[Federal Register Volume 65, Number 105 (Wednesday, May 31, 2000)]
[Notices]
[Pages 34715-34723]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-13554]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2076-N]
RIN 0938-AK16


Medicaid Infrastructure Grant Program To Support the Competitive 
Employment of People With Disabilities

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice announces the availability of HCFA funding, 
through grants, for eligible States under the Ticket to Work and Work 
Incentives Improvement Act of 1999 (TWWIIA). The grant program is 
designed to assist States in developing infrastructures to support the 
competitive employment of people with disabilities by facilitating 
targeted improvement to States' Medicaid programs. This notice contains 
information about the grants, application requirements, review 
procedures, and other relevant information.

DATES: States should submit a Notice of Intent to Apply for a grant by 
June 12, 2000. Grant applications must be submitted July 31, 2000, in 
order to be considered for funding beginning in October 2000. For an 
explanation of a timely submission, see Section V of this notice 
entitled ``Applying for a Grant.''
    Application Requests: To receive an application package contact 
Marilyn Lewis-Taylor, (410) 786-5701, [email protected].

ADDRESSES: Mail applications to the following: Health Care Financing 
Administration, Room C2-21-15, 7500 Security Boulevard, Baltimore, 
Maryland 21244-1850, Attn: Marilyn Lewis-Taylor, OICS, AGG, Grants 
Management Staff.

    Please Note: While State agencies are only required to submit an 
original and two copies, submission of an original and seven copies 
will greatly expedite the application process.

    Web Site Address for Additional Information: We have a website that 
provides additional details and

[[Page 34716]]

information about the grants. The address for this website is: http://www.hcfa.gov/medicaid/twwiia/twwiiahp.htm.

SUPPLEMENTARY INFORMATION:

I. Background

    The Ticket to Work and Work Incentives Improvement Act of 1999.
    The Ticket to Work and Work Incentives Improvement Act of 1999 was 
signed by President Clinton on December 17, 1999. This law seeks to 
address many of the obstacles that people with disabilities face as 
they seek sustained employment. It expands Medicare and Medicaid 
coverage for certain categories of employed individuals with 
disabilities because people with disabilities have continually 
identified the loss of health care coverage as one of the major 
obstacles that they face as they return to work.
    The infrastructure grants program was created to provide financial 
assistance to States to facilitate the competitive employment of people 
with disabilities through (a) Medicaid buy-in opportunities under the 
State Medicaid Plan, (b) demonstrations offering the ability to 
purchase Medicaid coverage for people with a severe impairment who do 
not yet meet the SSI disability test, (c) significant improvements to 
Medicaid services that support people with disabilities in their 
competitive employment efforts and/or (d) serving as a regional State-
to-State Medicaid Infrastructure Center.
    In addition to this infrastructure grant program, the Act provides 
States the option to offer Medicaid buy-ins to two optional eligibility 
groups. The first optional group is for individuals from age 16 through 
64 who would meet the eligibility requirements for the Supplemental 
Security Income program but for higher earnings or resources. The 
second optional group, referred as the Medicaid Improvement Group, is 
for people who, at one time, were eligible under the first optional 
group but who are determined to have medically improved at a regularly 
scheduled continuing disability review (CDR).
    Finally, the legislation creates a Medicaid Demonstration program 
that allows States to provide Medicaid benefits and services to a 
specified maximum number of working individuals who have a specific 
physical or mental impairment that is likely to lead to disability as 
defined by Social Security. This demonstration authority will allow 
States to assist working individuals by providing the necessary 
benefits and services required for people to manage to progression of 
their conditions and remain employed. A separate grant solicitation 
will be issued for this ``Demonstration to Maintain Independence and 
Employment.'' However, Medicaid Infrastructure Grant program funds may 
be used to support the development of the Demonstration to Maintain 
Independence and Employment. Infrastructure grant funds may also be 
used to conduct outreach to beneficiaries and other stakeholders about 
the availability of such new options.
    The Ticket to Work and Work Incentives Improvement Act of 1999 is a 
comprehensive law that changes programs operated by the Social Security 
Administration, the Department of Labor, and HCFA. We are working in a 
coordinated and strategic manner with our Federal agency partners to 
develop strong national policy. The Presidential Task Force on 
Employment of Adults with Disabilities is serving as the coordinating 
entity to this multi-agency process. Both the Department of Labor and 
the Social Security Administration are also issuing grant solicitations 
authorized under the Ticket to Work and Work Incentives Improvement Act 
to be implemented in fiscal year 2000. These grants share the common 
goal of supporting working-age individuals in securing and maintaining 
gainful employment.

II. The Medicaid Infrastructure Grants

    The goal of this grant program is to support people with 
disabilities in securing and sustaining competitive employment in an 
integrated setting. The grant program will achieve this goal by 
assisting State Medicaid programs in implementing provisions of the 
Ticket to Work and Work Incentives Improvement Act of 1999 which relate 
to health and long term care coverage.

A. Who May Apply

    Two types of State agencies in eligible States may apply: (a) the 
Single State Medicaid Agency or (b) any other State agency in 
partnership, agreement and active participation with the Single State 
Medicaid Agency. For purposes of this grant program. ``State'' is 
defined as each of the 50 States, the District of Columbia, Puerto 
Rico, Guam, the United States Virgin Islands, American Samoa, and the 
Commonwealth of the Northern Mariana Islands. Only one application will 
be accepted per State, unless a State wishes to separate its 
dissemination and learning component (or its proposal for a State-to-
State Medical Infrasture Center) into a distinct application. In such a 
case, the combined budget total will still be subject to the overall 
State funding limit described below in Section C.
    Eligible States are affected by a requirement adopted by Congress 
to promote the availability of personal assistance services necessary 
for many people to work. For purposes of this grant, ``personal 
assistance services'' means:
    A range of services, provided by one or more persons, designed to 
assist an individual with a disability to perform daily activities on 
and off the job that the individual would typically perform if the 
individual did not have a disability. Such services should be designed 
to increase the individual's control in life and the individual's 
ability to perform activities on and off the job.
    We recognize that States currently vary in the adequacy of their 
personal assistance services. In an effort to enable broad 
participation in this grant program, HCFA is establishing a multi-
tiered qualification system that will address the situation of 
different States. Personal assistance services used to qualify for this 
grant program, however, must conform to the intent of this law which 
aims to promote and support the competitive employment of people with 
disabilities. To do that, personal assistance services must be both 
available to people who need services outside their homes and not 
limited to one particular disability group.
    As described in detail below, fully eligible and conditionally 
eligible States are those which offer personal assistance services 
through their Medicaid program in a statewide manner. Fully eligible 
and conditionally eligible States are able to apply for and receive 
multi-year grant awards. Transitionally eligible States are those that 
offer personal assistance services outside the home but do not provide 
these services statewide, and agree to convert their personal 
assistance service to statewide by the last day of the grant cycle. 
Typically, this category would include States with 1915(c) waivers 
supportive of those engaged in competitive employment that are limited 
to certain geographic regions of a State. Transitionally eligible 
States are able to receive first year funding (up to $625,000) but must 
apply for conditional eligibility status before receiving any 
additional funds. States with full, conditional or transitional 
eligibility will receive funding at the beginning of the grant cycle. 
Other States may have funding reserved for them.
    To be considered sufficient, all of the eligibility categories 
require that

[[Page 34717]]

personal assistance services support the competitive employment of 
individuals with disabilities. Competitive employment means work--
    (i) In the competitive labor market that is performed on a full-
time or part-time basis in an integrated setting; and
    (ii) For which an individual is compensated at or above the minimum 
wage, but not less than the customary wage and level of benefits paid 
by the employer for the same or similar work performed by individuals 
who are not disabled.
    In addition, the personal assistance services offered by a State 
must support competitive employment of disabled individuals that takes 
place either in the home or in an integrated work setting. An 
integrated work setting means a setting typically found in the 
community in which employed disabled individuals interact with non-
disabled individuals, other than the non-disabled individuals who are 
providing the employment service. A person with a disability who is 
self-employed is considered to be engaged in competitive employment 
provided that such self-employment meets the definition of competitive 
employment.

B. Duration of Awards and Types of State Eligibility

    Award duration (and therefore cumulative award amount) depends 
partly upon the degree to which the State's Medicaid personal 
assistance services effectively support competitive employment. States 
receiving awards may retain grant funds until they are expended. States 
may only seek subsequent competitive awards (as their eligibility 
permits) contingent upon the expenditure or obligation of previous 
grant awards. States may apply under the following circumstances:
    1. Full Eligibility: Fully eligible States are defined in Appendix 
One which contains HCFA's operational definition of an effective 
personal assistance service that will qualify a State for full 
eligibility under the grants program. Those States with statewide 
personal assistance services meeting the criteria in Appendix One will 
enjoy full eligibility and may secure both (a) multi-year funding and 
(b) the ability to serve as State-to-State Medicaid Infrastructure 
Centers. States with personal assistance programs that meet the 
criteria described in Appendix One may apply for up to four years of 
funding. If a multi-year commitment is requested, funding beyond the 
first year will be reserved for such States for future grant years 
subject to the continued availability of funds under the grants 
program. At the end of four years, such State may re-apply and be 
eligible for further funding, contingent upon the availability of funds 
on a competitive basis.
     States seeking full eligibility must offer evidence that 
their personal assistance services under Medicaid fulfill the 
requirements in Appendix One of this grant solicitation.
    2. Conditional Eligibility: Conditionally eligible States are those 
States with statewide personal assistance services of limited people 
scope capable of serving people with disabilities engaged in 
competitive employment of at least 40 hours per month. These States do 
not meet the criteria in Appendix One. Such States may apply for up to 
four years of funding; however, funding after year one is contingent 
upon the States meeting annual benchmarks which have been agreed to by 
HCFA in the Terms and Conditions of the grants. These benchmarks must 
represent design changes which will significantly improve a State's 
personal assistance services under Medicaid and move them closer to the 
criteria established in Appendix One. We expect that the benchmarks 
will be designed with the involvement of the disability community. 
Subsequent year funding will be released after the State has achieved 
the agreed upon benchmarks. At the end of four years, States may re-
apply for funding on a competitive basis, contingent upon the 
availability of funds.
     To the extent that system improvements are sufficiently 
large that the State is later able to meet the criteria in Appendix 
One, the State may then apply for additional amounts and years of 
funding as a ``fully eligible State.''
    3. Transitional Eligibility: Transitionally eligible States are 
those that offer personal assistance services sufficient to support 
individuals engaged in competitive employment of at least 40 hours per 
month, but not in a statewide manner. Transitionally eligible States 
must commit to transitioning their personal assistance services to 
statewide by the end of the grant year to be eligible for one year of 
funding. This commitment will allow us to consider the last day of the 
grant cycle as the first day for purposes of establishing 
statewideness. States receiving funding under this category may re-
apply competitively for future funding as a conditionally eligible 
State. States can only qualify for funding under the transitional 
eligibility category on a one time basis.
     States seeking transitional eligibility must provide us 
with a letter of commitment outlining how the requirement of 
statewideness will be achieved by the end of the year.
    We expect this commitment letter will be developed with the 
involvement of the disability community.
    4. Reserved Eligibility: States that do not qualify for full, 
conditional, or transitional eligibility (those that do not have a 
personal assistance service and/or do not have capacity to deliver 
personal assistance services outside the home) may still apply and have 
first or second-year funds reserved for them, contingent upon later 
passage and implementation of coverage for personal assistance services 
capable of serving people with disabilities in competitive employment 
of at least 40 hours per month. Receipt of funding under this 
eligibility category is contingent upon the availability of funds. In 
addition, States seeking reserved eligibility must meet the following 
requirements:
    (a) Obtain a commitment from the Single State Medicaid Agency, with 
the involvement of the disability community, to seek the necessary 
legislative and/or Gubernatorial approvals to implement a personal 
assistance services system capable of supporting competitive employment 
of at least 40 hours per month within two years of the grant 
application due date; and
    (b) Provide evidence of such approval prior to the release of grant 
funds. Funds not claimed within the 2-year time period maybe released 
for competitive application by other States.
    States that are determined by HCFA to be ineligible for funding by 
the end of year two, may re-apply for reserved eligibility.

C. Amounts and Timelines for Funding

    HCFA anticipates announcing the first round of awards in October, 
2000. The first grant period will run 15 months from October 1, 2000, 
through December 31, 2001. The minimum grant award for this first award 
cycle of 15 months will be $625,000 unless the State specifically 
requests less. The maximum award a State may request is the greater of:
     $500,000 per year ($625,000 for the first grant period of 
25 months), or
     Ten percent of the Medicaid buy-in expenditures for people 
with disabilities, per year.
    In no instance may this be more than $1,250,000 for the first 
grant-year or $1,500,000 for subsequent grant years. States are 
required to document such expenditures either in the form of 
expenditure reports for the previous fiscal year or actual budgeted 
expenditure levels approved by the legislature and Governor for the 
previous year, the current year or the

[[Page 34718]]

grant year. All documentation regarding the buy-in expenditures must be 
included with the initial application.
    The Medicaid Infrastructure Grants program is authorized in law for 
11 years. Funding has been appropriated at $20 million for the first 
year, with gradually increasing annual amounts totaling $150 million 
for the first 5 years ($25 million in year two, $30 million in year 
three, etc). States may apply for 1 or more years of funding, as 
described below. We anticipate some form of grant solicitation 
annually, but also expect competition for the grants will increase 
significantly over time. No State or local matching funds are required.

D. Uses of Grant Funds

    Funds may be used for infrastructure, that is, to establish or 
improve the capability to provide or manage necessary health care 
services or support for competitive employment of people with 
disabilities who may be Medicaid eligible. The infrastructure may be at 
the State and/or local level and may be provided or contracted by 
government or other organizations under contract with the responsible 
government agency.
    Funds may not be used for the direct provision of services to 
people with disabilities except on a one-time, last resort, emergency 
basis for the purpose of sustaining the individual's competitive 
employment. An emergency use would consist of an intervention or 
support enduring no more than one day which is designed to compensate 
for the unexpected breakdown of a person's normal support system and 
for which other resources are not readily available to sustain a 
person's employment schedule or commitments. Examples might include: 
emergency rental of a replacement wheelchair or coverage for 
transportation breakdown.
    Funds under this grant initiative cannot be used to match any other 
Federal funds. Grant funds may not be used for services, equipment, or 
supports that are the responsibility of another party under Federal or 
State law (such as vocational rehabilitation or education services) or 
under any civil rights laws including, but not limited to, 
modifications of a workplace or other reasonable accommodations that 
represent an obligation of the employer or other party. Grant funds may 
not be used to provide personal assistance services (except for an 
emergency use described above) or substitute in other ways for the 
absence of adequate personal assistance services in the State. Funds 
may not be used for infrastructure for which Federal Medicaid matching 
funds are available at the 90/10 matching rate, such as certain 
information systems projects.
    States that receive funding commitments based on Full-Eligibility 
status or receive funding which exceeds the minimum grant award level 
($625,000 for the first 15-month grant period) must agree to provide 
and/or contribute to some form of technical assistance to other States 
based on the learning achieved in the process of implementing its 
Medicaid employment initiative. Specific details will be negotiated 
based on the State's interest in providing assistance, the type of 
assistance already offered by other grantee States, the expressed 
desire of States which are requesting assistance, and the input of all 
States with regard to the best methods to assure a national 
infrastructure capability. Examples of assistance already requested by 
States can be found in Appendix Two.
    Funds may be applied to one or more of the following four purposes:
    1. Medicaid Buy-In: Planning, design, implementation and/or 
effective management of any of the Medicaid buy-in options under the 
1997 Balanced Budget Act (section 1902(a)(10)(A)(ii)(XIII) of the 
Social Security Act (the Act)) and/or the Ticket to Work and Work 
Incentives Improvement Act (section 1902(a)(10)(A)(ii)(XV) or (XVI) of 
the Act. Examples include: time-limited staff planning costs; expenses 
for people with disabilities to participate in State planning and 
implementation events; automated information and eligibility systems 
modifications necessary for the Buy-In or for Medicaid payment of 
Medicare Part B premiums on behalf of subscribers to the Medicaid Buy-
In; automated enrollee tracking systems; basic research and evaluation, 
etc. Also included is outreach to people with disabilities or employers 
to learn about the opportunities to work and to sustain health coverage 
under Medicaid and/or Medicare, to enroll in the Medicaid Buy-In, and 
to access needed supports to sustain competitive employment. Additional 
examples are provided in Appendix Two.
    2. Medicaid Services: Planning, design, or initial management and/
or evaluation of improvements to make the Medicaid State Plan (or 
Medicaid waivers) provide more effective support to workers with 
disabilities. Examples include: improvements to personal care, 
transportation, durable medical equipment, community-based treatment, 
or Medicaid waiver support of employment. Coordination between the 
activities of other State Agencies in support of working people with 
disabilities and the State Medicaid Program is permissible. Additional 
examples are provided in Appendix Two.
     On-going administration of Medicaid services is not a 
fundable activity unless such administration is part of a well-defined 
test of alternate and improved methods focused specifically on 
employment (e.g., testing, implementation and management of new prior 
authorization criteria under Medicaid personal care designed to assess 
the need for additional support when people are employed).
    3. Demonstration To Maintain Independence and Employment: Planning, 
design, and initial implementation of the demonstration authorized 
under section 204 of the Ticket to Work and Work Incentives Improvement 
Act. Separate funding (through a separate grants solicitation) is 
provided for State demonstrations that offer Medicaid coverage for 
people who do not meet the SSI disability test but have a potentially 
severe physical or mental impairment, as defined by the State. Medicaid 
infrastructure funds allocated pursuant to this solicitation may be 
used to design such a demonstration and to make necessary 
implementation preparations.
    A separate solicitation will provide funding both for Medicaid 
services and also for on-going administration of the demonstration. If 
a State seeks Infrastructure Grant funding for design or initial 
implementation of the demonstration, the State must submit a response 
to the separate solicitation to participate in the Demonstration to 
Maintain Independence and Employment found on the HCFA website at 
www.hcfa.gov/medicaid/twwiia/twwiiahp.htm (it need not attach a copy to 
this solicitation response). To minimize the risk assumed by the State 
when going through consecutive competitive selection processes, a State 
may submit two versions of its budget under this solicitation. One 
would reflect the budget if a State is also approved for a 
demonstration, the second would reflect the budget if the State is not 
chosen as a demonstration participant.
    4. State-to-State Medicaid Infrastructure Centers: States that (a) 
meet the full eligibility criteria and (b) also make a commitment to 
implement a Medicaid buy-in program for working adults with 
disabilities, may apply to use funds to form a regional technical 
assistance center. The Center would: help other States plan and design 
needed Medicaid infrastructure; disseminate information on ``lessons 
learned''; facilitate the sharing of

[[Page 34719]]

knowledge among States, employers and community organizations; support 
efforts to involve people with disabilities in the design and 
management of the Medicaid buy-ins; and replicate successful programs 
supporting the employment of people with disabilities by eliminating 
health care barriers.
    Proposals to create these regional centers must make significant 
use of staff administering state programs affecting work incentives 
improvements who can share their experience with other States. One of 
the purposes of this regional resource network is to identify key 
actors with special knowledge and talents that can promote sharing of 
successful practices. State administrative staff must be available to 
the State-to-State Medicaid Infrastructure Center for purposes of 
traveling to other States to provide technical assistance. The indirect 
rate for State-to-State Infrastructure Centers is limited to the Single 
State Medicaid Agency's approved indirect rate not to exceed 9%.

III. Review Criteria and Process

    Planning and Problem Analysis--15 Points: To what extent does the 
application evidence an understanding of the barriers that impede 
competitive employment of people with disabilities? To what extent does 
the planning and implementation process meaningfully involve people 
with disabilities? How well has the State been able to identify 
population groups who would benefit from a Medicaid buy-in program?
    Significance--25 points: To what extent the application propose 
infrastructure development which will offer enduring and significant 
improvement in the ability of the system to provide adequate health 
coverage for people with disabilities who are competitively employed, 
provide needed personal assistance and other supports, and/or remove 
other significant employment barriers?
    Methodology and Budget--40 points: To what extent do the methods, 
work plan, and timetable inspire confidence that the goals of the 
proposal will be met? For example, to what extent are:
     The needed partners aligned with the proposal;
     The goals and methods clearly and effectively delineated;
     The Medicaid buy-in, Medicaid services and/or Medicaid 
infrastructure complemented and coordinated with other important 
components of an effective system (e.g. benefits counseling, vocational 
rehabilitation, school to work programs, and other important pieces of 
the employment puzzle); or to what extent will the Medicaid 
infrastructure grant improve such coordination toward the common 
purpose of enabling competitive employment?
    Is the budget reasonable; to what extent does the budget offer good 
value in relation to the achievements that are promised (that is, the 
size of the budget in relationship to the significant products or 
outcomes being achieved)?
    Staffing--10 points: To what extent is evidence provided that key 
staff are qualified and possess the experience and skills to implement 
and conduct the program within the available time frames? To what 
extent is there evidence that key project staff, by virtue of their 
personal and/or first-hand professional experiences with disability, 
have the requisite knowledge to design and implement infrastructure for 
a customer-responsive health coverage system?
    Dissemination and Learning--10 points: To what extent does the 
State have a plan for using its grant experiences to identify different 
or better ways to improve its buy-in or Medicaid services that support 
competitive employment efforts of people with disabilities? Does the 
State have a cogent plan for obtaining timely feedback from people 
enrolled in the Medicaid buy-in (including the Medicaid demonstration) 
and from the disability community?
    Will the grantee State make such lessons available to key actors 
within the State? To what extent will it make such lessons available to 
other States (required for fully-eligible States and State receiving 
more than $500,000 per fiscal year)? To what extent does the applicant 
plan to: help other States design needed Medicaid infrastructure; 
facilitate the sharing of knowledge among States, employers and 
community organizations; support efforts to involve people with 
disabilities in the design and management of the Medicaid buy-ins, or 
replicate successful techniques?
     To what extent does the State's proposal indicate the 
staffing and technical capability to ensure such dissemination and 
learning (or include a cogent plan to develop/acquire such capability)?

In General

    States that include people with disabilities in the development and 
implementation of their grant proposal and make a commitment to ongoing 
inclusion will receive scoring preference.
    Panels of experts will conduct an independent review of all 
applications. The panelists will assess each application based on the 
areas specified previously to determine the merits of the proposal and 
the extent to which it furthers the purposes of the grant program. HCFA 
will review the recommendations of the panel. HCFA reserves the right 
to request that States revise or otherwise modify certain sections of 
their proposals based on the recommendations of the panel. HCFA 
reserves the right to assure reasonable geographic and other 
representation among States receiving grant awards, as well as assure 
the presence of at least one State-to-State Medicaid Infrastructure 
Center.
    Final award decisions will be made by the HCFA Administrator after 
consideration of the comments and recommendations of the review 
panelists, and the availability of funds. HCFA anticipates announcing 
the awards in October, 2000. States will receive written notification 
of the final award decision.

IV. General Provisions

    Although applicants have considerable flexibility in developing 
grant programs under this solicitation, the State must agree to the 
following:

Grantee Reporting

    States receiving awards must agree to cooperate with any Federal 
evaluation of the program and provide quarterly and annual reports in a 
form prescribed by HCFA (including the SF-269a Financial Status Report 
forms). The reports will be designed to outline how grant funds were 
used and to describe program progress and barriers. States will also 
provide data on key aspects of their system improvements, scaled to the 
size of their grant award. For States with Medicaid buy-in programs, 
such data include the number of subscribers, prior Medicaid eligibility 
status, Medicare eligibility status, presence of other public or 
private third-party insurance, premium collections, employment status, 
and the number of subscribers who increase their employment level.
    For States using grant funds to improve Medicaid services that 
support competitive employment, we will seek data on the nature and 
extent of the improvements as well as the number of people who benefit 
from such improvements. A report format will be supplied by HCFA and 
final details will be negotiated as part of the final grant award 
process.
    Congress imposed a reporting requirement on grantee States when it 
created this program which involves tracking and reporting the number 
of

[[Page 34720]]

Title II and Title XVI disability beneficiaries who return to work 
during each year of the grant program. HCFA will work with the Social 
Security Administration and the States to fulfill this reporting 
requirement.

Coordination With Medicare and Private Insurance

    States that receive grant funds and that propose (or have) a 
Medicaid buy-in program or a project under the Medicaid Demonstration 
to Maintain Independence and Employment should plan on designing 
methods to coordinate the buy-in or demonstration effectively with 
private insurance and with Medicare (e.g. payment of Medicare Part B 
premiums to ensure full Medicare coverage and a reduction in eventual 
cost to Medicaid). HCFA will provide technical assistance on design 
elements that may be useful for States to consider.

Transition for On-Going Administration

    States that use grant funds for any on-going administrative 
expenses must include a short plan for phasing out grant funds and 
ensuring that necessary, on-going administration will be assumed as a 
regular Medicaid administrative expense or paid for through other 
means.

Annual Meeting

    All States receiving awards should plan to attend an annual meeting 
of grantee States. States proposing to serve as State-to-State Medicaid 
Infrastructure Centers should plan to attend two additional meetings. 
Proposed grant budgets must contain the necessary funds to send two 
representatives to the meetings and, for budgeting purposes, should be 
based on a Washington, DC, location.

Civil Rights

    All grantees receiving awards under this grant program must meet 
the requirements of Title VI of the Civil Rights Act of 1964; Section 
504 of the Rehabilitation Act of 1973; the Age Discrimination Act of 
1975; Hill-Burton Community Service nondiscrimination provisions; and 
Title II, Subtitle A, of the Americans with Disabilities Act of 1990.

Intergovernmental Review of Federal Programs

    Executive Order 12372 or ``Intergovernmental Review of Federal 
Programs'' (45 CFR Part 100) is not applicable to this program.

V. Applying for a Grant

Application Format

    Appendix Three contains a format for submitting an application.

Notice of Intent To Apply

    Appendix Four is a Notice of Intent to Apply. States that submit 
this form with questions before June 12, 2000 will receive answers to 
the questions at the Applicants' Conference which may help provide 
guidance for proposals. This form does not represent an obligation on 
the part of the State to apply and it is not a requirement for a 
successful State application.

Applicants' Conference

    HCFA will conduct an open Applicants' Conference for all States 
interested in the Medicaid Infrastructure Grants. Participation in the 
Conference is not required but is recommended as a forum for States to 
ask questions and obtain additional information. The conference will be 
held in June, 2000.

Deadline for Submission

    The closing date for proposals submitted under this solicitation is 
July 31, 2000. Applications mailed through the U.S. Postal Service or a 
commercial delivery service will be considered on time if they are 
received in HCFA's Grants Office or postmarked by this date. 
Submissions by facsimile (fax) transmission will not be accepted. A 
proposal postmarked after the closing date will be considered late. 
Late proposals will not be considered for an award in this round of 
applications and will be returned without review.
    An original proposal should be sent with seven copes to: Attn: 
Marilyn Lewis-Taylor, Health Care Financing Administration, OICS, AGG, 
Grants Management Staff, Mailstop C2-21-15, 7500 Security Boulevard, 
Baltimore, Maryland 21244-1850, Phone: (410) 786-5701, e-mail: 
[email protected]

    Please note: While State agencies are only required to submit an 
original and two copies, submission of an original and seven copies 
will greatly expedite the application process.

VI. Additional Information

    For additional information regarding this solicitation, please 
contact: Medicaid Employment Infrastructure Grants Program, Disabled 
and Elderly Health Programs Group, Center for Medicaid and State 
Operations, 7500 Security Boulevard, Baltimore, Maryland 21244-1850, 
(410) 786-6126, Attn: Joe Razes, Project Manager.
    Information is also available on HCFA's dedicated Ticket to Work 
and Work Incentives Improvement Act website at the following address: 
http//:www.hcfa.gov/medicaid/twwiia/twwiiahp.htm

    Authority: Section 203 of the Ticket to Work and Work Incentive 
Improvement Act of 1999, Public law 106-170.

(Catalog of Federal Domestic Assistance Program No. 93.779, Health 
Care Financing Research, Demonstration, and Evaluations)

    Dated: May 22, 2000.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

Appendix One: Personal Assistance Services

    Personal assistance services sufficient to enable individuals to 
work:
    For full eligibility under this grant program, entitling a State 
to receive multiple year funding, a State must offer personal 
assistance services statewide to the extent necessary to enable an 
individual to be employed competitively. For purposes of this grant 
program, ``personal assistance services'' means:
     A range of services, provided by 1 or more persons, 
designed to assist an individual with a disability to perform daily 
activities on and off the job that the individual would typically 
perform if the individual did not have a disability. Such services 
shall be designed to increase the individual's control in life and 
the individual's ability to perform activities on and off the job.
    Offering personal assistance services to the extent necessary to 
enable individuals with disabilities to remain competitively 
employed is defined as the following:
     Personal assistance services must be offered statewide 
through:
    (a) The optional Medicaid personal care services benefit under 
the State Medicaid plan as defined in 42 CFR 440.167, or
    (b) A section 1115 and/or section 1915(c) waiver and/or 1915(b) 
waiver which substitutes for statewide personal care coverage 
sufficient to support employment under the State Medicaid plan as 
defined below, or
    (c) A combination of State Plan personal care option (or 
personal care within a Home Health State Plan service) and Medicaid 
waiver which collectively meet the statewideness and other criteria 
described below, and which is not substantially different for 
employed and unemployed individuals.
     The personal care benefit must be sufficient in amount, 
duration and scope such that an individual with a moderate to severe 
level of disability would be able to obtain the support needed to 
both live and get to and from work. Evidence must be available that 
the State has the ability, through mechanisms including 
individualized assessments, to match need for personal assistance 
services with the quantity of services delivered. Establishing caps 
on the number of days or the number of hours per day that services 
are available

[[Page 34721]]

without regard to individual need will not satisfy this requirement. 
A State must have criteria for reviewing and responding to requests 
from qualified employed individuals with disabilities who believe 
they require more services than determined at their individuals 
assessment, or a different type of physical or cognitive assistance 
than that which has been made available. Such criteria should be 
developed in consultation with individuals with disabilities who use 
personal assistance services and are competitively employed.
     Workers receiving personal assistance services must be 
able to receive personal assistance services outside their home.
     Workers receiving personal assistance services must be 
able to receive personal assistance services at times during both 
the day and night seven days a week, subject to a finding of 
individual need.
     Unless an individual needs only assistance with 
activities of daily living, medical necessity definitions used by a 
State must not preclude the availability of personal assistance 
services for instrumental activities of daily living such as 
cooking, cleaning or shopping if such assistance is required for an 
individual to remain competitively employed.

Appendix Two: Examples of Permitted and Prohibited Uses of Grant 
Funds

A. Examples of Permitted Uses of Funds

1. Medicaid Buy-In Programs

    Buy-In Design and Implementation: Design, cost-modeling, 
development and initial administrative implementation of medicaid 
buy-ins for the eligibility groups described in sections 
1902(a)(10)(a)(ii)(XIII), (XV) and (XVI) of the Social Security Act 
including:
     Staffing or contracting costs (and related staff 
expenses) for planing, cost-modeling, initial implementation and 
management.
     Expenses incurred by people who have a disability who 
volunteer to participate in State planning, design, training, and 
implementation events.
     Expenses related to processes that actively involve 
people with disabilities in the design and/or implementation of the 
buy-in programs.
     Changes to the State's automated eligibility 
determination systems.
     Changes to the State's information systems necessary 
to: issue Medicaid cards; track enrollment; gather and track key 
information about enrollees (see grantee reporting requirements); 
manage premium collections and payments; coordinate benefits with 
Medicare and other third-party insurers; manage and track special 
asset disregards such as special earned-income savings accounts that 
a State may permit as part of its work incentives.
     Training materials, curricula, and events for training 
eligibility determination workers, SSA field staff, benefit 
counselors, independent living centers, advocacy organizations, and 
others.
     Software for managing premium collections or tracking 
special savings accounts permitted as an asset disregard.
     Outreach efforts to inform prospective enrollees and/or 
employers about the availability of the buy-in and provide 
information regarding costs and enrollment criteria.
    Tracking, Reporting and Learning Systems: Costs to build and 
maintain capacity to:
     Meet the reporting requirements of this grant 
solicitation.
     Track key enrollee data (e.g. enrollee characteristics, 
prior Medicaid and Medicare status, employment, etc.).
     Conduct basic research on costs of services used by 
enrollees, utilization, or trends over time.
     Design and conduct effective methods to obtain enrollee 
feedback or input on the on the operation of the buy-in, the 
effectiveness of the coverage being provided, and methods to improve 
the manner in which the buy-in facilitates employment.
    Coordination of benefits: Expenses involved in designing and 
implementing methods to coordinate the buy-in programs effectively 
with Medicare and with other public or private or insurance 
coverage.

2. Medicaid Services That Most Directly Support individuals with 
Disabilities Who Are Employed

     Personal Care Under the State Plan: Design, cost-
modeling, and development of a Medicaid State Plan service to cover 
the personal care services optional benefit under the State plan.
     Providers of PAS: Development of provider capacity and 
reliability to support the provision of personal assistance services 
(PAS) seven days a week, during the day and night as needed by 
competitively employed individuals with disabilities; development of 
effective emergency or back-up systems for people who are 
competitively employed.
     Adequacy of PAS: Design and/or initial implementation 
of changes to the State's personal assistance services that 
substantially improve the extent to which the service supports the 
competitive employment of people with disabilities, such as: 
conversion of across-the-board service caps to authorizations based 
on individual need, inclusion of cueing as a component of personal 
assistance services, etc.
     Training Medicaid Case Managers: Training materials, 
curricula and events designed to train case managers funded by 
Medicaid regarding: the Medicaid buy-in; the availability of 
vocational rehabilitation services (VR) and the procedures for 
working with VR agencies; the availability of Section 1619 Medicaid 
protections for SSI beneficiaries who work; the inner workings of 
the SSI provision for Programs to Achieve Self-Sufficiency (PASS); 
provisions of the new Ticket to Work and Work Incentives Improvement 
Act; changes to Medicare extended periods of eligibility, and other 
programs which will assist people with disabilities to be employed 
competitively.
     Medicaid Case Management Design: Redesigning the 
content, scope, activities, and outcomes of Medicaid case management 
activities to incorporate valued social and economic roles, defined 
and desired by the individual with a disability, as an element of 
each case plan.
     Self-Determination Designs: Incorporating the new 
employment possibilities in the evolving field of self-determination 
within the Medicaid program, or redesigning traditional Medicaid 
services to incorporate self-determination principles with an 
employment focus.
     Other Medicaid Services: Improvements in the design, 
cost-modeling, development and initial implementation or evaluation 
of other Medicaid services which have a direct and significant 
impact on the ability of individuals with disabilities to sustain 
competitive employment, such as transportation services or 
modifications, assistive devices, communication aids, or community 
mental health services.

3. Medicaid Demonstration To Maintain Independence and Employment

     Demonstration Design and Initial Implementation: Design 
and development of a demonstration program to provide Medicaid 
coverage to a State defined maximum number of working individuals 
who have a specific physical or mental impairment likely to lead to 
disability (as created by Section 204 of the Ticket to Work and Work 
Incentives Improvement Act of 1999), including the examples cited 
above as permitted uses for the basic Medicaid buy-in programs.

4. State-to State Medicaid Infrastructure Centers

     Staffing: Staffing or contracting costs (and related 
expenses) for a technical assistance and resource center to assist 
other States to design or implement Medicaid buy-ins or a Medicaid 
demonstration project.
     Training and Consulting: Training materials, curricula 
development, training events, travel in-state or out-of-state, etc.
     Peer and Network Education: Fostering forums for the 
sharing of knowledge amongst peers, developing effective networks 
among States, employers, and people with disabilities to share new 
information, learn new problem-solving techniques, and advance the 
state-of-the-art in return to work programs.
     Direct Technical Assistance: Provision of direct 
technical assistance to other State agencies, legislatures, 
Governors, employers, consumer forums, or others on any topic 
related to the buy-ins (including the Medicaid demonstration) or to 
improving Medicaid services to support competitive employment of 
people with disabilities.
     Informational Resources: Construction of resources 
databases for use by others in cost-modeling, tracking progress and 
learning of other States across the country, compiling key design 
features and results of different States' buy-in programs or 
Medicaid demonstration.
     Outreach and Communication Resources and Services: 
Developing and distributing key outreach resource materials for use 
in other States, including printed material, videos, testimony, 
audio interviews, graphics, etc. Developing and maintaining web-
sites, links translation services, employer outreach systems, and 
other communication infrastructure.

5. Other

     Personal computers: Personal computers and related 
software for any added staff

[[Page 34722]]

capacity (hired or contracted) devoted to development or maintenance 
of an adequate infrastructure for the Medicaid buy-in programs 
(including the Medicaid demonstration).
     Reasonable accommodation: Reasonable accommodation 
expenses for staff with a disability who have been enlisted to 
improve design or implementation capability.
     Outreach: Outreach to stakeholders to increase 
awareness of the availability of the Medicaid options or Medicaid 
demonstration.
     Inclusion: Inclusion of the disability community in the 
design, implementation and outreach efforts around these options and 
demonstrations.

B. Prohibited Uses

     Match: State or local match to any services provided 
under the Medicaid program or other Federal program.
     Medicaid 90/10 Projects: Any infrastructure expense for 
which Federal Medicaid funds are available at the 90/10 matching 
ratio.
     Non-Competitive Employment: Any costs related to 
employment efforts which are not entirely designed to eventuate in 
the competitive employment of individuals with disabilities.
     Other Target Groups: Any infrastructure expense that is 
not designed to be used primarily for the benefit of people with 
disabilities who are employed.
     Premiums: Premiums for participants in a Medicaid buy-
in or other cost-sharing under the Medicaid program.
     Other Party Responsibility: Services, equipment, or 
supports that are the responsibility of another party under Federal 
or State law (such as vocational rehabilitation or education 
services) or under any civil rights laws including, but not limited 
to, modifications of a workplace or other reasonable accommodations.
     Direct Provision of Services: Direct provision of 
services to people with disabilities except on a one-time, last 
resort, emergency basis for the purpose of sustaining the 
individual's competitive employment.
     On-going Administration of Medicaid Services: Ongoing 
administration is not a fundable activity unless such administration 
is part of a well-defined test of alternate and improved methods 
focused specifically on employment (e.g. testing, implementation and 
management of new prior authorization criteria under Medicaid 
personal care designed to assess the need for additional support 
when people are employed).
     Benefits Counseling: Benefits planning or counseling 
services that are not part of a single-session Medicaid outreach 
event, a Medicaid eligibility determination process, or a Medicaid 
buy-in enrollment process.
     Data Processing Hardware: Hardware in excess of the 
personal computers required for staff devoted to the Medicaid 
employment initiative.

Appendix Three: Application Format and Guidelines

    Please use the format outlined below and submit materials in the 
order listed.
     The narrative portion of the proposal should not exceed 
30 double-spaced typewritten pages, with one inch margins on all 
sides, in 12-point font. This page limit does not include the cover 
letter, budget, required appendices, or letters of support.
     Additional documentation may be appended; however, 
material should be limited to information relevant but not essential 
to the specific scope and purpose of the grant. Please do not 
include critical details in an appendix as appendices will not be 
included for purposes of the ratings process.
     States receiving awards may be asked for an electronic 
version of their proposals at a later date. States must submit their 
applications initially in paper (hard copy) format.
    A complete proposal consists of a narrative application plus the 
required material noted below and a completed grant application kit. 
Application materials should be organized in order as follows:

1. State Agency's Cover Letter

    A letter from the Director of the State Medicaid Agency* or 
other designated State Agency identifying his/her agency as the lead 
organization, indicating the title of the project, the principal 
contact person, the amount of funding requested, and the names of 
all organizations collaborating in the project. The letter should 
indicate that the State Agency has clear authority to oversee and 
coordinate the proposed activities and is capable of convening a 
suitable working group of all relevant partners.
     For purposes of this solicitation, State Medicaid 
Agency means the Single State Medicaid Agency or umbrella agency 
which houses the State Medicaid Program.

2. Application Kit Forms

    Appendix Five contains the standard forms which must be 
completed with an original signature and enclosed as part of the 
proposal.

3. Letter of Agreement from Single State Medicaid Agency

    If the State Medicaid Agency is not the lead organization, a 
letter from the Director of the Single State Medicaid Agency is 
required specifying the Medicaid Agency's agreement, endorsement and 
active participation in the grant program.

4. Project Abstract

    A project abstract limited to one page. The abstract should 
serve as a succinct description of the proposed project and should 
include:
     The overall goals of the project; and
     The level of eligibility being applied for, number of 
years of funding requested, total budget; and
     A description of how the grant will be used to support 
or expand competitive employment opportunities for persons with 
disabilities.

5. Project Narrative

    The narrative application should provide a concise and complete 
description of the proposed project. The narrative or body of the 
application must not exceed 30 double-spaced pages as described 
earlier. Please do not rely on appendices to describe key details. 
This narrative should contain the information necessary for 
reviewers to fully understand the proposed project and should be 
organized as follows:

A. Current Infrastructure

    Provide a description of the State's current infrastructure for 
supporting competitive employment for people with disabilities. 
Please include the following:
     A description of people with disabilities currently 
competitively employed in your State;
     A description of services provided with State and 
Federal funds to people with disabilities who are competitively 
employed or seeking competitive employment in your State;
     A description of personal assistance services delivery 
systems currently in place in your State including who is served, 
how services are accessed and who funds the services; and
     An overall assessment of the strengths and weaknesses 
of your State's capacity to support people with disabilities seeking 
to return to work.

B. Use of Grant Funds

    Provide a description of how the grant funds will be used to 
improve the existing infrastructure. Please include as much detail 
about the following components as possible:
    1. Removal of Barriers
    Discuss the major barriers to competitive employment for people 
with disabilities that will be addressed with grant funds. Describe 
the proposed grant projects in terms of their approach to barrier 
elimination. Provide a succinct statement of the problems for which 
Medicaid infrastructure funding will be an answer.
    2. Health Systems Change
    Because this Infrastructure Grant program is premised upon the 
positive correlation between access to health care benefits and 
employment, please describe the health systems charges that will 
result from Infrastructure Grant funding. Examples of health systems 
change include offering a Medicaid buy-in to people with 
disabilities who return to work, expanding personal care services, 
or identifying health system needs and strategies for improvement.
    3. Communication/Access Plan
    Discuss how the State intends to make known the availability of 
infrastructure improvement to the disability and employer 
communities.
    4. Partnerships
    Describe any partnership with employers, other State or local 
agencies and the disability community.
    5. Monitoring Plan
    Describe plans for monitoring the success of the program over 
time, including establishing a base estimate of the number of people 
with disabilities who are currently competitively employed.

6. Research/Program

    Describe any ongoing research or program development efforts in 
this area.

C. Products and Timeline

    The purpose of this section is to outline clearly what the State 
hopes to achieve with

[[Page 34723]]

each grant. Describe milestones and work products to be accomplished 
during the grant period.
    For States applying for Conditional Eligibility. States must 
clearly indicate the annual benchmarks for improvements to personal 
assistance services (PAS) that must be achieved before funding 
beyond the first year's will be released. These benchmarks should 
represent improvements in PAS that will move a State closer to 
meeting the level of PAS described in Appendix One.
    For States applying for Transitional eligibility, States must 
provide a letter of commitment outlining how the requirement of 
providing PAS statewide by the end of the grant year will be 
achieved.
     Examples of work products include completed program 
designs, legislative campaigns, or proposed educational campaigns.
     A timetable for accomplishing the major tasks to be 
undertaken should include key dates relevant to the proposed project 
(e.g. State budget cycles and legislative sessions).

D. Organization and Staffing

    Describe the project organization and staffing include:
     Proposed management structure and how key project staff 
will relate to the proposed project director, the Medicaid Agency, 
and any interagency or community working groups.
     Brief biographical sketches of the project director and 
key project personnel indicating their qualifications, and prior 
experience for the project. Resumes for the key project personnel 
should be provided as an attachment.

E. Endorsements and Support

    Provide a set of endorsements of the support and commitments 
that have been pledged for the proposed project (e.g. cooperation 
from the disability community, other state agencies, the executive 
branch, the legislative branch, employers, business groups, etc.). 
Individual letters of support should be included as attachments.

6. Budget Narrative/Justification

    For the budget recorded on form 424 (see Appendix Five), provide 
a breakdown of the aggregate number detailing their allocation to 
each major set of activities. If your State is applying to create a 
State-to-State Medicaid Infrastructure Center, the budget narrative 
must separate that activity. The proposed budget for the program 
should distinguish the proportion of grant funding designated for 
each grant activity. The budget must separate out funding that is 
administered directly by the lead agency from funding that will be 
subcontracted to other partners. If you have budgeted for 
Infrastructure Grant money to use toward the realization of a 
Demonstration to Maintain Independence project, you may submit a 
separate budget section reflecting how that money will be spent if 
the Demonstration project is not approved.
    If your State has an approved State Plan amendment under section 
1902(a)(10)(A)(ii)(XII) of the Social Security Act and is applying 
for funds in excess of $500,000 per fiscal year, please provide 
documentation of State and Federal spending for this optional 
categorically needy eligibility group.

7. Required Appendices

    (a) Organizational Charts: Append one or more charts depicting 
the organizational relationship amongst the lead agency for this 
grant, the Single State Medicaid Agency (if different), the agency 
administering Home and Community-Based Service waivers (if 
different), and the State Vocational Rehabilitation Agency.
    (b) Memoranda of Understanding: Append any relevant memoranda of 
understanding which might illustrate the breadth of the State's 
employment efforts and the extent of collaboration between relevant 
agencies.
    (c) Key Staff Qualifications: Include a biographical sketch or 
resume of key staff describing their qualifications.

Appendix Four: Notice of Intent to Apply

    Please return this form by June 12, 2000 to: Medicaid 
Infrastructure Grants Program, Disabled and Elderly Health Programs 
Group, Center for Medicaid and State Operations Health Care 
Financing Administration, 7500 Security Boulevard, S2-12-24, 
Baltimore, MD 21244-1850
1. State Name:---------------------------------------------------------

2. State Agency likely to serve as lead:-------------------------------

3. Contact Name and Title:---------------------------------------------

4. Address:------------------------------------------------------------

5. Phone:--------------------------------------------------------------

6. Fax:----------------------------------------------------------------

7. E-mail:-------------------------------------------------------------

8. Eligibility Category: Full____

Conditional____

 Transitional ____

Reserved____

9. Expected Duration of Grant Request: From ______ to ______

10. Infrastructure Center: Will You Propose to Serve as a State-to-
State Medicaid
Infrastructure Center?  Yes__  No__

11. Expected amount of request: $--------------------------------------
12. Questions: Please attach any questions you would like to have 
answered before you complete your application.

    Information will be sent in June with responses to questions 
posed by States that submit this Notice of Intent to Apply. This 
Notice of Intent is not a required document. States that do not 
submit a letter of intent may still apply. Similarly, submission of 
a letter of intent does not bind the State, nor will it cause a 
proposal to be reviewed more favorably. However, we cannot assure 
that answers to questions posed by States subsequent to issuance of 
this grant solicitation will be provided to States that do not 
submit a letter of intent.

Appendix 5

Grant Application Kit (standard forms) (Please complete the attached 
forms:)
SF-424: Application for Federal Assistance
SF-424A: Budget Information
SF-424B: Assurances-Non Construction Programs
Biographical Sketch
Standard Form LLL: Disclosure of Lobbying Activities
Additional Assurances

    If copies of these forms are needed, they may be obtained from 
the HCFA website at www.hcfa.gov under Research and Demonstration.
[FR Doc. 00-13554 Filed 5-26-00; 8:45 am]
BILLING CODE 4120-01-M