[Federal Register Volume 73, Number 193 (Friday, October 3, 2008)]
[Rules and Regulations]
[Pages 57854-57886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-23102]
[[Page 57853]]
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Part IV
Department of Health and Human Services
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Centers for Medicare & Medicaid Services
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42 CFR Part 441
Medicaid Program; Self-Directed Personal Assistance Services Program
State Plan Option (Cash and Counseling); Final Rule
Federal Register / Vol. 73, No. 193 / Friday, October 3, 2008 / Rules
and Regulations
[[Page 57854]]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 441
[CMS-2229-F]
RIN 0938-AO52
Medicaid Program; Self-Directed Personal Assistance Services
Program State Plan Option (Cash and Counseling)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
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SUMMARY: This final rule provides guidance to States that want to
administer self-directed personal assistance services through their
State Plans, as authorized by the Deficit Reduction Act of 2005. The
State plan option allows beneficiaries, through an approved self-
directed services plan and budget, to purchase personal assistance
services. The rule also provides guidance to ensure beneficiary health
and welfare and financial accountability of the State Plan option.
DATES: Effective date: November 3, 2008.
FOR FURTHER INFORMATION CONTACT: Marguerite Schervish, (410) 786-7200.
SUPPLEMENTARY INFORMATION:
I. Background
A. Section 6087 of the Deficit Reduction Act of 2005
The Deficit Reduction Act (DRA) of 2005 was enacted into law on
February 8, 2006 (Pub. L. 109-171). Section 6087 of the DRA provided
for a new State Plan option that is built on the experiences and
lessons learned from the disability rights movement and States that
pioneered self-direction programs. Self-direction is an important
component of independence, as it promotes quality, access, and choice.
Specifically, section 6087 of the DRA amended section 1915 of the
Social Security Act (the Act) to add new paragraph (j). Section
1915(j)(1) of the Act would allow a State the option to provide, as
``medical assistance,'' payment for part or all of the cost of self-
directed personal assistance services (PAS) provided pursuant to a
written plan of care to individuals for whom there has been a
determination that, but for the provision of such services, the
individuals would require and receive State Plan personal care
services, or section 1915(c) home and community-based waiver services.
Section 1915(j)(1) of the Act also expressly excludes Medicaid payment
for room and board. Finally, section 1915(j)(1) of the Act requires
that self-directed PAS may not be provided to individuals who reside in
a home or property that is owned, operated, or controlled by a provider
of services, not related by blood or marriage.
Section 1915(j)(2) of the Act sets forth five assurances that
States must provide in order for the Secretary to approve self-directed
PAS under this State Plan option. First, States must assure that
necessary safeguards are in place to protect the health and welfare of
individuals provided services under this State Plan option, and to
assure the financial accountability for funds expended with respect to
such services. Second, States must assure the provision of an
evaluation of the need for State Plan personal care services, or
personal services under a section 1915(c) waiver. Third, States must
assure that individuals who are likely to require State Plan personal
care services, or section 1915(c) waiver services, are informed of the
feasible alternatives to the self-directed PAS State Plan option (if
available) such as personal care under the regular State Plan option or
personal assistance services under a section 1915(c) waiver program.
Fourth, States must assure that they provide a support system that
ensures that participants in the self-directed PAS program are
appropriately assessed and counseled prior to enrollment and are able
to manage their budgets. Fifth, States must assure that they will
provide to the Secretary an annual report on the number of individuals
served under the State Plan option and the total expenditures on their
behalf in the aggregate. States must also provide an evaluation of the
overall impact of this new option on the health and welfare of
participating individuals compared to non-participants every 3 years.
Section 1915(j)(3) of the Act indicates that States that offer
self-directed PAS under this State Plan option are not subject to the
statewideness and comparability requirements of the Act. Section
1915(j)(4)(A) of the Act defines self-directed PAS to mean personal
care and related services under the State Plan, or home and community-
based waiver services under a section 1915(c) waiver, provided to a
participant eligible under this self-directed PAS State Plan option.
Furthermore, the statute states that within an approved self-directed
services plan and budget, individuals can purchase personal assistance
and related services and hire, fire, supervise, and manage the
individuals providing such services.
Section 1915(j)(4)(B) of the Act gives States the option to permit
participants to hire any individual capable of providing the assigned
tasks, including legally liable relatives, as paid providers of the
services. The statute also gives States the option to permit
participants to purchase items that increase independence or substitute
for human assistance to the extent that expenditures would otherwise be
made for the human assistance.
Section 1915(j)(5) of the Act sets forth the requirements for an
``approved self-directed services plan and budget.'' Section
1915(j)(5)(A) of the Act authorizes the individual or a defined
representative to exercise choice and control over the budget,
planning, and purchase of self-directed PAS, including the amount,
duration, scope, provider, and location of service provision. Section
1915(j)(5)(B) of the Act requires an assessment of participants' needs,
strengths, and preferences for PAS. Section 1915(j)(5)(C) of the Act
requires States to develop a service plan based on the assessment of
need using a person-centered planning process. Section 1915(j)(5)(D) of
the Act requires States to develop and approve a budget for
participants' services and supports based on the assessment of need and
service plan and on a methodology that uses valid, reliable cost data,
is open to public inspection, and includes a calculation of the
expected cost of such services if those services were not self-
directed. The budget may not restrict access to other medically
necessary care and services furnished under the State Plan and approved
by the State but not included in the budget.
Section 1915(j)(5)(E) of the Act requires that there are
appropriate quality assurance and risk management techniques used in
establishing and implementing the service plan and budget that
recognize the roles and responsibilities in obtaining services in a
self-directed manner and assure the appropriateness of such plan and
budget based upon the participant's resources and capabilities.
Section 1915(j)(6) of the Act indicates that States may employ a
financial management entity to make payments to providers, track costs,
and make reports. Payment for the activities of the financial
management entity shall be at the administrative rate established in
section 1903(a) of the Act.
Note: CMS released a pre-print for use by States, at their
discretion, to submit a State plan section 1915(j) amendment, which
was approved under OMB 0938-1024.
[[Page 57855]]
B. History of Self-Direction
The Independent Living movement in the 1960s was premised on the
concept that people with disabilities should have the same civil
rights, options, and control over choices in their own lives as do
people without disabilities, and that individuals with cognitive
impairments should not be prohibited from exercising control over their
lives. One mechanism that allows individuals to exercise more
involvement, control, and choice over their lives is self-directed
care. Self-directed care is a service delivery mechanism that empowers
individuals with the opportunity to select, direct, and manage their
needed services and supports identified in an individualized service
plan and budget plan. Self-direction is not a service, but rather an
alternative to the traditional service delivery model whereby a worker
hired by the Medicaid recipient will furnish the Medicaid service to
the Medicaid recipient and the Medicaid recipient retains the control
and authority over who provides the services, how the services are
provided, the hours they work, and their rate of pay.
Two national pilot projects demonstrated the success of self-
directed care. During the mid-1990s, the Robert Wood Johnson Foundation
awarded grants to develop self-determination in 19 States. These
projects primarily evolved into Medicaid-funded programs under the
section 1915(c) home and community-based services waiver authority. In
the late 1990s, the Robert Wood Johnson Foundation again awarded grants
to develop the ``Cash & Counseling'' national demonstration and
evaluation project in three States. These projects evolved into
demonstration programs under the section 1115 authority of the Act.
Evaluations were conducted in both of these national projects.
Results in both projects were similar--persons directing their personal
care experienced fewer unnecessary institutional placements,
experienced higher levels of satisfaction, had fewer unmet needs,
experienced higher continuity of care because of less worker turnover,
and maximized the efficient use of community services and supports.
On February 1, 2001, the President announced the New Freedom
Initiative, which included the following three elements: promoting full
access to community life through efforts to implement the Supreme
Court's decision in Olmstead v. L.C., 527 U.S. 581 (1999)
(``Olmstead''), integrating Americans with disabilities into the
workforce with programs under the Ticket to Work and Work Incentives
Improvement Act of 1999 (TWWIIA) (Pub. L. 106-170, enacted on December
19, 1999), and creating the National Commission on Mental Health. The
President subsequently expanded this initiative through Executive Order
13217 (June 18, 2001) by directing Federal agencies to work together to
``tear down the barriers'' to community living by developing a
government-wide framework for providing elders and people with
disabilities the supports necessary to learn and develop skills, engage
in productive work, choose where to live, and fully participate in
community life.
On May 9, 2002, as part of its response to the New Freedom
Initiative, the Department of Health and Human Services unveiled the
Independence Plus templates and the initiative to help States broaden
their ability to offer individuals the opportunity to maximize choice
and control over services in their own homes and communities. The
Department developed two templates that allowed States to choose
different self-directed design features to satisfy their unique
programs. The section 1115 demonstration template was developed for
States that wanted to permit individuals to receive a prospective cash
allowance equivalent to the amount of their Medicaid personal care
benefit. Under the section 1115 authority, individuals could directly
manage their cash allowance and direct the purchases of their personal
care and related services and goods. For those States not wanting to
offer the cash allowance, a section 1915(c) home and community-based
services waiver template was developed. The section 1915(c) waiver
template allowed Medicaid recipients to self-direct a wide array of
services, so long as these services are required to keep a person from
being institutionalized in a hospital, nursing facility or intermediate
care facility for the mentally retarded (ICF-MR).
However, a program was only given the Independence Plus designation
when a State demonstrated a strong commitment to self-direction by
developing a comprehensive program that offered a person-centered
planning process, individualized budgeting, self-directed supports
including financial management services, and a quality assurance and
improvement plan. The intended purposes of the Independence Plus
Initiative were to:
Delay or avoid institutional or other high cost out-of-
home placement by strengthening supports to individuals or families.
Recognize the essential role of the individual or family
in the planning and purchasing of health care supports and services by
providing individual or family control over an agreed upon resource
amount.
Encourage cost effective decision-making in the purchase
of supports and services.
Increase individual or family satisfaction through the
promotion of self-direction, control, and choice--a major theme
expressed during the New Freedom Initiative--National Listening
Session.
Promote solutions to the problem of worker availability.
Provide supports including financial management services
to support and sustain individuals or families as they direct their own
services.
Assist States with meeting their legal obligations under
the Americans with Disabilities Act (ADA) and the U.S. Supreme Court's
Olmstead decision.
Provide flexibility for States seeking to increase the
opportunities afforded individuals and families in deciding how best to
enlist or sustain home and community services.
A new section 1915(c) waiver application was also developed effective
spring 2005 that incorporates our requirements for an Independence Plus
program.
In 2003 we awarded 12 systems change grants to States for the
development of Independence Plus programs. On October 7, 2004, the
Robert Wood Johnson Foundation awarded a second round of ``Cash &
Counseling'' grants to 11 States to develop Independence Plus programs
using either the section 1915(c) waiver or section 1115 demonstration
application. As of March 20, 2006, 15 States had 17 approved
Independence Plus programs. In addition, there were 2 other States that
included self-direction options in their section 1115 demonstrations
and a multitude of States that offered self-directed program options in
their section 1915(c) home and community-based services waiver
programs.
This final rule finalizes provisions set forth in the January 18,
2008 proposed rule.
II. Analysis of and Responses to Public Comments on the Proposed Rule
We received a total of 55 timely comments from home care agencies
and provider associations, State Medicaid directors, home care
providers, unions, beneficiaries, and other individuals and
[[Page 57856]]
professional associations. The comments ranged from general support or
opposition to the proposed provisions to very specific questions and
detailed comments regarding the proposed changes. A summary of our
proposals, the public comments, and our responses are set forth below.
General
Comment: Several commenters expressed support for the rule and the
options, rights, support, and safeguards the provisions gave to
participants. One commenter was appreciative of the possibility to be
able to hire a caregiver of her own choosing. Another commenter stated
that her ``hard to serve'' clients were satisfied with hiring persons
of their choosing and that another client was able to get more hours of
``flexible'' care to fit her individualized needs and wishes.
Response: We appreciate the perspectives these commenters had in
support of the rule.
Comment: Several commenters indicated opposition to the self-
directed service delivery model. Some commenters stated that the model
was not appropriate for most Medicaid beneficiaries. Other commenters
were concerned that under the self-directed delivery model, caregivers
were inadequately trained, that there was insufficient oversight of the
care being provided beneficiaries, and that the potential for fraud,
abuse, neglect, and exploitation increased.
Response: We disagree that the self-directed service delivery model
is an inappropriate model. Our experience with programs that offer
self-direction in section 1915(c), home and community-based services
waiver programs and section 1115 demonstration programs, has confirmed
the positive results found in the formal evaluation of the ``Self-
Determination'' and ``Cash & Counseling'' projects. These programs
successfully offered the self-directed service delivery model to
children, older persons, and persons with cognitive impairments,
developmental disabilities, and mental health needs. This final rule
requires numerous participant safeguards, including the requirement for
a support system that provides information about self-direction, as
well as any counseling, training and assistance that may be needed or
desired by participants to effectively manage their services and
budgets. Key components of the support system are the support brokers
and consultants who help participants perform tasks (for example,
locating and accessing needed services, developing a service budget
plan, and monitoring the beneficiary's management of the PAS and
budget). Additionally, the support system includes financial management
services entities that perform, or assist participant beneficiaries who
have elected the cash option to perform, the employer-related and tax
responsibilities. States may also add other activities that they deem
necessary or appropriate in their support systems.
Other participant protections include requirements for an
assessment of the individual's needs, strengths, and preferences for
self-directed PAS; the use of a representative when needed; a person-
centered planning process that engages the individual and also involves
the individual's family, friends, and professionals in the planning or
delivery of services or supports; a quality assurance and improvement
plan; and individualized backup plans that address critical
contingencies or incidents that would pose a risk of harm to the
participant's health and welfare. We also require that States have in
place a risk management system that identifies potential risks to the
participant and employs tools or instruments (for example, criminal and
worker background checks) to mitigate risks. The statute and this final
rule further require States to assure that necessary safeguards have
been taken to protect the health and welfare of individuals furnished
services under this program and to assure financial accountability for
the funds expended for self-directed services.
Comment: Some commenters requested clarification about the impact
of funds paid to legally liable relatives, including a parent-
caregiver, on the individual's or family's resources for other public
benefit programs. The commenters urged that CMS work with other Federal
partners to ensure that the receipt of cash would not jeopardize other
public benefit programs and that we work to enact needed changes
through legislation.
Response: The scope of this regulation does not extend to the
impact of funds paid to legally liable relatives on their receipt of
public benefits. However, we will take under advisement the suggestion
of working with other agencies to address the impact of the cash option
on the receipt of other public benefits.
Comment: One commenter sought clarification on whether CMS will
require a State that has already implemented elements of self-direction
under its State plan and waivers to modify these existing programs or
submit a State plan amendment in compliance with the new rule. This
same commenter sought clarification on whether the section 1915(j)
option would be the exclusive authority for self-directed services or
whether States may pursue or rely on other Medicaid authorities.
Response: We have not required and do not intend to require any
State to submit a section 1915(j) State plan amendment, nor is the
section 1915(j) opportunity the exclusive opportunity for a State to
pursue the self-directed service delivery model. States are free to use
some, all, or none of the appropriate Medicaid authorities that are
available for use of the self-directed service delivery model.
Comment: One commenter requested clarification on the impact of the
rule on a participant's eligibility for self-directed PAS, generally
focusing on the interaction with a section 1915(c) waiver program. The
commenter requested clarification on the following:
(1) Whether a participant may receive a budget for self-directed
PAS and concurrently receive waiver services, or whether States may
limit or deny access to waiver services.
(2) Whether waiver recipients who elect the self-directed PAS
service option are considered enrolled in the waiver, and whether
waiver ``slots'' must be set aside for persons who may disenroll from
the option.
(3) Whether CMS intends to allow States to cover services beyond
personal care and items that increase independence or substitute for
human assistance.
(4) Whether individuals who are eligible for section 1915(c) waiver
services under the special income group may be eligible for the self-
directed PAS State plan option.
(5) Whether the individual would have to maintain enrollment in a
waiver and what threshold is required to maintain that enrollment (for
example, meeting the level of care criteria, having a plan of care, or
receiving a waiver service on a periodic basis).
Response: Our response follows the order of the commenter's
questions as noted above.
(1) It is permissible for an individual to participate in the self-
directed PAS State plan option and concurrently receive services under
a section 1915(c) waiver program as a State can select which of the
section 1915(c) waiver services participants will have the opportunity
to self-direct. It is not permissible to limit or deny a participant
the other section 1915(c) waiver services for which the participant is
eligible but not self-directing. Specifically, 42 CFR 441.472(d)
requires that the ``budget may not restrict access to other
[[Page 57857]]
medically-necessary care and services furnished under the plan and
approved by the State but not included in the budget.''
(2) Participants who elect the self-directed PAS State plan option
may remain ``enrolled'' in their section 1915(c) waiver program and
their so-called ``slots'' must be kept available in the event the
participant voluntarily disenrolls or is involuntarily disenrolled from
the self-directed PAS State plan option.
(3) When a State offers the opportunity to self-direct State plan
personal care services (PCS), we do not believe it would be permissible
for participants to purchase services that are not included within the
State's definition of its PCS benefit. However, we recognize that both
the statute and regulation at Sec. 441.470(d) allow a State, at the
State's election, to offer participants the opportunity to reserve
funds to purchase items that increase independence or substitute for
human assistance, to the extent that expenditures would otherwise be
made for human assistance, including additional goods, supports,
services, or supplies. We intend to issue further guidance on the
criteria for permissible purchases to assist States in deciding the
scope of the permissible purchases in their self-direction programs. We
believe that, at a minimum, the permissible purchase must relate to a
need or goal identified in the service plan.
(4) Individuals who are eligible for section 1915(c) home and
community-based waiver services under the special income group may be
eligible for the self-directed PAS State plan option.
(5) A participant would have to maintain all eligibility, level of
care, and other requirements for the section 1915(c) waiver program.
If, upon reassessment, a participant would no longer be eligible for
the section 1915(c) waiver services through which the participant was
able to self-direct their PAS, then the participant would no longer be
able to self-direct their PAS under this State plan option.
Comment: Some commenters stated that they believe that the self-
directed service delivery model would reduce the viability of agencies
that deliver traditional agency-delivered services especially in rural
or difficult to serve areas, would force individuals into a more
expensive option, such as a skilled nursing facility (SNF) or hospital,
and would delay hospital discharges and would force more agencies to
only serve private pay clients.
Response: The evaluations conducted on the ``Self-Determination''
and the ``Cash & Counseling'' national projects have provided evidence
of consumer satisfaction and quality of care. In addition, our
experience with the section 1115 demonstration and section 1915(c)
waiver programs has not shown this impact on traditional agency-
delivered services. Therefore, we do not believe that the consequences
noted in the comments regarding the self-directed service delivery
model are necessarily predicted outcomes.
Comment: One commenter disagreed that the self-directed service
delivery model costs less than traditional agency-delivered services.
Response: We have not asserted that the self-directed PAS State
plan option costs less than the traditional agency-delivered service
model. Two national pilot projects demonstrated the success of the
self-directed service delivery model. The ``Self-Determination'' and
the ``Cash & Counseling'' national projects were evaluated in a
scientifically designed study. The evaluation results of those projects
were similar and concluded that persons directing their personal care
experienced fewer unnecessary institutional placements; experienced
higher levels of satisfaction; had fewer unmet needs; experienced
higher continuity of care because of less worker turnover; and
maximized the efficient use of community services and supports. The
results did not necessarily confirm that self-directed care costs less.
For example, the results in the ``Cash & Counseling'' States indicated
that Medicaid personal care costs were somewhat higher under ``Cash &
Counseling'', mainly because enrollees received more of the care they
were authorized to receive, as compared to the services delivered under
the traditional agency model. Another finding was that increased
Medicaid personal care costs under ``Cash & Counseling'' were partially
offset by savings in institutional and other long-term-care costs.
Furthermore, the findings also suggested that ``Cash & Counseling''
need not cost more than traditional programs if states carefully design
and monitor their programs. For example, States could design their
``Cash & Counseling'' programs so that the cost per month is budgeted
to match the cost per month of its traditional system, assuming that
home care agencies will fully meet their care obligations. If the
traditional system delivers the services beneficiaries are authorized
to receive, there should be no difference in planned costs.
Comment: Two commenters expressed concern that the proposed rule
added too many additional administrative requirements that would be
burdensome or costly to States. One commenter thought that the rule
would eliminate the efficiencies intended by the Congress.
Response: We acknowledge that States that have not yet developed
the infrastructure necessary to support the self-directed service
delivery model, in particular developing a support system, may
experience higher initial administrative burdens and costs when
designing their self-directed PAS programs. Regardless of whether a
State uses its self-directed PAS State plan option, a section 1915(c)
home and community-based services waiver option, or a section 1915(i)
home and community-based services State plan option to offer the self-
directed service delivery model, there will be administrative and
support system requirements, and State Medicaid agencies must exercise
administrative and oversight functions over their Medicaid programs.
Basis, Scope & Definitions (Sec. 441.450)
We proposed to implement section 1915(j) of the Social Security Act
(the Act) concerning the self-directed PAS option through a State plan.
We proposed that individuals who self-direct their PAS under this
option have the decision-making authority to identify, access, manage,
and purchase their PAS including a proposed list of minimum activities
over which the individuals may exercise decision-making authority. We
proposed several definitions specific to the self-directed PAS State
plan option.
Comment: One commenter recommended that CMS add a reference to ``or
their representative(s)'' whenever the rule refers to individuals or
participants.
Response: We agree with the comment because the use of a
representative to assist the individual or participant in exercising
their decision-making authority is consistent with the self-directed
service delivery model. Accordingly, we have revised the part 441,
subpart J in relevant places by adding ``or their representatives''
when we refer to ``individuals'' or ``participants.''
Comment: A few commenters suggested that CMS add ``training'' of
the PAS providers to the list of items subject to the participant's
authority in Sec. 441.450(b) and that participants have access to
training provided by or through the State.
Response: We agree with the comment about adding ``training'' to
the list of items subject to the participant's authority because the
ability of a
[[Page 57858]]
participant to train the provider of their PAS in the participant's
needs and in a manner that comports with the participant's preferences
is crucial to the self-directed service delivery model. Accordingly, we
have revised the authority provision at Sec. 441.450(b)(4) to
expressly include the ability of the participant to train their
workers. We also believe that there are circumstances in which
participants may desire that their PAS providers secure additional
training beyond what the participants can provide. Accordingly, we have
further revised the authority provision at Sec. 441.450(b)(4) to
permit participants to have access to other training provided by or
through the State so that their PAS providers can meet any additional
qualifications that participants think their providers may need.
Comment: Some commenters thought that Sec. 441.450(b) should be
revised to include the ability of the participant to select his or her
own financial management services (FMS) entity and his or her own
supports brokers or consultant.
Response: We believe that the services of the FMS entities are
administrative functions and that States have the authority to
determine whether or not to limit the FMS entities that will provide
the FMS functions. We believe that the functions of a supports broker
or consultant comprise a service that is unique to this State plan
option and, as such, recognize that States would want to be able to
claim Federal medical assistance percentages (FMAP) for this service.
The supports broker or consultant performs a variety of key functions
that include the provision of information, counseling, training and
assistance, or helping participants access needed information,
counseling, training and assistance to help participants effectively
manage their PAS. Typically, they may assist participants in locating
and accessing needed services, developing service budget plans and
helping participants to fulfill their roles and responsibilities as an
employer. Based on our experience with self-direction programs under
section 1115 demonstrations or section 1915(c) waiver programs, we have
learned that participants desired the opportunity to select a different
supports broker or consultant if the relationship between an assigned
supports broker or consultant and the participant was not satisfactory.
We have revised the rule at Sec. 441.450(c) to add a definition for
``supports broker'' or ``consultant.'' Further detail on the definition
is provided in response to another comment.
Comment: Some commenters expressed disagreement with the
requirement that participants are allowed to determine the amount paid
for a service, support, or item stating that a State law or collective
bargaining agreement could conflict with this authority. One commenter
thought that this requirement was inconsistent with the statutory
language and congressional intent and would deprive States of their
``traditional wage standard-setting role.'' Another commenter asked for
clarification on how the requirement comports with State plan rate-
setting requirements, including the requirement that there must be
public notice of any significant proposed change in methods and
standards for setting payment rates.
Response: We believe that the statutory authority contemplates
including participants in the decision-making authority over the amount
paid for a service, support or item. We believe that only a few States
have actually set the precise wages for participants of self-direction
programs. Indeed, we believe that most States reimburse varying amounts
even for services provided by traditional service models. We further
note that the requirement for public notice applies to rates paid by
the Medicaid agency for services. In the case of self-directed
services, it would be the budget amount upon which Medicaid
reimbursement would be based. The rate that the participant pays their
provider of PAS from the available budgeted amount is outside the scope
of the requirement for public notice of Medicaid rate setting.
Comment: One commenter was confused about the apparent multiple
meanings for the word ``support'' or ``supports.'' The commenter
suggested that we amend the rule to clarify that the State has the
discretion to limit supports that are beyond the State's obligation,
such as repeated counseling, training, and assistance sessions.
Response: To clarify, in the context of self-directed PAS,
``supports'' generally means a service or item that a participant can
purchase and ``support'' generally means the information, counseling,
training, or assistance provided under the support system, including
that provided by a support broker or consultant. We disagree that the
regulation needs further amending to allow the State to provide limits
to the PAS supports. If participants demonstrate that they cannot
effectively manage their PAS or budgets, the rule provides States with
options such as offering additional assistance, including FMS;
mandating the use of a representative; or involuntarily disenrolling a
participant from the self-directed PAS option.
Comment: One commenter requested clarification about how the
requirement that States have a mechanism that satisfies the Medicaid
requirements on provider agreements would apply when vendors furnish
items and supplies. It is unclear who the ``enrolled provider'' is when
services, items, or supplies are purchased with cash.
Response: As self-directed PAS is not ``cash assistance'' but
rather is a service delivery model, the requirements on provider
agreements at section 1902(a)(27) of the Act would not be a barrier if
a State elected the cash option.
Comment: One commenter thought the definition of ``assessment of
need'' was too vague. The commenter recommended use of a standardized
assessment instrument.
Response: We believe the definition of ``assessment of need'' is
adequate. We acknowledge that a standardized assessment instrument
could lead to more uniformity in determining an individual's PAS needs
and encourage their use where possible. However, it may not be useful
in determining the strengths, personal goals, and preferences of the
individual for PAS which is essential in a self-directed service
delivery model. Accordingly, we are not amending the definition of
``assessment of need'' to require States to use a standardized
assessment instrument, but recognize a State may nonetheless choose to
do so.
Comment: Some commenters suggested language to be included in the
definition of ``individualized backup plans.'' The recommended language
included additional language for the following areas: respecting the
individual's choices and preferences, planning for emergency
preparedness, and a State assessment of worker shortage that could
possibly impact the ability of an agency to provide back-up care, and
if a shortage exists, require that the individual cannot enroll unless
a backup plan can be developed that relies on family, personal, and
available community services.
Response: We agree with the comment that an individualized backup
plan has to respect the individual's choices and preferences and not
substitute the individual's choices with those of others who may be
participating in the development of the backup plan. We believe that
this is consistent with the ``dignity of risk'' concept that recognizes
as individuals experience greater choice and control, they may also
desire to assume more of the responsibilities and risks associated with
the provision of their PAS. The
[[Page 57859]]
individualized backup plan is related to the provisions of the rule at
Sec. 441.476 on risk management and should occur as part of the
discussion about the risks an individual is willing and able to assume.
As it is of utmost importance that the backup plan is individually
tailored to the individual's needs and preferences, we believe that a
State or regional approach that treats all participants' contingencies
the same by imposing a requirement that participants should simply
contact 911 emergency services in the event of a critical contingency
or incident, is not a sufficiently individualized backup plan. We have
revised the definition of ``individualized backup plan'' in Sec.
441.450(c) to clarify that the individualized backup plan must
demonstrate an interface with the risk management provision at Sec.
441.476 which requires States to assess and identify the potential
risks to the participant (such as any critical health needs), and
ensure that the risks and how they will be managed are the result of
discussion and negotiation among persons involved in the service plan
development. We have also revised the definition to include that the
backup plan must be individualized as well as not include a 911
emergency system or other emergency system as the sole backup feature
of the plan.
We also agree that emergency preparedness may be a part of the
individualized backup planning; however, we must stress that these two
things are not the same. We view ``emergency preparedness'' as
addressing the contingency of a natural disaster or other similar
catastrophic disaster and planning for how the participant will be
secured or evacuated to safety. We view the ``individualized backup
plan'' as a much broader participant protection than emergency
preparedness. We view the individualized backup plan as a cornerstone
to self-directed PAS because it sets forth the participant's wishes in
a critical contingency or incident that would pose a risk of harm to
the participant's health or welfare. While ``emergency preparedness''
can be part of an individualized backup plan, we do not believe
additional language is necessary for it to be included.
We disagree with the comment that individuals should not be
permitted to enroll in the self-directed PAS State plan option if an
individualized backup plan cannot be developed which relies on family,
personal, and available community services. While we are aware that
some individuals who select the self-directed State plan option will
not have access to family and personal resources or to community
resources, in these instances, the supports broker or consultant would
help the individual locate and access the providers of PAS needed by
the individual. If, after reasonable effort by the supports broker or
consultant, it is not possible to locate providers of PAS suitable to
the individual, then it would be permissible to delay the individual's
enrollment in the self-directed PAS option until such time as suitable
providers of their PAS can be found. We do not believe that the
definition of ``individualized backup plan'' needs to be revised to
reflect this procedure because the definition of ``supports broker or
consultant'' indicates that one of the roles of the supports broker or
consultant is to help an individual locate and access needed PAS, if
necessary.
Comment: We invited comments on other possible relationships that
could be included within the definition of ``legally liable relatives''
(LLRs). One commenter thought that ``significant others'' should be
included in the definition. Some commenters suggested that we amend the
rule to include provider training requirements and other safeguards.
Another commenter suggested that we amend the regulation to require
States to have a mechanism to deal with situations in which
participants may be pressured to hire a family member or friend or are
having difficulty discharging a family member or friend.
Response: We disagree that the definition should be revised to
include ``significant others.'' We believe it is up to the States to
determine what relationships they include in their definition of
``legally liable relatives''. We also disagree that the regulation
should be revised to specify certain safeguards, such as minimum
training requirements, competency evaluations, criminal background
checks, or other modifications to ensure that PAS workers, including
LLRs, are properly trained and qualified to perform the functions of
their jobs. One of the most valued aspects of a self-directed program
is that participants have the authority to train their providers of PAS
in what they need and how to deliver the PAS in accordance with their
personal, cultural, and religious preferences. As noted previously, we
have revised the regulation at Sec. 441.450 to permit participants to
have access to other training provided by or through the State so that
their PAS providers can meet any additional qualifications that
participants think are needed or desired. Accordingly, we do not
believe that the rule needs to be revised to specify provider training
requirements as this will vary from participant to participant. We
further do not believe that the regulations need to be revised to
require that States have a mechanism to deal with situations in which
participants may be pressured to hire a family member or friend or
where they are having difficulty discharging a family member or friend.
The role of the supports broker or consultant is to assist the
participant in managing their PAS and budget plans, including how to
hire the person most suitable to the participant, and how to discharge
the worker if necessary. Finally, as noted above, we do not believe the
regulation needs to be revised to add more safeguards to detect whether
needed services are actually being provided. We believe that the
regulation provides sufficient participant protections to detect
whether needed services are actually being provided. It is CMS'
expectation that participants' services and budget plans will be
monitored by supports brokers or consultants; that the FMS entities, as
required in the rule, will report any irregularities detected to
participants and States; and that the State Medicaid agency will
exercise ongoing oversight and monitoring of the provision of PAS
through its Quality Assurance and Improvement Plan and remediate any
problematic issues for participants.
Comment: One commenter noted that the definition of ``self-
direction'' did not acknowledge that participants who self-direct their
PAS must have the ability to perform the required roles and
responsibilities. Another commenter sought further clarification of the
definition of ``self-direction.'' The commenter stated that a
clarification may be needed to ensure that the maximum amount and scope
of a person's budget will not exceed the level of services determined
by the assessment or the budget established by the valid budget
methodology.
Response: The self-directed service delivery model does not presume
who can and cannot self-direct their PAS. Instead, the model requires
that the participant is assessed for their need for PAS, and furnished
the necessary information, counseling, training, and assistance so that
the participant can manage his services and budget. In addition to the
support system, the regulations provide several other mechanisms that
enable participants to manage their services and budgets such as the
use of a representative to assist the participant to exercise his
decision-making authority over the services and budget. If a
participant is no longer able or willing to self-direct their PAS, the
[[Page 57860]]
State is allowed to require additional assistance for the participant,
mandate the use of a representative, or, if need be, involuntarily
disenroll the participant. Therefore, we have not revised the
regulation as we do not believe any clarification is necessary.
Moreover, the regulation at Sec. 441.470 clearly sets out the steps
for determining a participant's budget amount such that we do not
believe that the budget will exceed the level of needed PAS.
Comment: A few commenters had concerns about the definition of the
``service plan.'' One commenter suggested that the definition not
require unpaid caregivers to attend the planning meeting, but instead,
provide the service hours that are included in the service plan. One
commenter cautioned against a reduction in the budget based on an
erroneous assumption that informal support is available and another
sought minimum qualifications for those responsible for development of
the service plan.
Response: The definition of ``service plan'' permits the
participant to direct the planning process, including inviting the
participant's family or others of the participant's choosing to the
planning meeting. This is not a requirement, however. In addition, we
believe it would be inappropriate to revise the definition to require
any minimum qualifications of individuals responsible for development
of the service plan as States should have the flexibility to craft
their own requirements. However, we acknowledge that there may be a
``lead'' person who will assume responsibility for assuring that the
planning meetings occur and that the resultant plan meets the
regulatory requirements. We would expect that this individual or
individuals would minimally be familiar with person-centered and
directed planning and person-centered services, and preferably possess
demonstrated skill to facilitate person-centered and directed planning.
We wish to clarify that our reference to persons who are ``required''
to attend the planning meeting was to include those persons who may be
required by the State to attend the person-centered planning meeting.
We did not intend to suggest that the participant should require the
attendance of family, friends, or others who do not wish to participate
in the meeting. Finally, we agree that the service budget should not be
reduced based on an erroneous assumption about the level of service
that an informal caregiver would be providing.
Comment: Two commenters indicated that the requirements for a
comprehensive assessment, care planning, health and welfare assurances,
and monitoring appear to meet the definition of case management as
defined in section 6052 of the DRA, Optional State Plan Case Management
Services. They also requested clarification on whether a participant
who elects this option will be unable to receive any other type of case
management covered by Medicaid. One commenter asked how States would
reconcile the requirements of the self-directed PAS State plan option
final rule with section 6052 of the DRA. For example, as outlined in
the January 18, 2008 self-directed PAS State plan option proposed rule,
CMS ``requires case management services under self-directed PAS,'' but
the case management provision of the DRA prohibits States from
requiring beneficiaries to receive case management. Furthermore, the
commenter suggested that the self-directed PAS State plan option
proposed rule requires ``gate-keeping'' and advocacy functions but the
case management DRA provision requires these functions to be separated
by payment source and beneficiaries to be allowed to select from all
qualified providers. One commenter asked how CMS could require a case
manager to monitor the participant's service plan under the self-
directed PAS State plan option, if, as stated in the case management
DRA provision, the State cannot bill for services defined as ``case
management'' as administrative or other services.
Response: We believe that the functions that are required of the
supports broker or consultant are not ``case management'' within the
definition of case management provided pursuant to section 1915(g)(2)
of the Act, as revised by section 6052 of the DRA. Section 1915(g)(2)
of the Act defines case management services for purposes of section
1915(g) of the Act as services that will ``assist individuals eligible
under the State plan in gaining access to needed medical, social,
educational, and other services.'' Case management includes the
following: Assessment of an eligible individual to determine service
needs, including activities that focus on needs identification;
development of a specific care plan based on the information collected
through the assessment; referral and related activities to help an
individual obtain needed services, including activities that help link
the eligible individual with medical, social, educational providers, or
to other programs and services that are capable of providing needed
services; and monitoring and follow-up activities, including activities
and contacts that are necessary to ensure that the care plan is
effectively implemented and adequately addresses the needs of the
eligible individual.
We believe that the relationship between a supports broker or
consultant and a participant and the assistance provided by the
supports broker or consultant in the self-directed PAS State plan
option is fundamentally different than the relationship required
between a case manager and beneficiary and the assistance provided by a
case manager. Supports brokers or consultants are agents of the
participants in that they are primarily responsible for facilitating
participants' needs in a manner that comports with the participants'
preferences. As the relationship that develops must be supportive and
ongoing, participants may request a different supports broker or
consultant if the relationship is not working out. Furthermore, the
functions performed by supports brokers or consultants are unique to
the self-directed service delivery model because supports brokers or
consultants are primarily responsible for providing information,
training, and counseling and assistance, as desired by participants,
that help participants effectively manage their PAS and budgets. These
functions include helping participants develop their service budget
plans and fulfill their employer-related responsibilities. This
assistance can also include helping participants locate and access PAS,
but supports brokers or consultants do not perform assessments of need
or develop care plans. Although supports brokers or consultants do
perform a monitoring function for the purpose of checking whether
participants' health status has changed, they are also verifying
whether expenditures of funds are being made in accordance with the
service budget plans.
Because of the unique position of a supports broker or consultant
under the self-directed PAS State plan model, we believe that a
traditional case manager can perform the functions of supports brokers
or consultants only if they receive training in the self-directed
service delivery model that includes a demonstrated capacity to
understand that they are to assist the participants with fulfilling
their preferences, and not supplant the participants' preferences with
their views or preferences. As evidenced by the comment, it is
important to avoid confusion between the functions of a supports broker
or consultant and the services furnished by a case manager, and we
believe a definition of supports broker or
[[Page 57861]]
consultant would clarify the functions. Accordingly, we have revised
Sec. 441.450(c) to add a definition of supports broker and consultants
that reflects the unique role and functions of the supports broker or
consultant; that requires States to develop a protocol to ensure that
supports brokers or consultants are accessible to participants, have
regularly scheduled phone and in-person contacts with participants,
monitor whether participants' health status has changed and whether
expenditure of funds are being made in accordance with service budget
plans; and to require that supports brokers or consultants meet the
training and monitoring requirements and qualifications required by
their respective State. We have also added to Sec. 441.450(c) the
requirement that support brokers or consultants be available to each
participant as part of the support system.
Comment: One commenter suggested that we include a definition of
``person-centered services'' or ``person-directed planning'' because it
is critical that States have a uniform understanding and application of
these concepts.
Response: We include in the regulations at Sec. 441.468(b)(1) a
requirement that the service planning process be ``person-centered and
directed'' to ensure the identification of each participant's
preferences, choices, and abilities, and strategies to address those
preferences, choices, and abilities. We further require at Sec.
441.468(c)(1) that the State's procedures governing service plan
development allow the participant to engage in and direct the process
to the extent desired, and allow the participant the opportunity to
involve family, friends, and professionals. We do not believe that the
regulation should be revised to add definitions of ``person-centered
services'' or ``person-directed planning,'' because the intent of such
processes is clear and we wish to provide flexibility in implementing
the concepts. We wish to note there are numerous resources available
that define ``person-centered planning'' and ``person-centered
services'' to assist the States. There are also different models (for
example, MAPS, PATH, ELP, Personal Futures Planning) of person-centered
planning. According to one resource, (Schwartz, A.A., Jacobson, J.W., &
Holburn, S. (2000)). Defining ``person-centeredness'': Results of two
consensus methods. Education & Training in Mental Retardation &
Developmental Disabilities), each model has a different emphasis and
should be applied based on the needs of the individual. Furthermore,
the authors indicate that all models share a common underlying set of
eight basic characteristics. These characteristics include the
following:
The person's activities, services and supports are based
on his or her dreams, interests, preferences, strengths, and capacities
The person and people important to him or her are included
in planning, and have the opportunity to exercise control and make
informed decisions
The person has meaningful choices, with decisions based on
his or her experiences
The person uses, when possible, natural and community
supports
Activities, supports and services foster skills to achieve
personal relationships, community inclusion, dignity, and respect
The person's opportunities and experiences are maximized,
and flexibility is enhanced within existing regulatory and funding
constraints
Planning is collaborative, recurring, and involves an
ongoing commitment to the person
The person is satisfied with his or her activities,
supports and services.
Generally, any model for person-centered planning a State uses
should be based on the wishes and needs of the individual. With respect
to the concept of ``person-directed'' planning, we expect that
participants will actually direct the service planning and budget
development. We think this is an important aspect of person-centered
planning in order to ensure that the resultant service and budget plan
actively engages a participant, accurately reflects a participant's
abilities, preferences, and choices, and better meets the underlying
purpose of the self-directed PAS option. We are available to provide
information and technical assistance to any State that desires it.
After consideration of public comments received, we are finalizing
Sec. 441.450 with revision to the definition of individualized backup
plan and addition of a definition of supports broker or consultant. We
have also generally added ``representative'' throughout the
regulations, as applicable.
Self-Direction: General (Sec. 441.452)
We proposed that States must have in place, before electing the
self-directed PAS option, personal care services through the State
plan, or home and community-based services under a section 1915(c)
waiver. We proposed that the State must have both traditional service
delivery and the self-directed PAS service delivery option available in
the event that an individual voluntarily disenrolls or is involuntarily
disenrolled, from the self-directed PAS service delivery option. We
also proposed that the State's assessment of an individual's needs must
form the basis of the level of services for which the individual is
eligible and that nothing in the self-directed PAS State plan option
would be construed as affecting an individual's Medicaid eligibility,
including that of an individual whose Medicaid eligibility is attained
through receipt of section 1915(c) waiver services.
Comment: One commenter requested that CMS recognize other delivery
models as ``traditional'' besides ``agency-delivered'' services. This
same commenter asked whether a State that offers home health services
under its State plan could meet the requirement for a ``traditional''
service-delivery model under this rule. Finally, this commenter sought
clarification on whether the requirement that States offer a ``non-
self-directed'' model refers only to the ``agency-delivered'' service
model. Another commenter indicated that it is imperative that all
participants retain the option to use the ``traditional'' service-
delivery system.
Response: In the preamble to the proposed rule, we construed the
``traditional'' service-delivery model to mean ``traditional agency-
delivered services'', i.e., the personal care and related services and
section 1915(c) waiver services that are delivered by personnel hired,
supervised, and managed by a home care or similar agency. We agree with
the commenters that we should not limit the ``traditional'' delivery
system to ``agency-delivered services'' and now construe
``traditional'' delivery system to mean the delivery system that the
State has in place to provide their State plan optional personal care
services benefit or their section 1915(c) waiver services for
individuals who are not self-directing their PAS under a section
1915(j) State plan option.
``Personal care and related services'' as used in section
1915(j)(4)(A) of the Act are those services that are included in the
State's definition of its optional personal care services benefit and
not other State plan services such as home health. We further note
section 1915(j)(2)(C) of the Act already requires that participation in
the self-directed PAS State plan option is voluntary. Also, the
regulation at Sec. 441.456 permits participants to voluntarily
disenroll from the self-directed PAS option. Finally, the regulation at
Sec. 441.458 allows States to involuntarily disenroll participants. In
the event of a voluntary or involuntary disenrollment,
[[Page 57862]]
participants must resume receiving traditional services to which they
are eligible under the State plan personal care service benefit or a
section 1915(c) waiver program.
After consideration of the public comments received, we are
finalizing Sec. 441.452 without revision.
Use of Cash (Sec. 441.454)
We proposed that States have the option to disburse cash
prospectively to participants self-directing their PAS, and further,
that States must ensure compliance with all applicable Internal Revenue
Service requirements; that participants, at their option, could use the
financial management entity for some or all of the functions described
in Sec. 441.484(c); and that States must make a financial management
entity available to participants if they demonstrated, after additional
counseling, information, training, or assistance, that they could not
effectively manage the cash option.
Comment: One commenter thought that allowing individuals who choose
the cash option to perform tax-related reporting functions puts the
individual at risk with the Internal Revenue Service (IRS). One
commenter asserted that older persons and persons with disabilities are
unlikely to be able to properly manage the quarterly IRS tax payments.
One commenter suggested that the rule be revised to permit the State to
require a participant to use the financial management services (FMS)
entity for all or part of the functions described in Sec. 441.484(c).
One commenter thought that making use of the FMS entity optional would
add an additional administrative and cost burden to the States. Also,
the commenter stated that it is unwise for CMS to allow the practice of
the hours of needed PAS to be determined by the wage/pay needs of the
provider of care rather than the hours of PAS actually needed by the
individual.
Response: On September 13, 2007, we released a State Medicaid
Director Letter (SMDL07-013), with preprint, for the self-
directed PAS State plan option. In the preprint, we indicate that
States must assure that all IRS requirements regarding payroll/tax
filing functions will be followed, including when participants perform
these functions themselves. In the regulation at Sec. 441.454, we
require that States can elect to disburse cash prospectively to
participants who are self-directing their PAS and must ensure
compliance with the IRS requirements if they adopt this option. We have
revised the regulation at Sec. 441.454(b) to add a minimum list of the
tax-related responsibilities that are required by the IRS because we
believe these examples will help to illustrate some of the tax-related
responsibilities that must be performed. We recognize that not all
participants who select the cash option will have the interest or skill
to bear these responsibilities, so the regulation at Sec. 441.454(c)
notes that participants may use a FMS entity to perform some or all of
the employer and tax-related functions. We disagree that the regulation
should permit the State to require a participant to use an FMS entity
if that individual has selected the cash option and have not changed
the rule. The purpose of the self-directed service delivery model is to
vest participants with the choice and authority over decisions about
their PAS and budget purchases. Therefore, when participants who have
selected the cash option also choose to perform some or all of their
employer and tax-related functions, we intend for that decision to be
respected. Thereafter, if participants experience difficulty in
performing some or all of these functions, or no longer choose to
perform them, the regulation at Sec. 441.454(c) permits participants
to use the services of the FMS entity. We acknowledge that States who
have not yet built an infrastructure to support this self-directed
State plan option will likely experience an initial higher
administrative and cost burden, but again, the State is best suited to
make a determination on how best to expend its resources. Lastly, the
commenter misconstrues the link of needed hours of PAS to the wage/pay
needs of the provider. The regulation does not permit the wage/pay
needs of the provider of PAS to determine the wage/pay they will be
paid; rather, the participant determines the amount to be paid for a
service, support, or item.
Comment: One commenter requested guidance on whether the FMS
functions can be divided between a State and an FMS entity. Another
commenter asked that we delineate the fiscal responsibilities that a
participant who chooses the cash option may manage without the
involvement of an FMS entity, and those that the State or FMS must
retain, for example, disbursing the cash and monitoring spending.
Response: We believe these issues are best handled on a case-by-
case basis as we believe it is important that States have the
flexibility in the oversight of the functions it has delegated to an
FMS entity versus those it has retained.
Comment: One commenter requested more detail in the requirements
pertaining to the cash option.
Response: We believe the requirements for the cash option have been
adequately addressed in Sec. 441.454(c) of the regulation. We can work
to provide further technical guidance and assistance to States on a
case-by-case basis, as needed.
Comment: One commenter had concerns about how the IRS would treat
the cash received by a participant and asked if there is an IRS ruling
on the income tax consequences for participants who choose the cash
option.
Response: We are unaware of any IRS ruling regarding the cash
option under the self-directed PAS State plan option.
After consideration of the public comments received, we are
finalizing Sec. 441.454 with revision to provide examples of tax-
related responsibilities required by the IRS.
Voluntary Disenrollment/Involuntary Disenrollment (Sec. 441.456 and
Sec. 441.458)
In these provisions, we proposed that States must permit a
participant to voluntarily disenroll from the self-directed PAS option
at any time, and that States must specify the conditions under which a
participant may be involuntarily disenrolled from the self-directed PAS
option. We proposed that CMS must approve the State's conditions under
which a participant may be involuntarily disenrolled. In both
situations, we proposed that the State must specify in the State plan
the safeguards that are in place to ensure continuity of services
during the transition from self-directed PAS to the traditional service
delivery system.
Comment: Some commenters stated that States would not have the
ability to guarantee ``continuity of services during the transition
from self-directed PAS'' such that the rule needs to clarify that the
safeguards to ensure continuity of services belong in the section
1915(j) State plan amendment, and not in other parts of a State's plan;
and that States be required to have a ``transition period'' in the
State plan amendment.
Response: We continue to believe that States must have the
discretion and flexibility to design their own procedures to guarantee
the continuity of services when a participant voluntarily or
involuntarily disenrolls from the self-directed PAS State plan option.
We further believe States have the ability to guarantee ``continuity of
services during the transition from self-directed PAS.'' Accordingly,
we have not revised the regulations to provide a transition period as
the commenters suggested. However, we agree with the commenters that
the safeguards are better suited in the section 1915(j) State plan
amendment. Accordingly, we have revised the regulation at Sec.
441.456(b) and Sec. 441.458(c) to make the technical change that the
safeguards be listed in
[[Page 57863]]
the section 1915(j) State plan amendment and not other parts of a State
plan.
Comment: Some commenters suggested that participants receive
information about disenrollment at the time of enrollment and that
information about feasible alternatives and disenrollment should be
communicated in a manner that is clearly understandable by the
individual.
Response: We agree that individuals should receive information
about disenrollment at the time of enrollment and we believe that this
information would be best communicated as part of the initial
counseling that is provided to the individual. Accordingly, we have
revised the regulation at Sec. 441.464(d)(1) to require that a State
inform individuals about disenrollment at the time of counseling prior
to enrollment. We also agree with the comments that all information be
communicated to the individual in a manner and language understandable
by the individual. We have revised the regulations at Sec. 441.464(c)
and Sec. 441.464(d) to reflect this requirement. We believe that these
issues are better suited to the regulations at Sec. 441.464 as we
believe that areas such as information and effective communication are
more properly within the scope of the support system provisions at
Sec. 441.464, and thus have revised those regulations accordingly.
Comment: One commenter recommended that the rule be revised to
require that if a participant is dissatisfied with their FMS entity or
their ``agency with choice'' entity, that the State offer the
participant another entity to furnish these supports before
disenrolling a participant who seeks to voluntarily disenroll from the
self-directed PAS option.
Response: We believe decisions about whether to offer another
entity to a participant and the circumstances under which participants
may be disenrolled are best determined by each State when they design
their self-directed PAS State plan option. Accordingly, we have not
changed the regulation to require that a State offer a participant
another FMS or agency with choice entity if the participant becomes
dissatisfied with their current one. We do, however, encourage States
to design their self-directed PAS State plan option to optimize the
choice and authority participants will be able to exercise over their
needed supports.
Comment: One commenter suggested that we include protections for
workers in the rule at Sec. 441.458. Specifically, the commenter
recommended that the rule be revised to permit the State to
involuntarily disenroll a participant who is violating anti-
discrimination laws and other applicable federal or state labor laws
and regulations.
Response: We believe that issues about potential worker
discrimination or violations of labor laws and regulations are best
handled as part of the initial and ongoing information, counseling,
training, and assistance that are provided by the supports brokers or
consultants to the participants. We further believe that States could
make the determination whether potential worker discrimination or
violations of labor laws and regulations could be a condition of
disenrollment from the self-directed PAS State plan option. As we
believe that States are best suited to make this determination, we do
not believe it requires a revision to the regulations.
Comment: One commenter stated that States should not involuntarily
disenroll participants because of discomfort with the participant's
personal preferences. Also, the commenter suggested that the
participant be given an opportunity to rebut a decision of involuntary
disenrollment. Another commenter recommended that CMS revise the
regulations to clarify that States should not be allowed to
involuntarily disenroll a participant when that participant is fully
accessing services pursuant to the service plan and, as applicable,
complying with his risk management agreement.
Response: We agree that States should not disenroll a participant
based on discomfort with a participant's personal preferences, or when
a participant is fully accessing services pursuant to the service plan
and complying with any applicable risk management agreement. We will be
carefully reviewing the State's submission of the conditions for
involuntary disenrollment. We strongly encourage States to respect
participants' personal preferences and to afford participants their
dignity of risk. As stated previously, the concept of ``dignity of
risk'' recognizes that as individuals experience greater choice and
control, they may also desire to assume more of the responsibilities
and risks associated with the provision of their PAS. If a State has
concerns about participants' personal preferences or other risks
participants may wish to assume, we encourage States to use risk
mitigation strategies, such as the use of a risk agreement. A ``risk
agreement'' is an agreement entered into between the participant and
relevant and necessary parties. It identifies the risks that the
participant is willing to assume, the responsibilities that the
participant and others are willing to undertake to mitigate the
identified risks, and the circumstances that might cause the agreement
to be terminated. The risks that participants may assume and how to
mitigate them are subjects of discussion and negotiation as required in
the regulations at Sec. 441.476. We do not believe that the rule
requires further revision as suggested by the commenter since the
regulations at Sec. 441.476 adequately address risk management
requirements.
After consideration of the public comments received, we are
finalizing Sec. 441.456 and Sec. 441.458 with revision for a
technical change to specify that the safeguards for ensuring continuity
of services during the transition from self-directed PAS be listed in
the 1915(j) State Plan Amendment.
Participant Living Arrangements (Sec. 441.460)
In order to reflect the requirement at section 1915(j)(1) of the
Act, we proposed that self-directed PAS are not available to an
individual who resides in a home or property that is owned, operated,
or controlled by a provider of services who is not related to the
individual by blood or marriage. We proposed that States may specify
additional restrictions on a participant's living arrangements if they
have been approved by CMS.
Comment: A few commenters opposed the inclusion of assisted living
facilities (ALFs) within the requirement that self-directed PAS cannot
be provided in a home or property owned, operated, or controlled by a
provider of services who is unrelated by blood or marriage to the
individual. The commenters offered a variety of reasons that would
support how ALFs could successfully provide PAS. A few other commenters
noted that the limitation on living arrangements should not apply to
individuals who choose to live in the home of a non-related provider of
services, for example, a domestic partner or a friend, who is the paid
provider of their PAS. Some commenters stated that the rule should be
revised to clarify that an individual should not be precluded from the
self-directed PAS option unless they are living in arrangements where
the housing and the PAS are provided by the same individual or entity
and the PAS are part of the paid services. A commenter suggested that
we clarify that the prohibition would not apply to a landlord-tenant
relationship that meets local and State tenant laws; a housing provider
who co-signs a lease to allow an individual to secure affordable
housing; or a service provider's housing corporation that helps the
individual
[[Page 57864]]
secure housing, when the housing corporation has separate governance
from the service provider. A commenter thought that the requirement was
too restrictive and would preclude persons with severe disabilities who
need extensive support from the option to self-direct their PAS.
Response: The statute is very clear as to the type of living
arrangements that could be entered into under this self-directed PAS
State plan option. The living arrangements should optimize participant
independence, choice, and community integration and are intended to
mitigate the control that some providers of PAS could exert over
participants if participants lived in a setting owned, operated, or
controlled by the unrelated providers of PAS. The exception is if the
provider of PAS is related by blood or marriage to the participant
because it is presumed that providers of PAS related by blood or
marriage to the participant will not exert undue influence over the
participant and will facilitate, and not impede, the participant's
self-direction of the participant's PAS and budget.
In the proposed rule published on January 18, 2008, we noted that,
``programs that have successfully provided the self-directed care
option have typically provided it to individuals who live in homes of
their own or in the homes of their families.'' We also noted that we
believe that ``successfully directing one's own care may become less
feasible when individuals receive services and reside in large,
provider-owned, operated, or controlled residential living
arrangements.'' We provided an example of a residential facility that
also provides and receives payment for the provision of personal care
and related services that may prohibit the self-directed service
delivery option for fear of duplication of services. We further noted
that we believed this limitation should be applied to individuals
residing in ALFs, as we anticipated that the provider would both
control the housing and be expected to provide the PAS. However, we
noted that we did not believe this limitation would apply to situations
in which the individual resided in the home of another whom the
individual wished to employ under the self-directed PAS option. We are
now clarifying that any living arrangement, irrespective of the home-
like nature of the setting, that is owned, operated, or controlled by a
provider of the participant's PAS, not related by blood or marriage to
the participant, is not permitted by statute in the self-directed State
plan option. We agree with the commenters that stated that the
regulations should be revised to clarify that an individual should not
be precluded from the self-directed PAS option unless they are living
in arrangements where the housing and the PAS are both provided by the
same individual or entity and the PAS are part of the paid services. We
have revised the regulation at Sec. 441.460(a) to insert ``PAS''
before ``provider'', thereby indicating that the limitation only
applies where the living arrangement and the PAS are provided by one
and the same individual or entity. We further wish to clarify that when
we referenced the ``home of another'' in the proposed rule, we intended
that the home was controlled, operated, or owned by someone related by
blood or marriage to the participant and so we allowed this under the
exception to the statutory limitation.
Based on the comments we received pertaining to ALFs, we understand
that there are some ALFs that are not in the business of providing PAS.
Accordingly, we believe that where the living arrangements, including
ALFs, do not furnish PAS (as that term is defined under the self-
directed PAS State plan option), then the living arrangements may be
conducive to the participant's successful and effective self-direction
of their PAS and budgets. If a supports broker or consultant, the
State, or other person known to the participant, becomes aware that the
participant's exercise of choice over their PAS and budgets is hindered
because the nature of the living arrangement has changed, the living
arrangement begins to offer PAS, or other conditions arise making self-
direction of the participant's PAS overly difficult or impossible, then
the State must promptly rectify the situation by assisting the
participant to find other acceptable and safe housing.
Comment: A commenter recommended that we delete Sec. 441.460(b),
which permits States to specify additional restrictions on
participant's living arrangements if approved by CMS. The commenter
stated that this provision could possibly be used by States to overly
restrict self-directed PAS.
Response: We will be reviewing any State proposal further
restricting participant living arrangements to ensure all proposals
further enable the participant to engage in meaningful self-direction
of PAS and are not a restriction to self-directed PAS.
Based upon consideration of public comments received, we are
finalizing Sec. 441.460, with revision, to clarify the living
arrangement prohibition is for a living arrangement where the living
arrangement and a PAS provider are one and the same individual or
entity.
Statewideness, Comparability, and Limitations on Number Served (Sec.
441.462)
To reflect the requirements at section 1915(j)(3) of the Act, we
proposed that States may provide self-directed PAS without regard to
the requirements of statewideness, comparability of services, or the
number of individuals served.
Comment: Some commenters disagreed with CMS that the Medicaid
requirements for statewideness and comparability should be disregarded.
One commenter stated that States would not offer the self-direction
option to certain population groups that the State perceived as unable
to self-direct their PAS. Another commenter thought that to disregard
comparability and statewideness would unfairly disadvantage agencies
that have to meet stricter or more burdensome requirements. In
contrast, one commenter urged that we ``encourage'' or ``require''
States that have never implemented or had oversight for a self-directed
PAS program to first implement a program in a particular region and to
a particular population or both. Alternatively, the commenter
recommended that the number of people served should be limited.
Response: The regulation at Sec. 441.462 reflects the requirement
in section 1915(j)(3) of the Act that permits a State to provide self-
directed PAS without regard to statewideness, comparability of
services, or the number of individuals served. We believe that by
providing States this flexibility, States could allow for incremental
growth in offering self-directed PAS under the State plan option. As
States gain more experience, they can amend their State plans to allow
self-directed PAS statewide, to different populations and to more
individuals. We note Sec. 441.462 reflects the provisions of section
1915(j)(3) of the Act, and is not intended to disadvantage agencies
that provide traditionally delivered services or to adversely affect
certain population groups. We believe that all population groups can
successfully self-direct their PAS if they have the appropriate
information, counseling, training, and assistance they need.
Comment: A commenter sought clarification about the ``populations''
that could be targeted. Moreover, this commenter suggested we clarify
that the State may subject each population to its own enrollment cap
and specific eligibility criteria if the State so chooses.
[[Page 57865]]
Response: Section 1915(j)(1) of the Act sets forth the initial
eligibility criteria for participation in a self-directed PAS State
plan option. Specifically, section 1915(j)(1) requires that the self-
directed PAS State plan opportunity be available to individuals for
whom there has been a determination that, but for the provision of such
services, would require and receive State plan personal care services
or section 1915(c) waiver services. We believe that section 1915(j)(3),
regarding comparability, permits States to target persons who are
eligible for and receiving State plan personal care services or section
1915(c) waiver services. Section 1915(j) of the Act does not broaden or
narrow a State's definitions of the State's personal care services
benefit or section 1915(c) waiver services.
Comment: A commenter asked whether the services described in the
rule are mandatory under the early and periodic screening, diagnostic
and treatment (EPSDT) system.
Response: This rule implements section 1915(j) of the Act allowing
States the option to amend their State plans to offer individuals the
opportunity to self-direct their PAS. Therefore, Section 1915(j) of the
Act offers the self-directed service delivery model as an alternative
to traditionally delivered services. There are no new services that can
be self-directed; rather, participants are afforded the opportunity to
self-direct State plan personal care services and section 1915(c)
waiver services that they are already receiving. Accordingly, there is
no ``service'' under section 1905(a) of the Act that must be provided
under the EPSDT benefit.
After consideration of the public comments received, we are
finalizing Sec. 441.462 without revision.
State Assurances (Sec. 441.464)
We proposed to reflect the requirements at section 1915(j)(2) of
the Act that States must provide several assurances: (1) That necessary
safeguards have been taken to protect the health and welfare of
individuals furnished services under the program and the financial
accountability for funds expended for self-directed services; (2) that
States perform an evaluation of the need for personal care under the
State Plan or services under a section 1915(c) waiver program; (3) that
individuals who are likely to require personal care under the State
plan, or home and community-based services under a section 1915(c)
waiver program are informed of the feasible alternatives, when
available; (4) that States must provide a support system that meets
several delineated conditions; (5) that the State must provide to CMS
an annual report on the number of individuals served and the total
expenditures on their behalf in the aggregate; and (6) that the State
must provide to CMS an evaluation of the overall impact of the self-
directed PAS option on the health and welfare of participating
individuals compared to non-participants every 3 years.
Necessary Safeguards (Sec. 441.464(a))
Comment: A few commenters stated that the Federal and state level
of assurances should be the same between the self-directed and agency-
delivered models of service delivery. The commenters offered several
suggestions of safeguards that govern traditional agency-delivered
services that CMS should require in the rule governing the self-
directed PAS State plan option.
Response: We disagree that the regulations should be revised to add
the safeguards in the traditional agency-delivered service model
suggested by the commenters because we believe that the requirements
concerning needed safeguards are sufficient and adequately address the
concerns and needs in a self-directed service delivery model.
Furthermore, the self-directed service delivery model has been formally
evaluated in the ``Self-Determination'' and ``Cash & Counseling''
national projects and the regulatory requirements reflect the safeguard
analyses and conclusions made from those national projects. We believe
it is also important to note that States retain oversight and
monitoring functions and must fulfill the obligations in their QA/QI
plans to discover critical incidents and complaints and to subsequently
remediate them.
Comment: A commenter suggested that CMS add safeguards to protect
workers' rights, health, and safety.
Response: These issues are outside the scope of these regulations
as they do not extend to workers' rights, health, and safety.
Therefore, we are not revising the regulations as the commenter
suggested. However, as this self-directed PAS opportunity is a service
delivery model it is not intended to conflict with existing laws
governing workers' rights, health, or safety issues. We understand the
States and participants would comply with these laws and we encourage
States and participants to consider affording workers these kinds of
worker protections.
Comment: A commenter recommended that CMS establish a federally-
mandated resolution process that States would implement when problems
would arise between consumers and providers.
Response: We do not believe a mandated resolution process is either
necessary or appropriate because we believe existing safeguards are
sufficient to assist participants when problems arise between them and
their PAS providers. We encourage participants to seek out any needed
or desired training on how to be a better employer, or to consult with
their supports broker or consultant or a person of their choosing, when
there are employer-employee problems. There are also resources
available to assist in resolving these issues, such as voluntary
dispute resolution programs. If these types of programs exist in the
participant's community, and they may be of help, then we encourage
participants and workers to avail themselves of that opportunity if
they choose to do so. States may wish to consider providing such
information during the counseling session with participants prior to
their enrollment in the self-directed PAS State plan option.
Comment: A commenter stated that at Sec. 441.464(a), CMS should
add ``quality of life'' in addition to health and welfare for which
States must have necessary safeguards. The commenter further
recommended that we add a specific listing of safeguards related to the
health and welfare and the quality of life of participants to the
current list of financial safeguards.
Response: We believe that States may measure ``quality of life''
issues in the quality assurance and improvement plan as well as in the
three-year evaluation that the regulations require, if they choose to
do so. Therefore, while we do not believe that the regulations should
require ``quality of life'' safeguards, we do not prohibit States from
incorporating them into the design of their QA/QI plan or their three-
year evaluation. It should be noted that we will be issuing related
guidance on the requirement for the three-year evaluation of the impact
of the self-directed PAS option on the health and welfare of
participating individuals compared to non-participants. We believe that
States could measure and analyze ``quality of life'' issues such as
whether participants experienced greater independence, increased
community access, or were able to work. Therefore, we are not adopting
the commenter's suggestion to change the regulations as we think States
have the flexibility to design their QA/QI plans and their three-year
evaluations to consider ``quality of life'' issues.
[[Page 57866]]
Financial Accountability (Sec. 441.464(a))
Comment: One commenter stated that the language describing
necessary safeguards was too vague and would not assure financial
accountability. The commenter recommended program controls and controls
in the timekeeping system.
Response: We agree that there should be program controls and
controls in the timekeeping system, but we believe that States should
have flexibility to set up their own program controls and timekeeping
controls in order to meet the financial accountability requirements. We
believe that the oversight functions of the service budgets and
expenditures, required to be performed by the FMS entity, the supports
brokers and consultants, and States, should adequately address the
commenter's concerns by providing adequate financial accountability.
Comment: One commenter recommended that the amount of the budget
not be allocated on a monthly or quarterly basis as indicated in Sec.
441.464(a)(2)(iii) because it would be too rigid. The commenter
proposed that the regulation be revised to permit participants to plan
for periods of greater or lesser needed coverage ``during the State's
budget period.''
Response: We believe that prior planning for periods of greater or
lesser utilization and the ability of States to allocate funds
consistent with a participant's plan, during the State's budget period,
is already provided for in the regulation. The prefatory language at
section 441.464(a)(2) indicates that the listed safeguards, including
allocating the budget on a monthly or quarterly basis, are permissive,
not mandatory. Furthermore, we believe that the regulation at Sec.
441.470, concerning the service budget elements, further affords the
flexibility that the commenter desires. In Sec. 441.470, the service
budget must include procedures as to how the participants may adjust
the budget plan, including how the participant may freely make changes
to their budget plan and the circumstances, if any, that may require
prior approval before a budget plan adjustment is made.
Comment: Two commenters stated that abuse of funds could occur when
participants selected the cash option. The commenters recommended that
participants using the cash option be required to use a qualified
financial management entity; that participants and their PAS providers
are closely monitored to ensure that authorized services were actually
delivered and properly accounted for in timesheets; and, that CMS
develop criteria to ensure the financial accountability required,
including one set of national guidelines.
Response: At the core of the self-directed service delivery model
is participant ``choice and control'' over their services and budgets.
The ability of participants to choose to perform some or all of their
employer and tax-related responsibilities is in keeping with this
tenet. If a participant discovers that he is not interested in or able
to assume these responsibilities, then the participant may use the
service of the FMS entity. While we understand the commenters'
concerns, we believe that the requirements for the State assurances at
Sec. 441.464(a), and for the supports system at Sec. 441.454 and
Sec. 441.464(d) adequately address the commenters' concerns and
provide the requested financial accountability and oversight.
Comment: One commenter stated that although financial
accountability is important, States should not become overly
prescriptive about the ways in which individuals spend their budgets.
Response: We agree with the comment that flexibility in the budget
planning and spending should be encouraged by the State.
Evaluation of Need (Sec. 441.464(b))
We proposed that the State must perform an evaluation of the need
for personal care under the State plan or services under a section
1915(c) waiver program for certain individuals. We received no comments
on this proposal.
Notification of Feasible Alternatives (Sec. 441.464(c))
Comment: One commenter recommended that at the time feasible
alternatives are discussed, participants be given information about
agency-delivered or traditionally-delivered care and self-directed
care, including licensure and certification of agency or other entity
staff, required training and competency evaluation, criminal background
checks, and the ability to contact the agency or entity to request a
substitute caregiver if the initial caregiver does not show up.
Response: Section 1915(j)(2)(C) of the Act requires States to
provide an assurance that individuals who are likely to require
personal care under the State plan, or home and community-based
services under a section 1915(c) waiver program, are informed of the
feasible alternatives, where available, to self-directed PAS. The
information on feasible alternatives would include information about
agency-delivered or traditionally-delivered services. Furthermore, most
participants will already be familiar with the agency-delivered or
traditionally-delivered services because most will have been receiving
them under their State plan personal care benefit or a section 1915(c)
waiver program. Section 441.464(d), which implements this statutory
provision, provides a listing of information that must be provided to
participants. We believe the kind of information noted by the commenter
is included in the regulation as it states that individuals must be
given necessary information about self-direction, their
responsibilities and potential liabilities, the choice to receive
section 1915(c) waiver services regardless of delivery system, and the
option to receive and manage the cash amount of their budget
allocation.
Support System (Sec. 441.464(d))
Comment: One commenter suggested that the support system for
management of funds should include check-writing and accounting as part
of the training to those who wish to receive the cash option and manage
their own allocation.
Response: The extent and type of training needed or desired by a
participant will vary depending upon the individual. We anticipate that
participants will request any needed or desired training for management
of funds, or that their representatives, supports brokers, or
consultants will request this training including training along the
lines as that noted by the commenter. We also anticipate that the State
will offer the additional training that is desired or needed.
Comment: One commenter noted that the proposed regulations lacked a
practical plan to operationalize the ``freedom of choice of providers''
requirement and asked that this requirement be clarified.
Response: We believe the requirement to allow participants the
freedom to choose their PAS providers will be operationalized when
participants hire the person of their choosing to provide their PAS.
However, as indicated by the commenter, the intent of the requirement
is to allow participants freedom to choose their PAS providers and to
clarify this requirement, we are revising the regulations text at Sec.
441.464(d)(2)(vii) to now read, ``freely choose from available PAS
providers.''
Comment: One commenter recommended that the regulation be revised
at Sec. 441.464(d) to acknowledge that those participants with
progressive dementias will need increasing support, as will their
representatives or caregivers.
Response: We believe it is not necessary to revise the regulation
to indicate that persons with dementia will
[[Page 57867]]
require increasing support as their condition worsens. Section
441.464(d)(3) already requires ongoing support throughout the period
that a participant is self-directing their PAS under this option.
Consequently, support for any worsening condition, like dementia, is
contemplated under the regulations at Sec. 441.464(d)(3).
Comment: One commenter urged that CMS ``encourage'' States to
contract with or otherwise delegate certain responsibilities to
organizations that are privately accredited to perform the supports
broker or consultant function and financial management services
functions.
Response: We believe that States are free to contract with entities
to perform the required supports broker or consultant and FMS
functions, provided these entities have demonstrated knowledge and
skill in implementing the requirements of the self-directed PAS State
plan option and that the entities meet State requirements for
furnishing these support functions.
Comment: One commenter recommended that CMS clarify that States or
local governments do not have to actually provide the training needed
by participants, but may instead delegate the needed supports,
services, and training (through contractual means) to other entities,
including providers.
Response: We agree as it provides States with greater flexibility
to manage this option and conforms to current practice with other
services. Accordingly, we revised Sec. 441.464(d) to indicate that,
``States must provide, or arrange for the provision of, a support
system that meets the following conditions.''
Comment: Another commenter stated that participants would possibly
hesitate to complain about their workers for fear of retaliation.
Accordingly, the commenter recommended that participants have direct
access to an advocate.
Response: We agree that participants should have access to an
advocate or advocacy organization and we have revised the rule at Sec.
441.464(d)(2) (Support system) to add a new subsection (xv) that
requires that participants be given information about the advocate or
advocacy system in the State and how to contact the advocate or
advocacy system. In the ``Cash & Counseling'' and Independence Plus
programs, we required that an independent advocate or advocacy system
be available to participants as part of the State's support system. The
independent advocate or advocacy system would not have to be newly
created by the State, but could possibly include the State's Protection
and Advocacy System, the State and Local Long-Term Care Ombudsman
Program, or any other existing advocate or advocacy system within the
State's aging and disability networks. This requirement to inform
participants of this right would not absolve States of their obligation
to discover and investigate critical incidents and complaints that
participants and others report, nor would it supplant the State's
requirements to investigate complaints of abuse, neglect, or
exploitation made to their protective services agencies. Moreover, the
purpose of the support system is to assist participants in effectively
managing their service plans and budgets. Accordingly, the supports
broker should be assisting the participant in learning how to be an
effective employer, including how to discharge a worker, if necessary.
Annual Report and Evaluation of Impact (Sec. Sec. 441.464(e) and
441.464(f))
Comment: We invited comments on the requirements and structure of
the annual report required in the rule at section 441.464(e).
Commenters suggested that a varying spectrum of information be included
in the annual report. Commenters suggested that the following
information be included:
The number of individuals self-directing.
The units of service they received.
The expenditures for persons receiving self-directed
services, agency-delivered/traditionally-delivered services and those
receiving a mix of modes.
The number of participants with representatives helping
them.
The number of participants who are directing the State
plan personal care services benefit.
The number of participants who are directing section
1915(c) home and community-based services, and type of waiver.
The average per-participant spending (by eligibility)
category for those who direct their services and those who receive
agency-delivered or traditionally-delivered services.
The services and items used by those self-directing and
those who receive agency-delivered or traditionally-delivered services.
Whether LLRs are permitted to be paid providers.
Whether the State allows the purchase of items that
increase independence.
Whether the State allows the delivery of services in
alternative living arrangements.
The number of individuals who expressed interest in the
option, but were denied, and the reason for the denial.
The number who voluntarily disenrolled and the reasons for
the disenrollment.
The number who were involuntarily disenrolled and the
reasons for the disenrollment.
The number of fiscal intermediaries.
The number of providers.
A summary of critical events reported by participants.
As to the structure of the report itself, other commenters made the
following suggestions:
The Secretary should make the annual reports available to
the public.
CMS should closely monitor the costs associated with the
self-directed service delivery model.
Response: We appreciate the ideas that commenters submitted for the
annual report requirements. We will carefully consider these comments
as we develop guidance on the structure and criteria of the annual
report.
Comment: One commenter stated that the reporting requirements for
the annual report were burdensome and overly broad.
Response: As we noted that specific guidance about the annual
report requirements will be forthcoming, it is unclear what
requirements the commenter was referring to. However, we will take the
commenter's perspective into consideration as we develop our guidance
and will try to impose as little burden on the States as possible.
Comment: We invited comments on the requirements of what should be
included in the three-year evaluation required in Sec. 441.464(f). Two
commenters had the following suggestions:
The evaluation should separately address the experiences
of those with and without cognitive impairments.
The evaluation should address issues of quality of life of
participants, family caregiver burdens and comparisons of the
individuals with and without cognitive impairments.
The evaluation should assess the effectiveness of the
self-directed PAS option, especially for populations with cognitive
impairments.
Another commenter suggested CMS streamline any evaluation requirements
in our future guidance, given that the efficacy of consumer-directed
services has been evaluated through the cash and counseling
demonstration projects.
Response: We thank the commenters for their input and we will take
these
[[Page 57868]]
recommendations under consideration as we develop guidance on the
structure and implementation of the evaluation.
Comment: One commenter asked that CMS clarify what was meant by
``overall impact'' of the self-directed PAS on the health and welfare
of participating individuals compared to non-participants.
Response: We do not expect that States will need to conduct a
``scientific'' research study and evaluation as was done in the
national projects. We anticipate that our guidance will include minimum
criteria that will form the basis of what we expect States to evaluate.
We also anticipate that the guidance will include insight into the
numbers of participants versus non-participants to be evaluated.
After consideration of the public comments received, we are
finalizing Sec. 441.464, with revision, to clarify that participants
may freely choose from available PAS providers, that the State may
provide under arrangement, the provision of support services, and that
the State must provide information about advocates and the advocacy
system in the State and how to access them. As explained in response to
a prior comment, we also note changes were made to indicate that
information provided to individuals and participants be communicated in
a manner and language understood by the individual and participant and
that the support system includes counseling about disenrollment, prior
to when an individual enrolls.
Assessment of Need (Sec. 441.466)
We proposed that States must conduct an assessment of the
participant's needs, strengths, and preferences and indicated that the
assessment information is crucial as it supports the determination that
an individual requires PAS and also supports the development of the
service plan and budget.
Comment: Some commenters offered various suggestions on specifics
for the assessment of need, including that it be standardized;
performed by registered nurses or trained medical personnel; based on a
prescribed scale; use a national standard to assess the amount of
assistance needed; and that States be given latitude to develop their
own assessment criteria and to use their existing assessment tools.
Another commenter stated that the assessment was more burdensome than
it needed to be. One commenter stated that CMS should amend the
definition of ``assessment of need'' regulations at Sec. 441.450(c)
and the assessment requirements at Sec. 441.466 to specifically add
that an individual's cognitive function and mental health conditions
must be assessed, where indicated, including the individual's need for
``cueing'' or supervision.
Response: Section 441.466 requires the assessment of need but does
not specify the type of personnel that should perform the assessment.
We agree that appropriately trained medical personnel should be trained
and available, if an individual's condition warrants a need for
assessment. We also believe that assessing personnel should be trained
in the person-centered planning and directed process and person-
centered services, or be accompanied by someone who is trained in these
areas. While we have not specified the instruments or techniques that
should be used to secure the required information in Sec. 441.466(a),
information about the individual's health condition and functional
limitations must be included in the assessment. This should include
information about cognitive function and other health information.
Moreover, States have been given latitude to develop their own
assessment criteria and tool, and we expect that States will use that
latitude to perform the assessment of all of the individual's physical,
cognitive mental health, and functional needs, as required, in order to
fulfill the overall purpose of the assessment which is to obtain
information ``relevant to the need for and authorization and provision
of services.'' Given the importance of the assessment in light of the
role it plays in self-directed PAS under this option, we do not believe
that the listed information is burdensome to either assess or secure.
Comment: Two commenters recommended that CMS require that the
assessment determine whether an individual is capable of directing his
own care and that an individual's ability to manage his own care must
be established. The commenters suggested that the rule include minimum
processes to screen out individuals incapable of directing their own
care or who would require specialized medical treatments.
Response: As we interpret the commenter's statements, it appears
they are suggesting individuals should not be given the opportunity to
self-direct their PAS under this option simply because they may need or
desire supports to effectively manage their PAS and budgets. We
disagree with the commenters that exclusionary criteria should be used
to ``screen out'' participants. Individuals of different ages and
various impairments and skill levels have successfully directed their
PAS when given the supports they need or desire. However, the
assessment of needs, strengths, and preferences can be considered in
determining the extent to which supports may be needed or desired.
Comment: Two commenters stated that CMS should revise Sec. Sec.
441.466 and 441.468 to include in the assessment and the service plan,
respectively, a requirement to identify potential caregivers and to
assess their willingness and capacity to provide care to individuals.
Additionally, the commenters stated that the service plan should not
include hours of unpaid care.
Response: We believe that the assessment of need should take into
consideration an assessment of the individual's environment, including
the presence or absence of unpaid care and is one of the factors
relevant to the need for authorization and provision of services.
However, we do not believe that the regulations should be revised to
require this, and leave this determination to the States. We do not
believe that the specifics of any unpaid care need to be included in
the resultant service plan.
Comment: One commenter sought clarification on how States can bill
for an assessment before a participant's entry into the program.
Response: Individuals who will be permitted the opportunity to
self-direct their PAS under this new State plan option will already be
Medicaid-eligible beneficiaries. Therefore, the assessment for self-
directed PAS under this new State plan option can be properly claimed
by the State.
Comment: One commenter sought clarification on how the ``assessment
of need'' differs from or relates to the ``evaluation of need.''
Response: Section 1915(j)(2)(B) of the Act requires ``an evaluation
of the need'' for personal care under the State plan or personal
services under a section 1915(c) home and community-based services
waiver program. Section 1915(j)(5) of the Act requires that States
conduct an ``assessment'' of participants' needs, strengths, and
preferences for self-directed PAS. Section 1915(j)(2)(B) is intended to
evaluate an individual's need, generally, for personal care services or
section 1915(c) waiver services. The ``assessment of need'' determines
the specific needs, strengths and preferences of individuals in order
to self-direct their PAS under this State plan option.
After consideration of the public comments received, we are
finalizing Sec. 441.466 without revision.
[[Page 57869]]
Service Plan Elements (Sec. 441.468)
We proposed minimum requirements that would be included in a
service plan. We further proposed that the service plan must be
developed using a person-centered and directed planning process. We
also proposed that the State's applicable policies and procedures
associated with service plan development be carried out and listed a
minimum set of criteria that must be included in the State's policies
and procedures. Furthermore, we proposed that if an entity that
provides other State plan services is responsible for service plan
development, the State must describe the safeguards that are in place
to ensure that the service provider's role in the planning process is
fully disclosed to the participant, and that controls are in place to
avoid any possible conflict of interest. Finally, we proposed that the
approved service plan conveys authority to participants to perform
certain minimum tasks including recruiting and hiring their workers and
determining the amount paid for a service, support, or item.
Comment: Two commenters suggested that CMS explicitly require that
the participant be allowed to determine the wages paid to their
providers of PAS. However, other commenters disagreed that a
participant should determine the amount paid for a service, support, or
item. One commenter noted that such a requirement conflicts with the
commenter's State law that ``regulates county wages for PAS.'' Another
commenter noted that such a requirement would limit a State's ability
to establish a minimum wage standard for personal care workers or to
mandate a wage increase for personal care workers. A third commenter
noted that the requirement appears to be in conflict with the
collective bargaining agreement in the commenter's State between the
State and unions representing workers. The commenter noted that
``individual providers are unionized and the rates of pay and benefits
for PAS are established through a collective bargaining process.'' The
commenter asked CMS to clarify that a participant could determine the
portion of the budget that goes to PAS, but that the collective
bargaining agreement would govern the wage and benefit package for
individual or agency PAS providers. Another commenter stated that
applicable State or Federal minimum wage requirements should continue
to apply.
Response: We believe that the statute requires participants to
exercise control over the service plan and budget and that includes
determining the amount paid for services, supports, or items. Section
1915(j)(5)of the Act vests participants with decision-making authority
over their service plans and budgets. The regulations at Sec.
441.450(b) and Sec. 441.468(e) implementing section 1915(j)(5)of the
Act specifically grant participants the authority to hire, fire,
supervise, and manage their workers, and to determine the amount paid
for a service, support, or item. We do not believe that State laws or
collective bargaining agreements should hinder the ability of
participants to determine the amount they pay their workers. As this
self-directed PAS opportunity is a service delivery model it is not
intended to conflict with existing laws governing these issues. We
understand the States and participants would comply with these laws and
collective bargaining agreements and that support and education, as
needed, would be furnished to participants to inform them of any
necessary requirements.
Comment: One commenter stated that the rule should be revised to
specifically allow a participant to request revisions to the service
plan, based on a change in needs.
Response: We agree with the commenter and have revised the rule at
Sec. 441.468(c) to add a new subsection (8) to ``[e]nsure that a
participant may request revisions to a service plan, based on a change
in needs or health status.''
Comment: One commenter requested clarification of the language at
Sec. 441.468(c)(6) that those responsible for service plan development
``reflect the nature of the program's target population.''
Response: We were concerned that individuals developing the service
plan have the necessary background to adequately develop a service plan
for the person self-directing their PAS. In particular, individuals
with the ``lead'' responsibility for service plan development should
have knowledge about the population that will be self-directing their
PAS under this State plan option. In keeping with the overall focus of
a service plan, we also believe that those responsible for service plan
development have demonstrated skill to facilitate person-centered and
directed planning and to include person-centered services in the
service plan.
Comment: One commenter suggested that CMS add ``cognitive status''
after ``health status'' in the regulation at Sec. 441.468(c)(7).
Response: We believe that the term ``health status'' encompasses
any physical, cognitive, mental health, behavioral, or functional
change observed or discovered that would necessitate a reassessment
more often than annually, and therefore have not revised the
regulation.
Comment: One commenter requested that we revise the rule at Sec.
441.468(c) to clarify that States may delegate the reassessment of the
need for PAS to a sub-unit of government as long as the State sets
guidelines, exercises oversight, and performs quality assurance and
improvement activities over these sub-units.
Response: We agree with the comment but do not believe it requires
a revision in the regulations. States may delegate the reassessment of
the need for PAS to an agency or sub-unit of government, provided the
State retains all necessary administrative and monitoring oversight of
the entity that performs reassessments for the State. We believe this
will provide the State with the administrative option currently found
in the provision of other Medicaid services.
Comment: One commenter noted that a verb is missing from section
441.468(c)(2) and should be inserted.
Response: We have revised the rule to make this technical
correction.
Comment: One commenter suggested that the rule ``include that the
older adult and person with disabilities have a choice of all the
provider types available.''
Response: This new State plan option permits States the option to
amend their State plans to offer individuals the opportunity to self-
direct their PAS. As eligible individuals may include older adults and
persons with disabilities, we do not believe a regulation change is
necessary. Moreover, these individuals are free to choose to self-
direct their PAS under the section 1915(j) State plan option or to
remain with a traditional service delivery model. Individuals who do
not wish to self-direct their PAS under this State plan option may
consider other models of care available to them and for which they are
eligible, such as the Program of All Inclusive Care for the Elderly
(PACE). As required by both statute and regulations, a State's feasible
alternatives, if applicable, should be discussed with individuals
before they enroll in this new State plan option.
After consideration of public comments received, we are finalizing
Sec. 441.468, with revision, to correct a technical error and to
provide that participants may request a change to the service plan, as
needed.
Service Budget Elements (Sec. 441.470)
We proposed that a service budget must be developed and approved by
the State based on the assessment of need and service plan. We also
proposed
[[Page 57870]]
certain budget elements that govern the service budgets, including that
the participants have knowledge about the specific dollar amount
available for their PAS; how they may adjust the budget plan; the
procedures that govern how a person, at the election of the State, may
reserve funds to purchase items that increase independence or
substitute for human assistance; how a person may use a discretionary
amount, if applicable, to purchase items not otherwise delineated in
the budget; and how participants are afforded the opportunity to
request a fair hearing if a participant's request for a budget
adjustment is denied or the amount of the budget is reduced.
Comment: One commenter thought that we needed to provide more
detail on the steps used in developing the service budget. The
commenter was also concerned that some States may ``discount'' a
participant's service budget as a cost-cutting tool. The commenter
stated that it could result in inadequate provision of services.
Response: We believe that the regulations at Sec. Sec. 441.450 and
441.470 provide ample detail and give sufficient guidance in the
development of service budgets and no further detail is necessary.
There are numerous resources that can provide further guidance to
States in the development of service budgets and we are available to
provide technical assistance if necessary. We agree with the comment
that a person's budget should not be ``discounted'' in order for a
State to cut costs and do not believe that it would be proper for
States to do so.
Comment: One commenter recommended that each State be required to
develop a methodology for the timely recoupment of unused funds and
that these funds be used for the self-directed PAS option.
Response: We believe that it is important for States to have a
procedure to timely recoup unused funds. We believe that Sec.
441.464(a), that requires States to assure the financial accountability
of funds expended under this State plan option, would encompass the
recoupment of unused funds. Accordingly, we are not adopting the
commenter's suggestion.
Comment: Two commenters suggested that CMS add the language,
``earmarked for savings,'' to the regulations text at Sec. 441.470(e)
to permit individuals to use a discretionary amount of their budget to
purchase items not otherwise delineated in the budget plan or
``earmarked for savings,'' since that is the language we used in the
preamble.
Response: We agree and have revised the regulation at Sec.
441.470(e) to indicate that the discretionary amount could be used to
purchase items not otherwise delineated in the budget plan or
``reserved for permissible purchases.'' We believe the phrase
``reserved for permissible purchases'' better reflects this concept
rather than ``earmarked for savings'' because permissible purchases,
under this self-directed PAS State plan option, are those supports,
goods, equipment, or supplies that increase independence or substitute
for human assistance, and are purchased with the amount of funds that a
participant is able to save or ``reserve''.
Comment: One commenter suggested that we eliminate the requirements
in the regulation at Sec. 441.470(a) and (b) with regard to informing
the participant of the amount of the budget and conveying that
information before the service plan is finalized.
Response: We disagree with the commenter. The requirement in Sec.
441.470(a) that participants be informed of the ``specific dollar
amount a participant may utilize for services and supports'' is crucial
so that the participant, with assistance as needed or desired, can
develop a service plan and budget plan that properly reflects the
participant's needs, and the way in which any reserve or discretionary
funds, if permitted by the State, will be budgeted. Section 441.470(b)
is a requirement that describes only that the participant will be told,
at the time the service plan is developed, how the participant will
learn of the service budget amount, once it is determined. The
requirement was not meant to prescribe a particular process.
Comment: One commenter requested clarification on whether an
individual could purchase services that are not currently covered
within the State plan's definition of personal care services such as
supervision and cueing.
Response: When a State offers the opportunity to self-direct State
plan PAS, we do not believe it would be permissible for participants to
purchase services that are not included within the State's definition
of their PCS benefit. However, the statute and regulations at Sec.
441.470(d) allow a State, at the State's election, to offer
participants the opportunity to reserve funds to purchase items that
increase independence or substitute for human assistance, to the extent
that expenditures would otherwise be made for the human assistance,
including additional goods, supports, services, or supplies. If this
option is offered by the State, we believe that a participant can
purchase goods, supports, services, or supplies that are not included
within the definition of the State's PCS benefit.
Comment: A commenter requested clarification on how States are
supposed to review and approve the service budgets of PAS participants
when the participants are free to determine the amount they will be
spending for goods and services.
Response: Under the self-directed service delivery model,
individuals determine the rate or amount paid for their services,
supports, and items. Moreover, while individuals direct the decisions
about the purchases to be made with their service budget, they are
still responsible for remaining within the budgeted amount noted in
their budget plan. To clarify, we intended that States review and
approve the budget plan to ensure that the budget plan is not exceeding
the budget amount, that the participant's budget plan is in keeping
with the assessment of need and the identified needs in the service
plan, and because we believe it is an important step to ensure the
financial integrity of the self-directed State plan option.
Upon consideration of the public comments received, we are
finalizing Sec. 441.470, with revision for a technical change and to
note that the service budget may include a discretionary amount, if
applicable, to purchase items not otherwise delineated in the budget or
reserved for permissible purchases.
Budget Methodology (Sec. 441.472)
We proposed that the State's budget methodology to determine a
participant's service budget meet certain criteria and generally
tracked the statute at section 1915(j)(5)(D). We also proposed that the
State have procedures in place to safeguard participants when the
budgeted amount is insufficient to meet a participant's needs. We also
proposed that the State have a method of notifying participants of the
amount of any limit that applies to a participant's self-directed PAS
and supports. We also proposed that the budget may not restrict access
to other medically necessary care and services furnished under the plan
and approved by the State but not included in the budget.
Comment: One commenter requested that CMS clarify what is intended
by the requirement, ``The State's method includes a calculation of the
expected cost of the self-directed PAS and supports, if those services
and supports were not self-directed.''
Response: As persons eligible for self-directed PAS must already be
eligible for and receiving the optional State plan personal care
services benefit or services in a section 1915(c) waiver, the amount of
the funds available to a participant
[[Page 57871]]
for their self-directed PAS ``budget'' is not to exceed the amount that
the State would pay for the services and supports if those services and
supports were provided under the traditional service delivery model.
Comment: Several commenters requested that CMS clarify what is
meant when States are required to have a procedure to safeguard
participants when budgeted service amounts are insufficient to meet
participants' needs. One commenter asked whether the procedures to
safeguard participants included the following: Appeal rights to
challenge benefit levels that participants perceived to be inadequate;
institutionalization; additional financial resources when a participant
states that the funds or services are insufficient; or whether CMS
expects participants to forego needed services. One commenter suggested
that we revise the regulation at Sec. 441.472 to indicate that service
budget increases may be appropriate when it can be shown that some
change in a participant's medical condition, functional status, or
living arrangement requires it.
Response: It is important to note that at any time a reassessment
is performed, ultimate decision-making authority for the amount of
services authorized rests with the State, according to the State's
medical necessity criteria applied against an individual's assessed
needs. Therefore, we have revised Sec. 441.472(a) to indicate that the
budget methodology is established by the State in such a way as to
ensure the State's role in service authorization. Section 441.470(f)
permits participants to request a fair hearing if a participant's
request for a budget adjustment is denied or the amount of the budget
is reduced. We believe that this section will encompass a situation
where a participant perceives that the amount of the service budget is
inadequate to meet the participant's needs. However, the preferred
process in such a situation would be for a discussion to initially
occur between the participant, the participant's representative, if
any, the supports broker or consultant or other members of the service
planning team to explore an informal resolution to the participant's
concern. We believe that a reassessment of the participant's need for
PAS may be a proper solution to the participant's concern. We do not
necessarily agree with the other alternatives mentioned by the
commenters. Institutionalization is not an acceptable option in this
case, as the intent of the section 1915(j) provision is to avoid
institutionalization by strengthening supports to individuals. We also
do not support any process where participants forego needed services;
rather, we would expect that the PAS provider, the representative, if
any, the FMS entity or the supports broker or consultant would discover
whether a reassessment is indicated and report this information to the
State. As noted by the commenter, because reassessment is an
appropriate step when the participant or representative, if any, feels
the budgeted service amount is insufficient to meet a participant's
needs, we have revised Sec. 441.472 to add a new subsection (e) to
indicate that a State must have a procedure to adjust a budget when a
reassessment indicates a change in the participant's medical condition,
functional status, or living situation.
Comment: One commenter recommended that we delete the word
``medically'' from the language in the rule at Sec. 441.472(d). The
commenter was concerned that the word ``medically'' would restrict a
participant to the receipt of care or services related solely to a
participant's medical condition or disease.
Response: Section 441.472(d) reflects the statutory language which
states that, ``The budget may not restrict access to other medically
necessary care and services furnished under the plan and approved by
the State but not included in the budget.'' Moreover, we believe that
the term ``medically necessary'' is a commonly recognized term of art
that encompasses all the services, supplies, or equipment that a State
includes under its State plan, waiver, or other Medicaid programs, and
for which an eligible individual has been determined to need.
Comment: One commenter recommended that the rule include an
incentive system for payment to the counseling and fiscal agencies.
Specifically, the commenter recommended that a higher, one-time payment
be made to the counseling or FMS entity when an individual has selected
the option, followed by a one-time payment when the spending plan is
developed, and finally, by a monthly fee after the individual receives
the budget allowance.
Response: We believe that States should design the approach for
payment to FMS entities in a manner that comports best with the State's
fiscal processes and procedures.
Comment: One commenter indicated that there are insufficient
standards in the rule to ensure that budgets will not be arbitrarily
reduced for participants who self-direct their PAS. The commenter
further suggests that States should not assume that all participants
will be able to secure services at a lower cost than through the
traditional service delivery model.
Response: We believe that there are sufficient standards in the
regulations to ensure that budgets will not be arbitrarily reduced. The
regulations require that the budget methodology be consistently applied
to participants and that the budgeted amount be based on the assessment
of the participant's needs, strengths, and preferences and the service
plan. We believe that all these are safeguards against participants'
budgets being arbitrarily reduced.
Comment: One commenter questioned the need for a budget methodology
if participants are free to purchase what they need outside of any
State-imposed pricing methodology. The commenter further noted that it
seemed inappropriate to claim that participants would be free to
determine the pay rate for their providers of PAS when they have no
control over the total budget amount.
Response: We believe the commenter has confused the budget
methodology with the ability of the participant to determine the amount
paid for a service, support, or item. To clarify, among other things,
the budget methodology is for the purpose of ensuring that the budget
allocation for all participants is objective; evidenced based; utilizes
valid, reliable cost data; is applied consistently to participants; is
open to public inspection; and, includes a calculation of the expected
cost of the self-directed PAS and supports, if those services and
supports were not self-directed. Under the traditional service delivery
model, the amount that the State has budgeted for an individual is
based on these same factors. The only difference is that the
participant in this self-directed model is directing how that amount
will be used to purchase the services, supports, or items to meet his
or her needs.
Upon consideration of the public comments received, we are
finalizing Sec. 441.472, with revision, to indicate that the budget
methodology is established by the State in such a way as to ensure the
State's role in service authorization, and to require the State to have
a procedure to adjust a budget when a reassessment occurs and
necessitates a change.
Quality Assurance and Improvement Plan (Sec. 441.474)
We proposed that the State must provide a quality assurance and
improvement plan that describes the State's system of how it will
perform activities of discovery, remediation, and quality improvement
for self-directed
[[Page 57872]]
PAS. We proposed that the quality assurance and improvement plan
describe the system performance measures, outcome measures, and
satisfaction measures that the State must use to monitor and evaluate
the self-directed State plan option.
Comment: One commenter suggested that we require the State to
create a log of all critical events reported by participants.
Response: We do not accept the commenter's suggestion because we
believe that the State would already be required to track the critical
incidents reported by participants as part of the State's quality
assurance and improvement (QA/QI) plan under Sec. 441.474. Section
441.474 requires a State to have a QA/QI plan that includes a system to
discover critical incidents or events that may pose harm to
participants. Under such a system, critical incidents or events
reported by participants must be tracked, and the results analyzed and
evaluated, so that quality improvements that are needed to ensure
participant health and welfare are continuously made under the self-
directed PAS option.
Comment: One commenter indicated that State plans must address how
the State will monitor quality for those with progressive, degenerative
diseases (for example, Alzheimer's disease), developmental
disabilities, or mental health conditions. The commenter stated that
special attention to the experiences of those with cognitive
impairments is critically important in a program that relies on
participants to manage their own services.
Response: We agree that a State's QA/QI plan should take into
consideration the changing needs of particular populations that are
self-directing their PAS under this option. For example, a QA/QI plan
could include adjustments for more frequent phone or face-to-face
monitoring if the participants' conditions change. However, we do not
believe a change to the regulation is necessary as we will evaluate a
State's QA/QI plan during the review of the section 1915(j) State plan
application.
Comment: Some commenters suggested specific performance, outcome
and satisfaction measures be added as requirements for the QA/QI plan.
Response: We appreciate the commenters' input. Section 441.474
already requires that the QA/QI plan describe the system performance
measures, outcome measures, and satisfaction measures that the State
must use to monitor and evaluate the self-directed State plan option.
We believe requiring certain measures and indicators at this time may
be premature as we currently have an initiative underway to evaluate
whether certain quality measures and indicators should apply to all
Medicaid programs. To assist us in determining which quality measures
and indicators are generally being used in Medicaid, we are revising
Sec. 441.474(b) to indicate that quality of care measures must be made
available to CMS upon request. Moreover, if we do identify such quality
measures, we may wish to apply them to the self-directed PAS State plan
option. In light of this possibility, we have revised Sec. 441.474(b)
to clarify that quality of care measures must be made available to CMS
upon request and note that the QA/QI plan must include indicators
approved or prescribed by the Secretary.
Comment: One commenter recommended that CMS revise the regulations
to reflect the statutory language which requires only ``appropriate
quality assurance and risk management techniques'' instead of the
current requirements for a quality assurance and improvement plan and
the system performance measures, outcome measures, and satisfaction
measures.
Response: We do not agree with the commenter. Section 1915(j)(5)(E)
of the Act requires States to provide appropriate quality assurance
techniques to establish and implement the PAS service plan and budget.
As we stated in the proposed regulation, such techniques must recognize
the roles and responsibilities in obtaining services in a self-directed
manner and assure the appropriateness of such plan and budget based
upon the participant's resources and capabilities. For approximately 30
years, we have witnessed an increasing number of Medicaid recipients
who want to move into or remain in the community in order to receive
community-based care and services. Simultaneously, we have seen the
growth in the number of individuals who want to self-direct their
community-based care and services. States face the challenge of how to
ensure each participant's health and welfare while also respecting
individual autonomy and choice. We believe that this challenge can be
met with an effective QA/QI plan that incorporates performance of
discovery, remediation, and quality improvement activities and includes
system performance measures, outcome measures, and satisfaction
measures. Accordingly, we believe that the appropriate techniques must
reflect, at a minimum, the need for discovery, remediation, and quality
improvement activities and system performance measures, outcome
measures, and satisfaction measures as noted in the regulations at
Sec. 441.474(a) and (b).
Comment: One commenter recommended that we require a broad backup
plan to account for situations where budgeted funds are prematurely
depleted. Additionally, the commenter recommended a reassessment of an
individual's ability to participate in the State plan option if the
budget plan is not being followed.
Response: We believe that by ``broad backup plan'', the commenter
means that we should require States to have a ``template'' prepared in
advance that would address what to do in situations where budgeted
funds are prematurely depleted. We disagree with the commenter because
we believe that a backup plan should be individualized and tailored to
a participant's identified critical contingencies or incidents that
would pose a risk of harm to the participant's health or welfare. As
stated previously, there are several options that a State may employ to
safeguard participants who have prematurely spent the funds in their
service budgets, such as the provision of additional information or
counseling on budgeting. Moreover, a reassessment of an individual's
ability to self-direct their PAS if the budget plan is not being
followed, may not be appropriate in all situations. Again, it would
depend on whether additional information or training has helped the
participant to stay within the budget restrictions. However, we agree
with the commenter insofar as a change in the participant's health
status may be the cause of the participant's inability to stay within
budget restrictions. As we noted previously in response to a prior
comment, in such a situation, a reassessment of the participant's
health status would be appropriate.
After consideration of public comments received, we are finalizing
Sec. 441.474, with revision, to require that quality measures be
available to CMS upon request and include indicators approved or
prescribed by the Secretary.
Risk Management (Sec. 441.476)
We proposed that the State must specify the risk assessment methods
it uses to identify potential risks to the participant and the tools or
instruments it uses to mitigate identified risks. We further proposed
that the State must ensure that each service plan includes the risks
that an individual is willing and able to assume, and the plan for how
identified risks will be mitigated. Finally, we proposed that the State
must ensure that the risk management plan is the result of discussion
and negotiation among the persons designated by the
[[Page 57873]]
State to develop the service plan, the participant, the participant's
representative, if any, and others from whom the participant may seek
guidance.
Comment: One commenter urged that CMS require States to specify how
they will assess and address potential risks for those with impaired
cognition.
Response: The statute and the regulations note that States must
specify risk assessment methods, tools, or instruments the State uses
to mitigate identified risks, and a plan for how risks will be
mitigated. We do not believe that it is necessary to specify how
persons with impaired cognition will be assessed and how the potential
risks for these individuals will be addressed. As stated in the
proposed regulations, how much risk an individual is willing and able
to assume is a matter of discussion and negotiation among the persons
designated by the State to develop the service plan, the participant,
the participant's representative, if any, and others from whom the
participant may seek guidance. This process provides flexibility to the
State and to the participants to reflect the participants' needs and
resources in the service plan and budget plan. We believe this process
would adequately address situations where participants have impaired
cognition and have not revised the regulations.
Comment: In discussing the tools that may be used, we invited
comment on whether criminal background checks should be mandatory under
the State plan option or left to the discretion of the States, as is
the current practice in programs that offer self-direction. Several
commenters provided comments on whether criminal background checks
should be mandatory with one commenter stating we should include
national background checks for any provider of PAS that has one-to-one
contact with participants. Other commenters offered suggestions on how
the background checks should be reimbursed. Some commenters indicated
that an individual's spouse, parent, close relative, or friend who is
to be hired as a provider of PAS should not have to undergo a criminal
background check. Some commenters also thought that the individual
should retain the decision of whether to hire a person whom the
individual or participant knows to have, or discovers to have, a
criminal background.
Response: We recognize the commenters' perspective that recommended
that criminal background checks be mandatory under this State plan
option. However, we agree with the commenters who suggested that
criminal background checks remain at the State's discretion and are not
revising Sec. 441.476. Section 441.476 requires States to specify any
tools or instruments it uses to mitigate identified risks. We have not
prescribed the tools or instruments that States must use because States
should have the necessary flexibility to use the instruments or tools
that they have found best meets the needs of the participants. These
tools may include the use of criminal and worker background checks and
States have the option to determine who falls within the scope of such
background checks. In addition, if States make criminal or worker
background checks available as a tool to mitigate risks to
participants, then States would bear the expense of the criminal or
worker background checks it performs on behalf of participants. We
further believe that the individual, or individual's representative,
must retain the authority to decide who the participant will hire to
provide their PAS as this decision as to who to employ is inherent in
self-direction.
Comment: One commenter suggested that CMS establish procedures for
developing negotiated risk agreements. Moreover, the commenter stated
that CMS should require State Medicaid programs to develop appropriate
linkages with their State long-term care ombudsman and agencies that
administer protective service to ensure that there are safeguards
against abuse.
Response: Section 441.476(b) requires a State to specify the tools
or instruments it uses to mitigate identified risks. As noted in the
proposed regulation, we do not prescribe the tools or instruments that
States must use because States should have the flexibility necessary to
use the instruments or tools they have found best meet the needs of the
participants. We noted that examples of risk management tools or
instruments might include criminal and worker background checks; job
descriptions that clearly set forth the roles and responsibilities of
participant, workers, representatives, and all others involved with
supporting the participant; and the use of individual risk agreements
that permit the participant to acknowledge and accept the
responsibility for addressing certain types of risks. Accordingly, we
do not believe that CMS should establish procedures for the development
of negotiated risk agreements. Moreover, while we encourage States to
develop linkages with their State long-term care ombudsman program, we
do not believe we should require these relationships. We have
previously addressed the need for access to an independent advocate or
advocacy organization in our response to the comments under Sec.
441.464(d) (Support system) that we think would encompass programs such
as the State long-term care ombudsman program and protective services
programs that exist in the State. We assume and believe that States
already have agencies that administer protective services to ensure
that there are safeguards against abuse.
Upon consideration of public comments received, we are finalizing
Sec. 441.476 without modification.
Qualifications of Providers of Personal Assistance (Sec. 441.478)
We proposed that States have the option to permit participants to
hire any individual capable of providing the assigned tasks, including
legally liable relatives, as paid providers of the PAS identified in
the service plan and budget. We proposed that participants retain the
right to train their workers in the specific areas of personal
assistance needed and to perform the needed assistance in a manner that
comports with the participant's personal, cultural or religious
preferences. Finally, we proposed that participants retain the right to
establish additional staff qualifications based on participants' needs
and preferences.
Comment: We invited comment on whether a minimum age requirement
should be required for the providers of PAS. Three commenters opposed
the imposition of a minimum age requirement in order to maximize the
degree of flexibility participants have over their workers who will
furnish the participant's PAS. However, one commenter cautioned that
not including a minimum age requirement may run afoul of a State's
child labor laws. Further, one commenter stated that the focus should
be on whether the worker is qualified to furnish the service in the
service plan. Several commenters suggested that CMS demand some minimum
training, worker qualifications, and competency evaluation
requirements.
Response: We agree with the commenters that we should not impose a
minimum age restriction on providers of PAS; rather, the focus should
be on whether the worker is qualified to furnish the service in the
service plan according to the participant's personal, cultural, and
religious preferences.
As self-directed PAS may include services beyond personal care, any
minimum training, worker qualifications, or competency evaluation
requirements would have to be tailored to each of the different
[[Page 57874]]
provider types that will potentially furnish self-directed PAS under
this option. We do not believe that recreating a system of minimum
training, worker qualifications, and competency evaluation requirements
would be appropriate because it would remove the authority vested in
participants to train their providers of PAS and to determine their
qualifications.
We agree that participants should have access to additional
training for their workers, as needed or desired, provided by or
through the State. In this regard, we have revised the regulations at
Sec. 441.450(b) to permit participants to have access to other
training provided by or through the State so that their PAS providers
can meet any additional qualifications that participants think are
needed or desired. We also believe that Sec. 441.478(b) should include
this requirement and have revised that section similarly. The
participant's supports broker or consultant, as needed or desired,
should assist the participant in locating and accessing additional
training.
Comment: One commenter recommended that all individual assessments
include a determination of the ability of the individual to adequately
train their PAS provider.
Response: We believe that the regulations afford sufficient
supports to the participant, such as, the requirements that ongoing
information or counseling be provided to participants, or the use of
representatives, as needed, that would enable participants to
adequately communicate their needs to a PAS provider and to train their
PAS provider in how to meet those needs. Therefore, we are not adopting
the commenter's suggestion.
Upon consideration of the public comments received, we are
finalizing Sec. 441.478, with modification to permit access to
training provided by the State to allow the PAS providers to meet any
additional qualifications required or desired by the participant.
Use of a Representative (Sec. 441.480)
We proposed that States may permit participants to appoint a
representative to direct the provision of self-directed PAS on their
behalf and listed the types of representatives that are permissible. We
also proposed that States could mandate a representative, using
criteria approved by CMS, if the participant has demonstrated, after
additional counseling, information, training or assistance, the
inability to self-direct PAS. We further proposed that a person acting
as a representative for a participant receiving self-directed PAS is
prohibited from acting as a provider of self-directed PAS to the
participant.
Comment: Two commenters recommended that use of a representative
should be required in the rule. In contrast, other commenters urged
that CMS amend the rule to permit a representative to be ``an
individual chosen by the participant'' and to permit a spouse or
significant other to act as a representative. One commenter noted that
it is inappropriate for the participant to appoint a parent or guardian
as the representative, since this is the fundamental responsibility of
a parent or guardian. Several other commenters stated that the rule
should permit representatives to be paid providers of PAS to allow for
situations where workers are in short supply, or where a representative
is the participant's preferred or only available provider. One
commenter was concerned about the use of ``legally liable relatives''
as paid providers of PAS because the situation would be susceptible to
abuse and because the potential exists for violations of State Nurse
Practice Acts that delegate skilled nursing care to unpaid but not paid
caregivers. Another commenter suggested that we add a definition of
``representative'' to the rule. One commenter suggested that the
language at Sec. 441.480, with respect to who may be a representative,
should be moved to the definitions section to strengthen the
protections embodied in the regulatory language.
Response: We disagree that use of a representative should be
required as this could be overly prescriptive in situations where an
individual is able to indicate preferences or manage his own services
and budgets with assistance. We further note that while spouses are not
expressly included, they are not specifically excluded in the
regulations, and would likely be an individual recognized by State law
to act on the participant's behalf. We believe that other
representatives could be permitted by the State.
The role of the representative is to assist individuals in making
decisions with respect to the planning, development, management, and
direction of their service plans and budget plans. We encourage States
to recognize and permit other representative relationships, so that
participants can exercise greater flexibility in their choice of who
will assist them with their decisions.
We continue to believe that representatives should not be paid
providers of PAS. While it potentially limits a participant's choice of
representative or provider, we think it is important to avoid any
potential conflict of interest. We also learned from the experiences of
the States participating in the original ``Cash & Counseling''
demonstration, that it is important to include this limitation in order
to avoid the situation of a representative overseeing or making
decisions that directly impact them, such as approving their own rate
of pay, their own timesheets, and the like. Accordingly, in order to
promote participant health and welfare and program integrity, and to
ensure that participants actually receive their authorized PAS, we
included this necessary protection in the regulation at Sec.
441.480(b). Moreover, we believe that there are sufficient participant
and programmatic protections in the regulations that would detect
concerns about violations of Nurse Practice Acts. Finally, we disagree
that the rule should be amended to add those who may be a
representative, or that a separate definition is necessary, because we
believe that representative eligibility will vary under State law and
agency procedure. Therefore, we have left the regulations unchanged.
Comment: One commenter suggested that the rule address the ability
of potential representatives to freely choose or to decline to perform
the tasks associated with being the representative; to understand their
responsibilities; and to get support, training, and counseling as
needed to carry out their responsibilities.
Response: We do not believe that the details of the
representative's training and understanding of their responsibilities
is needed as we believe that the States will perform this function as
part of the pre-enrollment counseling and as necessary on an ongoing
basis.
Comment: One commenter suggested that CMS require a representative
agreement that lists the tasks the representative agrees to perform on
behalf of the participant.
Response: We encourage the voluntary use of an agreement if it
would be beneficial to the participant and the representative, but do
not believe a requirement for such an agreement should be dictated. We
believe that some representatives who are clear about their tasks and
responsibilities would find such a requirement unnecessary and
burdensome. We further believe that States should have the discretion
whether to impose such a requirement on representatives of participants
self-directing their PAS under this State plan option.
[[Page 57875]]
Upon consideration of public comments received, we are finalizing
Sec. 441.480 without modification.
Permissible purchases (Sec. 441.482)
We proposed that participants may, at the State's option, use their
service budgets to pay for items that increase a participant's
independence or substitute for human assistance, to the extent that
expenditures would otherwise be made for the human assistance. We also
proposed that the services, supports, and items that are purchased with
a service budget must be linked to an assessed participant need
established in the service plan.
Comment: One commenter stated that purchases must relate back to an
assessed need and must be restricted to those that relate to the
individual's medical condition. Furthermore, this commenter stated,
individuals in traditional models of service delivery should have
access to the same purchase options as participants in the self-
directed PAS State plan option, that is, to purchase items that
increase independence or substitute for human assistance.
Response: Section 441.482 indicates that permissible purchases must
be linked to an assessed participant need established in the service
plan. We do not agree that purchases must relate to a participant's
``medical condition'' because such a limitation may be overly
prescriptive and preclude the purchase of some items that may
substitute for human assistance, such as a microwave. However, we have
revised the regulation further to allow that permissible purchases must
be related to an assessed participant need or goal established in the
service plan. As service plans must be person-centered and identify
participants' preferences, we believe that service plans often include
participants' goals such as the desire to live in their own home.
Therefore, if a purchase would assist a participant to live in their
own home, thereby becoming more independent, then the purchase of an
item that would increase independence could be consistent with the
requirements in the regulation. In separate guidance, we will issue
further direction on permissible purchases. As to the commenter's
suggestion that individuals who receive their services in a traditional
service delivery model should have the option to purchase items that
increase independence or substitute for human assistance, we believe
that the statute directs this option only to participants of the self-
directed PAS State plan option.
Comment: One commenter noted that the use of the term ``medically
necessary'' in the preamble is not correct in the context of
permissible purchases. These purchases could be consistent with a
service plan, but not strictly ``medically necessary.''
Response: We agree with the commenter that in the context of
permissible purchases, the item need not be medically necessary. We are
clarifying this point here and will take this comment into
consideration as we develop the future guidance on permissible
purchases.
Comment: One commenter supported the concept of allowing
participants to use funds for permissible purchases but cautions that
doing so allows for more opportunities for abuse. The commenter
recommended more oversight to ensure the fiscal integrity of the State
plan option and accountability for the funds.
Response: Section 441.464(a) requires assurances that necessary
safeguards be taken to protect the health and welfare of individuals
furnished services under the State plan option and to assure the
financial accountability for funds expended for self-directed services,
which includes permissible purchases. We believe this provides adequate
oversight over the fiscal accountability of the funds and protects the
overall integrity of this option.
Upon consideration of public comments received, we are finalizing
Sec. 441.482 with revision to note that permissible purchases must be
linked to a participant need or goal established in the service plan.
Financial Management Services (Sec. 441.484)
We proposed that States may provide FMS themselves to participants
self-directing their PAS, or employ another FMS entity to provide these
services. Participants utilizing the cash option who directly perform
those functions themselves would not require this service. We proposed
that the FMS entity must comply with all applicable requirements of the
IRS. We further proposed that States must provide oversight of FMS by
performing certain prescribed functions. We also proposed the specific
functions that FMS entities must perform and proposed that States not
employing an FMS entity must perform those functions. Finally, we
proposed that States will be reimbursed for the cost of FMS, either
provided directly or through a financial management entity, at the
administrative rate of 50 percent to reflect the statutory requirement
for reimbursement of FMS.
Comment: One commenter stated that the requirement for FMS would
add considerable costs to a State's Medicaid budget and also add to the
oversight responsibilities borne by a State.
Response: We acknowledge that States may experience an initial
outlay of funds to provide, or employ an entity to provide, the FMS
required by this rule. This may be particularly true when a State has
not previously offered a self-direction opportunity that included a
participant's authority over their workers and services, as well as a
service budget. However, we do not believe an FMS option would
significantly add to States' fiscal and administrative
responsibilities, as States must already provide programmatic and
financial oversight of their Medicaid programs, including the functions
to be performed by the FMS entity.
Comment: One commenter asserted that agencies who are supposed to
serve as ``fiscal intermediaries'' are, in reality, functioning as home
care agencies without any regulatory oversight. One commenter cautioned
that the FMS entity cannot be allowed to operate independently without
oversight by the State and without oversight responsibility for the
expenditures made by a participant.
Response: We believe the commenter has misunderstood the role of
the FMS entity. We note that the term ``fiscal intermediary'' may be
interpreted differently by different people and States. ``Fiscal
intermediaries'' are not necessarily synonymous with financial
management services. Section 441.484 sets forth minimum mandatory
functions that must be performed by the FMS entity and the State's
responsibilities for oversight of the FMS entity. Accordingly, we
believe that the rule has sufficient safeguards to ensure that the FMS
responsibilities are properly carried out and supervised.
Comment: One commenter thought that reimbursing the FMS entity at
the 50 percent administrative rate was improper in situations when the
State offers an ``agency with choice'' model. The commenter explained
that under this model, the participant may choose to delegate certain
functions to the agency such as recruitment, initial and on-going
training, and the identification and management of backup services.
These functions should be reimbursed at the FMAP rate.
Response: Financial management services, regardless if performed by
a stand-alone FMS entity or one that is part of an agency with choice
model, will be reimbursed at the statutorily-required 50 percent
administrative rate.
[[Page 57876]]
Comment: One commenter suggested that we add a requirement to Sec.
441.484(c) that the FMS entity must maintain a separate account for
each participant's budget.
Response: This is already a requirement for the FMS entity as noted
in Section 441.484(c)(3).
Upon consideration of the public comments received, we are
finalizing Sec. 441.484 without modification.
IV. Provisions of the Final Regulation
Generally, this final regulation incorporates the January 18, 2007
provisions of the proposed rule. The provisions of this final
regulation that differ from the proposed rule are as follows:
(1) We have revised the final regulation in relevant places by
adding ``or their representatives, if applicable'' when we refer to
individuals or participants. The provisions that we revised include:
Sec. 441.450(b); Sec. 441.450(c) (that is, the definitions of
``Service budget'' and ``Service plan''); Sec. 441.454(a), (c), (d);
Sec. 441.464(a)(2)(ii); Sec. 441.464(d)(3)(i) and (ii); Sec.
441.464(d)(4); Sec. 441.468(b)(2); Sec. 441.468(c)(1) and (2); Sec.
441.468(d); Sec. 441.468(e); Sec. 441.470(c); Sec. 441.470(c)(1);
Sec. 441.470(e); Sec. 441.470(f); Sec. 441.472(c); Sec. 441.478(a),
(b) and (c); Sec. 441.482(a); and Sec. 441.484(a).
(2) We have revised Sec. 441.450(b) by adding a new requirement in
paragraph (4) to include the authority of participants to train their
workers and to access training provided by or through the State if
additional worker training is required or desired by the participant,
or participant's representative, if applicable.
(3) We have revised Sec. 441.450(c), the definition of
individualized backup plan, to clarify that the individualized backup
plan must demonstrate an interface with the risk management provision
at Sec. 441.476.
(4) We have revised Sec. 441.450(c) to add a definition for
``supports broker or consultant'' and to require that a supports broker
or consultant be available to each participant, as part of the support
system. We have defined ``supports broker or consultant'' to mean an
individual who supports participants in directing their PAS and service
budgets. The supports broker or consultant is an agent of the
participants and takes direction from the participants, or their
representatives, if applicable, about what support is needed or
desired. The supports broker or consultant is primarily responsible for
facilitating participants' needs in a manner that comports with the
participants' preferences. The primary functions of the supports broker
or consultant are to inform, counsel, train, and assist the
participant, or the participant's representative, if applicable, with
whatever is needed to develop a service budget and effectively manage
the participant's self-directed PAS and budgets. Supports brokers or
consultants must be accessible to participants, maintain an ongoing
relationship with participants, monitor whether participants' health
status has changed, and whether expenditures of funds are being made in
accordance with the service budgets. States must develop a monitoring
protocol that includes regularly scheduled telephone and face-to-face
contact with participants. States must also develop the training
requirements and qualifications for supports brokers or consultants
that include, at a minimum, the following:
An understanding of the philosophy of self-direction and
person-centered and directed planning.
The ability to facilitate participants' independence and
participants' preferences in managing PAS and budgets, including any
risks assumed by participants;
The ability to develop service budgets and ensure
appropriate documentation;
Knowledge of the PAS and resources available in the
participant's community and how to access them.
The availability of a supports broker or consultant to each participant
is a requirement of the support system.
(5) We have revised Sec. 441.454(b) to add examples of the types
of tax-related requirements that participants, if they have chosen the
cash option, or the FMS entity, must perform.
(6) We have revised Sec. 441.456(b) and Sec. 441.458(c) to
require that the State specify in the section 1915(j) State plan
amendment the safeguards that are in place to ensure continuity of
services during the transition from self-directed PAS.
(7) We have revised Sec. 441.460(a) to insert ``PAS'' before
``providers.''
(8) We have revised Sec. 441.464(c) to require that information on
feasible alternatives be communicated to the individual in a manner and
language understandable by the individual.
(9) We have revised Sec. 441.464(d) to add a requirement that
States may arrange for the provision of a support system, in addition
to providing the support system themselves.
(10) We have revised Sec. 441.464(d)(1) to add a requirement that
before enrollment, the support system appropriately counsels an
individual about disenrollment.
(11) We have revised Sec. 441.464(d)(2) to add a requirement that
any information provided to the participant as a part of the support
system must be communicated to the participant in a manner and language
understandable by the participant.
(12) We have revised Sec. 441.464(d)(2)(vii) to insert the term
``PAS'' to the requirement that the support activities include the
ability to freely choose PAS providers.
(13) We have revised Sec. 441.464(d)(2) by adding a clause (xv)
that the list of support activities include information about an
advocate or advocacy systems available in the State and how a
participant, or a participant's representative, can access the advocate
or advocacy systems.
(14) We have revised Sec. 441.468(c)(2) by adding the word
``allow'' at the beginning of the paragraph.
(15) We have revised Sec. 441.468(c) to add a new paragraph (8) to
include that the State ensures that a participant may request revisions
to a service plan, based on a change in needs or health status.
(16) We have revised Sec. 441.470(d) to make a technical change to
insert the phrase, ``to the extent that expenditures would otherwise be
made for the human assistance,'' into the requirement concerning
procedures that govern how a participant, at the election of a State,
may reserve funds to purchase items that increase independence or
substitute for human assistance.
(17) We have revised Sec. 441.470(e) to add the phrase, ``or
reserved for permissible purchases,'' to the requirement concerning
procedures that govern how a person may use a discretionary amount, if
applicable.
(18) We have revised Sec. 441.472 to revise subsection (a) to
indicate that the budget methodology is established by the State in
such a way as to ensure the State's role in service authorization, and
to add a new subsection (e) to require a State to have a procedure to
adjust a budget, subject to a State's medical necessity criteria, when
a reassessment indicates a change in a participant's medical condition,
functional status, or living situation.
(19) We have revised Sec. 441.474(b) to add a new requirement that
quality of care measures must be made available to CMS upon request and
that the QA/QI plan must include indicators approved or prescribed by
the Secretary.
(20) We have revised Sec. 441.478(b) to add a requirement that
participants, or their representatives, if applicable, also have the
right to access training
[[Page 57877]]
provided by or through the State so that their PAS providers can meet
any additional qualifications that participants think are needed.
(21) We have revised Sec. 441.482(b) to insert the words, ``or
goal,'' to the requirement that the services, supports, and items that
are purchased with a service budget must be linked to an assessed
participant need or goal established in the service plan.
V. Collection of Information Requirements
We solicited public comment on each of the issues for the following
sections of this document that contain information collection
requirements (ICRs). We received one general comment. We also received
public comments on four specific sections contained in the ICRs. The
comments and our responses follow:
General
Comment: Two commenters stated that the estimates in the collection
of information section do not reflect differences in State Medicaid
systems and the populations served and that we have severely
underestimated the time and resources that are necessary to meet the
requirements.
Response: Our estimates are based on the average time it may take
for States to fulfill the requirements of this rule and reflect the
appropriate differences in the State Medicaid systems and populations.
Note: The self-directed PAS State plan option pre-print is
currently approved under OMB number 09398-1024.
Section 441.454--Use of Cash
Section 441.454(d) requires States to make available a financial
management entity to a participant who has demonstrated, after
additional counseling, information, training, or assistance, that the
participant cannot effectively manage the cash option described in
paragraph (a) of this section.
The burden associated with this requirement is the time and effort
put forth by the State to counsel and to provide information, training,
and or assistance to participants. We believe that it would take a
State 1 hour per participant to provide this guidance. The total annual
burden of this requirement would vary according to the number of
participants in each State who are self-directing their PAS under this
State Plan option. We received no public comment on this section.
Therefore, we have not revised the collection of information estimate.
Section 441.456 Voluntary Disenrollment
Section 441.456(b) requires States to specify in the State plan the
safeguards that are in place to ensure continuity of services during
the transition from self-directed PAS.
The burden associated with this requirement is the time and effort
put forth by the State to revise its State plan to include the
safeguards. While the burden associated with this requirement is
subject to the PRA, the burden associated with the State plan amendment
is currently approved under OMB 0938-0933. We received no
public comment on this section. Therefore, we have not revised the
collection of information estimate.
Section 441.458 Involuntary Disenrollment
Section 441.458(c) requires States to specify in the State plan the
safeguards that are in place to ensure continuity of services during
the transition from self-directed PAS.
The burden associated with this requirement is the time and effort
put forth by the State to revise its State plan to include the
safeguards. While the burden associated with this requirement is
subject to the PRA, the burden associated with the State plan amendment
is currently approved under OMB 0938-0933. We received no
public comment on this section. Therefore, we have not revised the
collection of information estimate.
Section 441.464 State Assurances
Section 441.464(a) requires States to provide an assurance that
necessary safeguards have been taken to protect the health and welfare
of individuals furnished services under the program and to assure the
financial accountability for funds expended for self-directed services.
The burden associated with this requirement is the time and effort
it would take for each State to meet these conditions. To meet the
requirements in Sec. 441.464(a), we estimate it would take each State
80 hours to develop a system of safeguards that protects participants'
health and welfare and ensures financial accountability for funds
expended, and no further burden would be associated with this
requirement. We estimate the total maximum one-time burden for this
requirement to be 4,480 hours. (56 States x 80 hours = 4,480 hours)
Comment: One commenter thought that the estimate of 80 hours to
develop a system of safeguards was unreasonable given that some States
would be developing and promulgating state rules to implement the new
safeguards, in addition to having to adjust contracts, train staff and
providers in new procedures and make any needed system modifications.
Response: We do not believe that the estimate of 80 hours to
develop a system of safeguards is unreasonable. All Medicaid programs
must assure the health and welfare of beneficiaries and fiscal
accountability, so these are not new safeguards. Furthermore, we do not
believe that all States will have to develop and promulgate rules. We
acknowledge that some States may need to adjust contracts, train staff
and make system modifications, but do not believe, that making such
changes would exceed, on average, 80 hours per State. Many States
already offer the opportunity for self-direction in their section
1915(c) waiver programs, so it would not be overly difficult for these
States to transition to the opportunity for self-direction offered
under the self-directed PAS State plan option. We also note that there
would be little, if any, burden to the States associated with the
training of PAS providers, as participants bear the responsibility for
training their PAS providers. Accordingly, we have not revised the
collection of information estimate.
Section 441.464(b) requires States to provide an assurance that
they will perform an evaluation of the need for personal care under the
State plan or personal services under a section 1915(c) home and
community-based services waiver program. The burden associated with
this requirement is the time and effort it would take for each State to
meet this condition. To meet the requirement in Sec. 441.464(b), we
estimate it would take a State 2 hours per participant to perform this
evaluation of need. The total annual burden of this requirement would
vary according to the number of participants in each State who are (1)
entitled to medical assistance for personal care services under the
State plan, or receive home and community-based services under a
section 1915(c) waiver program; (2) may require self-directed PAS; and
(3) may be eligible for self-directed PAS. We received no public
comment on this section. Therefore, we have not revised the collection
of information estimate.
Section 441.464(c) requires States to provide an assurance that
individuals likely to require personal care under the State plan, or
home and community-based services under a section 1915(c) waiver
program, are informed of the feasible alternatives, if available, under
the State's self-directed PAS State plan option, at the choice of these
individuals, to the provision of personal
[[Page 57878]]
care services under the State plan or PAS under a section 1915(c) home
and community-based services waiver program. The burden associated with
this requirement is the time and effort it would take for each State to
meet this condition. To meet the requirement in Sec. 441.464(c), we
estimate it would take a State 15 minutes per participant to inform
individuals of feasible alternatives. The total annual burden of this
requirement would vary according to the number of participants in each
State who are likely to require personal care under the State plan, or
home and community-based services under a section 1915(c) waiver
program.
Comment: Two commenters stated that the proposed 15-minute time
estimate for explaining feasible alternatives to individuals was too
brief.
Response: We do not believe that the estimate of 15 minutes to
inform individuals of the feasible alternatives is too short. We
believe that most States will incorporate information about feasible
alternatives within the context of the assessment of the individual's
needs, or during some other pre-enrollment contact with the individual.
We estimated that the time to advise an individual of the feasible
alternatives would only be a small portion of the time spent during the
assessment. Accordingly, we have not revised the collection of
information estimate.
Section 441.464(d) requires States to provide a support system that
meets the following conditions:
(1) Appropriately assesses and counsels an individual before
enrollment.
(2) Provides appropriate information, counseling, training, and
assistance to ensure that a participant is able to manage the services
and budgets. The support activities must include at least the
following:
(i) Person-centered planning and how it is applied.
(ii) Information about the services available for self-direction.
(iii) Range and scope of individual choices and options.
(iv) Process for changing the service plan and service budget.
(v) Grievance process.
(vi) Risks and responsibilities of self-direction.
(vii) Freedom of choice of providers.
(viii) Individual rights.
(ix) Reassessment and review schedules.
(x) Defining goals, needs, and preferences.
(xi) Identifying and accessing services, supports, and resources.
(xii) Development of risk management agreements.
(xiii) Development of an individualized backup plan.
(xiv) Recognizing and reporting critical events.
(3) Offers additional information, counseling, training, or
assistance, including financial management services under either of the
following conditions:
(i) At the request of the participant for any reason.
(ii) When the State has determined the participant is not
effectively managing the services identified in the service plan or
budget.
The burden associated with this requirement is the time and effort
it would take for each State to meet these conditions. To meet the
requirements in Sec. 441.464(d)(1), we estimate it would take each
State 2 hours per participant. To meet the requirements in Sec.
441.464(d)(2), we estimate it would take each State 1 hour per
participant. To meet the requirements in Sec. 441.464(d)(3), we
estimate it would take each State 1 hour per participant. The total
annual burden of these requirements would vary according to the number
of participants in each State who are self-directing their PAS under
this State plan option. We received no public comment on this section.
Therefore, we have not revised the collection of information estimate.
Section 441.464(e) requires the State to provide to CMS an annual
report on the number of individuals served and the total expenditures
on their behalf in the aggregate.
The annual burden associated with this requirement is the time and
effort it would take for each State to gather the necessary data and
provide an annual report to CMS. We estimate that it would take one
State no more than 25 hours to meet this requirement; therefore, the
total maximum annual burden is 1,400 hours. (56 States x 25 hours =
1,400 hours) We received no public comment on this section. Therefore,
we have not revised the collection of information estimate.
Section 441.464(f) requires the State to provide to CMS an
evaluation of the overall impact on the health and welfare of
participating individuals compared to non-participants every three
years, as determined by CMS.
The burden associated with this requirement is the time and effort
it would take for each State to provide such an evaluation to CMS. We
estimate that it would take one State 200 hours to prepare and submit
the evaluation to CMS every 3rd year; therefore, the total maximum
burden on that 3rd year would be 11,200 hours. (56 States x 200 hours =
11,200)
Comment: One commenter questioned how we arrived at the estimate of
200 hours to prepare and submit an evaluation every three years as we
did not include the requirements for the report. The commenter urged
use of existing data sources.
Response: We believe that our estimate of the time to prepare and
submit the three-year evaluation was reasonable. Our estimate was based
on the time we expected it would take a State, on average, to determine
the measures it would use to compare the impact of the self-directed
PAS State plan option on the health and welfare of participants and
non-participants, collect and analyze data, and summarize the findings
in a report. Many, if not all, States collect data on performance and
outcome measures within the context of their quality management systems
in their current Medicaid programs. We believe that it would be
appropriate for States to use data they have already collected to
satisfy the requirement for the evaluation in Sec. 441.464(f).
Therefore, we have not revised the collection of information estimate.
Section 441.468 Service Plan Elements
Section 441.468(b) requires a State to develop a service plan for
each program participant using a person-centered and directed planning
process to ensure the following:
(1) The identification of each program participant's preferences,
choices, and abilities, and strategies to address those preferences,
choices, and abilities.
(2) The option for the program participant to exercise choice and
control over services and supports discussed in the plan.
(3) Assessment of, and planning for avoiding, risks that may pose
harm to a participant.
The burden associated with this requirement is the time and effort
it would take for each State to meet these conditions. We estimate it
would take each State 3 hours per participant to meet this requirement.
The total annual burden of this requirement would vary according to the
number of participants in each State who are self-directing their PAS
under this State plan option. We received no public comment on this
section. Therefore, we have not revised the collection of information
estimate.
Section 441.468(d) states that when an entity that is permitted to
provide other State plan services is responsible for service plan
development, the State must describe the safeguards that are in place
to ensure that the service provider's role in the planning process is
fully disclosed to the participant and
[[Page 57879]]
controls are in place to avoid any possible conflict of interest.
The burden associated with this requirement is the time and effort
it would take for the State to fully disclose the required information.
We estimate that it would take one State 15 minutes per participant to
meet this requirement. The total annual burden of this requirement
would vary according to the number of participants in each State who
are self-directing their PAS under this State Plan option. We received
no public comment on this section. Therefore, we have not revised the
collection of information estimate.
Section 441.468(e) requires that an approved self-directed service
plan conveys authority to the participant to perform, at a minimum, the
following tasks: recruit and hire workers to provide self-directed
services, including specifying worker qualifications; fire workers;
supervise workers in the provision of self-directed services; manage
workers in the provision of self-directed services (determining worker
duties, scheduling workers, training workers in assigned tasks, and
evaluating workers' performance); determine the amount paid for a
service, support, or item; and review and approve provider invoices.
While this information collection is subject to the PRA, we believe
this requirement meets the requirements of 5 CFR 1320.3(b)(2), and as
such, the burden associated with this requirement is exempt from the
PRA. We received no public comment on this section. Therefore, we have
not revised the collection of information estimate.
Section 441.470 Service Budget Elements
Section 441.470 states that a service budget must be developed and
approved by the State based on the assessment of need and service plan
and must include the following:
(a) The specific dollar amount a participant may utilize for
services and supports.
(b) How the participant is informed of the amount of the service
budget before the service plan is finalized;
(c) The procedures for how the participant may adjust the budget,
including the following:
(1) How the participant may freely make changes to the budget.
(2) The circumstances, if any, that may require prior approval
before a budget adjustment is made.
(3) The circumstances, if any, that may require a change in the
service plan.
(d) The procedure(s) that governs how a person, at the election of
the State, may reserve funds to purchase items that increase
independence or substitute for human assistance including additional
goods, supports, services or supplies.
(e) The procedure(s) that governs how a person may use a
discretionary amount, if applicable, to purchase items not otherwise
delineated in the budget.
(f) How participants are afforded the opportunity to request a fair
hearing under Sec. 441.300 if a participant's request for a budget
adjustment is denied or the amount of the budget is reduced.
The burden associated with this requirement is the time and effort
put forth by the State to develop a service budget. We estimate it
would take a State 3 hours per participant to meet this requirement.
The total annual burden of this requirement would vary according to the
number of participants in each State who are self-directing their PAS
under this State plan option. We received no public comment on this
section. Therefore, we have not revised the collection of information
estimate.
Section 441.472 Budget Methodology
Section 441.472(b) requires a State to have procedures in place to
safeguard participants when the budgeted service amount is insufficient
to meet a participant's needs.
The burden associated with this requirement is the time and effort
it would take for a State to develop its procedures on how to handle
this. We estimate that it would take one State 16 hours to develop
these procedures and no further burden would be associated with this
requirement. The one-time maximum burden associated with this
requirement is 896 hours. (56 States x 16 hours = 896 hours) We
received no public comment on this section. Therefore, we have not
revised the collection of information estimate.
Section 441.472(c) requires a State to have a method of notifying
participants of the amount of any limit that applies to a participant's
self-directed PAS and supports.
The burden associated with this requirement is the time and effort
it would take for the State to provide this notification. We estimate
it would take one State 15 minutes per participant to meet this
requirement. The total annual burden of this requirement would vary
according to the number of participants in each State who are self-
directing their PAS under this State plan option. We received no public
comment on this section. Therefore, we have not revised the collection
of information estimate.
Section 441.474 Quality Assurance and Improvement Plan
Section 441.474(a) requires States to provide a quality assurance
and improvement plan that describes the State's system of how it would
conduct activities of discovery, remediation, and quality improvement
in order to learn of critical incidents or events that affect
participants, correct shortcomings, and pursue opportunities for
improvement; and
(b) The quality assurance and improvement plan shall also describe
the system performance measures, outcome measures, and satisfaction
measures that the State would use to monitor and evaluate the self-
directed State plan option.
The burden associated with this requirement is the time and effort
it would take for the State to customize its quality assurance and
improvement plan to the self-directed service delivery model. We
estimate that it would take one State 100 hours to customize its
quality assurance and improvement plan and no further burden would be
associated with this requirement. The one-time maximum burden
associated with this requirement is 5,600 hours. (56 States x 100 hours
= 5,600 hours)
Comment: One commenter urged that CMS clarify that there will be
ongoing burdens associated with quality assurance and improvement
activities and not just the one-time burdens indicated in the rule.
Response: As States always retain the ultimate oversight and
administrative authority for any Medicaid program, we think that any
ongoing burden is subsumed within the State's normal course of doing
business. Accordingly, we have not revised the collection of
information estimate to account for an ongoing burden as suggested by
the commenter.
Section 441.484 Financial Management Services
Section 441.484(a) proposes that States may choose to provide
financial management services to participants self-directing PAS, with
the exception of those participants utilizing the cash option who
directly perform those functions.
Section 441.484(c) proposes to require that the financial
management entity provide functions including, but not limited to, the
following:
(1) Collect and process timesheets of the participant's workers.
(2) Process payroll, withholding, filing and payment of applicable
Federal, State, and local employment-related taxes and insurance.
[[Page 57880]]
(3) Maintain a separate account for each participant's budget.
(4) Track and report disbursements and balances of participant
funds.
(5) Process and pay invoices for goods and services approved in the
service plan.
(6) Provide to participants periodic reports of expenditures and
the status of the approved service budget.
Section 441.484(d) requires States not utilizing a financial
management entity must perform the functions listed in paragraph (c) of
this section on behalf of participants self-directing PAS, with the
exception of those participants utilizing the cash option who directly
perform those functions.
The burden associated with this requirement is the time and effort
it would take for the financial management entity or State to develop
and perform the listed functions. We estimate it would take a financial
management entity or the State 320 hours to develop the financial
management system. Once the system is in place, the annual burden
associated with these functions would vary according to the number of
participants in each State who are self-directing their PAS under this
State Plan option. We estimate the maximum one-time burden on the
States to develop the financial management system to be 17,920 hours
during the first year. (56 States x 320 hours = 17,920)
Note: Annual burden in the following years will vary. We have no
data on how many financial management entities would be affected by
this requirement; therefore, we are unable to provide total annual
burden associated with financial management entities. We received no
public comment on this section. Therefore, we have not revised the
collection of information estimate.
The total aggregate burden for the requirements in this final
regulation that affect States annually is estimated to be 1,400 hours.
The total aggregate burden associated with one-time requirements on
States is estimated to be 28,896. The total aggregate burden associated
with the burden placed on States every 3rd year is estimated to be
11,200 hours.
Note: We are unable to provide aggregate burden totals for those
requirements affecting participants because burden will vary
according to the number of participants in each State who are self-
directing their PAS under this State Plan option. We are also unable
to provide aggregate burden for financial management entities
affected by Sec. 441.484(a).
This document imposed information collection and recordkeeping
requirements. Consequently, it was reviewed by the Office of Management
and Budget under the authority of the Paperwork Reduction Act of 1995
(44 U.S.C. 35).
VI. Regulatory Impact Statement
A. Overall Impact
We have examined the impact of this rule as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354),
section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132 on
Federalism, and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866, as amended, directs agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any 1 year).
This final regulation does not reach the economic threshold and thus is
not considered a major rule.
The RFA requires agencies to analyze options for regulatory relief
of small businesses. For purposes of the RFA, small entities include
small businesses, nonprofit organizations, and small governmental
jurisdictions. Most hospitals and most other providers and suppliers
are small entities, either by nonprofit status or by having revenues of
$6.5 million to $31.5 million in any 1 year. Individuals and States are
not included in the definition of a small entity. An RFA was not
prepared because the Secretary has determined that this final
regulation would not have a significant economic impact on a
substantial number of small entities.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis if a rule may have a significant impact on
the operations of a substantial number of small rural hospitals. This
analysis must conform to the provisions of section 604 of the RFA. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a metropolitan
statistical area and has fewer than 100 beds. Analysis for section
1102(b) of the Act was not prepared because the Secretary has
determined that this final regulation would not have a significant
impact on the operations of a substantial number of small rural
hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. That threshold
level is currently approximately $130 million. This final regulation
would have no consequential effect on State, local, or tribal
governments in the aggregate, or on the private sector near the
threshold amount of $130 million.
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final regulation) that imposes substantial direct requirement costs on
State and local governments, preempts State law, or otherwise has
Federalism implications. As this final regulation would not impose any
costs on State or local governments, the requirements of E.O. 13132 are
not applicable.
B. Anticipated Effects
FFP will be available for self-directed PAS if the State elects to
offer this opportunity through the approved State plan. As self-
direction is an alternative service delivery model, it is expected that
the impact on Medicaid spending would not be very large. The use of
self-directed PAS is estimated to cost a total of $225 million in FY
2008 to FY 2012, of which, $127 million is Federal share.
In making this estimate, we considered that costs might increase
due to new covered expenses (such as microwave ovens or accessibility
ramps) as well as new applicants being attracted to the Medicaid
program, because of the permissibility of payments to relatives. Costs
could decrease because beneficiaries might require less help and less
expensive help. We also noted that some States have already implemented
self-directed programs under other Medicaid authorities and thus, in
those States, there would be little cost effect to the statute or this
new regulation. We first estimated that the projected impact of all our
proposals would amount to an overall 0.5 percent increase in personal
care service expenditures, if all States and Territories implemented
this self-direction PAS State plan option. We then accounted for a
partial starting year, a phase-in period and the fact that this is a
State plan option. Our final estimate is as noted in the table below.
[[Page 57881]]
Section 1915(j) Self-Directed Personal Assistance Services Program (Cash & Counseling)
[Dollars in Millions]
----------------------------------------------------------------------------------------------------------------
Total FY 2008-
FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 2012
----------------------------------------------------------------------------------------------------------------
Federal Cost................... 12 20 29 32 34 127
State Cost..................... 9 15 22 24 26 96
Total *........................ 22 35 51 56 61 225
----------------------------------------------------------------------------------------------------------------
* Amounts may not equal total due to rounding.
*Amounts may not equal total due to rounding.C. Alternatives
Considered
In considering alternatives to the proposals presented in this
proposed rule, we considered the current practices under section 1115
demonstrations and section 1915(c) waiver programs that implemented
self-direction. In particular, we considered whether to allow States
the flexibility to offer the option of disbursing cash prospectively to
participants. We learned from the experience of the section 1115
demonstrations that participants were able to successfully manage the
funds in their budget and maintain financial accountability, with some
general guidance and oversight. In light of our desire to provide
flexibility to the beneficiaries and to better reflect the intent of
the PAS State plan option, we proposed this option.
We also considered the extent to which to include prescriptive
support activities that States must include in their support system. We
proposed a minimum list of support activities to ensure that
participants have the necessary tools to successfully manage their
services and budgets. We were concerned that if States were not
required to include such activities as part of the support system
within the PAS State plan option, the likelihood of successfully self-
directing PAS would diminish. As we learned from our experience with
the section 1115 demonstrations and section 1915(c) waiver programs,
support activities have a crucial role in leading to the success of any
self-directed PAS program.
D. Conclusion
As indicated in the estimated expenditures table above, we project
the Federal Medicaid program cost of this final rule to be $127 million
over the period from FY 2008 to FY 2012. In addition, we project the
total State cost of this final rule to be $96 million over the period
from FY 2008 to FY 2012.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.
List of Subjects in 42 CFR Part 441
Aged, Family planning, Grant programs-health, Infants and children,
Medicaid, Penalties, and Reporting and recordkeeping requirements.
0
The Centers for Medicare & Medicaid Services amends 42 CFR chapter IV
as set forth below:
PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC
SERVICES
0
1. The authority citation for part 441 continues to read as follows:
Authority: Sec 1102 of the Social Security Act (42 U.S.C. 1302).
0
2. Amend part 441 by adding new subpart J to read as follows:
Subpart J--Optional Self-Directed Personal Assistance Services Program
Sec.
441.450 Basis, scope, and definitions.
441.452 Self-direction: General.
441.454 Use of cash.
441.456 Voluntary disenrollment.
441.458 Involuntary disenrollment.
441.460 Participant living arrangements.
441.462 Statewideness, comparability, and limitations on number
served.
441.464 State assurances.
441.466 Assessment of need.
441.468 Service plan elements.
441.470 Service budget elements.
441.472 Budget methodology.
441.474 Quality assurance and improvement plan.
441.476 Risk management.
441.478 Qualifications of providers of personal assistance.
441.480 Use of a representative.
441.482 Permissible purchases.
441.484 Financial management services.
Subpart J--Optional Self-Directed Personal Assistance Services
Program
Sec. 441.450 Basis, scope, and definitions.
(a) Basis. This subpart implements section 1915(j) of the Act
concerning the self-directed personal assistance services (PAS) option
through a State Plan.
(b) Scope. A self-directed PAS option is designed to allow
individuals, or their representatives, if applicable, to exercise
decision-making authority in identifying, accessing, managing and
purchasing their PAS. This authority includes, at a minimum, all of the
following:
(1) The purchase of PAS and supports for PAS.
(2) Recruiting workers.
(3) Hiring and discharging workers.
(4) Training workers and accessing training provided by or through
the State if additional worker training is required or desired by the
participant, or participant's representative, if applicable.
(5) Specifying worker qualifications.
(6) Determining worker duties.
(7) Scheduling workers.
(8) Supervising workers.
(9) Evaluating worker performance.
(10) Determining the amount paid for a service, support or item.
(11) Scheduling when services are provided.
(12) Identifying service workers.
(13) Reviewing and approving invoices.
(c) Definitions. As used in this part--
Assessment of need means an evaluation of the needs, strengths, and
preferences of participants for services. This includes one or more
processes to obtain information about an individual, including health
condition, personal goals and preferences, functional limitation, age,
school, employment, household, and other factors that are relevant to
the authorization and provision of services. Assessment information
supports the development of the service plan and the subsequent service
budget.
Individualized backup plan means a written plan that meets all of
the following:
(1) Is sufficiently individualized to address each participant's
critical contingencies or incidents that would pose a risk of harm to
the participant's health or welfare;
(2) Must demonstrate an interface with the risk management
provision at Sec. 441.476 which requires States to assess and identify
the potential risks to the participant (such as any critical health
needs), and ensure that the risks and how they will be managed are the
result of discussion and negotiation among the persons involved in the
service plan development;
[[Page 57882]]
(3) Must not include the 911 emergency system or other emergency
system as the sole backup feature of the plan; and
(4) Must be incorporated into the participant's service plan.
Legally liable relatives means persons who have a duty under the
provisions of State law to care for another person. Legally liable
relatives may include any of the following:
(1) The parent (biological or adoptive) of a minor child or the
guardian of a minor child who must provide care to the child.
(2) Legally-assigned caretaker relatives.
(3) A spouse.
Self-directed personal assistance services (PAS) means personal
care and related services, or home and community-based services
otherwise available under the State plan or a 1915(c) waiver program
that are provided to an individual who has been determined eligible for
the PAS option. Self-directed PAS also includes, at the State's option,
items that increase the individual's independence or substitutes (such
as a microwave oven or an accessibility ramp) for human assistance, to
the extent the expenditures would otherwise be made for the human
assistance.
Self-direction means the opportunity for participants or their
representatives to exercise choice and control over the budget,
planning, and purchase of self-directed PAS, including the amount,
duration, scope, provider, and location of service provision.
Service budget means an amount of funds that is under the control
and direction of a participant, or the participant's representative, if
any, when the State has selected the State plan option for provision of
self-directed PAS. It is developed using a person-centered and directed
process and is individually tailored in accordance with the
participant's needs and personal preferences as established in the
service plan.
Service plan means the written document that specifies the services
and supports (regardless of funding source) that are to be furnished to
meet the needs of a participant in the self-directed PAS option and to
assist the participant to direct the PAS and to remain in the
community. The service plan is developed based on the assessment of
need using a person-centered and directed process. The service plan
builds upon the participant's capacity to engage in activities that
promote community life and respects the participant's preferences,
choices, and abilities. The participant's representative, if any,
families, friends and professionals, as desired or required by the
participant, will be involved in the service-planning process.
Support system means information, counseling, training, and
assistance that support the participant (or the participant's family or
representative, as appropriate) in identifying, accessing, managing,
and directing their PAS and supports and in purchasing their PAS
identified in the service plan and budget.
Supports broker or consultant means an individual who supports
participants in directing their PAS and service budgets. The supports
broker or consultant is an agent of the participants and takes
direction from the participants, or their representatives, if
applicable, about what information, counseling, training or assistance
is needed or desired. The supports broker or consultant is primarily
responsible for facilitating participants' development of a service
budget and effective management of the participants' PAS and budgets in
a manner that comports with the participants' preferences. States must
develop a protocol to ensure that supports brokers or consultants: are
accessible to participants; have regularly scheduled phone and in-
person contacts with participants; monitor whether participants' health
status has changed and whether expenditure of funds are being made in
accordance with service budgets. States must also develop the training
requirements and qualifications for supports brokers or consultants
that include, at a minimum, the following:
(1) An understanding of the philosophy of self-direction and
person-centered and directed planning;
(2) The ability to facilitate participants' independence and
participants' preferences in managing PAS and budgets, including any
risks assumed by participants;
(3) The ability to develop service budgets and ensure appropriate
documentation; and
(4) Knowledge of the PAS and resources available in the
participant's community and how to access them.
The availability of a supports broker or consultant to each
participant is a requirement of the support system.
Sec. 441.452 Self-direction: General.
(a) States must have in place, before electing the self-directed
PAS option, personal care services through the State plan, or home and
community-based services under a section 1915(c) waiver.
(b) The State must have both traditional service delivery and the
self-directed PAS service delivery option available in the event that
an individual voluntarily disenrolls or is involuntarily disenrolled,
from the self-directed PAS service delivery option.
(c) The State's assessment of an individual's needs must form the
basis of the level of services for which the individual is eligible.
(d) Nothing in this subpart will be construed as affecting an
individual's Medicaid eligibility, including that of an individual
whose Medicaid eligibility is attained through receipt of section
1915(c) waiver services.
Sec. 441.454 Use of cash.
(a) States have the option of disbursing cash prospectively to
participants, or their representatives, as applicable, self-directing
their PAS.
(b) States that choose to offer the cash option must ensure
compliance with all applicable requirements of the Internal Revenue
Service, including, but not limited to, retaining required forms and
payment of FICA, FUTA and State unemployment taxes.
(c) States must permit participants, or their representatives, as
applicable, using the cash option to choose to use the financial
management entity for some or all of the functions described in Sec.
441.484(c).
(d) States must make available a financial management entity to a
participant, or the participant's representative, if applicable, who
has demonstrated, after additional counseling, information, training,
or assistance, that the participant cannot effectively manage the cash
option described in paragraph (a) of this section.
Sec. 441.456 Voluntary disenrollment.
(a) States must permit a participant to voluntarily disenroll from
the self-directed PAS option at any time and return to a traditional
service delivery system.
(b) The State must specify in a section 1915(j) State plan
amendment the safeguards that are in place to ensure continuity of
services during the transition from self-directed PAS.
Sec. 441.458 Involuntary disenrollment.
(a) States must specify the conditions under which a participant
may be involuntarily disenrolled from the self-directed PAS option.
(b) CMS must approve the State's conditions under which a
participant may be involuntarily disenrolled.
(c) The State must specify in the section 1915(j) State plan
amendment the safeguards that are in place to ensure continuity of
services during the transition from self-directed PAS.
[[Page 57883]]
Sec. 441.460 Participant living arrangements.
(a) Self-directed PAS are not available to an individual who
resides in a home or property that is owned, operated, or controlled by
a PAS provider who is not related to the individual by blood or
marriage.
(b) States may specify additional restrictions on a participant's
living arrangements if they have been approved by CMS.
Sec. 441.462 Statewideness, comparability and limitations on number
served.
A State may do the following:
(a) Provide self-directed PAS without regard to the requirements of
statewideness.
(b) Limit the population eligible to receive these services without
regard to comparability of amount, duration, and scope of services.
(c) Limit the number of persons served without regard to
comparability of amount, duration, and scope of services.
Sec. 441.464 State assurances.
A State must assure that the following requirements are met:
(a) Necessary safeguards. Necessary safeguards have been taken to
protect the health and welfare of individuals furnished services under
the program and to assure the financial accountability for funds
expended for self-directed services.
(1) Safeguards must prevent the premature depletion of the
participant directed budget as well as identify potential service
delivery problems that might be associated with budget
underutilization.
(2) These safeguards may include the following:
(i) Requiring a case manager, support broker or other person to
monitor the participant's expenditures.
(ii) Requiring the financial management entity to flag significant
budget variances (over and under expenditures) and bring them to the
attention of the participant, the participant's representative, if
applicable, case manager, or support broker.
(iii) Allocating the budget on a monthly or quarterly basis.
(iv) Other appropriate safeguards as determined by the State.
(3) Safeguards must be designed so that budget problems are
identified on a timely basis so that corrective action may be taken, if
necessary.
(b) Evaluation of need. The State must perform an evaluation of the
need for personal care under the State Plan or services under a section
1915(c) waiver program for individuals who meet the following
requirements:
(1) Are entitled to medical assistance for personal care services
under the State plan or receiving home and community based services
under a section 1915(c) waiver program.
(2) May require self-directed PAS.
(3) May be eligible for self-directed PAS.
(c) Notification of feasible alternatives. Individuals who are
likely to require personal care under the State plan, or home and
community-based services under a section 1915(c) waiver program are
informed of the feasible alternatives, if available, under the State's
self-directed PAS State plan option, at the choice of these
individuals, to the provision of personal care services under the State
plan, or PAS under a section 1915(c) home and community-based services
waiver program. Information on feasible alternatives must be
communicated to the individual in a manner and language understandable
by the individual. Such information includes, but is not limited to,
the following:
(1) Information about self-direction opportunities that is
sufficient to inform decision-making about the election of self-
direction and provided on a timely basis to an individual or the
representative which minimally includes the following:
(i) Elements of self-direction compared to non-self-directed PAS.
(ii) Individual responsibilities and potential liabilities under
the self-direction service delivery model.
(iii) The choice to receive PAS through a waiver program
administered under section 1915(c) of the Act, regardless of delivery
system, if applicable.
(iv) The option, if available, to receive and manage the cash
amount of their individual budget allocation.
(2) When and how this information is provided.
(d) Support system. States must provide, or arrange for the
provision of, a support system that meets the following conditions:
(1) Appropriately assesses and counsels an individual, or the
individual's representative, if applicable, before enrollment,
including information about disenrollment.
(2) Provides appropriate information, counseling, training, and
assistance to ensure that a participant is able to manage the services
and budgets. Such information must be communicated to the participant
in a manner and language understandable by the participant. The support
activities must include at least the following:
(i) Person-centered planning and how it is applied.
(ii) Information about the services available for self-direction.
(iii) Range and scope of individual choices and options.
(iv) Process for changing the service plan and service budget.
(v) Grievance process.
(vi) Risks and responsibilities of self-direction.
(vii) The ability to freely choose from available PAS providers.
(viii) Individual rights.
(ix) Reassessment and review schedules.
(x) Defining goals, needs, and preferences.
(xi) Identifying and accessing services, supports, and resources.
(xii) Development of risk management agreements.
(xiii) Development of an individualized backup plan.
(xiv) Recognizing and reporting critical events.
(xv) Information about an advocate or advocacy systems available in
the State and how a participant, or a participant's representative, if
applicable, can access the advocate or advocacy systems.
(3) Offers additional information, counseling, training, or
assistance, including financial management services under either of the
following conditions:
(i) At the request of the participant, or participant's
representative, if applicable, for any reason.
(ii) When the State has determined the participant, or
participant's representative, if applicable, is not effectively
managing the services identified in the service plan or budget.
(4) The State may mandate the use of additional assistance,
including the use of a financial management entity, or may initiate an
involuntary disenrollment in accordance with Sec. 441.458, if, after
additional information, counseling, training or assistance is provided
to a participant (or participant's representative, if applicable), the
participant (or participant's representative, if applicable) has
continued to demonstrate an inability to effectively manage the
services and budget.
(e) Annual report. The State must provide to CMS an annual report
on the number of individuals served and the total expenditures on their
behalf in the aggregate.
(f) Three-year evaluation. The State must provide to CMS an
evaluation of the overall impact of the self-directed PAS option on the
health and welfare of participating individuals compared to non-
participants every 3 years.
[[Page 57884]]
Sec. 441.466 Assessment of need.
States must conduct an assessment of the participant's needs,
strengths, and preferences in accordance with the following:
(a) States may use one or more processes and techniques to obtain
information about an individual, including health condition, personal
goals and preferences for the provision of services, functional
limitations, age, school, employment, household, and other factors that
are relevant to the need for and authorization and provision of
services.
(b) Assessment information supports the determination that an
individual requires PAS and also supports the development of the
service plan and budget.
Sec. 441.468 Service plan elements.
(a) The service plan must include at least the following:
(1) The scope, amount, frequency, and duration of each service.
(2) The type of provider to furnish each service.
(3) Location of the service provision.
(4) The identification of risks that may pose harm to the
participant along with a written individualized backup plan for
mitigating those risks.
(b) A State must develop a service plan for each program
participant using a person-centered and directed planning process to
ensure the following:
(1) The identification of each program participant's preferences,
choices, and abilities, and strategies to address those preferences,
choices, and abilities.
(2) The option for the program participant, or participant's
representative, if applicable, to exercise choice and control over
services and supports discussed in the plan.
(3) Assessment of, and planning for avoiding, risks that may pose
harm to a participant.
(c) All of the State's applicable policies and procedures
associated with service plan development must be carried out and
include, but are not limited to, the following:
(1) Allow the participant, or participant's representative, if
applicable, the opportunity to engage in, and direct, the process to
the extent desired.
(2) Allow the participant, or participant's representative, if
applicable, the opportunity to involve family, friends, and
professionals (as desired or required) in the development and
implementation of the service plan.
(3) Ensure the planning process is timely.
(4) Ensure the participant's needs are assessed and that the
services meet the participant's needs.
(5) Ensure the responsibilities for service plan development are
identified.
(6) Ensure the qualifications of the individuals who are
responsible for service plan development reflect the nature of the
program's target population(s).
(7) Ensure the State reviews the service plan annually, or whenever
necessary due to a change in the participant's needs or health status.
(8) Ensure that a participant may request revisions to a service
plan, based on a change in needs or health status.
(d) When an entity that is permitted to provide other State plan
services is responsible for service plan development, the State must
describe the safeguards that are in place to ensure that the service
provider's role in the planning process is fully disclosed to the
participant, or participant's representative, if applicable, and
controls are in place to avoid any possible conflict of interest.
(e) An approved self-directed service plan conveys authority to the
participant, or participant's representative, if applicable, to
perform, at a minimum, the following tasks:
(1) Recruit and hire workers to provide self-directed services,
including specifying worker qualifications.
(2) Fire workers.
(3) Supervise workers in the provision of self-directed services.
(4) Manage workers in the provision of self-directed services,
which includes the following functions:
(i) Determining worker duties.
(ii) Scheduling workers.
(iii) Training workers in assigned tasks.
(iv) Evaluating workers performance.
(5) Determine the amount paid for a service, support, or item.
(6) Review and approve provider invoices.
Sec. 441.470 Service budget elements.
A service budget must be developed and approved by the State based
on the assessment of need and service plan and must include the
following:
(a) The specific dollar amount a participant may utilize for
services and supports.
(b) How the participant is informed of the amount of the service
budget before the service plan is finalized.
(c) The procedures for how the participant, or participant's
representative, if applicable, may adjust the budget, including the
following:
(1) How the participant, or participant's representative, if
applicable, may freely make changes to the budget.
(2) The circumstances, if any, that may require prior approval
before a budget adjustment is made.
(3) The circumstances, if any, that may require a change in the
service plan.
(d) The procedure(s) that governs how a person, at the election of
the State, may reserve funds to purchase items that increase
independence or substitute for human assistance, to the extent that
expenditures would otherwise be made for the human assistance,
including additional goods, supports, services or supplies.
(e) The procedure(s) that governs how a person may use a
discretionary amount, if applicable, to purchase items not otherwise
delineated in the budget or reserved for permissible purchases.
(f) How participants, or their representative, if applicable, are
afforded the opportunity to request a fair hearing under Sec. 441.300
if a participant's, or participant's representative, if applicable,
request for a budget adjustment is denied or the amount of the budget
is reduced.
Sec. 441.472 Budget methodology.
(a) The State shall set forth a budget methodology that ensures
service authorization resides with the State and meets the following
criteria:
(1) The State's method of determining the budget allocation is
objective and evidence based utilizing valid, reliable cost data.
(2) The State's method is applied consistently to participants.
(3) The State's method is open for public inspection.
(4) The State's method includes a calculation of the expected cost
of the self-directed PAS and supports, if those services and supports
were not self-directed.
(5) The State has a process in place that describes the following:
(i) Any limits it places on self-directed services and supports,
and the basis for the limits.
(ii) Any adjustments that will be allowed and the basis for the
adjustments.
(b) The State must have procedures to safeguard participants when
the budgeted service amount is insufficient to meet a participant's
needs.
(c) The State must have a method of notifying participants, or
their representative, if applicable, of the amount of any limit that
applies to a participant's self-directed PAS and supports.
(d) The budget may not restrict access to other medically necessary
care and services furnished under the plan and approved by the State
but not included in the budget.
[[Page 57885]]
(e) The State must have a procedure to adjust a budget when a
reassessment indicates a change in a participant's medical condition,
functional status or living situation.
Sec. 441.474 Quality assurance and improvement plan.
(a) The State must provide a quality assurance and improvement plan
that describes the State's system of how it will perform activities of
discovery, remediation and quality improvement in order to learn of
critical incidents or events that affect participants, correct
shortcomings, and pursue opportunities for system improvement.
(b) The quality assurance and improvement plan shall also describe
the system performance measures, outcome measures, and satisfaction
measures that the State must use to monitor and evaluate the self-
directed State plan option. Quality of care measures must be made
available to CMS upon request and include indicators approved or
prescribed by the Secretary.
Sec. 441.476 Risk management.
(a) The State must specify the risk assessment methods it uses to
identify potential risks to the participant.
(b) The State must specify any tools or instruments it uses to
mitigate identified risks.
(c) The State must ensure that each service plan includes the risks
that an individual is willing and able to assume, and the plan for how
identified risks will be mitigated.
(d) The State must ensure that the risk management plan is the
result of discussion and negotiation among the persons designated by
the State to develop the service plan, the participant, the
participant's representative, if any, and others from whom the
participant may seek guidance.
Sec. 441.478 Qualifications of providers of personal assistance.
(a) States have the option to permit participants, or their
representatives, if applicable, to hire any individual capable of
providing the assigned tasks, including legally liable relatives, as
paid providers of the PAS identified in the service plan and budget.
(b) Participants, or their representatives, if applicable, retain
the right to train their workers in the specific areas of personal
assistance needed by the participant and to perform the needed
assistance in a manner that comports with the participant's personal,
cultural, and/or religious preferences. Participants, or their
representatives, if applicable, also have the right to access other
training provided by or through the State so that their PAS providers
can meet any additional qualifications required or desired by
participants, or participants' representatives, if applicable.
(c) Participants, or their representatives, if applicable, retain
the right to establish additional staff qualifications based on
participants' needs and preferences.
Sec. 441.480 Use of a representative.
(a) States may permit participants to appoint a representative to
direct the provision of self-directed PAS on their behalf. The
following types of representatives are permissible:
(1) A minor child's parent or guardian.
(2) An individual recognized under State law to act on behalf of an
incapacitated adult.
(3) A State-mandated representative, after approval by CMS of the
State criteria, if the participant has demonstrated, after additional
counseling, information, training or assistance, the inability to self-
direct PAS.
(b) A person acting as a representative for a participant receiving
self-directed PAS is prohibited from acting as a provider of self-
directed PAS to the participant.
Sec. 441.482 Permissible purchases.
(a) Participants, or their representatives, if applicable, may, at
the State's option, use their service budgets to pay for items that
increase a participant's independence or substitute (such as a
microwave oven or an accessibility ramp) for human assistance, to the
extent that expenditures would otherwise be made for the human
assistance.
(b) The services, supports and items that are purchased with a
service budget must be linked to an assessed participant need or goal
established in the service plan.
Sec. 441.484 Financial management services.
(a) States may choose to provide financial management services to
participants, or their representatives, as applicable, self-directing
PAS, with the exception of those participants utilizing the cash option
who directly perform those functions, utilizing a financial management
entity, through the following arrangements:
(1) States may use a reporting or subagent through its fiscal
intermediary in accordance with section 3504 of the IRS Code and
Revenue Procedure 80-4 and Notice 2003-70; or
(2) States may use a vendor organization that has the capabilities
to perform the required tasks in accordance with Section 3504 of the
IRS Code and Revenue Procedure 70-6. When private entities furnish
financial management services, the procurement method must meet the
requirements set forth in 45 CFR 74.40 through 74.48.
(b) States must provide oversight of financial management services
by performing the following functions:
(1) Monitoring and assessing the performance of financial
management entity, including assuring the integrity of financial
transactions they perform.
(2) Designating a State entity or entities responsible for this
monitoring.
(3) Determining how frequently financial management entity
performance will be assessed.
(c) A financial management entity must provide functions including,
but not limited to, the following:
(1) Collect and process timesheets of the participant's workers.
(2) Process payroll, withholding, filing and payment of applicable
Federal, State and local employment-related taxes and insurance.
(3) Maintain a separate account for each participant's budget.
(4) Track and report disbursements and balances of participant
funds.
(5) Process and pay invoices for goods and services approved in the
service plan.
(6) Provide to participants periodic reports of expenditures and
the status of the approved service budget.
(d) States not utilizing a financial management entity must perform
the functions listed in paragraph (c) of this section on behalf of
participants self-directing PAS, with the exception of those
participants utilizing the cash option who directly perform those
functions.
(e) States will be reimbursed for the cost of financial management
services, either provided directly or through a financial management
entity, at the administrative rate of 50 percent.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
[[Page 57886]]
Dated: June 18, 2008.s
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: August 6, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. E8-23102 Filed 9-29-08; 11:15 am]
BILLING CODE 4120-01-P