Key State Policy Choices About Medicaid Home and Community-Based Services
State Medicaid programs must cover long-term services and supports (LTSS) provided in nursing homes, while most home and community-based services (HCBS) are optional.1 In addition to choosing which HCBS to offer, states determine a number of policies that shape these benefits in important ways for the seniors and people with disabilities who rely on them to live independently in the community. This issue brief presents the latest (2017) data on key state policy choices from the Kaiser Family Foundation’s 17th annual survey of Medicaid HCBS programs in all 50 states and DC. Our survey encompasses home health, personal care, Community First Choice, and Section 1915 (i) state plan benefits as well as Section 1915 (c) and Section 1115 waivers (Figure 1 and Appendix Table 1).
We include findings related to state choices about HCBS financial and functional eligibility criteria, scope of benefits, self-direction, utilization controls, provider policies and reimbursement rates, and quality measures. We also report on state progress in implementing notable regulations, including the LTSS provisions in the Medicaid managed care rule, the home and community-based settings rule, and the U.S. Department of Labor direct care worker minimum wage and overtime rule. The Appendix Tables contain detailed state-level data. Related briefs present the latest state-level Medicaid HCBS enrollment and spending data and key state policies related to HCBS waiver waiting lists.
Home Health State Plan Benefit Policies
All 51 states cover home health services in their state plan benefit package (Figure 1 and Appendix Table 1). These services are required for all states that choose to participate in Medicaid. At minimum, home health services include medical supplies, equipment, and appliances, nursing services, and home health aide services. Home health aide services typically assist individuals with self-care tasks, such as bathing or eating. Although states must cover home health services in their Medicaid programs, states make a number of policy choices that allow them to shape this benefit. Key state home health policy choices are described below and summarized in Figure 2 and Appendix Table 2.
Most (46 of 51) states choose to expand the scope of their home health benefit by covering some optional therapy services (Figure 2 and Appendix Table 2). Most of these states (44) include all three therapy types (physical, occupational, and speech-language) in their home health benefit, in addition to the basic set of home health services listed in the preceding paragraph. In addition, 15 states choose to cover assistance with household activities, such as preparing meals or housekeeping, and nine states cover nutrition services, such as consultation with a dietitian and individualized meal plans, as part of their home health benefit (no data shown).
Few (5 of 51) states allow beneficiaries to self-direct home health services in 2017 (Figure 2 and Appendix Table 2), one state less than in 2016. Alaska and Louisiana discontinued self-direction of home health services, while Illinois added the benefit. Self-direction typically allows beneficiaries to select and dismiss their direct care workers, determine worker schedules, set worker payment rates, and/or allocate their service budgets. States may be less likely to offer self-direction for home health services compared to personal care services (discussed below) at least in part because home health services may be used by some beneficiaries for shorter periods of time. Nebraska is the only state that allows self-direction for home health services but not for personal care services (Appendix Tables 2 and 3).
About half (25 of 51) states apply utilization controls to their home health benefit in 2017, down from 32 states doing so in 2016 (Figure 2 and Appendix Table 2). Specifically, in 2017, 21 states cap the number of home health hours that a beneficiary can receive, two states cap the amount that can be spent on home health services for a beneficiary, and two states apply both hour and spending caps. Among states making policy changes in this area, six (IN, KY, LA, NY, RI, and WA) discontinued hour caps, and two (AZ and MI) discontinued spending caps in 2017. Michigan retains its cap on home health service hours, while the other seven states with policy changes no longer report any home health utilization controls.
Nearly all (36) states require home health service providers to undergo criminal background checks, and about one-quarter (12 of 51) of states have provider training requirements in addition to federal regulations (Figure 2 and Appendix Table 2). Three states (FL, IL, and NY) report new provider training requirements in 2017. Among states that require provider training, California, Florida, and West Virginia each mandate one-time training of 75 hours, Kansas requires a 20-hour training course, and Indiana requires 12 hours of annual training.2
The average state reimbursement rate ($81.88/visit, Appendix Table 2) paid to home health agencies continued to decrease in 2017,3 compared to 2016 ($92.52/visit), and 2015 ($93.93/visit). Agency rates account for a range of home health providers, such as registered nurses, home health aides, physical, occupational, and speech-language therapists, and social workers. Average rates per visit increased in states that paid home health service providers directly or mandated their reimbursement rates. Specifically, the average rate per visit increased from $83.29 in 2016, to $86.41 in 2017, in states that reported direct payment or mandated rates for registered nurses providing home health services.4 Similarly, the average rate per visit increased from $42.56 in 2016, to $47.28 in 2017, in states that reported direct payment or mandated rates for home health aides.5
Personal Care State Plan Benefit Policies
Thirty-five states offer personal care services as an optional state plan benefit (Figure 1 and Appendix Table 1). Nearly all (31 of 32 responding)6 of these states cover assistance with household activities, such as preparing meals or housekeeping, as part of their personal care benefit.7 Sixteen states provide transportation, 16 states cover cueing or monitoring, and 11 states cover tasks delegated by a nurse, such as injections (no data shown). Other key state policy choices about personal care state plan benefits are summarized in Figure 3 and Appendix Table 3 and described below.
In addition to a beneficiary’s residence, nearly three-quarters (23 of 32) of states electing the personal care state plan option offer services at a beneficiary’s work site (Figure 3 and Appendix Table 3). Twenty states provide personal care services elsewhere in the community outside of a home or work setting (Figure 3 and Appendix Table 3), and 16 states provide personal care services at residential care, foster care, or assisted living facilities (no data shown). Providing services at a work site or elsewhere in the community can increase the extent to which beneficiaries are integrated into the community.
Nearly two-thirds (20 of 32) of states allow beneficiaries to self-direct personal care services (Figure 3 and Appendix Table 3), four times the number that do so for home health services. As noted above, self-direction typically allows beneficiaries to select and dismiss their direct care workers, determine worker schedules, set worker payment rates, and/or allocate their service budgets. In 2017, two states (CO8 and ME) newly reported that they allow beneficiaries to self-direct personal care services, and one state (Louisiana) reported that it stopped doing so.9
Over half (17 of 32) of states apply utilization controls to personal care services (Figure 3 and Appendix Table 3). Specifically, 16 states cap the number of hours that a beneficiary can receive, and one state (MO) caps the amount spent on personal care services that a beneficiary can receive. State policy choices about personal care services utilization controls were relatively stable from 2016 to 2017, with one state (FL) discontinuing hour and spending caps.
Nearly one-third (10 of 32) of states allow beneficiaries to choose among both agency and independent providers for personal care services (Figure 3 and Appendix Table 3). Covering more provider types can help increase beneficiary access to personal care services, which is especially critical as beneficiaries often rely on these services for basic daily care. Seventeen states only cover agency providers, and three states offer only independent providers.
Nearly all (27 of 32) states require personal care service providers to undergo criminal background checks, and most (21) states require provider training (Figure 3 and Appendix Table 3). Twenty-two states require personal care attendants to be supervised, typically by nurses, provider agency staff, or case managers. Four states (CO, NC, NH, and RI) added supervision requirements in 2017, while one state (TX) no longer has this requirement. States determine supervision requirements for PCS services.
The average state reimbursement rate paid to personal care agencies increased slightly, from $19.01 per hour in 2016, to $21.03 per hour in 2017 (Appendix Table 3).10 In states that paid personal care service providers directly or mandated their reimbursement rates, the average hourly rate was $16.70 in 2017, up from $14.32 in 2016.11
Community First Choice Policies
Eight states (CA, CT, MD, MT, NY, OR, TX, and WA) continue to offer attendant services and supports through the Community First Choice (CFC) state plan option (Figure 1 and Appendix Table 1). No state newly elected the CFC option in 2017. The CFC benefit was added by the Affordable Care Act (ACA) and became available to states in October 2011. It includes six percent enhanced federal matching funds. In addition to meeting financial eligibility criteria (described below), individuals receiving CFC services must have functional needs that would otherwise require an institutional level of care. CFC services must include assistance with self-care, household activities, and health-related tasks,12 self-direction opportunities, and back-up systems.13 States also may choose to cover other services under their CFC benefit, such as institutional to community transition costs14 and supports that increase independence or substitute for human assistance.15 Four (of 6 responding)16 states (CT, MD, OR, and WA) cover both of these optional services; two states (MT and TX) do not cover CFC optional services.
Six states (CT, MT, NY,17 OR, TX,18 and WA) extend CFC financial eligibility to individuals who qualify for Medicaid under an HCBS waiver.19 To be financially eligible for CFC services, an individual must either (1) be eligible for Medicaid in a state plan coverage group that includes nursing home services in the benefit package, or (2) have income at or below 150% of the federal poverty level (FPL, $18,735/year for an individual in 2019).20 States can extend CFC eligibility to individuals who are eligible for Medicaid under an HCBS waiver; these waivers (described below) enable states to expand Medicaid financial eligibility up to 300% SSI ($27,756/year for an individual in 2019).21
Section 1915 (i) Policies
Ohio newly elected the Section 1915 (i) HCBS state plan option in 2017, joining 15 other states offering these services (CA, CO, CT, DE, DC, FL, ID, IN, IA, MD, MS, NV, OR, TX, and WI, Figure 1 and Appendix Table 1). Section 1915 (i) allows states to offer HCBS as part of their Medicaid state plan benefit package instead of through a waiver. Like waivers, states can target Section 1915 (i) services to a particular population. Unlike waivers, states are not permitted to cap enrollment or maintain a waiting list for Section 1915 (i) HCBS. However, states can manage enrollment under Section 1915 (i) by restricting functional eligibility criteria if the state will exceed the number of beneficiaries that it anticipated serving. Functional eligibility for Section 1915 (i) HCBS requires beneficiaries to have needs that are less than what the state requires to qualify for an institutional level of care.
Maryland extends Section 1915 (i) financial eligibility to the federal maximum of 300% of SSI for certain beneficiaries, while the other 16 states elect the federal minimum of up to 150% FPL. Under Section 1915 (i), states can cover (1) people who are eligible for Medicaid under the state plan up to 150% FPL with no asset limit who meet functional eligibility criteria; and also may cover (2) people up to 300% SSI who would be eligible for Medicaid under an existing HCBS waiver.
People with mental illness and seniors/people with physical disabilities are the target populations most frequently served under Section 1915 (i) (Figure 4).22 Six states (FL, IA, IN, OR, TX, and WI) target people with mental illness, six states target seniors and people with physical disabilities (CO, CT, DC, MD, NV, and OH), and four states target people with I/DD (CA, DE, ID, and MS).
Indiana and Ohio are the only states using Section 1915 (i) as an independent Medicaid coverage pathway.23 This option allows individuals who are not otherwise eligible to gain Medicaid coverage. The other 16 states use Section 1915 (i) to authorize HCBS but require beneficiaries to be otherwise eligible for Medicaid through another coverage pathway.
Section 1915 (c) and Section 1115 HCBS Waiver Policies
Medicaid HCBS waiver authorities include Section 1915 (c) and Section 1115. Both allow states to expand financial eligibility and offer HCBS to seniors and people with disabilities who would otherwise qualify for an institutional level of care. Section 1115 also enables states to deliver HCBS through capitated managed care and to serve multiple target populations in a single waiver.
All 51 states offer a total of 287 HCBS waivers targeted to different populations (Appendix Tables 4 and 5). The vast majority (276 waivers in 48 states) continue to be Section 1915 (c) waivers (Figure 1 and Appendix Table 4). A minority (11 waivers in 11 states) are Section 1115 waivers24 (Figure 1 and Appendix Table 5). Eight of the Section 1115 waiver states (CA, DE, HI, NJ, NM, NY, TN, and TX) serve some HCBS populations under that authority and other HCBS populations through Section 1915 (c) waivers. The other three Section 1115 waiver states (AZ, RI, and VT) use that authority to provide HCBS to all covered populations and do not offer any Section 1915 (c) waivers. Unlike Section 1915 (c) waivers, Section 1115 waivers enable state to require HCBS beneficiaries to enroll in capitated managed care and to serve multiple target populations in a single waiver.
The number of Section 1915 (c) waivers averages six per state and ranges from one to 11, depending on the number of populations targeted (Appendix Table 4). Some states, such as Delaware, Hawaii, and New Jersey, operate only one Section 1915 (c) waiver and use Section 1115 capitated managed care waivers for other HCBS populations. On the other end of the range, Colorado operates 11 Section 1915 (c) waivers, and four states (CT, MA, MO, and NY) each offer 10 Section 1915 (c) waivers targeted to different populations. Section 1115 waiver states each operate one such waiver but, unlike Section 1915 (c), may serve multiple populations through a single waiver (Appendix Table 5).
All 51 states serve people with intellectual and developmental disabilities (I/DD), seniors, and nonelderly adults with physical disabilities through HCBS waivers (Figure 5, Appendix Tables 4 and 5). For the I/DD population, 46 states use Section 1915 (c) waivers, three states (AZ, RI, and VT) use Section 1115 waivers, and 2 states (NY and TN) use both waiver authorities. One state (DE) expanded its Section 1915 (c) I/DD waiver population in 2017 to include those living in the family home. For seniors and adults with physical disabilities, 40 states use Section 1915 (c) waivers,25 nine states (AZ, DE, HI, NJ, NM, RI, TN, TX, and VT) use Section 1115 waivers, and two states (CA and NY) use both waiver authorities.
A minority of states use HCBS waivers to serve people with traumatic brain and/or spinal cord injuries (TBI/SCI, 25), children who are medically fragile or technology dependent (18), people with mental health disabilities (14), and people with HIV/AIDS (10) (Figure 5, Appendix Tables 4 and 5). Nearly all (22 of 25) states with TBI/SCI waivers use Section 1915 (c), while three (DE, RI, and VT) use Section 1115.26 Most (16 of 18) waivers that target children who are medically fragile or technology dependent are under Section 1915 (c), while two states (HI and RI) use Section 1115.27 Most (12 of 14) mental health HCBS waiver states use Section 1915 (c), while two states (DE and RI) use Section 1115. Seven of 10 states using HCBS waivers to cover people with HIV/AIDS use Section 1915 (c) authority, while three states (DE, HI, and RI) use Section 1115 for this population.
Over three-quarters (78%, 223 of 287) of HCBS waivers set financial eligibility at the federal maximum (Figures 6 and 7, Appendix Table 6). States can use waivers to expand HCBS financial eligibility to a maximum of 300% of SSI ($2,313/month for an individual in 2019). Seven percent of HCBS waivers (21 in 8 states) set financial eligibility at 100% of SSI ($771/month for an individual in 2019). There was little change in state choices about HCBS waiver financial eligibility limits from 2016 to 2017.
Nearly all (99%, 284 of 287) HCBS waivers set financial eligibility limits at or below the nursing home limit (Figure 7). Most HCBS waivers (89%, 254 in 48 states) waivers use the same financial eligibility criteria as are required for nursing home eligibility. Another 30 HCBS waivers in 12 states (10% of all waivers) use financial eligibility criteria that are less stringent than those required for institutional care. Only three waivers in three states (CO, MD, and ND, 1% of all waivers) use financial eligibility criteria that are more restrictive than those required for institutional care. Two of these waivers (CO I/DD and MD seniors/adults with physical disabilities) set functional eligibility comparable to institutions, although financial eligibility is more restrictive than institutions. The other waiver (ND medically fragile children) has more restrictive financial and functional eligibility criteria (discussed below) compared to institutions. Using the same financial eligibility for HCBS waivers and institutional care removes any potential bias in favor of institutional care, which can occur if an individual must have less income and/or assets to receive HCBS than to receive institutional services.
Nearly all (98%, 282 of 287) HCBS waivers use functional eligibility criteria that are the same as or less stringent than the criteria to qualify for nursing home services (Figure 7). Most (94%, 270 in 51 states) HCBS waivers use the same functional eligibility criteria as are required for nursing facility eligibility, treating HCBS and institutional care equally. Another 12 HCBS waivers in eight states (4% of all waivers) use functional eligibility criteria that are less stringent than those required for institutional care. Five waivers in three states (CA, ND, and SC, 2% of all waivers) use functional eligibility criteria that are more restrictive than those required for institutional care. Four of these waivers (CA medically fragile children, and SC HIV/AIDS, adults with physical disabilities, and seniors/adults with physical disabilities) set financial eligibility the same as for institutions, even though functional eligibility is more restrictive. Functional eligibility criteria typically include the extent of assistance needed to perform self-care (such as eating, bathing, or dressing) and/or household activities (such as preparing meals or managing medications). Using the same functional eligibility for HCBS waivers and institutional care removes any potential bias in favor of institutional care, which can occur if an individual must have greater functional needs to receive HCBS than to receive institutional services.
Nearly all states (48 of 51) allow beneficiaries in at least one HCBS waiver to self-direct services (Figure 8 and Appendix Table 8). Self-direction is available statewide in 47 of 48 states; the exception is Mississippi. Three states (AK, AR, and NV) do not allow HCBS waiver self-direction. In all 48 self-direction states, beneficiaries can select, train, and dismiss direct care workers and set worker schedules.28 In 38 states, beneficiaries can decide how to allocate their service budgets, and in 35 states, beneficiaries can determine worker payment rates.29 Among states making policy changes related to self-direction in 2017, one state (AK) stopped allowing self-direction in HCBS waivers, three states (GA, MO, and TX) began allowing beneficiaries to allocate their service budgets, and one state (MO) began allowing beneficiaries to determine worker payment rates.30
The majority (29 of 48) of states offering waiver self-direction allow beneficiaries to choose either agency-employed or independent providers (Figure 8 and Appendix Table 8). Fifteen states (DE, GA, HI, IN, IA, LA, MS, OK, OR, RI, TN, UT, VT, VA, and WY) offer only independent providers, and four states (DC, MD, SD, and WV) offer only agency providers. Thirty-five states allow certain family members to be paid providers, typically those who are not the beneficiary’s spouse or legally responsible relative.
Eighty percent (41 of 51) of states use utilization controls in their HCBS waivers32 (Figure 8 and Appendix Table 9). Nineteen states use more than one type of cost control, including 15 states (ID, IA, KY, LA, MD, MA, MO, NM, NC, OK, SC, SD, TX, WV, and WY) with caps on both the amount spent and the number of service hours, three states (CO, MN, and NY) with both spending and geographic limits, and one state (CA) with all three types of utilization controls. Another 18 states use spending amount caps only, such as limiting the cost of HCBS to a percentage of the nursing facility reimbursement rate. Four states (AK, DC, MI, and NE) use hourly service caps only, such as day, week, annual or lifetime limits; services to which states apply hourly service caps include personal care, respite, chore/homemaker, adult day, physical/occupational/speech therapy, and supported employment. The 10 states without any HCBS waiver service utilization controls include AR, GA, HI, MS, NV, OR, UT, VT, VA, and WI. Among states making utilization control policy changes in 2017, five (CA, MI, MO, SC, and SD) added hour limits, and one (GA) added a spending limit. Three states (ME, MN, and PA) discontinued hour limits, one state (VA) discontinued a spending limit, and one state (WA) discontinued geographic limits.
State cost control policies vary by waiver target population with most spending caps (48%) and service hour limits (59%) applying to waivers targeting people with I/DD. Over one-third (35%) of spending caps and about one-quarter of service hour limits apply to waivers targeting seniors and/or adults with physical disabilities. Waivers targeting people with TBI/SCI accounted for 8% of spending caps and 9% of service hour limits.
All states had at least one HCBS waiver quality measure in place (Figure 8). HCBS quality measures vary by state but typically do not vary by waiver within a state. Most states rely on a combination of beneficiary experience data (to assess measures such as community participation/inclusion, choice and control, or employment) and performance measures (to assess measures such as level of care determinations, provider qualifications, service plans, enrollee health and welfare, and financial compliance) outlined in their Section 1915 (c) waiver applications. Relatedly, the Medicaid managed care rule (discussed below) requires states that provide managed LTSS to identify standard performance measures related to quality of life, rebalancing, and community integration for health plan contracts beginning on or after July 1, 2017.33
Forty-eight states measure beneficiary quality of life (Appendix Table 9). To do so, states use tools such as the National Core Indicators – Aging and Disability (NCI-AD) survey,34 the CAHPS HCBS survey,35 and other consumer satisfaction surveys. For example, Washington uses the NCI-AD survey to measure the percentage of waiver participants and family members who indicate satisfaction with their service providers as well as the percentage of service plans that identify personal goals for waiver participants.
Forty-two states have quality measures related to community integration (Appendix Table 9). States assess community integration through the NCI-AD survey, care plan reviews to evaluate person-centeredness, or monitoring beneficiary choice of service providers.
Seventeen states use LTSS rebalancing measures (Appendix Table 9). These states draw on annual needs assessment data or the Money Follows the Person rebalancing benchmarks. In Arizona’s Section 1115 waiver, there are financial incentives for HCBS included in the per-member-per month blended capitation rate for HCBS and institutions, with state monitoring to ensure that HCBS rebalancing targets are met. Arizona currently has 87 percent of its LTSS population living in a home and community-based setting, including 68 percent who live in their own home.
Forty-four states have an ombudsman program, typically as part of state government (37 states), to assist Medicaid beneficiaries receiving HCBS (Figure 8 and Appendix Table 9). Six states (LA, MS, NM, WA, WI, and WY) reported ombudsman programs located both within and outside of state government. Ombudsman programs may provide enrollment options counseling, assist beneficiaries with health plan appeals, offer information about state fair hearings, track beneficiary complaints, train health plans and providers about community-based services and supports that can be linked with Medicaid-covered services, and report data and systemic issues to states. The 2016 Medicaid managed care rule requires states using capitated MLTSS to offer an independent beneficiary support system, in health plan contracts beginning on or after July 1, 2018, that provides the following services for people who use or wish to use LTSS: (1) an access point for complaints and concerns; (2) education on enrollee rights and responsibilities; (3) assistance in navigating the grievance and appeals process; and (4) review and oversight of data to guide the state in identifying and resolving systemic LTSS issues.36
LTSS Provisions in the Medicaid Managed Care Rule
Twenty-four states have capitated managed long-term services and supports (MLTSS) programs that include HCBS in 2017 (Figure 9). These include the 11 states that provide HCBS through Section 1115 MLTSS waivers (described above), and 13 states that use another MLTSS program authority. We surveyed these 24 states to gauge progress with implementing key LTSS provisions of the Medicaid managed care regulations. Box 1 provides background on these regulations. Key findings related to state MLTSS policies are described below and summarized in Figure 10 and Appendix Table 10. State MLTSS policies were relatively stable from 2016 to 2017.
Box 1: Background on Medicaid Managed Care Regulations Affecting LTSS
The 2016 revision of the Medicaid managed care regulations, issued under the Obama Administration, addressed capitated MLTSS programs for the first time. It included new provisions for independent enrollment choice counseling, disenrollment for cause if an LTSS provider leaves the health plan network, LTSS provider network adequacy standards, and stakeholder advisory committees; different provisions of the regulations have different effective dates.37 Subsequently, under the Trump Administration, CMS proposed some changes to the 2016 regulations, most notably to the network adequacy standards.38 The proposed changes were issued in November 2018, and the public comment period closed in January 2019. CMS also issued a June 2017 informational bulletin indicating that it “intends to use [its] enforcement discretion. . . when states are unable to implement new and potentially burdensome requirements of the final [managed care] rule by the required compliance date, particularly provisions with a compliance deadline of contracts beginning on or after July 1, 2017,” while changes to the managed care regulations are pending.39
LTSS Network Adequacy Standards
Fourteen states (58% of the 24 MLTSS states) require network adequacy standards for LTSS providers in 2017, up from 13 states the prior year (Figure 10 and Appendix Table 10). For example, Texas has time and distance requirements. Arizona and Florida require geographic location standards in addition to time and distance. Delaware’s Section 1115 waiver specifies maximum time from service authorization to service implementation, including no more than 60 days for minor home modifications, no more than 10 days for home delivered meals, and 10 days for new beneficiaries (or immediately for nursing facility beneficiaries transitioning to the community) for personal care attendant services.
The 2016 managed care regulations require states to develop time and distance standards for MLTSS providers when the enrollee must travel to the provider, and network adequacy standards other than time and distance standards for MLTSS providers that travel to the enrollee to deliver services. These standards are required for health plan contracts beginning on or after July 1, 2018.40 However, CMS’s November 2018 proposed rule would remove the requirement for time and distance standards and instead would allow states to choose another quantitative standard, such as minimum provider-to-enrollee ratios, maximum travel time or distance to providers, minimum percentage of contracting providers accepting new patients, maximum wait times for an appointment, or hours of operation requirements.41
Independent Enrollment Options Counseling
Seventeen states (71% of the 24 MLTSS states) provide MLTSS enrollees with independent enrollment options counseling (Figure 10 and Appendix Table 10). Some states contract with a third party enrollment broker, while others rely on community-based organizations such as aging and disability resource centers. A couple (AZ and IA) provide this service through the state Medicaid agency. Delaware reported plans to expand this service in 2018, while Minnesota also noted plans to improve beneficiary access to options counseling by broadening the service in order “to come more fully into compliance with the managed care regulation.” CMS’s 2016 Medicaid managed care regulations require all states to offer enrollee choice counseling through the independent beneficiary support system required in health plan contracts beginning on or after July 1, 2018.42 Options counseling seeks to help MLTSS enrollees select a health plan; this population may not be familiar with that process because they traditionally have been enrolled in the fee-for-service delivery system. MLTSS enrollees also may seek assistance with choosing a health plan to find a provider network that best meets their various needs – which may go beyond primary care to include specialists, behavioral health providers, durable medical equipment suppliers, and personal care attendants — and preserves their existing provider relationships to the extent possible.
Disenrollment If LTSS Provider Leaves Plan Network
Fourteen states (58% of the 24 MLTSS states) allow MLTSS beneficiaries to disenroll from their health plan if their residence or employment would be disrupted due to an LTSS provider leaving the plan network in 2017 (Figure 10 and Appendix Table 10), one more state than the prior year. Under the 2016 Medicaid managed care regulations, states must consider these circumstances as good cause for disenrollment for health plan contracts beginning or after July 1, 2017.43 In Arizona, individuals cannot choose to disenroll from a health plan for employment disruptions; however, if a skilled nursing facility or assisted living facility exits the health plan network, the plan is required to pay for these services until the individual’s next open enrollment period in order to mitigate disruption in residential placement. Individuals can then choose either another plan contracted with the provider or choose another residential placement.
Stakeholder Advisory Committees
Twenty states (83% of the 24 MLTSS states) had a state-level managed care advisory committee, and 18 states (75%) required health plans to have a stakeholder advisory committee (Figure 10 and Appendix Table 10). In Delaware, managed care plans are required to have a provider advisory committee in addition to a member advisory committee. The 2016 Medicaid managed care regulations require states to create and maintain a stakeholder group to solicit and address the opinions of beneficiaries, individuals representing beneficiaries, providers, and other stakeholders in the design, implementation, and oversight of a state’s MLTSS program. In addition, health plans providing MLTSS must have a member advisory committee that includes at least a reasonably representative sample of the populations receiving LTSS covered by the plan or other individuals representing those enrollees. These provisions are effective for health plan contracts beginning on or after July 1, 2017.44
HCBS Settings Rule
States were further along in the process of identifying policy changes necessary to come into compliance with CMS’s home and community-based settings rule in 2017, compared to the previous two years. CMS’s January 2014 rule defines the qualities of residential and non-residential settings in which Medicaid-funded HCBS can be provided.45 To be considered community-based, settings must support an individual’s full access to the greater community; be selected by the individual from options including non-disability specific settings; ensure individual privacy, dignity, respect and freedom from coercion or restraint; optimize individual autonomy in making life choices; and facilitate individual choice regarding services and providers. Additional criteria apply to provider-owned or controlled settings. In May 2017, CMS extended the state compliance deadline by three years, to March, 2022, but retained the March 2019 deadline for states to submit transition plans.46 As of March 2019, 13 states (AK, AR, DE, DC, ID, KY, MN, ND, OK, OR, TN, WA, and WY) have received final CMS approval on their transition plan.47 Another 29 states have received initial approval from CMS.48
Forty-five states anticipate having to change state rules or policies to come into compliance with the settings rule in 2017, up from 42 states in 2016 (Figure 11 and Appendix Table 11). Four states (AK, DC, NY, and VT) joined this list in 2017, while Florida anticipated changes in 2016 but not 2017. Specifically, 36 states have identified some settings that will have to be modified in some way to continue to be used for Medicaid-funded HCBS (up from 13 states in 2015, and 35 states in 2016). The number of settings that must be modified varies substantially by state, ranging from the single digits, to several hundred, to one thousand or more. Additionally, 11 states identified settings that cannot be modified to meet the settings rule and consequently will require beneficiaries to be relocated to continue receiving Medicaid-funded HCBS (up from 2 states in 2015, and down from 16 states in 2016). Relatively few settings per state fall into this category.
Thirty-two states plan to submit information to the HHS Secretary to overcome the rule’s presumption that a specific setting is institutional so that Medicaid-funded HCBS can continue to be provided there, up from 11 states in 2015, and 28 states in 2016 (Figure 11 and Appendix Table 11). The number of settings for which each state plans to seek to overcome the institutional presumption ranges from the single digits to nearly 200. The settings rule presumes that certain settings are not community-based because they have institutional qualities, such as those in a facility that provides inpatient treatment, those on the grounds of or adjacent to a public institution, and those that have the effect of isolating individuals from the broader community. The Secretary can overcome the institutional presumption for these settings by applying heightened scrutiny based on information submitted by the state.49 Twenty-three states have identified settings that are presumed institutional because they effectively isolate beneficiaries, up from 10 states in 2015, and 22 states in 2016. Most states have relatively few settings in this category.
Direct Care Worker Minimum Wage and Overtime Rule
Fifteen states planned to restrict worker hours or make other policy changes in 2017, in response to the U.S. Department of Labor (DOL) minimum wage and overtime rules (Figure 12 and Appendix Table 11), up from seven states that reported doing so in 2015. States reporting a policy change in 2017 include CA, IA, KS, KY, ME, ND, NH, NM, OH, OK, OR, VA, WA, WI, and WY; 11 of these states (all but ME, ND, OH, and VA) also reported a policy change in this area in 2016. DOL extended the Fair Labor Standards Act minimum wage and overtime rules to most direct care workers, such as certified nursing assistants, home health aides, personal care aides, and other caregivers, who previously were exempt from those requirements; the new rules took effect in 2015.50 CMS policy guidance issued in 2014 anticipated that the new DOL rules could affect self-directed Medicaid HCBS and observed that “many states will need to develop policies and consider programmatic changes to address the costs related to overtime and/or worker time spent traveling between worksites (i.e., individuals’ homes), to avoid or minimize negative impacts to individual [service] budgets, and to preserve the ability of individuals to self-direct services and supports effectively.”51
Among the states reporting policy changes in response to the DOL rule, six (IA, ME, NM, OK, WI, and WY) limited worker hours to 40 per week (Figure 12 and Appendix Table 11). Five of these states had this policy in 2016, with one state (ME) joining this list in 2017. In Oklahoma, beneficiaries are encouraged to have more than one direct caregiver, since no one caregiver is permitted to work over forty hours per week. In California, participants who are authorized for more than 360 hours a month of combined state plan and/or waiver personal care services must receive care from two or more providers. Other states allow worker overtime only if certain conditions are met. For example, two states allow providers with a history of overtime hours to work a limited amount of overtime (up to 50 hours per week in Oregon, and up to 65 hours per week in Washington)52.
Thirteen states reported budgeting state funds for worker overtime and/or travel time pay as a result of the DOL rule (Figure 12 and Appendix Table 11), up from ten states in the prior year. Specifically, 10 states (AL, CA, CT, IL, MA, MS, NE, OR, SC, and WA) budgeted funds for both direct care worker overtime and travel pay in in 2017. Seven of these 10 states did so last year, and three states (CT, MS, and OR) began doing so this year. For example, Illinois pays 1.5 times the basic hourly pay rate in order to cover travel time from one Medicaid beneficiary’s home to another individual’s home. Three states (KY, PA, and WI) budgeted funds for overtime only, both last year and this year.
States are using Medicaid HCBS to advance community integration and counter the historical bias toward institutional care through policies such as financial and functional eligibility and expanding the care settings where HCBS are available beyond the beneficiary’s home to work and other community settings. States also are using newer HCBS state plan authorities, including Section 1915 (i) and CFC, to expand or augment the populations and services they cover under waivers. Section 1915 (i) enables states to reach people with functional needs that do not yet rise to an institutional level of care, using HCBS to potentially prevent or delay the need for costlier care in the future. States also are continuing to make policy changes in response to key federal regulations affecting HCBS.
State HCBS policies have been instrumental in increasing beneficiary access to HCBS and shifting the balance of Medicaid LTSS spending in favor of HCBS over nursing homes and other institutional care. The historical bias toward institutions, requiring states to cover nursing home case while making most HCBS optional, remains in federal Medicaid law. Still, states continue to take advantage of various options to use federal Medicaid matching funds to increase HCBS eligibility and covered services and to modify their delivery systems and provider policies to support HCBS. As the primary payer for LTSS and the only source of many HCBS important to the daily needs and independent living of seniors and people with disabilities and chronic illnesses, Medicaid will continue to play an important role in this area, and state Medicaid HCBS policy choices will remain a key area to watch.Executive Summary Appendix Tables