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Creating Comprehensive Cost-Effective Systems: System Design Issues 167An interdisciplinary team of professional andparaprofessional staff assesses participants' needs,develops care plans, and delivers all services(including acute care services and, when necessary,nursing facility services), in an integratedmanner. PACE programs provide social and medicalservices primarily in an adult day health center,supplemented by in-home and referral servicesin accordance with the participant's needs. ThePACE service package must include all MedicareandMedicaid-covered services and any otherservices determined necessary by the multidisciplinaryteam for the care of the PACE participant.PACE providers receive monthly Medicare andMedicaid capitation payments for each eligibleenrollee. Medicare-eligible participants not eligiblefor Medicaid pay monthly premiums equal tothe Medicaid capitation amount. But no deductibles,coinsurance, or other type of Medicareor Medicaid cost-sharing applies. PACE providersassume full financial risk for participants' carewithout limits on amount, duration, or scope ofservices.Endnotes1. The primary contributors to this chapter are GarySmith and Janet O'Keeffe.2. States establish and administer their Medicaid programsin accordance with Federal statutory and regulatoryprovisions and submit their administrativeexpenditures to HCFA for approval.3. HCFA letter to state Medicaid directors, August 31,2000. Available at the following website: www.hcfa.gov/medicaid/smd83100.htm.4. HCFA's policies with respect to the use of these alternativesare contained mainly in Section 4302 of theState Medicaid Manual. See also: Cooper, R.E., andSmith, G. (1998). Medicaid and case management for peoplewith developmental disabilities: Options, practice and issues.Alexandria, VA: National Association of StateDirectors of Developmental Disabilities Services.5. Smith, G. (1999). Closing the gap: Addressing the needsof people with developmental disabilities waiting for supports.Alexandria, VA: National Association of StateDirectors of Developmental Disabilities Services, Inc.;Smith, G. (1999). A supplement to Closing the gap:Addressing the needs of people with developmental disabilitieswaiting for supports. Alexandria, VA: National Associationof State Directors of Developmental DisabilitiesServices, Inc.6. Per capita costs, in turn, are affected by the extent towhich individuals use the particular home and communityservices a state offers and the price paid for theservices. Issues with respect to pricing are addressedseparately in a later section of this chapter.7. It is also difficult to achieve budget neutrality due topolitical pressures and practical concerns at the statelevel. For example, it would be difficult to close downa nursing home even if 90 percent of the residents weremoved into HCBS waiver programs.8. Section 1915(c)(2)(D) of the Social Security Act.9. 42 CFR 441.303(f)(1).10. Sometimes called the cold bed rule.11. 42 CFR 441.303(f).12. At the conclusion of each year, the state is requiredto prepare and submit to HCFA a special report (FormHCFA 372) that provides data concerning the actualcost-effectiveness of the state's program. When thesedata suggest that the state's estimates do not correspondto actual program experience, the state may beencouraged to amend its waiver to ensure that estimatesare reasonable, as required by law.13. The HCBS waiver application form provides directlyfor a state establishing a "hard cap" on the costs ofinstitutional services. A state may select or reject thislimit as it pleases. However, if rejected, a state mustspecify substitute limits of its choosing for the optionscontained in the application.14. Section 1915(c)(7)(A) of the Social Security Act.15. A discussion of the technical pros and cons associatedwith each of these methods is beyond the scope ofthis Primer.16. HCFA is concerned that institutional models of carenot be replicated in the community. In an institution,the facility assumes responsibility for identifying andmeeting a resident's needs. In HCBS models, thisresponsibility is separate from the community-basedmilieu in which the individual lives. This separation isfundamental to the concept of community integrationand the provision of services in the most integrated settingappropriate to a person's needs.HCBS waiver programs are not intended to foster there-creation of multiple (presumably smaller) "institutions"dispersed throughout the community. Rather,the program supports freedom of choice of providersfor service and support needs. This purpose underlies
168 UNDERSTANDING MEDICAID HOME AND COMMUNITY SERVICES: A PRIMERHCFA's expressed concern that "bundled" servicesmay infringe on a beneficiary's freedom of choice by (a)limiting providers to those who can furnish the fullrange of bundled services, and (b) removing individuals'ability to participate fully in community life byeliminating their choice of service modality andprovider.17. Section 1902(a)(32)(B) of the Social Security Act andregulation 42 CFR 447.10(c).18. Carving out a particular service means that it willnot be included in the capitation rate but furnished byanother provider.19. For a more detailed discussion see Hamilton, T.(1995). Using pre-paid health plan authority to provide integratedacute and long term care services under Medicaid.Wisconsin Department of Health and Social Services.20. Even after the State Plan Amendment became anoption under the BBA, there are still certain groups thatstates cannot mandate enrollment for (e.g., childrenwith disabilities).21. Both 1915(b) and 1115(a) contain the authority towaive Section 1902(a)(23), the right of Medicaid beneficiariesto have freedom of provider choice.22. Freedom of choice here means that underMedicaid's traditional fee-for-service system, Medicaidbeneficiaries are free to receive Medicaid-covered servicesfrom any Medicaid-certified provider of theirchoosing. Under a 1915(b) managed care waiver,Medicaid beneficiaries must receive their Medicaidcoveredservices (i.e., those services covered under themanaged care contract) from those providers includedin their managed care plan's network.23. These are recipients of benefits under TemporaryAssistance for Needy Families (TANF), the successor ofAid to Families with Dependent Children (AFDC).24. For a description of state Medicaid managed careprograms for mental health and substance abuse services,see State profiles, 1999, on public sector managed-behavioralhealth care (May 2000). Washington, DC: SubstanceAbuse and Mental Health Services Administration, U.S.Department of Health and Human Services.25. SSI-related beneficiaries are those who meet the SSIdisability criteria but are not receiving SSI benefitsbecause they have too much income or for other reasons.26. McCall, N., Wrightson, C., Korb J., Crane, M.,Weissert, W., and Wilkin, J. (1996). Evaluation of Arizona’shealth care cost containment system demonstration.Prepared for the Health Care Financing Administrationby Laguna Research Associates.Annotated BibliographyColeman, B. (October 1998). New directions for statelong-term care systems [2nd Edition]. Pub. #9809,Washington, DC: AARP, Public Policy Institute. (30pages)This issue paper describes the strategies used by statesto increase and improve the organization, financing,and delivery of publicly funded long-term care services,particularly home and community based care services.To obtain a free copy of this document, contact AARP'sPublic Policy Institute at (202) 434-3860 or search theirwebsite at www.research.aarp.org. Publication ID: 9809.Wiener, J., and Stevenson, D. (August 1998). Longtermcare for the elderly: Profiles of thirteen states.Washington, DC: The Urban Institute. (61 pages)Part of the Urban Institute's "Assessing the NewFederalism" project, this paper analyzes long-term careservices for older adults in thirteen states (AL, CA, CO,FL, MA, MI, MN, MS, NJ, NY, TX, WA, and WI). It summarizesinitiatives by these states to control the rate ofincrease in Medicaid long-term care expenditures forthe elderly. This article may be obtained free of charge fromthe Urban Institute website at www.urban.org/authors/wieneror by contacting the Urban Institute at (202) 833-7200.Weiner, J., and Stevenson, D. (May/June 1998). Statepolicy on long-term care for the elderly: Statesapproach their long-term care policies differently, butall agree that curbing spending is top priority. HealthAffairs 17 (3): 81-100. (20 pages)This article discusses state initiatives to provide longtermcare. It looks at state objectives, difficulties in cuttingcosts, and Medicare maximization policies. The
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Understanding MedicaidHome and Comm
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IntroductionPeople of all ages with
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Introduction 31998—is the group m
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Introduction 5This Primer has been
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CHAPTER 1Medicaid Coverage of Home
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Medicaid Coverage of Home and Commu
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CHAPTER 2Financial Eligibility Rule
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Financial Eligibility Rules and Opt
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CHAPTER 3Health and Functional Crit
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Options for Designing Service Cover
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