Medicaid Proposes Allowing Recipients to Direct Own Home Care

Medicaid beneficiaries who need help living at home could soon choose to receive a cash allowance to hire their own home care workers or even pay a family member to deliver their care.

Currently Medicaid beneficiaries who need help with activities of daily living like bathing and dressing must work with personnel employed by a home-care agency. But beneficiaries often have limited choices about how and when their care is provided, especially since agencies generally do not provide care on weekends or outside normal business hours.

Now, the Centers for Medicare & Medicaid Services (CMS) has proposed new rule that would give beneficiaries a cash allowance to hire, direct, train or fire their own personal care workers to help with things like preparing meals, household chores and other related services that help a person to live independently. Beneficiaries could even hire qualified family members who may already be familiar with the individual's needs to perform personal assistance (although not medical) services.

In addition, the allowance could be used for assistive technologies or home modifications that could reduce dependency on human assistance, such as a wheelchair ramp or microwave oven. The beneficiaries also have the option to have their cash benefit allotment managed for them.

"This proposal would give Medicaid beneficiaries significant new freedom to determine how their personal assistance services are delivered and by whom," said Kerry Weems, CMS acting administrator. "As health care is not simply an economic transaction, this proposal represents a fundamental shift that restores a person's ability to improve their overall health by taking greater control of his or her own decisions."

ElderLawAnswers reported in 2003 that the innovation, called Cash and Counseling, was being field tested in three states -- Arkansas, Florida and New Jersey. A study done at that time found that disabled Medicaid recipients living at home who were allowed to direct their own care were more satisfied with their care and spent less money on nursing homes than those using Medicaid's traditional agency-provided services. (See "Consumer-Directed Medicaid Home Care Shows Promise".)

The proposal would put into place a provision of the Deficit Reduction Act of 2005 that allows states to elect a state plan option to provide care in ways that previously required "waivers" of Medicaid laws. States must apply for approval of this state plan option in order to be able to provide these self-directed services. Enrollment in the new state plan option is voluntary and the state must also provide traditional agency-delivered services if the beneficiary wishes to discontinue self-directed care.

States choosing the option must have necessary quality assurances and other safeguards in place to assure the health and welfare of participants. States must also train potential participants in ways to manage their budgets and assess their personal care needs.

The notice of proposed rulemaking was published in the January 18, 2008, issue of the Federal Register. There is a 30-day comment period. Comments are due February 19, 2008.

To read the notice of the proposed rule in the Federal Register, click here.