Medicaid Policy LLC by mlw20723

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									                           Medicaid Policy LLC
                             3948 Garrison Street, N.W.
                              Washington, DC 20016
                                   (202) 393-6898
                                (202) 393-6899 (fax)
                                medicaidpolicy@aol.com

TO: Kevin Mahoney

FROM: Andy Schneider

RE: Deficit Reduction Act (DRA) Provisions Relating to Cash and Counseling

DATE: February 20, 2006

        By way of background for the February 28 Technical Assistance call, attached are
outlines of three provisions in the Deficit Reduction Act of 2005, P.L. 109-171, relating
to the availability of federal Medicaid funds for the provision of cash and counseling and
related non-institutional long-term care services to low-income elderly and low-income
individuals with disabilities. The three provisions are a cash and counseling option
(section 6087), a home- and community-based services (HCBS) option (section 6086),
and a money follows the person (MFP) demonstration project (section 6071).

         According to the Congressional Budget Office (CBO), these three provisions will
result in new federal Medicaid expenditures totaling $1.2 billion over the five years (FY
2006 – FY 2010) and $4.9 billion over ten (FY 2006 – FY 2015). Of this amount, the
cash and counseling option is estimated to account for about 8 percent of the new
spending. Most of the new federal resources – nearly two-thirds over the first five years
– are estimated to flow into the new HCBS option.

        Overall, CBO estimates that the DRA will, through a combination of spending
reductions and increases, reduce federal Medicaid spending on net by $6.9 billion over
five years and $28.3 billion over ten. The new federal spending attributed to these three
provisions is second only to the new federal spending attributed to the option to buy-in
certain disabled children (section 6062, Family Opportunity Act).

        In reaching this result, the conferees accepted the relevant provisions of both the
House and Senate bills, with some modifications. The Senate bill contained only the
MFP demonstration project; the House bill contained both the cash and counseling and
HCBS options, but not the MFP demo. Going into conference, CBO estimated that these
three provisions in total would result in new federal Medicaid spending of $1.0 billion
over five years and $5.0 billion over ten. In the final conference agreement, the estimates
for these provisions increased somewhat over five years and decreased somewhat over
ten. This occurred in the context of negotiations in which the overall federal Medicaid
savings in the Senate bill were increased on net by $2.6 billion over five and $14.1
billion over ten years, suggesting a strong bicameral support for these provisions.


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 COMPARISON OF MEDICAID PROVISIONS RE: CASH AND COUNSELING
          Deficit Reduction Act of 2005 (DRA), P.L. 109-171

                Cash and                HCBS State Plan         Money Follows the
                Counseling              Option                  Person (MFP)
                Option                  (§ 6086)                “Rebalancing”
                (§ 6087)                                        Demonstration
                                                                (§ 6071)
Statutory       SSA §1915(j)            SSA §1915(i)            DRA §6071
Authority
Effective       January 1, 2007         January 1, 2007         January 1, 2007
Date
CBO             $100 million (5 yrs)    $766 million (5 yrs)    $340 million (5 yrs)
Estimate        $360 million (10)       $2.6 billion (10 yrs)   $1.975 billion (10 yrs)
State           Optional                Optional via State      Optional
Participation                           Plan amendment          (competitive grant)
Beneficiary     Voluntary               Presumably              Voluntary
Participation                           voluntary
Self-Directed   Yes                     Yes                     Yes
Services
Option
Matchable       Cost of self-directed   Cost of HCBS            Cost of home and
Expenditures    personal assistance     services listed in      community-based long-
                services for            §1915(c)(4)(B)          term care services
                Medicaid                waiver authority for    furnished during the 12-
                beneficiaries who,      beneficiaries with      month period that a
                but for such            incomes at or below     Medicaid beneficiary is
                services, would         150 percent of FPL;     discharged from a
                require and receive     beneficiary need not    hospital, NF, ICF/MR,
                personal care or        require hospital, NF,   or IMD and resides in a
                §1915(c) HCBS           or ICF/MR level of      “qualified residence”
                waiver services         care
Federal         Regular (57% on         Regular (57% on         “MFP-enhanced
Matching        average) except         average)                FMAP” (78% on
Rate            50% for financial                               average)
                management entity
Federal         No                      No                      Yes ($1.75 billion over
Funds                                                           FY 07 – FY 11 period)
Capped
State M.O.E.    No                      No                      Yes (total Medicaid
Required                                                        HCBS spending in FY
                                                                prior to demonstration).
Waivers         Statewideness,          Statewideness,          Statewideness,
Available       comparability           income and resource     comparability, income
                                        rules                   and resource rules,
                                                                provider agreements


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         Self-Directed Personal Assistance Services Program Option
                              (Cash and Counseling)
             (Section 6087 of Deficit Reduction Act of 2005, P.L. 109-171)

Statutory Authority: Section 1915(j) of the Social Security Act

Effective Date: Services furnished on or after January 1, 2007

CBO Estimate: Increases federal Medicaid outlays by $100 million over five years
(FY 2006- 2010), $360 million over ten years (FY 2006 – 2015)

State Participation: Optional. State must obtain CMS approval of “self-directed
personal assistance services program” meeting the requirements of section 1915(j)(2).
Unlike section 1915(c) HCBS waiver authority, this does not require a State to obtain a
waiver, demonstrate budget neutrality, or seek renewal every 2 years in order to obtain
federal matching funds. There is no state maintenance of effort requirement, and no
restriction on state use of section 1115 or section 1915(c) waivers or the new HCBS State
Plan option (section 1915(i)) or the new MFP “Rebalancing” demonstration.

Beneficiary Participation: Voluntary. (§ 1915(j)(2)(C))

Matchable Expenditures: The cost of “self-directed personal assistance services”
(other than room and board) … which are provided pursuant to a written plan of care to
[eligible individuals].”

      Self-directed personal assistance services are “personal care and related services,
       or home and community-based services otherwise available under [the State
       Medicaid program] or [a 1915(c) waiver] that are provided to an eligible
       participant under a self-directed personal assistance services program.”
       (§1915(j)(4)(A))

      Eligible individuals are those “with respect to whom there has been a
       determination that, but for the provision of such services, the individual would
       require and receive personal care services under [the State Medicaid program] or
       home and community-based services provided pursuant to a [section 1915(c)
       HCBS waiver].” (§1915(j)(1))

      Services are not eligible for federal matching if individual “reside[s] in a home or
       property that is owned, operated, or controlled by a provider of services, not
       related by blood or marriage.” (§1915(j)(1))

Federal Matching Rate: Regular Federal matching rate applies, except State
payments to a financial management entity are matched at administrative rate (50%).
(§1915(j)(6)) Federal funds are not capped.

Waivers Permitted: Statewideness, Comparability (enrollment caps) (§1915(j)(3))


                                                                                             3
       Home- and Community Based Services (HCBS) State Plan Option
           (Section 6086 of Deficit Reduction Act of 2005, P.L. 109-171)


Statutory Authority: Section 1915(i) of the Social Security Act

Effective Date: Services furnished on or after January 1, 2007

CBO Estimate: Increases federal Medicaid outlays by $766 million over five years
(FY 2006- 2010), $2.611 billion over ten years (FY 2006 – 2015).

State Participation: Optional through State Plan amendment (SPA). State is not
required to obtain a waiver, demonstrate budget neutrality, or seek renewal every 2 years
in order to obtain federal matching funds. There is no state maintenance of effort
requirement and no restriction on state use of section 1115 or section 1915(c) waivers or
the new cash and counseling option (section 1915(j)) or the new MFP “Rebalancing”
demonstration (section 6071 of DRA).

       States electing this option must establish needs-based eligibility criteria for
        hospital, NF, or ICF/MR care that are “more stringent” than the eligibility criteria
        for HCBS services that the State establishes under this option. (§1915(i)(1)(B))

Beneficiary Participation: Presumably voluntary (not expressly stated).

Matchable Expenditures: The cost of HCBS services “within the scope of services
described in [the section 1915(c) waiver authority]” for Medicaid beneficiaries whose
income does not exceed 150 percent of poverty ($14,700 for an individual, $19,800 for a
couple in 2006). State is not required to determine that individual would require level of
care provided in a hospital, NF, or ICF/MR. (§1915(i)(1)).

       State has option of providing presumptive eligibility of up to 60 days for
        individuals it “has reason to believe may be eligible for home and community-
        based services.” (§1915(i)(1)(J))

Self-Directed Services: State has option to offer, and individual has option to elect,
“self directed services,” defined as home and community-based services “which are
planned and purchased under the direction and control of such individual or the
individual’s authorized representative … consistent with” statutory requirements relating
to assessment, service plan, and budget process. (§1915(i)(1)(G)(iii))

Federal Matching Rate: Regular Federal matching rate applies. Federal matching
funds for allowable expenditures are not capped.

Waivers Permitted: Statewideness, income and resource rules applicable in the
community. (§1915(i)(3)) State may cap enrollment. (§1915(i)(1)(C)(ii))




                                                                                             4
        Money Follows the Person (MFP) Rebalancing Demonstration
           (Section 6071 of Deficit Reduction Act of 2005, P.L. 109-171)

Statutory Authority: Section 6071 of the Deficit Reduction Act

Effective Date: Services furnished on or after January 1, 2007

CBO Estimate: Increases federal Medicaid outlays by $340 million over five years
(FY 2006- 2010), $1.975 billion over ten years (FY 2006 – 2015)

State Participation: Optional, subject to available funds and number of grants
awarded by Secretary of HHS. There is no restriction on State use of section 1115 or
section 1915(c) waivers or the new HCBS State Plan option (section 1915(i)) or the new
cash and counseling option. (section 1915(j)) State must meet M.O.E. (see below).

Beneficiary Participation: Voluntary. (§ 6071(c)(6)(A))

Matchable Expenditures: Costs for “home and community-based long-term care
services for an eligible individual participating in the MFP demonstration project, but
only with respect to services furnished during the 12-month period beginning on the date
the individual is discharged from [a hospital, NF, ICF/MR, or IMD].” (§6071(b)(7))

      An “eligible individual” is an individual receiving Medicaid benefits for inpatient
       services furnished in a hospital, NF, ICF/MR, or IMD for at least 6 months
       immediately prior to participating in the demonstration project who, but for the
       provision of home and community-based long-term care services, would continue
       to require the level of care provided the institution. (§6071(b)(2))

Self-Directed Services: States have option to offer, and participants have option to
elect (section 6071(c)(12)). “Self directed services” are defined as “home and
community-based long-term care services for an eligible individual … which are planned
and purchased under the direction and control of such individual’s authorized
representative … under the State Medicaid program consistent with” statutory
requirements relating to assessment, service plan, and budget process. (§ 6071(c)(8))

Federal Matching Rate: “MFP-enhanced FMAP” applies to costs of demonstration
service. State regular matching rate is increased by 50% of the percentage point
difference between 100% and the State’s regular matching rate, up to 90%. (§6071(e)(5))
Federal payments limited to grant award, subject to appropriated amounts. (§6071(h))

State Maintenance of Effort: During any year of an MFP demonstration, total State
Medicaid spending for home and community-based long-term care services may not be
less than such spending during the first year prior to such demonstration. (§6071(c)(9))

Waivers Permitted: Statewideness, comparability (targeting); income and resources
eligibility (institutional rules in community); provider agreements. (§6071(d)(3))


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