entity performs these functions for them.)

Quality Assurance and Improvement
Each SMA is tasked with having in place a system of continuous quality assurance and improvement. The system must include activities of discovery, remediation, and quality improvement so that the State learns of critical incidents or events that affect individuals, corrects shortcomings and pursues opportunities for system improvement. The SMA also has overall responsibility for monitoring the system performance measures and individual outcome measures. (Note: It is important to check each funding authority for quality requirements, as they vary, particularly the section 1915(c) home and community-based services waiver.)

In some states, the oversight and administration of these types of programs are often assigned to a local area agency on aging. To find out if self direction with home care is available in a given area, the local area agency on aging should be contacted first.