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December 2013 Policy Study, Number 13-12

   

Iowans Want to Age in Place

   

History of Medicaid HCBS

   


In response to the high costs of receiving care in a nursing home in conjunction with the suggestion that Medicaid appeared to have an “institutional bias,” state Medicaid offices and the federal government started to investigate alternative options for providing LTSS in more cost- effective settings that patients preferred. In 1970 the home-health benefit for patients who qualified to receive care in a nursing home became mandatory. Having evolved over time, Medicaid has grown into a more flexible program that facilitates each state’s ability to offer coverage for essentially all LTSS that the elderly and patients with disabilities would require for them to remain independent in the patient-preferred setting – their home or other various residential-care settings within their community. In 1994, Congress passed legislation to allow states to utilize supervisory oversight for the provision of personal-care services by individuals other than a registered nurse and allowed other methods for authorizing these services than only by a prescribing physician. In November 1997, the Balanced Budget Amendment (BBA) allowed the Center for Medicaid and Medicare Services (CMS) to write regulation revisions regarding an optional Medicaid state plan for personal-care services to reflect the previous legislative changes.[14]

 

In 1999, a legal case called the Olmstead decision set the groundwork for every state to begin providing HCBS under one or more of the available provisions except the 1915 (i) waiver. In 2007, the 1915 (i) waiver provisions went into full effect. In 1997 Medicaid’s scope had grown so large that it had become this country’s prime financer for LTSS for low-income individuals across the age spectrum and those with various physical and mental special needs.[15] In January 1999 CMS published a manual with revised guidelines regarding updated coverage of personal-care services and supports. These newly covered personal-care services may now encompass assistance with instrumental activities of daily living (IADLs) in addition to activities of daily living (ADLs).

 

Specifically, covered IADLs include assistance with “personal hygiene, light housework, laundry, meal preparation, transportation, grocery shopping, using the telephone, medication management, and money management.”[16] By contrast, ADLs are defined as dressing and bathing, feeding oneself, walking, toileting, and personal hygiene. In addition to allowing coverage for IADLs, the manual also clarified who could be paid for providing these services.

 

In fact, all relatives except “legally responsible relatives,” the husband/wife or parent, could provide personal-care services and be paid by Medicaid for it. These new guidelines specifically addressed the needs of patients with cognitive impairments to allow for “cueing” that assures that a patient performs a given task the way it should be performed. The manual also allowed for care to be directed by the patient to include training and supervising their personal- care attendants, as this had been a component of many state programs for several years prior.

 

The Deficit Reduction Act of 2005 added 1915 (j), effective on January 2007.[17] This provision allowed each state’s patients to be allocated an individual budget in order to cover the costs of non-traditional goods and services that were not personal care, per se, but would assist them personally. This provision also allowed cash-disbursement options to patients who wished to determine whether they received services under the State Plan Personal Care (SPPC) benefit or an HCBS-waiver program in their state.

 

Patients were able to set pay rates for their personal-care attendants, providers of chore services or other human services, with the assistance of an accountant or other payroll/tax personnel called the “budget authority.”[18] Without the 1915 (j), patient direction of personal-care services was limited to “hiring, supervising, and dismissing their personal-care attendants” or caregivers under the “employer authority” provision.[19] States can use the 1915 (j) if they already offer similar programs through their approved state plan or under an HCBS waiver.

 

YEAR

Progression in Medicaid HCBS-covered services, mandates, and rulings:

1965

Medicaid is established:  Includes optional coverage of home health services

1970

Mandatory coverage of home health services for those entitled to skilled nursing facilities (SNF) services.

1981

Establishment of HCBS waiver authority.

1986

Option to cover targeted case management (TCM).  States are allowed to cover TCM services without regard to “state-wideness” and comparability requirements. 
Option to offer supported employment services through HCBS-waiver programs to individuals who had been institutionalized some time prior to entering the HCBS- waiver program.

1993/94

Removal of requirements for physician authorization and nurse supervision for personal-care services provided under the state plan.  States explicitly authorized to provide personal-care services outside the individual’s home.  Personal care added to the statutory list of Medicaid services.  (Personal care was an option since the mid-1970s, when it was established administratively under the Secretary of Health and Human Services’ authority.)

1997

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.  Establishment of the Program of All-Inclusive Care for the Elderly (PACE) as a state plan option.

1999

Olmstead decision

2005

Establishment of a new Medicaid State Plan authority for providing HCBS under 1915 (i), under the Deficit Reduction Act of 2005 (DRA-2005), effective 2007. 
The DRA-2005 also expanded 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.

2010

Patient Protection and Affordable Care Act (PPACA) of 2010 established a new authority under 1915 (k) effective October 2011.  Allows states to provide “community-based attendant services and supports” under the Community First Choice Option.

(Table adapted from similar original)[20]

 

   

 

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