Medicaid: Waiver Program for Developmentally Disabled Is Promising But
Poses Some Risks (Letter Report, 07/22/96, GAO/HEHS-96-120).

Pursuant to a congressional request, GAO reviewed states' experiences in
utilizing the Medicaid waiver program to provide care for
developmentally disabled adults in alternative settings, focusing on:
(1) expanding state use of the waiver program; (2) controlling long-term
care costs for developmentally disabled individuals; and (3) the
strengths and limitations in states' quality assurance approaches in
community settings.

GAO found that: (1) based on national data and three case studies,
states' use of the waiver program has changed long-term care for
developmental disabled persons by providing such persons with a broader
range of services that they and their families prefer; (2) the waiver
program has increased the number of persons served and the use of group
home settings while allowing states to close many institutional care
facilities and to expand services to persons in state-financed programs;
(3) states now serve more developmentally disabled persons through the
waiver program than the institutional program; (4) the waiver program
has allowed states to pursue distinct strategies and achieve different
program results; (5) from 1990 to 1995, Medicaid costs for long-term
care for developmentally disabled persons increased an average of 9
percent annually due to increased costs for waiver and institutional
program services, but per capita costs and cost increases varied by
state; (6) the cap on the number of program recipients and state
management practices helped contain these costs; (7) changes in the
Health Care Financing Administration's (HCFA) process for setting waiver
program caps could increase program costs, but HCFA believes that state
budget constraints could limit program growth; and (8) although states
are changing their quality assurance procedures for waiver program
services, such as customizing quality assurance to individual
circumstances, more needs to be done to improve quality oversight
mechanisms and reduce participants' risk as these mechanisms evolve.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-96-120
     TITLE:  Medicaid: Waiver Program for Developmentally Disabled Is 
             Promising But Poses Some Risks
      DATE:  07/22/96
   SUBJECT:  Health care programs
             Handicapped persons
             Long-term care
             Home health care services
             Community health services
             Health care cost control
             Quality assurance
             Waivers
             State-administered programs
             Health services administration
IDENTIFIER:  Medicaid Program
             Medicaid Intermediate Care Facility for Mental Retardation 
             Program
             Florida
             Michigan
             Rhode Island
             Medicaid Home and Community-Based Waiver Program
             Community Supported Living Arrangement Program
             
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Cover
================================================================ COVER


Report to Congressional Requesters

July 1996

MEDICAID - WAIVER PROGRAM FOR
DEVELOPMENTALLY DISABLED IS
PROMISING BUT POSES SOME RISKS

GAO/HEHS-96-120

Waiver Program for Developmentally Disabled

(101341)


Abbreviations
=============================================================== ABBREV

  ASPE - Assistant Secretary for Planning and Evaluation
  CMHB - Community Mental Health Board
  CSLA - Community Supported Living Arrangements
  DS - Developmental Services
  F.S.  - Florida statutes
  HCFA - Health Care Financing Administration
  HIV/AIDS - human immunodeficiency virus/acquired immunodeficiency
     syndrome
  HRS - Department of Health and Rehabilitative Services
  ICF - intermediate care facility
  ICF/MR - intermediate care facility for mental retardation
  NASDDDS - National Association of State Directors of Developmental
     Disabilities Services, Inc. 
  NF - nursing facility
  PERS - Personal Emergency Response System
  SNF - skilled nursing facility
  SSI - Supplemental Security Income
  UAP - University Affiliated Program

Letter
=============================================================== LETTER


B-266320

July 22, 1996

The Honorable William S.  Cohen
Chairman
The Honorable David H.  Pryor
Ranking Minority Member
Special Committee on Aging
United States Senate

The Honorable Bill Frist
Chairman
Subcommittee on Disability Policy
Committee on Labor and Human Resources
United States Senate

Adults with developmental disabilities are highly dependent on public
programs for meeting their long-term care needs.  Most persons with
developmental disabilities have mental retardation, but others have
severe, chronic disability resulting from cerebral palsy, epilepsy,
or other life-long conditions, except mental illness, that began
before they were 22 years old.  The population with developmental
disabilities receives more than $13 billion annually in public
funding for long-term care, second only to the elderly.  More than
300,000 adults with developmental disabilities receive government
long-term services financed primarily through Medicaid and to a
lesser extent through state and local programs.  Long-term care
services can include supervision and assistance with everyday
activities such as help in dressing, going to the bathroom, managing
money, and keeping out of danger.  Persons with developmental
disabilities have traditionally received their long-term care in
institutional settings. 

Recently, states have begun to significantly expand the use of the
Medicaid 1915(c) home and community-based waiver, enacted by the
Congress in 1981, to provide alternatives to institutional care for
persons with developmental disabilities.\1 The waiver program has two
advantages.  First, it gives states a tool to control costs by
allowing them to limit the number of recipients served.  In contrast,
states must serve all eligible individuals in the regular Medicaid
program.  Second, it permits states to meet the needs of many persons
with developmental disabilities by offering them a broader range of
services in less restrictive settings such as group or family home,
rather than in a Medicaid intermediate care facility for mental
retardation (ICF/MR), the setting where most of the institutional
care for this population is provided. 

At your request, we examined states' experiences in utilizing the
flexibility offered by the Medicaid waiver program to provide care
for adults with developmental disabilities in alternative settings. 
To understand changes in services, cost, and quality assurance, we
reviewed national data and conducted three case studies on issues and
choices states faced in using the waiver program.  Specifically, we
examined (1) expanded state use of the waiver program, (2) the growth
in long-term care costs for individuals with developmental
disabilities, (3) how costs are controlled, and (4) strengths and
limitations in states' approaches to assuring quality in community
settings. 

To conduct our work, we reviewed the literature, interviewed Health
Care Financing Administration (HCFA) officials responsible for waiver
programs and national experts, and analyzed national data on Medicaid
expenditures and recipients.  We also performed case studies in three
states:  Florida, Michigan, and Rhode Island.  We chose these states
because they have large waiver programs, provide a range in state
size and geographic representation, and have different strategies for
using the waiver program.  In visits to these states, we interviewed
program officials, providers, recipients, families, and advocates. 
We also reviewed data on costs and program participation for these
states.  We conducted our review between May 1995 and May 1996 in
accordance with generally accepted government auditing standards. 
For a complete description of our scope and methodology, see appendix
I. 


--------------------
\1 States also use the waiver for other populations.  See Medicaid
Long-Term Care:  Successful State Efforts to Expand Home Services
While Limiting Costs (GAO/HEHS-94-167, Aug.  11, 1994). 


   RESULTS IN BRIEF
------------------------------------------------------------ Letter :1

State use of the Medicaid 1915(c) home and community-based waiver has
changed the face of long-term care nationally for persons with
developmental disabilities by providing more persons with the kind of
services that most recipients and families prefer.  It has
significantly expanded the number of persons served overall and
resulted in more people being served by the waiver program in group
home and home settings than in the more restrictive and often large
ICFs/MR.  Florida, Michigan, Rhode Island, and other states have used
the waiver program to pursue various objectives, such as closing many
large and some small ICFs/MR, expanding services to persons
previously in state-financed programs, and including persons not
previously served.  Waiver program services have been provided
primarily in group homes.  However, some states have begun to shift
the focus of their waiver programs to serve more people at
home--their own home, their family's home, or an adult foster care
home--and to provide a broader range of services tailored to
individuals' needs and preferences. 

From 1990 to 1995, Medicaid costs for long-term care services for
persons with developmental disabilities nationwide rose at an average
annual rate of 9 percent.  Although most of the increase reflected
increased costs for waiver program services, increased costs for
ICF/MR program services also were a factor.  Waiver program costs
grew primarily because more people were served as per capita costs
for the program increased slightly less than inflation.  ICF/MR
program costs increased even though the number of ICF/MR residents
declined 7 percent.  The program's cost increases resulted solely
from per capita cost growth for the ICF/MR program, which was
somewhat higher than inflation. 

If not for a cap on the number of waiver program recipients in each
state and state management practices, cost growth would likely have
been higher.  HCFA requires each state to set limits on the number of
persons to be served in the waiver program subject to federal
approval.  Therefore, HCFA allows states to deny services to
otherwise eligible individuals once the cap is reached.  In contrast,
the regular Medicaid program requires that states serve all those who
meet eligibility requirements.  In addition, states use their own
management practices to control costs.  In the three states we
visited, these management practices include fixed agency budgets for
waiver program services and linking of the management of the care
plan and use of non-Medicaid services to individual budgets for each
person served. 

A 1994 change in federal rules could result in higher caps and costs. 
In this change, HCFA eased the process by which waiver program caps
were established, giving states more discretion in determining the
number of waiver program recipients.  In doing so, HCFA recognized
the risk of cost increases if states increased the number of people
served, but it expected that state budget pressures would likely
inhibit the size of the increase.  If states elect to use this
discretion, as two states we visited said they planned to do, a risk
exists that the number of waiver program recipients and costs could
increase more rapidly. 

Some states are changing their quality assurance approaches to
improve quality as services offered by the waiver program continue to
evolve, but more development is needed to reduce risks.  States
continue to use traditional mechanisms such as provider certification
to assure recipient safety.  At the same time, states are introducing
promising innovations to customize quality assurance for an
individual's circumstances.  For example, states may use a
combination of methods to monitor quality, including arranging for a
roommate to live with a disabled individual; home visits from
community volunteers to check on an individual's status; and visits
from program staff at locations where the individual is likely to be,
such as his or her home or local park or library.  At the heart of
this effort is the recognition that reducing the level of program
restrictions and the amount of supervision in these individuals'
lives and increasing their choices of where they live, whom they live
with, and what they do during the day are desirable goals but can
pose risks because of the cognitive and physical impairments of the
population served.  State officials recognize that increasing
recipient choice and making providers compete can play an important
role in improving the quality of services provided.  But they and
HCFA officials acknowledge that more remains to be done to fully
develop the quality oversight mechanisms being used.  Until this
occurs, some recipients may not have better service quality and may
face some health and safety risks. 


   BACKGROUND
------------------------------------------------------------ Letter :2

Medicaid funds most publicly supported long-term care services for
persons with developmental disabilities.  In 1995, Medicaid provided
more than $13.2 billion to support over 275,000 individuals with
these services.  To be eligible for Medicaid, individuals must
generally meet federal and state income and asset thresholds.  To be
considered developmentally disabled, individuals must also have a
mental or physical impairment, with onset before they are 22 years
old, that is likely to continue indefinitely and they must be unable
to carry out some everyday activities, such as making basic
decisions, communicating, taking transportation, keeping track of
money, keeping out of danger, eating, and going to the bathroom,
without substantial assistance from others. 

Until recently, states provided the bulk of services for this
population through the Medicaid ICF/MR program.  The ICF/MR program
funds large institutions and smaller settings of 4 to 15 beds, and
both sizes of settings are subject to the same regulatory standards. 
ICF/MR program services are available and provided as needed on a
24-hour basis.  These services include medical and nursing services,
physical and occupational therapy, psychological services,
recreational and social services, and speech and audiology services. 
ICF/MR program services also include room and board.  Providers of
ICF/MR program services must adhere to an extensive set of
regulations and are subject to annual on-site inspections as mandated
by Medicaid. 

In 1981, the Congress enacted the 1915(c) waiver allowing states to
apply to HCFA for a waiver of certain Medicaid rules to offer home
and community-based services.  By 1995, 49 states had 1915(c) home
and community-based waiver programs for persons with developmental
disabilities.\2 Waiver program services vary by state, but include
primarily nonmedical services such as chore services, respite care,
and habilitation services, which are all intended to help people live
more independently and learn to take care of themselves.  (See apps. 
II and III for a list of waiver program services and definitions in
the three states we visited).  Unlike ICF/MR program services, waiver
program services do not include room and board and are often provided
on less than a 24-hour basis. 

HCFA carries out its waiver program oversight responsibilities
through review of applications and renewals and monitoring of
implementation through on-site compliance reviews.  In approving
waivers,\3 HCFA reviews applications to ensure that (1) services are
offered to individuals who, "but for the provision of such services . 
.  .  would require the level of care provided" in an institutional
setting such as an ICF/MR;\4 (2) total Medicaid per capita costs for
waiver program recipients are not greater than total Medicaid per
capita costs for persons receiving institutional care; and (3) states
properly assure quality. 

The waiver program enables states to control utilization and costs in
ways not permitted under the regular Medicaid program.  The waiver
program has a cap for the number of persons served at HCFA-approved
levels.  It also allows states, with HCFA permission, to target
services to distinct geographic areas or populations, such as persons
with developmental disabilities or the elderly; offer a broader range
of services; and serve persons with incomes somewhat higher than
normal eligibility thresholds.  In contrast, the regular Medicaid
program generally requires that each state provide eligible
beneficiaries with all federally mandated services and any optional
services it chooses to offer. 

States, however, provide some community-based services to
developmentally disabled individuals through the regular Medicaid
program.  These services include federally mandated services, such as
home health care, and other services that states may elect to
provide, which are called optional services.  Some of the more
important optional services for the population with developmental
disabilities are rehabilitative services,\5 case management, and
personal care.  Because the regular Medicaid program operates as an
entitlement--that is, all eligible individuals in a state are
entitled to receive all services offered by the state--states have
less control over utilization and the cost of services than in waiver
programs. 


--------------------
\2 Arizona provides similar services through a Medicaid 1115
demonstration waiver. 

\3 Initial waiver program approvals are for a 3-year period and
renewals are for a 5-year period. 

\4 Section 1915(c)(1) of the Social Security Act. 

\5 Some states use the Medicaid optional service of rehabilitation to
provide services to persons with developmental disabilities. 
However, HCFA considers the services provided under this option for
the developmentally disabled population to be habilitation rather
than rehabilitation because these services are intended to help
individuals learn to perform tasks rather than restore their ability
to perform tasks they have lost the capacity to perform.  HCFA no
longer allows states to select the rehabilitation plan option to
offer habilitation services.  However, states that had received
approval to do so before June 30, 1989, can continue providing such
services. 


   STATES USE WAIVERS TO EXPAND
   AND CHANGE PROGRAMS FOR
   DEVELOPMENTALLY DISABLED
------------------------------------------------------------ Letter :3

Through the use of waivers, states have changed long-term care
nationally for persons with developmental disabilities in two ways. 
First, states have significantly expanded the number of individuals
being served.  Second, states have shifted the program balance from
serving most people through the ICF/MR program to serving most
through the waiver program.  Generally the shift to the waiver
program has been part of an evolution of services away from large and
more restrictive settings to providing services in small and less
restrictive settings, which are preferred by recipients and their
families.  Some state waiver programs are continuing to evolve from
their earlier approach of providing services primarily in group home
settings to one of serving people at home. 


      STATES SERVE MORE PEOPLE AND
      SHIFT BALANCE BY SERVING
      MORE IN WAIVER THAN IN
      ICF/MR PROGRAM
---------------------------------------------------------- Letter :3.1

From 1990 to 1995 the number of persons served by the waiver and
ICF/MR programs combined rose at an average annual rate of 8 percent
(see table 1).  The number served by the waiver program more than
tripled to over 142,000 persons during this period and accounted for
the entire increase in the number of persons served by both programs. 
States dramatically increased the number of people who received
waiver program services using a variety of strategies, including
substituting waiver program for ICF/MR program services, services
provided under state-only programs, and services to persons who were
not being served before. 



                          Table 1
          
            Growth of Developmental Disabilities
          Population Served by Medicaid Long-Term
                            Care

Recipients            1982    1986    1990    1994    1995
------------------  ------  ------  ------  ------  ------
==========================================================
Total               140,59  156,50  184,12  257,42  276,45
                         3       5       6       0       2
Served by waiver     1,381  17,180  39,838  115,30  142,06
 program\a                                       2       8
Served by ICF/MR    139,21  139,32  144,28  142,11  134,38
 program                 2       5       8       8       4
----------------------------------------------------------
\a Does not include those served by Arizona's 1115 waiver program who
live in alternative settings. 

Source:  Research and Training Center on Community Living, Institute
on Community Integration/UAP, College of Education and Human
Development, University of Minnesota, Minneapolis. 

More people are now served through the waiver program than the ICF/MR
program.  Although the percentage of persons served through the
waiver program varies by state, 30 states provide services to more
people through the waiver program than the ICF/MR program (see fig. 
1). 

   Figure 1:  States' Use of
   Medicaid Waivers for Long-Term
   Care for Persons With
   Developmental Disabilities,
   1995

   (See figure in printed
   edition.)

Source:  Calculated from data obtained from the Research and Training
Center on Community Living, Institute on Community Integration/UAP,
College of Education and Human Development, University of Minnesota,
Minneapolis. 

With the support of recipients and their families, state officials
have made changes to serve more people through the waiver program. 
All three groups have come to believe that the alternatives possible
through the waiver can better serve persons with developmental
disabilities.  They believe that in many cases individuals can have a
higher quality of life through greater community participation,
including relationships with neighbors, activities in social
organizations, attendance at public events, and shopping for food and
other items.  This can result in expanded social networks, enhanced
family involvement, more living space and privacy, and improvements
in communication, self-care, and other skills of daily living. 

States believed that they could use the waiver program to expand
services while simultaneously reducing or limiting access to ICF/MR
program care as a means to control growth in expenditures.  As a
result, many states have closed large institutions or held steady
ICF/MR capacity even as the population in need has grown.  Some
states have also reduced smaller ICF/MR settings by converting them
to waiver programs.  The number of people in ICF/MR settings has
dropped 7 percent from 1990 to 1995.  These actions have been part of
an overall strategy to change the way services are provided and
financed. 


      FLEXIBILITY OF THE WAIVER
      PROGRAM HAS ALLOWED STATES
      TO PURSUE DISTINCT
      STRATEGIES
---------------------------------------------------------- Letter :3.2

States have used the flexibility of the waiver program to pursue
distinct strategies and achieve different program results as shown in
the three states we visited (see table 2).  These states used the
waiver program to substitute for ICFs/MR that were being closed,
expand the number of persons being served, or both. 



                          Table 2
          
           Changes in Number of Waiver and ICF/MR
             Program Recipients, 1990 and 1994


                Waiver      ICF/MR      Waiver      ICF/MR
               program     program     program     program
State       recipients  recipients  recipients  recipients
----------  ----------  ----------  ----------  ----------
Florida          2,488       3,243       6,547       3,395
Michigan         1,647       3,337       3,130       3,205
Rhode              738         903       1,262         458
 Island
----------------------------------------------------------
Note:  Some double counting occurs for recipient numbers because the
same individual may receive services through the waiver and ICF/MR
programs in the same year. 

Source:  State agencies. 

Rhode Island targeted waiver program services as a substitute for
ICF/MR program care with little change in the number of persons
served.  The state began the 1990s with short waiting lists for
services and a goal of closing all large institutions of 16 or more
beds.  Providing waiver program services to many of its former
residents, the state closed the Ladd Center, its last large
institution, in 1994 to become one of only two states along with the
District of Columbia to close all its large institutions.\6

Rhode Island also substantially reduced the number of recipients of
services in smaller ICFs/MR by converting the ICFs/MR to the waiver
program.  As a result, a substantial number of persons who had been
supported through the state's ICF/MR program are now supported by its
waiver program.  The number of developmentally disabled persons
served through the waiver and ICF/MR programs in Rhode Island,
however, did not expand significantly. 

In contrast, Florida's strategy for the waiver program was to expand
services to a much broader population rather than using the waiver
program to close ICF/MR settings.  Florida began the 1990s with
substantial waiting lists for services and fewer ICF/MR beds than
most of the country relative to the size of the population with
developmental disabilities.  Florida chose to greatly expand the
number of persons with developmental disabilities served to include
people who had not been served or who needed more services.  The
overwhelming source of growth has been from the large increase in
waiver program recipients, although Florida has also experienced
modest growth in the number of ICF/MR recipients.  The state's
increase in waiver program recipients includes persons who were
receiving services from state-only programs and persons who were not
previously served. 

Michigan used the waiver program in the 1990s to continue pursuing
its goals of closing large institutions, offering placements for
persons leaving small ICFs/MR, and expanding services to those with
unmet needs.  Michigan, like Florida, began the 1990s with many
persons who needed but had not received services.  Michigan, however,
had more ICF/MR capacity than Florida.  Most of Michigan's ICF/MR
capacity was in smaller settings, many of which had been developed to
help the state close some of its large institutions.  As a result,
Michigan has closed all but about 400 beds in large institutions and
significantly increased the number of persons served.  State
officials told us that by 1995, Michigan was serving more individuals
in the waiver program than in its ICF/MR program. 


--------------------
\6 Vermont is the other state to close all its ICFs/MR of 16 or more
beds.  New Hampshire is the only other state to close all its large
state institutions, but it still has one large private institution in
operation. 


      STATES ARE CHANGING THEIR
      WAIVER PROGRAMS TO SERVE
      MORE INDIVIDUALS AT HOME
---------------------------------------------------------- Letter :3.3

In the continuing evolution of services for persons with
developmental disabilities, some states, such as Florida, Michigan,
and Rhode Island, are changing the focus of waiver program services
from group home care to more tailored services to meet individuals'
unique needs and preferences at home.  These states and most others
began their waiver programs by providing services primarily in group
homes.  Recently, state officials have come to believe that for many
persons, services are best provided on a more individualized basis in
a recipient's home--his or her family's home or own home or an adult
foster care home--rather than in group home settings.  The three
states we visited became convinced that this was possible even for
persons with severe disabilities, in part, because of their success
in using this approach in the recently concluded Community Supported
Living Arrangements (CSLA) program.\7

Slightly more than one-half of all waiver program recipients
nationally are estimated to have been living in settings other than
group homes in 1995.\8 In each of the three states we visited, many
1915(c) waiver recipients now live in their family's home or their
own home.  In Florida, more than one-half of all waiver recipients
live in settings other than group homes, including nearly 50 percent
who live in their family's homes.  The majority of Michigan's waiver
program recipients live in small settings other than licensed group
homes.  Just under one-half of Rhode Island's recipients live in
settings other than group homes.  Each state expects the percentage
of waiver program recipients living in nongroup home settings to
increase. 

Officials in the states we visited and other experts told us that
serving individuals with developmental disabilities who live in their
own or their family's home and receive less than 24-hour support
often requires changes in the service delivery model.  For example,
these settings may need environmental changes and supports to make
them suitable for persons with developmental disabilities.  Such
changes could include the installation of ramps for persons with
physical disabilities or emergency communication technology and other
equipment for persons with communication or cognitive impairments or
a history of seizures who may need quick assistance.  Paid assistance
may also be needed to provide a variety of other services, such as
supervision of or assistance in toileting, dressing, bathing,
carrying out routine chores, managing money, or accessing public
transportation and other community services.  Assistance for such
services is often provided on an individual basis rather than for
several persons in a group home.  Respite care may also be provided
for family caregivers. 

Although the three states we visited have made major commitments to
convert their waiver programs to individualized supports at home,
these changes will require significant change on the part of everyone
involved and could take years to fully implement.  For example, some
public agencies own or have long-term contracts for the use of group
homes or have encouraged the development of private group homes.  In
addition, state officials told us that public agencies and other
service providers may find it difficult to adapt to designing
services for each individual living at home rather than offering
services in the more familiar group home program setting.  In
addition, some family members and advocates have expressed concern
that the level of funding available for and the range of services
offered under the waiver program may not be sufficient for
individuals who require constant supervision and care. 


--------------------
\7 Starting in 1990, the Congress funded the CSLA program for a
5-year period.  The eight states selected to participate in the
program used CSLA to expand or test a fundamentally different
approach to supporting people with disabilities in the community,
often referred to as the supports model.  The program ended in 1995. 
CSLA expenditures were $38 million in 1995. 

\8 Robert Prouty, and and K.  Charlie Lakin, eds., Residential
Services for Persons With Developmental Disabilities:  Status and
Trends Through 1995 (Minneapolis:  University of Minnesota, Research
and Training Center on Community Living, Institute on Community
Integration/UAP, College of Education and Human Development, 1996),
p.  102. 


   MEDICAID COSTS ROSE DURING
   PLANNED EXPANSION IN PERSONS
   SERVED
------------------------------------------------------------ Letter :4

Nationwide, Medicaid costs for long-term care services for persons
with developmental disability rose at an average annual rate of 9
percent between 1990 and 1995 as states implemented their planned
increases in the number of persons served.  Costs rose from $8.5
billion in 1990 to $13.2 billion in 1995.  (See table 3.) Most of the
increase reflected increased costs for waiver program services, but
increased ICF/MR program costs also were a factor.  Waiver program
costs grew primarily because more people were served as per capita
waiver costs increased slightly less than inflation.  ICF/MR program
cost increases resulted solely from growth in per capita ICF/MR
program costs, which rose somewhat faster than inflation, as the
number of residents declined.  In 1995, per capita waiver program
costs ($24,970) remained significantly lower than per capita ICF/MR
spending ($71,992).\9



                          Table 3
          
          Growth in Medicaid Long-Term Care Costs
               for Persons With Developmental
             Disabilities, 1990, 1994, and 1995

                   (Dollars in billions)

Program                   1990          1994          1995
----------------  ------------  ------------  ------------
==========================================================
Total                   $8.478       $12.085       $13.222
Waiver program\a         0.846         2.862         3.547
ICF/MR program           7.632         9.222         9.675
----------------------------------------------------------
Note:  Numbers may not add due to rounding. 

\a Does not include costs for Arizona's 1115 waiver program for
services in alternative settings. 

Source:  Research and Training Center on Community Living, Institute
on Community Integration/UAP, College of Education and Human
Development, University of Minnesota, Minneapolis. 


--------------------
\9 Although Medicaid costs are much lower for waiver program
recipients than ICF/MR program recipients, government savings are
less for waiver program recipients than this comparison might
suggest.  For example, waiver program recipients receive other
government funding not available to ICF/MR program recipients. 
Furthermore, although waiver program recipients can receive federal
Supplemental Security Income (SSI) payments for general income,
ICF/MR program recipients can only receive the SSI personal needs
allowance.  In 1995, the general income maximum was $458 a month or
$5,496 annually, while the personal needs allowance was $30 a month. 
The amount of SSI payments can be greater if states choose to
supplement the federal payment.  Waiver program recipients may also
benefit from the Food Stamp program, some federal housing programs,
and state and local government programs. 


      STATE COSTS AND COST
      INCREASES VARY
---------------------------------------------------------- Letter :4.1

In the three states we visited, average per capita costs and average
increases in per capita costs varied according to each state's waiver
program strategy and other factors (see table 4).  Florida per capita
waiver costs, for example, were among the lowest in the nation, in
part, as a result of the state's strategy to expand services to more
persons.  According to state officials, limited resources were
stretched to cover as many people as possible by providing each
individual with the level of services required to prevent
institutionalization rather than providing all the services from
which an individual might benefit. 



                          Table 4
          
          Per Capita Costs and Cost Increases Vary


                Waiver      ICF/MR      Waiver      ICF/MR
               program     program     program     program
----------  ----------  ----------  ----------  ----------
United         $24,824     $64,892           4           5
 States
Florida          9,955      62,815           9           8
Michigan        27,537      66,361           5           1
Rhode           49,884     117,118          27          11
 Island
----------------------------------------------------------
Source:  Calculated from national data obtained from the Research and
Training Center on Community Living, Institute on Community
Integration/UAP, College of Education and Human Development,
University of Minnesota, Minneapolis, and state data provided by
state officials.  Because 1995 data were not available from the
states, we use 1994 national data for comparison purposes.  See
appendix I for details on national and state data comparison. 

By contrast, from 1990 to 1994 Rhode Island's per capita costs under
the waiver and ICF/MR programs were much higher than the national
average.\10 The large increase in per capita waiver program costs
resulted because unlike Florida and Michigan, Rhode Island
substituted waiver program services for persons receiving high-cost
ICF/MR care and closed its last large institution.  As a result,
Rhode Island was serving a substantial number of persons through the
waiver program who had previously received expensive ICF/MR care.  At
the same time, ICF/MR per capita costs were also higher, in part,
because as the number of people in ICF/MR settings declined, the
fixed costs were spread over a smaller population.  In addition, the
population that remained in ICF/MR settings was substantially
disabled and required intensive services. 


--------------------
\10 Per capita costs for both programs are substantially higher in
New England than in most other parts of the country. 


   ENROLLMENT CAPS AND MANAGEMENT
   PRACTICES HELPED LIMIT COST
   GROWTH
------------------------------------------------------------ Letter :5

Cost growth has been limited by two factors.  First is a cap on the
number of program recipients.  Second, states have employed a variety
of management practices to control per capita spending. 

Fundamental to waiver program cost control has been the federal
Medicaid rule which, in effect, capped the number of recipients who
could have been served each year.  HCFA approves each state's cap,
and states are allowed to deny admission for services to otherwise
qualified individuals when the cap is reached.  By contrast, under
the regular Medicaid program, all eligible recipients must be served
and no limits exist on the number of recipients.  As a result, waiver
caps have given states a greater ability to control access and
thereby cost growth than would have been possible if they had
expanded services through the regular Medicaid program. 

States have also used several management practices to help contain
costs.  In the three states we visited, these management practices
include fixed agency budgets for waiver services and linking
management of care plan and use of non-Medicaid services to
individual budgets for each person served. 


      FIXED AGENCY BUDGETS
---------------------------------------------------------- Letter :5.1

States have developed fixed agency budgets within limits established
under waiver rules.  In Florida, Michigan, and Rhode Island,
appropriations for waiver program and other services are in the
budgets of developmental disability agencies.  In Florida, budgets
are allocated among 15 state district offices.  In Michigan, budgets
for serving persons with developmental disabilities are allocated
among 52 local government community mental health boards and three
state-operated agencies, each responsible for serving a local area. 
State or local agencies are responsible for approving individual
service plans, authorizing budgets for the costs of these services,
and monitoring program expenditures on an ongoing basis to ensure
that total expenditures are within appropriated budgetary amounts as
the three states transition to a person-centered planning basis in
their waiver programs. 


      MANAGEMENT OF CARE PLAN
      LINKED TO INDIVIDUAL BUDGETS
---------------------------------------------------------- Letter :5.2

The three states we visited require that case managers or service
providers in consultation with case managers develop a plan of care
linked to an individual budget for each person being served in the
person-centered planning approach.  This care plan and its costs must
be approved by the state developmental disability agency, state
district office, or community mental health board, depending upon the
state.  Upon agency approval, the case manager oversees the
implementation of the care plan and monitors it on an ongoing basis. 
Significant variation from the plan requires agency approval and
changes in service and budget authorizations.  This process provides
more stability for the budget process and allows state agencies to
monitor their overall spending on an ongoing basis and plan for
contingencies to remain within budget levels. 


      USE OF NON-MEDICAID SERVICES
      LINKED TO INDIVIDUAL BUDGETS
---------------------------------------------------------- Letter :5.3

State developmental disability agencies in the three states we
visited also require that case managers build into the care planning
process and individual budget determination the use of non-Medicaid
services, both paid and unpaid.  State officials told us that this is
a part of better integration of persons with developmental
disabilities into the community and making it possible to extend
available waiver dollars to serve as many people as possible.  When
paid services are needed, states try to take advantage of services
funded for broader populations, such as recreation or socialization
in senior citizen centers or the use of public transportation. 
States also attempt to use unpaid services when possible by
increasing assistance from families, friends, and volunteers.  State
officials told us that use of these paid and unpaid services reduces
the need for Medicaid-financed supervision and care. 


   CHANGE IN FEDERAL RULE COULD
   RESULT IN HIGHER CAPS AND COSTS
------------------------------------------------------------ Letter :6

A change in federal rules could result in high waiver caps on
enrollment and therefore higher costs.  Until August 24, 1994, HCFA
limited the number of waiver recipients in a state under the
so-called cold bed rule.  This rule required that each state document
for HCFA approval that it either had an unoccupied Medicaid-certified
institutional bed--or a bed that would be built or converted--for
each individual waiver recipient the state requested to serve in its
application.  However, in 1994, HCFA eased waiver restrictions by
eliminating the cold bed rule so that states were no longer required
to demonstrate to HCFA that they had "cold beds."

HCFA took this action because it believed that the cold bed rule
placed an unreasonable burden on states by requiring them to project
estimates of additional institutional capacity.  HCFA now accepts a
state's assurance that absent the waiver the people served in the
waiver program would receive appropriate Medicaid-funded
institutional services.  As HCFA recognized when it eliminated the
cold bed rule, this change could result in higher waiver costs if
states elect to increase the number of waiver recipients more rapidly
than before.  HCFA, however, recognized that the state budget
constraints could play a restrictive role in waiver growth. 

State officials told us that elimination of the cold bed rule allows
them to expand waiver services more rapidly than in the past, both to
persons not currently receiving services and to others receiving
services from state-only programs.  State officials told us that
converting state program recipients to the waiver was particularly
advantageous given the federal Medicaid match.\11 Officials in
Florida and Michigan told us that they are planning to expand the
number of people served in the waiver program more rapidly than they
could have under the cold bed rule.  This could increase costs more
rapidly than in the past.  Officials in Florida and Michigan said
that they will phase in increases in the number of waiver recipients
to stay within state budget constraints and to allow for a more
orderly expansion of services to the larger numbers of new
recipients. 


--------------------
\11 The federal government matches state expenditures for Medicaid
according to a prescribed formula, providing on average 57 cents of
every Medicaid dollar spent. 


   MORE DEVELOPMENT OF PROMISING
   QUALITY ASSURANCE APPROACHES
   NEEDED TO REDUCE POTENTIAL
   RISKS
------------------------------------------------------------ Letter :7

To increase quality for recipients and families, states are
introducing promising quality assurance innovations while
simultaneously building in more flexibility in traditional quality
assurance mechanisms.  These changes are intended to provide
recipients and families with a greater choice of services within
appropriate budget and safety limits.  However, until states more
comprehensively develop and test these approaches, some recipients
may face health and safety risks and others may not have access to
the range of choices state programs seek to provide. 


      STATES CONTINUE TO USE
      TRADITIONAL MECHANISMS TO
      ASSURE ADEQUATE QUALITY
---------------------------------------------------------- Letter :7.1

One of the most important mechanisms that states use to assure
adequate quality is service standards.  Each state, as required by
HCFA guidelines, adopts or develops standards for each waiver
service.  Waiver standards are specified in state and local laws,
regulations, or operating guidelines and are enforced by specific
agencies.  As a result, waiver standards reflect specific state
processes and choices in how states assure quality, and are not
uniform across the nation as are ICF/MR standards.  (For example, see
app.  IV for a summary of how Florida meets HCFA requirements for
specifying waiver standards.) Waiver standards may include
professional licensing standards, minimum training requirements for
staff, and criminal background checks for providers.  The standards
may also include requirements for certification of group home or
other facilities and compliance with local building codes and fire
and safety requirements. 

States review providers and services on an ongoing basis and have
abuse and neglect reporting procedures in place.  Florida, Michigan,
and Rhode Island, for example, conduct routine and unannounced
reviews of providers.  As a result of these reviews, providers can be
required to provide plans of correction for identified problems and
implement improvements.  In some cases, providers have lost their
certification to participate in the program.  These states also have
formal grievance procedures and a grievance unit, such as a state
agency or human rights committee, to investigate complaints on a
statewide, regional, or agency basis.  Through these processes, the
states have also identified problems in quality and taken steps to
ensure corrective action. 

In addition to state quality assurance efforts, HCFA regional staff
conduct a compliance review of each state's waiver program before its
renewal.  HCFA uses a compliance review document for this process. 
HCFA reviews involve random selections of recipients for interviews
and visits to their homes.  The reviews also involve interviews with
and visits to service providers and advocates.  If HCFA determines
that quality is not satisfactory, it can require that a state take
corrective action before a waiver can be renewed. 


      STATES ARE INTRODUCING
      INNOVATIONS TO PROMOTE
      BETTER QUALITY FOR
      RECIPIENTS
---------------------------------------------------------- Letter :7.2

States are taking steps to develop or enhance existing mechanisms to
promote better quality in waiver program services.  Many of these
mechanisms were used in the recently concluded CSLA program to
provide individualized services to people at home and are now being
incorporated into the home and community-based waiver program even
for persons with substantial disabilities.  Advocates, family
members, and recipients have been generally positive about this shift
to support individuals in more integrated community settings. 

Person-centered planning is a key element of providing better quality
in waiver services, according to officials in the three states we
visited and national experts.  The planning process and the resulting
plans are individualized to incorporate substantial recipient and
family input on how the individual will live and what assistance the
individual will need.  The case manager, called support coordinator
in some states, has primary responsibility in person-centered
planning, which includes working with the recipient to develop the
plan, arranging for needed services, monitoring service delivery and
quality, and revising the plan as necessary.  A budget for the
individual is established to provide the services identified as
appropriate and cost-effective.  Recipients and case managers choose
providers on the basis of their satisfaction with services.  State
officials told us that this approach not only gives recipients more
say in how they are served but that the resulting competition
motivates providers to increase service quality. 

Linking persons living in the community with volunteers who can
provide assistance and serve as advocates is seen as another
important mechanism for promoting quality.  For example, some states,
including the three we visited, have a circle of friends or similar
process for individual recipients.  A circle of friends is a group of
volunteers, which can include family, friends, community members, and
others, who meet regularly to help persons with disabilities reach
their goals.  These volunteers help plan how to obtain needed
supports; help persons participate in community, work, or leisure
activities they choose; and try to help find solutions to problems. 
By integrating recipients in the community, recipients have more
choice and can get better quality services, according to national
experts and state officials we interviewed.  This community
integration increases the number of persons who can observe and
identify problems in service quality and notify appropriate officials
when there are deficiencies. 

Because program quality depends on the active participation of
recipients, families, and service providers, states are also
providing substantial training to these groups to encourage and
strengthen their participation.  Training can include informing
recipients and families of available service providers, procedures
for providing feedback about services, and steps to take if quality
is not improved.  Training for service providers may focus on
reinforcing the fact that the recipient and family have the right to
make choices about services and that staff must be responsive to
those choices unless they are inappropriate for safety concerns or
for other compelling reasons, such as available financial resources. 

States are also modifying how they monitor quality.  Traditionally,
they emphasized compliance with certain criteria, such as maintaining
a minimum level of staff resources and implementing standard care
processes.  Some states are focusing their quality monitoring more on
outcome measures for each individual while still assessing providers'
compliance with program standards.  For example, states, including
the three we visited, are trying to determine whether the recipients
are living where and with whom they chose, whether they are safe in
this environment, and whether they are satisfied with their
environment and the services they receive. 

States are also attempting to make their oversight less intrusive for
the recipients.  For example, some states use trained volunteers to
interview recipients at their homes on a periodic basis to check the
quality of services received.  In other instances, although case
managers are required to meet recipients on a regular basis, meetings
can be arranged at the recipient's convenience, including in the
evening or on weekends or at a place the recipient likes to meet at,
such as at his or her home or local park or library.  Case managers
talk with the recipients and their families about the quality of the
services they receive and take any actions necessary to correct
deficiencies. 


      SOME RECIPIENTS MAY FACE
      AVOIDABLE RISKS UNTIL STATES
      MORE FULLY DEVELOP AND
      IMPLEMENT EVOLVING
      APPROACHES TO QUALITY
---------------------------------------------------------- Letter :7.3

While officials in the three states we visited and other experts
agree that many persons prefer services provided at home to services
provided in institutions or other group settings, they also note that
providing services at home presents unique problems in ensuring
quality.  Because the new focus is on providing individual choice,
the types of services that are offered and the means for providing
these services can vary greatly.  To promote quality and ensure that
minimum standards are met requires a broad range of approaches. 

Although states continue to develop quality assurance mechanisms,
state officials acknowledge that these are not yet comprehensive
enough to assure recipient satisfaction and safety.  In the three
states we visited, state officials and provider agencies told us that
they are still developing guidance and oversight in a number of key
areas.  Michigan, for example, is revising its case management
standards and statewide quality assurance approaches.  Rhode Island
is developing a more systematic monitoring approach statewide, and
Florida is continuing to implement and evaluate its independent
service coordinator approach. 

One of the greatest difficulties in developing quality mechanisms for
services in alternative settings is balancing individual choice and
risks.\12 Where greater choice is encouraged and risks are higher,
more frequent monitoring and contingency planning need to be built
into the process.  Yet some professional staff and agency providers
in the states we visited believe that they do not have sufficient
guidance on where to draw the line between their assessment of what
is appropriate for the disabled person and the individual's choice. 
For example, some persons with mental retardation cannot speak
clearly enough to be understood by people who do not know them;
cannot manage household chores, such as cooking in a safe manner; or
have no family member to perform overall supervision to keep them
from danger.  Yet these people express a desire to live
independently, without 24-hour staff supervision. 

Florida, Michigan, and Rhode Island each attempt to customize
supports to reduce risks for individuals who live in these
situations.  They may arrange for roommates, encourage frequent
visits and telephone contact by neighbors and friends, enroll
individuals in supervised day activities, install in-home electronic
access to emergency help, and provide paid meal preparation and chore
services.  As this new process evolves, states and providers seek to
develop a better understanding of how to manage risks and reduce them
where possible.  This should lead to improved guidance for balancing
risks and choices for each recipient's unique circumstances. 

Determining what recipients' choices are can be difficult for a
number of reasons.  First, many of these individuals have had little
experience in making decisions and may also have difficulty in
communicating.  In addition, some recipients have complained that
they are not being provided the range of choices to which they should
have access and that quality monitoring is too frequent or intrusive
despite the changes states have introduced.  However, concern has
been expressed that quality assurance is not rigorous enough to
reduce all health or safety risks and that the range of choices is
too great for some individuals.\13

State officials and other experts we interviewed have emphasized the
need for vigilance to protect recipients and ensure their rights. 
They have been especially concerned with assuring quality for
recipients who are unable to communicate well and for those who do
not have family members to assist them.  The states we visited are
taking special precautions to try to assure quality in these
cases--such as recruiting volunteers to assist and asking recipient
groups to suggest how to assure quality for this vulnerable
population.  However, state officials and HCFA agree that more
development of quality assurance approaches is needed. 


--------------------
\12 HCFA has also recognized the need to balance these issues.  See
The Role of Medicare and Medicaid in Long-Term Care:  Opportunities,
Challenges, and New Directions (Baltimore:  U.S.  Department of
Health and Human Services, HCFA, Sept., 1995), p.  44. 

\13 See Robert G.  Erb, "Perspectives:  Where, Oh Where, Has Common
Sense Gone?  (Or If the Shoe Don't Fit, Why Wear It?), Mental
Retardation:  A Journal of Policy, Practices, and Perspectives, Vol. 
33, No.  3 (1995), pp.  197-99. 


   AGENCY COMMENTS
------------------------------------------------------------ Letter :8

Officials from the Office of Long-Term Care Services in HCFA's
Medicaid Bureau and from Florida, Michigan, and Rhode Island reviewed
a draft of this report.  They generally agreed with its contents and
provided technical comments that we incorporated as appropriate. 

We are sending copies of this report to the Secretary of Health and
Human Services; the Administrator, Health Care Financing
Administration; and other interested parties.  Copies of this report
will also be made available to others upon request. 

If you or your staff have any questions, please call me at (202)
512-7119; Bruce D.  Layton, Assistant Director, at (202) 512-6837; or
James C.  Musselwhite, Senior Social Science Analyst, at (202)
512-7259.  Other major contributors to this report include Carla
Brown, Eric Anderson, and Martha Grove Hipskind. 

William J.  Scanlon
Director, Health Systems Issues


SCOPE AND METHODOLOGY
=========================================================== Appendix I

We focused our work on Medicaid 1915(c) waivers for adults with
developmental disabilities.  We also examined related aspects of
institutional care provided through ICF/MR, state plan optional
services, and the CSLA program, all under Medicaid. 

To address our study objectives we (1) conducted a literature review,
(2) interviewed national experts on mental retardation and other
developmental disabilities, (3) collected national data on
expenditures and the number of individuals served, and (4) collected
and analyzed data from three states.  National experts interviewed
included officials at HCFA; the Office of the Assistant Secretary for
Planning and Evaluation (ASPE) in the Department of Health and Human
Services; the Administration on Developmental Disabilities; the
President's Committee on Mental Retardation; the National Association
of Developmental Disabilities Councils; the Administration on Aging;
the National Association of State Directors of Developmental
Disabilities Services, Inc.  (NASDDDS); and the ARC, formerly known
as the Association for Retarded Citizens.  We also interviewed
researchers at University Affiliated Programs (UAP)\14 on
developmental disabilities at the Universities of Illinois and
Minnesota and Wayne State University. 

We conducted our case studies in Florida, Michigan, and Rhode Island. 
We chose these states for several reasons.  The three states provide
a range of state size and geographic representation.  Each state has
a substantial developmental disability waiver program that serves
more people than its ICF/MR program.  Experts told us that these
states would provide examples of different state strategies for
utilizing the Medicaid waiver.  This included their policies
regarding large and small institutions as well as the design and
implementation of their waiver programs.  The three states also have
important differences in the administrative structure of their
developmental disability programs.  Rhode Island administers its
waiver program statewide through the Division of Developmental
Disabilities in the Department of Mental Health, Retardation and
Hospitals.  Florida places statewide administration and oversight
responsibility for its waiver program in Developmental Services, the
Department of Health and Rehabilitative Services, but operational
responsibility rests with its 15 district offices of Developmental
Services.  Michigan places statewide administration and oversight
responsibility for its waiver programs in the state Department of
Mental Health, but operating responsibilities rest with 52 Community
Mental Health Boards (CMHB), which are local government entities
covering one or more counties and three state-operated agencies each
responsible for serving a local area.  Florida district offices and
Michigan CMHBs have discretion in the design and implementation of
waiver program and other services within the broad outlines of state
policy. 

We visited each state to conduct interviews with state and local
officials, researchers, service providers, advocates, families, and
recipients.  These interviews included state Medicaid officials and
developmental services officials and officials in agencies on aging
and developmental disability councils.  In Florida, we also visited
state district offices in Pensacola and Tallahassee to conduct
interviews with district government and nongovernment
representatives.  In Michigan, we visited the Detroit-Wayne and
Midland/Gladwin CMHBS to conduct interviews with government and
nongovernment representatives.  We followed up with state agencies to
collect additional information. 

The national waiver and ICF/MR program expenditure and recipient data
used in this report are from the UAP on developmental disabilities at
the Research and Training Center on Community Living, Institute on
Community Integration, at the University of Minnesota.  The Institute
collects these data, with the exception of ICF/MR expenditures,
directly from state agencies.  The Institute uses ICF/MR expenditure
data, compiled by the Medstat Group under contract to HCFA.  National
data from the Institute were available through 1995.  The expenditure
and recipient data we report for Florida, Michigan, and Rhode Island
were provided to us by the state agencies responsible for
developmental services and the Medicaid agencies.  The latest
complete data available from these three states were for 1994.  We
therefore used 1994 national data for comparison purposes. 

Some differences occur in the recipient counts among the national
data we used from the Institute and data we collected from agencies
in Florida, Michigan, and Rhode Island.  These differences could
affect some aspects of our comparisons of national trends and trends
in the three states.  Institute data on recipients show the total
number of persons receiving services on a given date--June 30 of each
year--whereas data for the three states show the cumulative number of
persons receiving services over a 12-month period.  Therefore, data
supplied by the states could result in a larger count of program
recipients than the methodology used by the Institute.  This could
have the impact of making per capita expenditure calculations smaller
for the state data than for the national data.  Our comparisons of
data from the two sources, however, showed few substantial
differences in the data for the three states. 

We excluded children from our analysis because (1) their needs are
different in many respects from those of adults, (2) family
responsibilities for the care of children are more comprehensive than
for adults, and (3) the educational system has the lead public
responsibility for services for children.  Recipient and expenditure
data in this report, however, include some children because it was
not possible to systematically exclude them.  However, the percentage
of children in these services is small.  In 1992, for example, about
11 percent of ICF/MR service recipients were less than 21 years
old.\15

We conducted our review from May 1995 through May 1996 in accordance
with generally accepted government auditing standards. 


--------------------
\14 University affiliated programs are funded by the Administration
on Developmental Disabilities as part of the Developmental
Disabilities Act to provide information and analysis on developmental
disability programs. 

\15 Robert Prouty, and K.  Charlie Lakin, eds., Residential Services
for Persons with Developmental Disabilities:  Status and Trends
Through 1994 (Minneapolis:  University of Minnesota, Research and
Training Center on Community Living, Institute on Community
Integration/UAP, The College of Education and Human Development,
1995), p.  113. 


MEDICAID WAIVER PROGRAM SERVICES
OFFERED FOR PERSONS WITH
DEVELOPMENTAL DISABILITIES IN
FLORIDA, MICHIGAN, AND RHODE
ISLAND
========================================================== Appendix II

States, with HCFA's approval, choose which services they offer
through waiver programs and how the services are defined.  States can
choose from a list of standard services and definitions in the HCFA
waiver application or design their own services.  In designing their
own services, states can add new services or redefine standard
services.  States can also extend optional services to offer more
units of these services to waiver program recipients than are
available to other recipients under the regular Medicaid program. 

The three states we visited chose to offer a number of standard
services under their waiver program.  Each state also modified the
definition of some standard services that it provides or offered
services not on the standard waiver list.  (See fig II.1.) For
example, Florida modified the definition of case management to
include helping individuals and families identify preferences for
services.  Florida also added several nonstandard, state-defined
services such as behavior analysis and assessments and supported
living coaching.  Rhode Island's modified definition of homemaker
services includes a bundle of services often offered separately,
including standard homemaker services, personal care services, and
licensed practical nursing services.  Rhode Island also added
nonstandard services to provide minor assistive devices and support
of family living arrangements.  Michigan modified the standard
definition of environmental accessibility adaptations to include not
only physical adaptations to the home, but to the work environment as
well.  Michigan also recently added a new state-defined service,
community living supports, which is a consolidation of four
services--in-home habilitation, enhanced personal care, personal
assistance, and transportation--
previously provided separately.  Florida and Michigan also chose to
offer several optional services in their waiver programs. 

   Figure II.1:  Waiver Program
   Services Provided in Florida,
   Rhode Island, and Michigan

   (See figure in printed
   edition.)

\a Rhode Island's definition of homemaker includes not only homemaker
services as typically defined, but personal care and licensed
practical nursing services as well. 

Source:  HCFA 1915(c) Waiver Application Format (June 1995) and state
waiver applications. 

The HCFA definition for each standard waiver service offered in
Florida, Michigan, and Rhode Island is shown in appendix III. 


STANDARD SERVICES AS DEFINED IN
HCFA'S 1915(C) WAIVER APPLICATION
FORMAT
========================================================= Appendix III

This appendix shows HCFA's definition for each standard waiver
service offered in Florida, Michigan, and Rhode Island.  These
service names and definitions are written as they appear in the
latest version of the HCFA 1915(c) waiver application format, dated
June 1995.  Because states have the flexibility to modify these
definitions, the definitions and how services are implemented vary
among the states. 



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)



(See figure in printed edition.)


LICENSURE, CERTIFICATION, AND
OTHER STANDARDS FOR WAIVER PROGRAM
SERVICES
========================================================== Appendix IV

HCFA requires that each state specify licensure, certification, or
other standards for each service in its waiver application.  These
requirements are detailed in state and local laws, regulations, or
operating guidelines and enforced by state and local agencies.  Such
requirements may include professional standards for individuals
providing services, minimum training requirements, criminal
background checks, certification for facilities, local building
codes, and fire and health requirements.  For example, the
information below shows how Florida addresses HCFA requirements for
licensure, certification, and other standards for each of its waiver
program services.  The information, unless otherwise noted, was
obtained from Florida's Department of Health and Rehabilitative
Services' July 1995 Services Directory, which provides the details of
service standards in Florida's approved waiver.\16

SERVICES


--------------------
\16 All providers of Developmental Services (DS) waiver services must
be certified by the district level Department of Health and
Rehabilitative Services (HRS) DS program office. 


      BEHAVIORAL ANALYSIS AND
      ASSESSMENT
------------------------------------------------------ Appendix IV:0.1


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.1.1

Psychologists, clinical social workers, marriage and family
therapists, mental health counselors, or providers certified by the
Department of Health and Rehabilitative Services (HRS) Developmental
Services (DS) Behavior Analysis Certification program. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.1.2

Psychologists shall be licensed by the Department of Business and
Professional Regulation in accordance with Chapter 490, Florida
statutes (F.S.).  Clinical social workers, marriage and family
therapists, and mental health counselors shall be licensed in
accordance with Chapter 491, F.S.  Others must be certified under the
HRS Behavior Analysis Certification program. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.1.3

Background screening is required for those certified under the HRS
Developmental Services Behavior Analysis Certification program. 


      CHORE
------------------------------------------------------ Appendix IV:0.2


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.2.1

Home health agencies, hospice agencies, and independent vendors. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.2.2

Home health and hospice agencies must be licensed by the Agency for
Health Care Administration.  In accordance with Chapter 400, Part IV
or Part VI, F.S.  Independent vendors are not required to be licensed
or registered. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.2.3

Independent vendors must have at least 1 year of experience working
in a medical, psychiatric, nursing, or child care setting or working
with developmentally disabled persons.  College or
vocational/technical training, equal to 30 semester hours, 45 quarter
hours, or 720 classroom hours can substitute for the required
experience.  Background screening required of independent vendors. 


      COMPANION
------------------------------------------------------ Appendix IV:0.3


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.3.1

Home health agencies, hospice agencies, and independent vendors. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.3.2

Home health and hospice agencies shall be licensed by the Agency for
Health Care Administration, Chapter 400, Part IV or Part VI, F.S. 
Independents shall be registered with the Agency for Health Care
Administration as companions or sitters in accordance with Section
400.509, F.S. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.3.3

Background screening required for independent vendors. 


      DAY TRAINING (ADULT)
------------------------------------------------------ Appendix IV:0.4


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.4.1

Centers or sites designated by the district DS office as adult day
training centers. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.4.2

Licensure/registration is not required. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.4.3

Background screening required for all direct care staff. 


      ENVIRONMENTAL MODIFICATIONS
------------------------------------------------------ Appendix IV:0.5


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.5.1

Contractors, electricians, plumbers, carpenters, handymen, medical
supply companies, and other vendors. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.5.2

Contractors, plumbers, and electricians will be licensed by the
Department of Business and Professional Regulation in accordance with
Chapter 489, F.S.  Medical supply companies, carpenters, handymen,
and other vendors shall hold local occupational licenses or permits
in accordance with Chapter 205, F.S. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.5.3

None. 


      HOMEMAKER
------------------------------------------------------ Appendix IV:0.6


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.6.1

Home health agencies, hospice agencies, and independent vendors. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.6.2

Home health and hospice agencies shall be licensed by the Agency for
Health Care Administration in accordance with Chapter 400, Part IV or
Part VI, F.S.  Independent vendors must be registered as homemakers
with the Agency for Health Care Administration in accordance with
Section 400.509, F.S. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.6.3

Background screening required for independents. 


      NONRESIDENTIAL SUPPORT
------------------------------------------------------ Appendix IV:0.7


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.7.1

Independent vendors and agencies. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.7.2

Licensure/registration is not required. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.7.3

Independent vendors must have at least 1 year of experience working
in a medical, psychiatric, nursing, or child care setting or in
working with developmentally disabled persons.  College or
vocational/technical training that equals at least 30 semester hours,
45 quarter hours, or 720 classroom hours may substitute for the
required experience.  Agency employees providing this service must
meet the same requirements.  Background screening required of agency
employees who perform this service and of independent vendors. 


      OCCUPATIONAL THERAPY AND
      ASSESSMENT
------------------------------------------------------ Appendix IV:0.8


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.8.1

Occupational therapists, occupational therapy aides, and occupational
therapy assistants.  Occupational therapists, aides, and assistants
may provide this service as independent vendors or as employees of
licensed home health or hospice agencies. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.8.2

Occupational therapists, occupational therapy aides, and occupational
therapy assistants shall be licensed by the Department of Business
and Professional Regulation in accordance with Chapter 468, Part III,
F.S.  and may perform services only within the scope of their
licenses.  Home health and hospice agencies shall be licensed by the
Agency for Health Care Administration in accordance with Chapter 400,
Part IV or Part VI, F.S. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.8.3

None. 


      PERSONAL CARE ASSISTANCE
------------------------------------------------------ Appendix IV:0.9


         PROVIDER TYPES
---------------------------------------------------- Appendix IV:0.9.1

Home health and hospice agencies and independent vendors. 


         LICENSURE/REGISTRATION
---------------------------------------------------- Appendix IV:0.9.2

Home health and hospice agencies shall be licensed by the Agency for
Health Care Administration in accordance with Chapter 400, Part IV or
Part VI, F.S.  Independent vendors are not required to be licensed or
registered. 


         OTHER STANDARDS
---------------------------------------------------- Appendix IV:0.9.3

Independent vendors shall have at least 1 year of experience working
in a medical, psychiatric, nursing, or child care setting or working
with developmentally disabled persons.  College or
vocational/technical training that equals at least 30 semester hours,
45 quarter hours, or 720 classroom hours may substitute for the
required experience.  Background screening is required of independent
vendors. 


      PERSONAL EMERGENCY RESPONSE
      SYSTEM (PERS)
----------------------------------------------------- Appendix IV:0.10


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.10.1

Electrical contractors and alarm system contractors. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.10.2

Electrical contractors and alarm system contractors must be licensed
by the Department of Business and Professional Regulation in
accordance with Chapter 489, Part II, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.10.3

None. 


      PHYSICAL THERAPY AND
      ASSESSMENT
----------------------------------------------------- Appendix IV:0.11


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.11.1

Physical therapist and physical therapist assistants.  Physical
therapist and assistants may provide this service as independent
vendors or as employees of licensed home health or hospice agencies. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.11.2

Physical therapists and therapist assistants shall be licensed by the
Department of Business and Professional Regulation in accordance with
Chapter 486, F.S., and may perform services only within the scope of
their licenses.  Home health and hospice agencies shall be licensed
by the Agency for Health Care Administration in accordance with
Chapter 400, Part IV or Part VI, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.11.3

None. 


      PRIVATE DUTY NURSING
----------------------------------------------------- Appendix IV:0.12


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.12.1

Registered nurses and licensed practical nurses.  Nurses may provide
this service as independent vendors or as employees of licensed home
health or hospice agencies. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.12.2

Nurses shall be registered or licensed by the Department of Business
and Professional Regulation in accordance with Chapter 464, F.S. 
Home health or hospice agencies shall be licensed by the Agency for
Health Care Administration in accordance with Chapter 400, Part IV or
Part VI, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.12.3

None. 


      PSYCHOLOGICAL SERVICES
----------------------------------------------------- Appendix IV:0.13


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.13.1

Psychologists. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.13.2

Psychologists shall be licensed by the Department of Business and
Professional Regulation, Chapter 490, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.13.3

None. 


      RESIDENTIAL HABILITATION
----------------------------------------------------- Appendix IV:0.14


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.14.1

Group homes, foster homes, and adult congregate living facilities and
independent vendors. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.14.2

Group and foster homes facilities shall be licensed by the Department
of Health and Rehabilitative Services in accordance with Chapter 393,
F.S.  Adult congregate living facilities shall be licensed by the
Agency for Health Care Administration in accordance with Chapter 400,
Part III, F.S.  Licensure or registration is not required for
independent vendors. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.14.3

Independent vendors must possess at least an associate's degree from
an accredited college with a major in nursing; education; or a
social, behavioral, or rehabilitative science.  Experience in one of
these fields shall substitute on a year-for-year basis for required
education.  Background screening required of direct care staff
employed by licensed residential facilities and independent vendors. 


      RESPITE CARE
----------------------------------------------------- Appendix IV:0.15


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.15.1

Group homes; foster homes; adult congregate living facilities; home
health agencies; hospice agencies; other agencies that specialize in
serving persons who have a developmental disability; and independent
vendors, registered nurses, and licensed practical nurses. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.15.2

Group and foster homes shall be licensed by the Department of Health
and Rehabilitative Services in accordance with Chapter 393, F.S. 
Adult congregate living facilities shall be licensed by the Agency
for Health Care Administration in accordance with Chapter 400, Part
III, F.S.  Home health and hospice agencies shall be licensed by the
Agency for Health Care Administration in accordance with Chapter 400,
Part IV or Part VI, F.S.  Nurses who render the service as
independent vendors shall be licensed or registered by the Department
of Business and Professional Regulation in accordance with Chapter
464, F.S.  Licensure or registration is not required for independent
vendors who are not nurses. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.15.3

Background screening is required of direct care staff employed by
licensed residential facilities and other agencies that serve persons
who have a developmental disability and of independent vendors who
are not registered or licensed practical nurses.  Independent vendors
who are not nurses must have at least 1 year of experience working in
a medical, psychiatric, nursing, or child care setting or working
with developmentally disabled persons.  College or
vocational/technical training that equals at least 30 semester hours,
45 quarter hours, or 720 classroom hours may substitute for the
required experience. 


      SKILLED NURSING CARE
----------------------------------------------------- Appendix IV:0.16


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.16.1

Registered nurses and licensed practical nurses.  Nurses may provide
this service as independent vendors or as employees of licensed home
health or hospice agencies. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.16.2

Nurses shall be registered or licensed by the Department of Business
and Professional Regulation in accordance with Chapter 464, F.S. 
Home health and hospice agencies shall be licensed by the Agency for
Health Care Administration in accordance with Chapter 400, Part IV or
Part VI, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.16.3

None. 


      SPECIAL MEDICAL HOME CARE
----------------------------------------------------- Appendix IV:0.17


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.17.1

Group homes that employ registered nurses, licensed practical nurses,
or licensed nurse aides. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.17.2

Group homes shall be licensed by the Department of Health and
Rehabilitative Services in accordance with Chapter 393, F.S.  Nurses
shall be registered or licensed by the Department of Business and
Professional Regulation in accordance with Chapter 464, F.S.  and may
perform services only within the scope of their license or
registration. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.17.3

Background screening required of direct care staff employed by
licensed group homes. 


      SPECIALIZED MEDICAL
      EQUIPMENT AND SUPPLIES
----------------------------------------------------- Appendix IV:0.18

(See Florida's approved waiver renewal application for 1993-98.)


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.18.1

Medical supply companies, licensed pharmacies, and independent
vendors. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.18.2

Pharmacies must be licensed by the Department of Business and
Professional Regulation in accordance with Chapter 465, F.S.  Medical
supply companies and independent vendors must be licensed under
Chapter 205, F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.18.3

None. 


      SPEECH THERAPY AND
      ASSESSMENT
----------------------------------------------------- Appendix IV:0.19


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.19.1

Speech-language pathologists and speech-language pathology
assistants.  Speech-language pathologists or assistants may provide
this service as independent vendors or as employees of licensed home
health or hospice agencies. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.19.2

Speech-language pathologists and pathology assistant shall be
licensed by the Department of Business and Professional Regulation in
accordance with Chapter 468, Part I, F.S.  Home health and hospice
agencies shall be licensed by the Agency for Health Care
Administration in accordance with Chapter 400, Part IV or Part VI,
F.S. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.19.3

None. 


      SUPPORT COORDINATION (CASE
      MANAGEMENT)
----------------------------------------------------- Appendix IV:0.20


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.20.1

Single practitioner vendors or agency vendors. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.20.2

Licensure is not required. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.20.3

Single practitioners and support coordinators employed by agencies
shall have a bachelor's degree from an accredited college or
university and 2 years of professional experience in mental health,
counseling, social work, guidance, or health and rehabilitative
programs.  A master's degree shall substitute for 1 year of the
required experience.  Providers (single practitioners and agency
directors/managers) are required to complete statewide training
conducted by the Developmental Services Program Office, as well as
district-specific training conducted by the district DS office. 
Support coordinators employed by agencies are also required to be
trained on the same topics covered in the statewide and
district-specific training; however, this training may be conducted
by the support coordination agency if approved by the district and
the agency trainer meets specific requirements described in Chapter
10F-13, Florida Administrative Code. 


      SUPPORTED LIVING COACHING
----------------------------------------------------- Appendix IV:0.21


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.21.1

Independent vendors and agency vendors. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.21.2

Licensure is not required. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.21.3

Independent vendors and employees of agencies who render this service
shall have a bachelor's degree from an accredited college or
university with a major in nursing; education; or a social,
behavioral, or rehabilitative science or shall have an associate's
degree from an accredited college or university with a major in
nursing; education; or a social, behavioral, or rehabilitative
science and 2 years of experience.  Experience in one of these fields
shall substitute on a year-for-year basis for the required college
education.  Agency employees are required to attend at least 12 hours
of preservice training and independent vendors must attend at least
one supported living-related conference or workshop before
certification.  All providers and employees are also required to
attend human immunodeficiency virus/acquired immunodeficiency
syndrome (HIV/AIDS) training.  Background screening is required. 


      TRANSPORTATION
----------------------------------------------------- Appendix IV:0.22


         PROVIDER TYPES
--------------------------------------------------- Appendix IV:0.22.1

Independent vendors and commercial transportation agencies. 


         LICENSURE/REGISTRATION
--------------------------------------------------- Appendix IV:0.22.2

Providers shall hold applicable licenses issued by the Department of
Highway Safety and Motor Vehicles and shall secure appropriate
insurance.  Proof of license and insurance shall be provided to the
district DS office. 


         OTHER STANDARDS
--------------------------------------------------- Appendix IV:0.22.3

Background screening required for independent vendors. 


RELATED GAO PRODUCTS
=========================================================== Appendix 0

Medicaid Long-Term Care:  State Use of Assessment Instruments in Care
Planning (GAO/PEMD-96-4, Apr.  2, 1996). 

Long-Term Care:  Current Issues and Future Directions
(GAO/HEHS-95-109, Apr.  13, 1995). 

Medicaid:  Spending Pressures Drive States Toward Program Reinvention
(GAO/HEHS-95-122, Apr.  4, 1995). 

Long-Term Care:  Diverse, Growing Population Includes Millions of
Americans of All Ages (GAO/HEHS-95-26, Nov.  7, 1994). 

Long-Term Care Reform:  States' Views on Key Elements of
Well-Designed Programs for the Elderly (GAO/HEHS-94-227, Sept.  6,
1994). 

Long-Term Care:  Other Countries Tighten Budgets While Seeking Better
Access (GAO/HEHS-94-154, Aug.  30, 1994). 

Financial Management:  Oversight of Small Facilities for the Mentally
Retarded and Developmentally Disabled (GAO/AIMD-94-152, Aug.  12,
1994). 

Medicaid Long-Term Care:  Successful State Efforts to Expand Home
Services While Limiting Costs (GAO/HEHS-94-167, Aug.  11.  1994). 

Long-Term Care:  Status of Quality Assurance and Measurement in Home
and Community Based Services (GAO/PEMD-94-19, Mar.  31, 1994). 

Long-Term Care:  Support for Elder Care Could Benefit the Government
Workplace and the Elderly (GAO/HEHS-94-64, Mar.  4, 1994). 

Long-Term Care:  Private Sector Elder Care Could Yield Multiple
Benefits (GAO/HEHS-94-60, Jan.  31, 1994). 

Health Care Reform:  Supplemental and Long-Term Care Insurance
(GAO/T-HRD-94-58, Nov.  9, 1993). 

Long-Term Care Reform:  Rethinking Service Delivery, Accountability,
and Cost Control (GAO/HRD-93-1-SP, July 13, 1993). 


*** End of document. ***