THE TEXAS MEDICAID STATE PLAN PERSONAL CARE SERVICES PROGRAM

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1 THE TEXAS MEDICAID STATE PLAN PERSONAL CARE SERVICES PROGRAM Martin Kitchener, Ph.D Terence Ng Micky Willmott Charlene Harrington, Ph.D Center for Personal Assistance Services Department of Social & Behavioral Sciences 3333 California Street, Suite 455 University of California, San Francisco Telephone: July 2006 This project was funded by National Institutes on Disability and Rehabilitation Research (NIDDR) Grant No. H133B Government sponsorship of this research does not constitute endorsement of the results or the conclusions presented here.

2 Acknowledgements The State of Texas is participating in a broader CMS-funded 7-state collaborative study of its effort to rebalance long-term care and support programs, which is being conducted through a master contract with the CAN Corporation (Contract Number - RTPP CMS ). Rosalie A. Kane from the Division of Health Services Research, School of Public Health, University of Minnesota is the Principal Investigator; Charlene Harrington and Martin Kitchener from the University of California, San Francisco, are participating on the multi-organization study team. The Year 1 reports from this 3-year study are expected to be available from the investigators and CMS in the fall of 2005 and will provide fuller information and context for the material presented here. The authors acknowledge colleagues from the CMS project team who are working on the Texas report: Rosalie Kane, Dann Milne, Robert Kane, Reinhard Priester, and Donna Spencer. The authors are also grateful to Alicia Essary and Marc Gold of Texas DADS for their valuable and detailed comments on a draft of this report. All errors are, of course, ours. ii

3 Table of Contents Introduction Methods 1 Texas State Characteristics 2 Socio-Demographic, Economic, and Political Characteristics 2 State Medicaid Program 3 Texas Long Term Care 4 Organizational Structure 4 Medicaid LTC Participants and Expenditures 5 Medicaid HCBS Waivers 6 Personal Care provided in TX Medicaid Waivers 8 Texas Personal Care in Older Americans Act Title III 8 Other Sources of Personal Care Funding in Texas 9 Strategic Planning Activity and Stakeholder Involvement 10 Litigation Related to the Olmstead Decision 11 Texas Medicaid State Plan Personal Care Services 12 Program History and Structure 12 Program Participants and Expenditures 12 Types of Clients 13 Types of Providers 13 Functional Assessment Procedures 14 Financial Eligibility 14 Services Available 15 PHC Delivery Sites 16 Cost Controls and Hours of Care 16 Consumer Choice and Consumer Directed Care 17 Provider Training 17 Provider Rates, Wages and Benefits 18 Provider Supply 18 Future Plans 18 Summary 19 References 21 iii

4 List of Tables Table 1 Socio-Demographic (Need) Characteristics, Texas and US 2 Table 2 Economic and Political Characteristics, Texas and US 3 Table 3 Medicaid, Texas and US, Table 4 Texas Medicaid LTC Participants and Expenditures 6 Table 5 Texas Medicaid 1915(c) HCBS Waivers 7 Table 6 Texas Medicaid Personal Care Waivers, Table 7 Personal Care in Older Americans Act Title III, Table 8 Alternative Sources of Personal Care Funding in Texas 10 Table 9 Texas Medicaid PHC Program Data, Table 10 Texas Medicaid PHC Client Groups Served, Table 11 Texas Medicaid PHC Enrolled Providers, Table 12 Texas Medicaid PHC Assessment & Authorization, Table 13 Texas Medicaid PHC Financial Eligibility, Table 14 Texas Medicaid PHC Services, Table 15 Texas Medicaid PHC Delivery Sites, Table 16 Texas Medicaid PHC Cost Controls, Table 17 Texas Medicaid PHC Care Providers, Table 18 Texas Medicaid PHC Provider Rates, Table 19 Texas Medicaid PHC Provider Benefits, Table 20 Reimbursement Rates and Supply 19 iv

5 INTRODUCTION Although the majority of long-term care (LTC) in the United States is provided informally (unpaid, usually by family and friends), policy-makers face mounting pressure to expand access to formal (paid) home and community-based services (HCBS). The main aim is to allow consumers to live as independently as possible rather than in institutions such as nursing homes. The pressure on states to broaden access to HCBS increased in 1999 when the Supreme Court ruled in the Olmstead case that unjustified institutionalization of persons on public programs constitutes discrimination in violation of the 1990 Americans with Disabilities Act (ADA). Subsequent consumer litigation against certain states has provided further impetus for change (Kitchener et al., 2005). HCBS programs have become increasingly popular over institutional care as a model for providing LTC. Despite these mounting pressures for HCBS, studies report that the development of HCBS funded by Medicaid (the largest single payer of LTC) remains uneven across the states and limited by factors including policies that commit 64.5 percent of the program s LTC expenditures to institutions (Burwell et al., 2005). Previous studies of HCBS development have given limited attention to personal care services which involve non-medical assistance with activities of daily living (ADLs), such as bathing and eating, and instrumental ADLs (IADLs), such as shopping and preparing meals (LeBlanc et al., 2001). In the US, formal personal care is paid by a combination of private sources (out of pocket expenses and the limited indemnity insurance markets) and governmental programs. While Medicaid is the main program for providing personal care, it is also funded through a variety of other federal and state programs including: Older Americans Act (OAA) Title III, the U.S. Department of Veterans Affairs Housebound and Aid and Attendance Allowance Program, the Medicare home health benefit, and Title XX Social Security Block Grants. Many elderly and disabled persons rely on formal personal care services (PCS) to remain independent, especially Medicaid programs delivering community-based personal care (Stone, 2001). Although states have had the option of providing PCS as a Medicaid state plan benefit since 1975, 22 states reported no commitment of funds to the benefit in 1995 (Winterbottom et al., 1995). Since then, the PCS benefit has become the major funding mechanism for personal care used by the elderly and by younger, physically disabled persons living in the community (LeBlanc et al., 2001). While the Medicaid program allows states considerable discretion in defining PCS, care must be approved by an authority recognized by the state (e.g., a physician) and cannot solely involve ancillary tasks (e.g., housekeeping or chores). The PCS benefit must be made available to all categorically eligible groups statewide although it may (at the discretion of states) include the medically needy (those who spend down to the state standard because of medical expenses). By 2002, 30 states operated Medicaid PCS programs with 683,099 participants and total expenditures of $5.6 billion (Kitchener et al., 2005b). Nationally, the PCS program represented 63% of public personal care expenditures. Studies of PCS programs indicate wide variation in policies including: hours provided per day, services provided outside the participant s residence, and hiring independent providers not employed by licensed agencies (Mollica, 2001; Kitchener, et al., 2005b). An increasing number of state PCS programs aim to expand consumer-directed

6 services that give clients greater control over funds (e.g., cash allowances) and the management of care attendants. The most common approaches involve either traditional home care or personal attendant agencies or by the use of independent providers (Summer and Ihara, 2004). A study of California s PCS program indicated that allowing participants to hire relatives, friends, and neighbors may increase client satisfaction and help address the limited supply of attendants (Benjamin, 2001). To address the information gap about state PCS programs, this study selected states that had promising practices in their Medicaid PCS optional state plan program for more in-depth study. Texas (TX) was selected as one of these states because it displayed three interesting features. First, Texas Personal Health Care (PHC) program is one of the older Medicaid state plan PCS optional programs. Second, TX had been working to rebalance its long-term care system for some time. Third, the state reported allowing for independent providers and consumer directed care in its PHC program. This report contains three main sections. The first presents an overview of the TX state socio-demographic characteristics, economic and political factors, and budget. The second part reviews the TX Medicaid program and the administration and management of its HCBS programs. Specifically, it reviews the state personal care programs including the personal care in waivers, the Older Americans Act, and other programs. The third section describes the main features of the Texas Medicaid PHC optional state plan program concentrating on the organization and management of the benefit. METHODS The purpose of this in-depth study was to describe selected Medicaid State Plan PCS programs and to understand the factors that facilitated or created barriers to the development of better PCS practices. From a systematic review of the research literature, a list of better practices concerning the following three aspects of PCS programs was compiled: planning, structure/content, and review/monitoring. Better practices within each category involve issues concerning consumer perspectives. Evidence of better practices among PCS programs was collected from two sources: (1) the PAS Center advisory panel; and (2) the researchers annual survey of all PCS programs. The final selection of case sites involved three further criteria: (1) each program must have been operational for at least one year, (2) there must have been some quantitative or qualitative program data even if this information was not collected as part of an organized evaluative design, and (3) the set of programs was designed to include variation along dimensions including: state size, region, per capita income, population density, and various other attributes. The information on this and the other cases was obtained from multiple sources including: secondary data, face-to-face and telephone interviews with state officials and various consumer and professional organization representatives conducted in the state in the summer of In addition, statistical data on the PCS programs were collected for l Page 1

7 TEXAS CHARACTERISTICS As background to this study of the Texas (TX) Medicaid State Plan PCS Program, this section presents information on three sets of state characteristics shown to be important within the research literature: (1) socio-demographics, (2) economic and political features, and (3) the state Medicaid program. 1. Socio-Demographic, Economic, and Political Characteristics Texas is a large state both geographically and in terms of population with the second largest state population in the nation in 2003 (US Census Bureau, Population Division 2003). While the majority of the Texan population is white, the state has the third largest Hispanic population in the nation (US Census Bureau 2003). Although Texas had a lower than average older population, an estimated 2.6 million Texans over the age of 5 had a disability. A fifth of Texans with self care difficulties lived alone which is below the US rate of nearly a quarter (see Table 1). In 2003, an estimated 497,000 Texans had difficulty performing self-care activities such as bathing, dressing, or eating. Table 1: Socio-Demographic (Need) Characteristics, Texas and US TX US Total Population (2004) 1 22,490, ,655,404 Percent of Persons Age 65+ (2003) % 11.98% Percent of Persons Age 85+ (2003) % 1.25% Percent of Population Minority (2003) 2 26% 23.84% Percent of Persons with Disabilities (2003) % 14.8% Percent of Persons with Difficulty in Self-Care (2003) 3 2.5% 2.7% Percent of Persons with Difficulty in Self-Care Living Alone (2002) % 23.5% Number of informal caregivers (2004) (percentage of total population) 4 1,900,000 (8.45%) 27,200,000 (9.26%) Number of informal caregiving hours (2004) 4 2,067,200 29,182,000 Annual market value of informal caregiving (2004) 4 $18,211,900 $257,096,000 Sources: (1) U.S. Census Bureau Population Division (2004), (2) U.S. Census Bureau, American Community Survey (2004c,d), (3) National Center for Personal Assistance Services, State Disability Statistics, (4) Friss Feinberg et al (2004) Economic and Political Characteristics In 2003, Texas ranked 27 th in the nation in terms of per capita income (Smith 2004) and more than 16 percent of the state s population lived in poverty (see Table 2). In November 2004, the state had an unemployment rate that was 0.4 percent higher than the national average of 5.4 percent (Bureau of Labor Statistics, 2004). Despite this, the Texas state government generated total revenues of almost $60.6 billion which translated into about $2,787 per person (US Census Bureau 2005). The percentage of Texans residing in an urban area was greater than the national average (82.50% vs %). Texas had the highest percentage of population not covered by health insurance in the nation (24.6%) (DeNavas et al 2004). The Governor of Texas in 2005 was Republican Rick Perry who succeeded to the office in 2001 and was elected in In 2005, both U.S. Senators from Texas were Republicans (John Cornyn and Kay Bailey Hutchison, Texas s first woman Senator). Hutchison was first elected in 1993 and is serving her 2nd full term, while Cornyn is serving his first term having succeeded Phil Gramm in In 2003, both Senators had very low Americans for Democratic Action (ADA) liberalism ratings of 10 percent. Page 2

8 Table 2: Economic and Political Characteristics, Texas and US TX US Economic Characteristics State Munificence (State revenue-expenditure, 2003) 1 -$9,686,373 Percent of Population in Urban Area (2000) % 79.01% Percent of Population in Poverty (2003) % 12.7% Personal Income Per Capita (2003) 4 $29,074 $31,472 Percent of Population Unemployed (2004) 5 5.8% 5.4% Percent Persons Not Covered by Health Insurance (2003) % 15.1% Percent households with internet access % 50.1% Percent homeownership rate (2004) % 69.0% Percent of population age 25+ with High School Graduates or higher (2003) % 83.6% Percent of Bachelor level education or higher (age 25+) (2003) % 26.5% Political Climate ADA Senator liberalism rating 9 10% Sources: (1) U.S. Census Bureau (2005), (2) US Census Bureau (2004) (3) U.S. Census Bureau American Community Survey, (2004a), (4) US Bureau of Economic Analysis (2005), (5) US Dept of Labor (2005), (6) DeNavas et al (2004), (7) Friss Feinberg et al (2004), (8) U.S. Census Bureau (2004c), and (9) Americans for Democratic Action (2005). In 2005, Texas had 32 U.S. Representatives, 16 Republicans and 16 Democrats. The Democrats had ADA scores ranging from 60 to 95 percent, while the combined Republican ADA scores ranged primarily from 5 to 15 percent, with one outlier of 60 percent. The average US Senate and House liberalism score for TX in 2004 was 39 percent, lower than neighboring states such as New Mexico (46 percent). In 2005, the Texas House of Representatives was comprised of 67 Democrats and 83 Republicans. The State Senate was comprised of 12 Democrats and 19 Republicans (2003). State Medicaid Program In 2002, although the Texas Medicaid program served over 2.95 million participants, the rate of participants per 1,000 population fell way below the national average of (see Table 3). Similarly in 2002, while total TX Medicaid expenditures exceeded $13 billion, per capita expenditures were more the $200 below the national average. The federal government matched the Texas state Medicaid expenditures for both mandated and optional services at the rate of percent in In 1993, Texas initiated a Medicaid managed care program called State of Texas Access Reform (STAR) for acute services only. The Star+Plus program covers both acute care and LTC. Table 3: Medicaid, Texas and US TX US Participants (2002) 1 2,952,569 49,754,619 Participants per 1,000 population (2002) Expenditures (2004) 2 $15,665,374,340 $282,262,742,600 Expenditures per capita (2004) 2 $ $ Federal match (2004) % Managed care? 4 Star (acute only) Star+Plus (acute and LTC) Financial Eligibility (% FPL) b Rules 5 No State Supplemental Payment (SSP only) 6 Yes ($15) in LTC institutions Sources: (1) Centers for Medicare and Medicaid Services (2005a), (2) Burwell, Sredl, and Eiken, 2005, (3) Kaiser Family Foundation, State Health Facts (2005a), (4) Texas Health & Human Services Commission (2004b), (5)Kaiser Family Foundation, State Health Facts (2005b) (6) Social Security Administration (2005b) Individuals eligible for Supplemental Security Income (SSI) and who are aged, blind and disabled are automatically qualified for Medicaid services as categorically eligible individuals. Page 3

9 The federal SSI standard for an individual was $579 per month in States had the option of supplementing the SSI income provided by the federal government. Texas provided state supplemental payments (SSP) to 10,380 participants totaling about $155,700 in January 2005 (Social Security Administration 2005b). To manage financial eligibility decisions for Medicaid and other programs, Texas is piloting an integrated computer system called TIERS (Texas Integrated Eligibility Redesign System) which includes a web-based self-screening tool STARS (State of Texas Assistance and Referral System) (Wiener et al 2004). In Texas, while there are medically needy criteria for Medicaid they do not cover the aged, blind, or disabled. Texas allowed for the maximum level of 300 percent of SSI for its special income standards for institutional and HCBS waiver care for the categorically needy. Although Texas had seemingly generous eligibility criteria for the Medicaid program, the lack of medically needy criteria for the aged, blind, or disabled makes these rules less generous than some states. Recent cutbacks due to budget constraints included the enactment of legislation implementing federally-mandated rules requiring estate recovery for Medicaid nursing home residents and HCBS recipients and a reduction of reimbursement rates to nursing facilities (by 1.75 percent) and community care providers (by 1.1 percent) in 2003 (Wiener et al., 2004). State officials state that these cuts were restored in the 2005 legislative session and over 9,000 new waiver slots were authorized. TEXAS LONG TERM CARE As background to this study of the Texas Medicaid State Plan PCS Program, this section presents information on five aspects of the publicly funded LTC system in Texas: (1) organizational structure, (2) Medicaid LTC participants and expenditures by provision type, (3) personal care delivered through Medicaid waivers, (4) other programs delivering personal care, and (5) strategic planning. Organizational Structure In September 2004, twelve Texas health and human agencies were consolidated into a single health and human service enterprise comprised of the Texas Health and Human Services Commission (THHSC) which is the operating agency for Medicaid, and four departments (Texas House Bill 2292, 78 th Legislative Session). One of the resulting departments, the Texas Department of Aging and Disability Services (DADS) was formed from Legacy Departments including Human Services and the Texas Department on Aging. DADS is now the central LTC agency with an annual budget of $15 billion and responsibility for administering mental retardation services, state schools, nursing facilities, aging services, and community care services including waivers and the state plan PCS program. DADS has 3 operating divisions: (1) Access and Intake which includes Area Agencies on Aging (AAAs), (2) Provider Services including home and community-based services, nursing facilities and ICF/MRs, and (3) Regulation Services including licensing, survey and enforcement. Overall, it has been suggested that the reorganization represents a shift in power towards the governor as all legal authority now rests with him and his appointed head of THHSC (Wiener et al 2004). Page 4

10 In 1998, building on the earlier development of the Texas Medicaid managed acute care program (STAR), the STAR+PLUS program became the nation s first mandatory Medicaid managed care program for both acute and LTC services for older people and persons with disabilities. This program is operated in Harris County (Houston) using a Medicaid 1915b/c waiver. As of March 2004, 62,830 participants were enrolled in STAR+PLUS and approximately half are eligible for both Medicare and Medicaid (Tilly et al., 2003). In 2007, STAR+PLUS is slated to expand to 28 additional urban and suburban counties. In addition, there are two Program of All-inclusive Care for the Elderly (PACE) sites in Texas. The first site at El Paso served 684 clients at an average monthly cost of $2,386 per person in The same year, the new site at Amarillo served 23 clients at an average monthly cost of $2,035 per person (TDADS 2005:46). Like other parts of the Texas health system, long-term care has been described as fragmented and because of the geography and size of the state, access to services can be difficult. To help address this problem, Texas established a statewide telephone information line ( 211 ) that connects consumers (including LTC consumers) to information about services provided by their local Area Agency on Aging (AAA), DADS, and other agencies. The availability of information by locality varies depending on whether the answering service is run by either an AAA or a United Way organization. It is planned for the state to contract with a private firm to outsource this service and provide a single point of entry telephone facility for all LTC programs (Holahan et al., 2004). Texas Medicaid LTC Participants and Expenditures As shown in Table 4, Texas 395,043 Medicaid LTC participants were less likely to use nursing facilities and more likely to use ICF/MRs when compared with the national average in Texans were more likely to use a combination of home health services, personal care or waiver programs than participants nationally. Of the total number of Medicaid LTC participants in Texas, percent were served in institutions (nursing facilities and ICF/MRs) and percent were HCBS recipients. However, total state spending on Medicaid HCBS was just under half of the state s spending on institutional care in Nursing facility residents received percent of all state Medicaid LTC expenditures, even though they constituted percent of participants. ICF/MR residents accounted for less than four percent of all participants but received percent of total Medicaid LTC expenditures. Both Texas total Medicaid expenditures per capita and Medicaid LTC expenditures per capita were lower than the national average. The percentage of Texan Medicaid LTC dollars spent on HCBS (36.04 percent, $1,469,508,817) was just above that spent nationally (35.51 percent). Texas HCBS waiver expenditures per capita were 56 percent of the national average even though the state s Medicaid HCBS expenditures per capita were 60 percent of the national average. In 2003, the majority of nursing facility residents were funded by Medicaid, 69.5 percent had Medicaid as their primary payer, slightly more than the national average of 66.3 percent (Gibson et al 2004). Four percent of the 65+ population lived in nursing facilities in 2003 (87,470), which is the same percentage as the national average for that year (Gibson et al 2004). Page 5

11 Table 4: Texas Medicaid LTC Participants and Expenditures TX US Participants (per 1,000 population) Nursing facility (2002) 1 112,195 (5.16) 1,767,700 (6.14) ICF/MR (2002) 1 13,527 (0.63) 117,497 (0.41) Total Institutional (2002) 125,722 1,885,197 Home Health (2002) 2 157,095 (7.23) 722,257 (2.57) PCS (2002) 3 62,366 (2.87) 683,099 (2.43) Waivers (2002) 4 49,860 (2.30) 920,833 (3.28) Total HCBS (2002) 269,321 (12.40) 2,326,189 (8.08) Total Medicaid LTC participants (2002) 395,043 (18.19) 4,211,386 (14.63) Expenditures $ (per capita) Nursing facility (2004) 5 $1,781,030,713 ($79.12) $45,835,646,786 ($156.09) ICF/MR (2004) 5 $826,576,409 ($36.75) $11,761,206,072 ($40.05) Total Institutional (2004) $2,607,607,122 ($115.95) $57,596,852,858 ($196.14) Home Health (2004) 5 $141,455,514 ($6.29) $3,445,549,127 ($11.73) PCS (2004) 5 $418,089,038 ($18.61) $7,028,041,064($23.93) Waivers (2004) 5 $907,500,160 ($40.35) $21,244,610,417 ($72.35) Total HCBS (2004) 5 $1,469,508,817 ($65.34) $31,718,200,608 ($108.01) Total Medicaid LTC expenditures 5 $4,077,115,939 ($181.29) $89,315,053,266 ($304.15) Source: (1) CMS (2005b) (2) UCSF Annual Survey Home Health (2004), (3) UCSF Annual Survey PCS (2004), -does not include CAS program; (4) UCSF Annual Survey 372 reports (2004), (5) Burwell et al (2005) Medicaid HCBS Waivers In 2005, Texas operated seven Medicaid 1915(c) waivers, with eight waivers, that provided a range of population groups with HCBS. The largest waiver is the Community Based Alternatives (CBA) program which has grown to serve over 30,000 elderly and disabled adults in 2003 (see Table 5). Two smaller waivers serve specific populations and had less than 200 participants in 2003: (1) the Deaf, Blind and Multiple Disabilities (DBMD) waiver, and (2) the Consolidated Waiver Program (CWP) which, since 2001, serves a broad range of persons with disabilities in Bexar County (San Antonio) and is divided into two (NF and ICF-MR) subprograms. The HCS and CLASS waivers serve the statewide MR/DD population. Since 1999, the Texas Medically Dependent Children s waiver has served roughly 1,000 young people with severe medical conditions. The Texas Home Living waiver (TxHmL) provides services and supports to enable persons with mental retardation to continue living in community settings. This waiver has a CMS approved start date of March 1, 2005, no data are yet available. Table 5 also shows data for the Mental Retardation Local Authority (MRLA) waiver that ended in September Texas was one of the first states to receive approval from CMS for the implementation of consumer directed services (CDS) in multiple HCBS waiver programs. In July 2002, CDS were introduced into five Texas Medicaid HCBS waivers including CBA, CLASS and DBMD in response to Senate Bill 1586 (76 th Legislature, Regular Session). The CDS model allows consumer or their guardians or designated representatives to be legal employers of record for the service providers. The utilization rate of CDS varies widely across programs from a high of 35.2 percent in CLASS to a low of less than 1 percent in CBA (THHSC 2005:4). While CDS is typically lower in the waivers with higher rates of elderly persons, the higher utilization of CDS in CLASS may reflect that a responsible party is often involved, and they are able to manage the employer responsibilities. A state official also suggest that the high uptake of CDA in CLASS is probably also related to the fact that CLASS uses independent case managers (contractors who are not the providers of services) who have small caseloads. They have the time to explain the options [to clients] and have no interest in promoting the use of agency services. Page 6

12 Table 5: Texas Medicaid 1915(c) HCBS Waivers 1 Waiver name (identifier) Community Based Alternatives (CBA) (0266) Deaf, Blind & Multiple Disabilities (DMMD) ( ) Home and Community-Based Services (HCS) (0110) Population served Participants (2003) Expenditure (2003) Services provided include: Elderly (65+), 37,784 $454,056,840 aids, medical supplies, adult foster Adaptive care, people over 21 $427,604,617 assisted living/residential care, consumer directed with a disability (2004) 2 services and emergency response. Deaf-Blind people 105 $3,939,577 Adaptive aids, medical supplies, assisted living, with at least one $6,223,505 consumer directed services, case management, chore other disability (2004) 2 services. MR/DD 5,023 $161,244,947 $316,155,212 (2004) 2 Case management, adaptive aids, home modifications, counseling & therapies. Personal care Yes, in home only Yes Yes Medically Dependent Children Program (MDCP) (0181) Children with special health care needs 438 $7,231,759 $16,416,185 (2004) 2 Adaptive aids & adjunct support services (e.g. independent living, home modifications, respite). Yes Consolidated Waiver Program (CWP) (0373 and 0374) Community Living Assistance & Support Services (CLASS) (0221) MR/DD 116 $1,901,147 Nursing, PAS, adaptive aids, durable medical $3,729,946 supplies, respite, habilitation. This consolidates (2004) 2 services provided in CBA, CLASS, HCS & MDCP waivers & is limited to 200 clients in Bexar county. MR/DD 1,892 $55,967,375 Adaptive aids, medical supplies, case management, $60,222,617 consumer directed services, habilitation, home (2004) 2 modifications. Yes Yes HCBS (HCS) (0240) MR/DD 122 $4,271,045 Supported living, case management, nursing, training services. Mental Retardation Local Authority Program (MRLA) (0330) MR/DD (Ended 1 Sept 2003) 1,122 $48,092,251 Nursing, day habilitation, dental, residential support. No STAR + PLUS (325) Elderly (65+), people over 21 with a disability 2,848 3,014 (2004) $31,346,298 $42,052,796 (2004) Source: 1 National Center for Personal Assistance Services (2005) and UCSF survey of 372 reports, 2002; 2 State estimate. Adaptive aids, medical supplies, adult foster care, assisted living/residential care, consumer directed services & emergency response. It is similar to the CBA waiver except managed care organizations provide the services. Since 1998, the STAR+PLUS waiver has provided HCBS through managed care organizations to elderly and disabled people in Harris County. STAR+PLUS involves two Medicaid waivers: (1) a 1915(b) waiver to make enrollment mandatory, and (2) a 1915(c) waiver to provide HCBS. Since January 2002, CDS have been an option for STAR+PLUS enrollees. With the CDS option, the member or guardian is the employer of record and assumes all responsibilities for provider hiring, firing, and training etc. All providers must be registered with an agency licensed by the state. In response to a study of the cost effectiveness of these Medicaid managed care models, Texas proposes to extend STAR+PLUS managed care to 28 additional counties in January In 2004, a total of 109,557 people were on waiting lists for 6 Texas waivers, the largest waiting list being 66,199 people waiting for CBA waiver services. The average wait time is 36 months in 2004 (USCF survey data, 2005). Information on list trends for people interested in mental retardation services are published regularly on the Texas Department of Aging and Disability Services website. State officials suggest that the introduction of an additional 9,000 waiver slots in 2005 has improved the wait list situation in Texas. Yes Page 7

13 Medicaid Personal Care in Waivers Texas state estimates suggest that the number of persons receiving personal assistance under its various programs has tripled since 1980 reaching 109,153 individuals in 2001 (Bermea 2001). After the State Plan PCS program, the second largest Texas Medicaid program delivering personal care is 1915(c) HCBS waivers. In 2005, personal care was offered in all Texas waivers operating in As shown in Table 6, after a dip in enrollment between 2000 and 2001, the number of participants receiving personal care through Texas HCBS waivers increased by 26 percent between 2001 (27,929) and 2002 (35,054). Additionally, total expenditures increased by one-quarter after a drop in expenditures from 1999 to Between 1999 and 2002, the overall inflation-adjusted increase in expenditures was around eight percent. Despite increases in the number of participants and expenditures between 2001 and 2002, expenditures per participant remained stable. Furthermore, expenditures per participant were almost $1,000 less in 2002 than in Table 6: Texas Medicaid Personal Care in 1915(c) Waivers, Participants Raw 27,553 31,231 27,929 35,054 Per 1,000 population Expenditures ($) Raw 292,891, ,783, ,030, ,247,324 Per capita Per participant 10,630 8,670 9,704 9,706 CPI-adjusted (2002) 316,273, ,891, ,315, ,247,324 Source: Kitchener, Ng and Harrington, In a program that is thought to be unique to Texas, around the inception of the Texas state plan PCS benefit in 1979, the state was awarded a Medicaid 1115 research and demonstration waiver to provide services identical to those provided under the PCS program to persons with incomes upto three times SSI (225% of poverty) and $4,000 in assets (the same financial criteria as nursing home and waiver services). More recently, this program was authorized under a Section 1929(b) waiver and was called initially Frail Elderly and then Community Assistance Services. Participants on CAS do not necessarily receive any other services from Medicaid although they may qualify for Medicare services and many will be treated as Partial Dual Eligibles under Medicare Part D. Between 2001 and 2005, CAS expenditures rose from $163 million to $324 million with participation growing from 26,000 to 45,000. A state official noted that some persons on CAS also qualify for Specified Low-income Medical Beneficiaries (SLMB), and Qualified Medical Beneficiaries (QMB). Texas Personal Care in Older Americans Act Title III The federal Older Americans Act (OAA) is authorized until FY Title III of the OAA enables states to provide services to support older people (60+) to stay independent in the community, including through providing personal care services. DADS Access and Intake Division and the 28 Texas AAAs with which it contracts combine to support a statewide system of supportive in-home services under the OAA including personal assistance (TDADS 2005: 39). Page 8

14 Federal Administration on Aging data report that the number of people receiving personal care through Title III OAA funds in Texas decreased by more than half between 1999 and 2000, remained the same through 2001 but then increased almost threefold between 2001 and 2002 (see Table 7). However, expenditures followed a different pattern, increasing by two percent between 1999 and 2000, decreasing by almost three percent the next year, and increasing by about sixteen percent between 2001 and The pattern exhibited by expenditures per participant nearly doubled between 1999 and 2000, decreased slightly the next year, and decreased by nearly 60% between 2001 and The net result was lower per participant expenditure in 2002 than in Data reported by Texas suggest between 2003 and 2004, the number of persons receiving OAA Title III personal assistance and the average cost of those services fell from 1,140 and $1,046 to 1,292 and $1,000 (TDADS 2005: 41). Table 7: Texas Personal Care in Older Americans Act Title III, Participants Raw ,073 Per 1,000 population Expenditures ($) Raw 986,773 1,006, ,508 1,141,082 Per capita Per participant 1,339 2,656 2,587 1,063 CPI-adjusted (2002) 1,065,549 1,051, ,010 1,141,082 Source: Kitchener, Willmott, & Harrington (2004b) Texas also participates in the OAA National Family Caregiver Support Program (enacted in 2001) and received $7,764,738 in federal funding in Other Sources of Personal Care Funding in Texas Five programs in Texas provide personal care or attendant care services through either state and/or Social Services Block Grant funds. Four of these programs use both Social Services Block grant (Title XX) and state funds to provide personal care. These are; Consumer Managed PAS (CMPAS), Family Care Services (FC), Special Services to Persons with Disabilities (SSPD) and Special Services to Persons with Disabilities 24 hour shared attendant care (SSPD-SAC). For each of these programs, recipients must be aged 18 or older, meet the eligibility requirements for institutional care, have a monthly income of no more than $1,737, resources of no more than $5,000, and meet the program-specific functional assessment requirements (DADS 2005b). By far the largest of the joint Social Services Block Grant and State-funded programs is the Family Care program (FC). FC served an average of 6,048 clients per month at an average cost of $486 each in The next highest number of participants per month in 2004 was 531 (average $1,005 per month each) for the CMPAS program (DADS 2005b). The program is similar to the Texas state plan PCS benefit (Primary Home Care - PHC) in that contract agency providers are used, case managers oversee aspects of service delivery, and a maximum number of hours of care are operated. In contrast to PHC, FC has a higher income eligibility requirement, no medical need must be demonstrated, and provider agencies compete for a regional contract (rather than competing for clients on the PCS program) (Kennedy and Litvak 1991). Page 9

15 The In-Home Family Support (IHFS) program (see table 8), uses exclusively state funds. The program provides approximately 3,500 physically disabled individuals (or their families) with direct monthly grants to purchase the support they need in order to remain in the community (e.g., medical supplies, adaptive aids, home modifications or attendant care). IHFS provides up to $1,200 per year in cash subsidy for the purchase of ongoing services with a lifetime limit of $3,600 for purchases of equipment or modifications costing over $250. Co-payments begin when an individual s income reaches 105 percent of the median state household income (Texas DADS 2005). Texas has been awarded several grants through the federal New Freedom Initiative. As shown in Table 8, since 2001 Texas has received $3,522,000 in Federal Systems Change grants from the Centers for Medicare and Medicaid Services (CMS). In 2001, an additional $308,000 Nursing Facility Transition Grant (Independent Living Partnership) was awarded. In 2005, Texas Department of Aging and Disability Services received an Aging and Disability Resource Center (ADRC) grant of $800,000 from CMS and the Administration on Aging (AOA) to establish centers to streamline access to long-term care for people over 60 and later, for younger people with disabilities. Table 8: Alternative Sources of TX Personal Care Funding - State-only funded programs and Federal Grants State-only funded programs Total Systems Change Grant awards ($thousands) Title of Program Expenditure (year) (source of funding) In-Home Family Support Program (State) $8,642,553 (DADS 2005a) 50* 1,385 1, ** Source: Kitchener, Willmott & Harrington (2004a,c,e) *An additional Nursing Facility Transition, Independent Living Partnership grant of $308,000 was awarded to a Texas Community Living Center in ** Award made to Texas Parent to Parent to develop a Family to Family Health information and Education Center Strategic Planning Activity and Stakeholder Involvement The federal Supreme Court Olmstead ruling suggested that states demonstrate compliance with the 1990 Americans with Disabilities Act integration mandate by producing formal plans for increasing community integration and involving a wide range of stakeholders in the process. Drawing from work beginning in January 2000, Texas produced its first Olmstead Plan in 2001 ( The Promoting Independence Plan ). A later version of the Plan (December 2004) outlines measures towards the goal of extending the availability and efficacy of HCBS including opportunities for individuals residing in state mental facilities to move into community alternatives within 180 days of their request (THHSC 2004; TDADS 2005). In contrast to many other states, Texas encouraged early and considerable stakeholder involvement within the strategic planning process. Central to these efforts have been taskforces that involve a wide range of consumer and provider interests. These initiatives include the 2001 Interagency Task Force on Appropriate Care Settings for Persons with Disabilities (SB 367), and the Promoting Independence Advisory Committee which, since December 2002, oversees the Promoting Independence Plan and meets at least quarterly (SB 367). The latter group includes Page 10

16 members from various state agencies, a university researcher, ADAPT, AARP, ARC, and Advocates for Human Potential (THHSC 2004). A recent report for the Administration on Aging confirmed that consumer groups and providers have been included in Texas LTC planning processes and are influential in the long-term care system, especially the development of home and community-based services, particularly organizations representing younger people with disabilities (e.g. ADAPT). This occurs despite a highly influential and very politically active nursing home industry in the state (Wiener et al. 2004). State officials report that other advocacy groups focus their LTC interests elsewhere, for example the home care industry focuses more on Medicare issues and the older people s lobby (e.g. AARP) has largely concentrated on nursing home quality issues. A major part of the state s strategic LTC plan is legislative Rider 28 to the 2003 appropriations act which reinforces the state s commitment to Money Follows the Person. This allows the state s original strategy, known as Rider 37 (2001), for moving people and the Medicaid funds spent on them from institutions to the community. The Rider has changed since its initial implementation, in part as a result of lobbying by opponents who almost succeeded in repealing the legislation in 2003 (Wiener et al, 2004). In the original legislation (Rider 37), funds for HCBS (including housing supplements and transition supports) were transferred permanently from the Medicaid nursing facility budget to the Medicaid HCBS budget. Since reenactment in 2003 (Rider 28), budget transfers are linked to individuals and are temporary so that if the person dies or goes back into a home, HCBS funds revert back to the nursing home budget. A state official reported that by 2006, more than 11,000 persons (mostly elderly) had participated in the program. Four Independent Living Centers have contracted with the state to provide assistance to individuals transitioning to the community. This initiative was supported by a Money Follows the Person grant (around $730,000) in 2003 from CMS. For residents of ICF/MRs, the Community Living Options process was implemented in 2000 to help them transition to community settings through Medicaid HCBS waiver services. By September 2004, 4,474 individuals (mostly older people) have moved from nursing facilities into less restrictive settings using the money follows the person (Riders 37 and 28) mechanisms (THHSC 2004: 35). Since November 2004, DADS has published a monthly report online (based on the Minimum Data Set figures) showing the number of people in Texas nursing facilities who express interest in returning to their communities. In addition to the efforts for nursing home transition through Rider 28, Texas has also developed the Family Based Alternatives project which began in 2002 and aims to create a system of family-based alternatives to institutional care for children and young adults (under 22) with developmental disabilities. Litigation Related to Olmstead As of May 2004, an estimated national total of 627 Olmstead-related complaints have been filed against state agencies claiming people have not received services in the most integrated setting (Kaiser Family Foundation 2004). There have been 62 lawsuits filed relating to HCBS and/or community integration since 2000 and in at least 20 such cases, states have made settlement agreements involving the development of detailed plans to extend HCBS. Page 11

17 In Texas there have been 6 cases relating to community integration and Medicaid which have been brought and/or decided since 1999 (the date of the Supreme Court Olmstead ruling). Four of these are now closed but one open case (McCarthy et al. v. Hawkins) brought in 2002, claims that the state has violated the ADA by denying people with MR/DD access to two 1915(c) HCBS waiver programs by leaving them on waiting lists (the Arc of Texas claims more than 30,000 people are on waiting lists for HCBS waiver services) (Arc of Texas, 2004). The state attempted to get the case dismissed but this was denied and the case continues. Program History and Structure TEXAS MEDICAID STATE PLAN PCS Before 1979, personal care services in Texas were funded solely through Title XX funds. Independent providers were recruited by caseworks and these attendants were paid by the state at below minimum wages (Kennedy and Litvak 1991). As Title XX revenues diminished in the late 1970s, the state added personal care services (PCS) to the state Medicaid plan in order to capture federal matching funds. Around the same time, Texas began the precursor to the CAS program described on page 8. Texas s state plan PCS program is called Primary Home Care (PHC) and provides a non-technical, personal care service for persons whose chronic health problems impair their ability to perform activities of daily living. Personal attendants assist clients in performing tasks of daily living such as arranging or accompanying clients on trips to receive medical treatment, bathing, dressing, grooming, preparing meals, housekeeping and shopping. (TDADS 2005: 18). From the outset, PHC was designed as a private vendor system with multiple agencies agreeing to uniform state-wide reimbursement rates and regulations prescribed by the state. This structure encouraged the development of a relatively strong industry lobby called the Texas Association for Home Care. Prior to the introduction of consumer directed service (CDS) options in 2002, only licensed home health and personal care agencies were allowed to provide attendants for PHC. The state believes that competition among agencies encourages service quality. PHC has always been administered at the state level; until September 2004 by the Texas Department of Human Services (DHS) and thence by DADS. PHC Program Participants and Expenditures PHC is the third largest Medicaid State Plan PCS programs in the country (Kitchener et al., 2005). The number of participants in Texas PHC increased 81 percent between 1999 and 2005 while CPI-adjusted expenditures increased by almost 56 percent over the same period. (Table 9). This led to a decline in expenditures per participant by almost 5 percent from 2001 to 2005 although there was a steady increase in such expenditures between 2002 and Between 2003 and 2004, the average monthly number of PHC clients and costs per client increased from 51,801 and $602.98, to 56,871 and $ (TDADS 2005: 19) Page 12

18 Table 9: Texas Medicaid PHC Program Data, Participants Raw 43,000 62,366 66,965 71,365 77,632 Per 1,000 population Expenditures ($) Raw 267,000, ,237, ,428, ,089, ,098,535 Per capita Per participant 6,209 5,055 5,591 5,858 5,914 CPI-adjusted (2005) 294,438, ,223, ,509, ,254, ,098,535 Note: These figures do not include the Texas CAS program operated under Medicaid 1929(b) authority which is reported on page 8. Source: Kitchener, Ng and Harrington (2005) Types of Clients Texas reports that PHC provides services to children, the elderly, and the physically disabled who qualify for Medicaid (see Table 10). Unlike PCS programs elsewhere, Texas does not serve the MR/DD and mental health target groups. Interviews with senior program administrators suggested that persons with MR/DD were served on the program if they also had a Medical description such as Downs Syndrome or heart disease. The populations served have not changed between 2002 and Table 10: Texas Medicaid PHC Clients Groups Served, Children Y Y Y MR/DD N N N Elderly Y Y Y Mental Health N N N Physically disabled Y Y Y Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, Types of Providers In Texas, only licensed home health and personal care agencies qualify to provide PHC services. Currently, the program excludes spouses and legal or foster parents of minors from being attendants under PHC. Other family members can become paid caregivers. Parents of adult consumers providing PCS prior to program enrollment may be paid with Medicaid funds if the caseworker determines the parent would otherwise be employed. For participants on the Consumer-Directed Services (CDS) option, providers contract with local DADS offices. The consumer directed option is used extensively by younger people with disabilities but not many older people take advantage of the consumer directed option although the consumer-directed respite voucher provided under the Older Americans Act has been helpful in rural areas (Wiener et al., 2004). Table 11: Texas Medicaid PHC Enrolled Providers, Medicare certified home health agencies N N N Licensed home health & personal care agencies Y Y Y Centers for independent living N N N Independent providers (no agency affiliation) with fiscal intermediary N N N Independent providers (no agency affiliation) without fiscal intermediary N N N Persons legally responsible for client (using state only money) N N N Other family members & friends, not legally responsible for client Y Y Y Page 13

19 Facilities such as foster care/residential/assisted living etc N N N Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, Functional Assessment Procedures In order to qualify for PHC, applicants must obtain a statement (Form 30-52) from a physician or doctor of osteopathy that the individual s medical condition causes a functional limitation for at least one personal care task (TDADS 2005: 18). Reassessment of the functional need and authorization for continued personal care services are required at least every twelve months. Case workers (trained by DADS but with no professional or degree requirements) are responsible for determining the level of care required and authorize the amount of hours with minimum review (see Table 12). Assessments are conducted using the standardized Form Need is determined using a point system in which a total score of 24 or greater indicates the required need for assistance with at least one activity of daily living (ADL). Form 2060 assessments are then sent to regional Medicaid managers for review. If accepted, the agency has seven days to develop the detailed service plan and begin providing PHC services. Rider 31 (78 th Legislature, General Appropriations Act) directed the development of a new functional assessment instrument to replace Form 2060 for use in PHC and other community-based programs (TDADS 2004). After considering tools used in other states, Texas decided to adopt the Minimum Data Set-Home Care (MDS-HC) instrument developed by InterRAI. The instrument, called the Community Care Assessment Tool (CCAT) was adapted for Texas by the School of Rural Public Health at Texas A&M University. In contrast to the questionnaire style of Form 2060, CCAT is designed to give interviewers more flexibility. While no cost estimates for the implementation of CCAT exist, it is estimated that interviewers will require 3-4 days of training and considerable work is anticipated to ensure that CCAT data can be inputted into Texas integrated eligibility system (TIERS). Pilot testing suggested that CCAT may take longer to complete than Form The implementation of CCAT is currently on hold pending further research. Table 12: Texas Medicaid PHC Need Assessment & Authorization, Non-physicians assess client s functional needs (e.g., nurses) Y (Case managers) Y (Case managers) Y (Case managers) Need assessment based on a scoring system such as ADLs Y (24 points) Y (24 points) Y (24 points) After assessment, non-physicians authorize State Plan PC Y Y Y Specific criteria used for the authorization decision Y (Prior approval process) Y (Prior approval process) Y (Prior approval process) State tracks unmet needs, that is, services (e.g., respite) or extra N N N hours of care that are needed by clients but not currently available Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, Financial Eligibility Similar to other states, Texas allows a number of ways for persons to qualify for PHC if already categorically eligible for Medicaid (see Table 13). Clients may have countable resources of no more than $2,000 and have a monthly income that is equal to 100 percent of the monthly income limit for Supplemental Security Income (SSI) which is $579 per month (TDADS 2005: 18). Criteria for qualification also include: SSI, Temporary Assistance for Needy Families Page 14

20 (TANF), FA (Family Assistance), Medical Assistance Only (MA), Specified Low-income Medical Beneficiaries (SLMB), and Qualified Medical Beneficiaries (QMB). Texas also employs two features that make its financial eligibility standards for PHC different from those used by other states PCS benefits (Tilly et al. 2003:15). First, Texas uses the Special Income Rule (SIR) to determine eligibility. In the early 1980s, this feature was introduced into (what was known as) the Frail Elders Program using a Social Security Act Section 1115 demonstration waiver. Under the SIR, persons may have income up to 300 percent of the federal SSI level and quality for Medicaid. Typically, states have been allowed to use this more liberal income standard for Medicaid institutional care and for 1915(c) waivers. Because Texas does not operate a medically needy program (that allows people with high medical expenses to spend down to establish Medicaid eligibility), the 300 percent rule was introduced to expand access to persons with higher incomes than would usually be eligible. When the Texas SIR demonstration project ended, Congress inserted a special clause in Section 4711 of OBRA 1990 to amend Section 1929b of the Medicaid statute to allow the State to continue to use the 300 percent eligibility rule on the PHC program (Kennedy and Litvak 1991). Frail Elders was then renamed Community Attendant Services and serves clients of all ages with incomes within 300 percent of the monthly SSI limit ($1,737/month), countable resources of no more than $2,000 (TDADS 2005:19), a functional assessment score of 24 or greater, and have medical practitioner s statement that the individual s medical condition causes a functional limitation of at least one task. The second unusual (but not unique) feature of the Texas PHC benefit (and not the CAS program) is that it allows persons who quality for nursing home care and whose income exceeds 300 percent of the SSI level to place income into special Miller trusts and still qualify for Medicaid coverage (Tilly et al. 2003). Medicaid law requires that states that use only the 300 percent rule (and do not have medically needy program) allow participants to place income in excess of that level in trusts to receive Medicaid coverage (the state becomes the beneficiary of the trust on the person s death). Table 13: Texas Medicaid PHC Financial Eligibility, Medically needy N N N 100 percent of SSI (Title 19) N N N 150 percent of SSI N N N 300 percent of SSI (29b) Y Y Y Other, please specify Categorical status-ssi, TANF, FA, MAO, SLMB or QMB Categorical status-ssi, TANF, FA, MAO, SLMB or QMB Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, Services Available Categorical status-ssi, TANF, FA, MAO, SLMB or QMB In 2004, there were three types of services provided by PHC: personal care, home management, and escort services (see Table 14). Personal care includes activities such as bathing, dressing, preparing meals, feeding, exercising, grooming, caring for routine hair/skin needs, setting-out self-administered medication, toileting, and transferring. PHC services like cleaning, laundering, and shopping are only to be provided for the consumer and cannot be used to support others in the household. Escort services are limited to medical visits and do not Page 15