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POLICY ISSUES AFFECTING THE MEDICAID 
PERSONAL CARE SERVICES OPTIONAL BENEFIT 

Simi Litvak, Ph.D., Research Director 
Jae Kennedy, M.A., Research Associate 

December, 1991 

WORLD INSTITUTE-DISABILITY 
510 SIXTEENTH ST 
SUITE 100 
OAKLAND 
CA 94612-1500 
USA 
VOICE OR TDD 
510 763 4100 
FAX 510 763 4109 

MOVING TOWARD EQUALITY 


Acknowledgements 

This project was funded by the office of the Assistant Secretary of Planning and 
Evaluation (ASPE) US Department of Health and Human Services (HHS), contract #HHS-10089-
0025. Quantitative analyses were based on national surveys funded the Charles Stuart Mott 
Foundation and by the National Institute of Disability and Rehabilitation Research (NIDRR), 
grant #G008720134. 

The publication and distribution of this document is made possible through the Research 
and Training Center on Public Policy and Independent Living (NIDRR grant #H133B00006-91), 
a joint project with the World Institute on Disability, InfoUse, and The Western Consortium of 
Public Health, University of California. The authors would like to acknowledge the contributions 
of the HHS project officer, Pam Doty, the advice of Deborah Lewis-Idema, Marylin Falik, 
Marshall Kapp, Charles Sabatino, and Linda Toms-Barker, and the support of the entire staff at 
the World Institute on Disability. We would like to express our special thanks to the people 
who to time out their busy schedules to help us plan and conduct the site visits, who agreed to 
be interviewed, and who reviewed these program descriptions. Without these generous 
contributions of time and expertise, this research project would not have been possible. The 
content of these reports do not represent the policies of the funding agencies, and endorsement 
by the federal government should not be assumed. 


TABLE OF CONTENTS 


EXECUTIVE SUMMARY 1 

INTRODUCTION 7 
Purpose 7 
Source of Information 8 

POPULATION SERVED 9 
Income Criteria 10 
Age Groups Eligible and Served 11 
Degree of Disability 13 
Type of Disability 14 
Other Eligibility Criteria 14 
Size of the Program Relative to Potential Users 15 

SERVICES PROVIDED 17 
Personal Care Services 17 
Household Maintenance Services 18 
Communication Services 18 
Transportation Services 19 
Short-term Services 19 

AVAILABILITY AND INTENSITY OF SERVICE DELIVERY 19 
Hours and Days Available 19 
Service Limits 20 
Availability of services 24 hours/day 21 
Relationship between provider type and hours of service 21 

PROGRAM GOALS 22 
Description of Goals 22 
Degree to Which Goals are Met 23 

ACCESS CONTROL MECHANISMS 25 
Eligibility Limits to Access 26 
Program Features Limiting Access 26 
External Factors Limiting Access 27 
Population Target Priorities 28 

DELIVERY MODE 28 

Benefits and Wages 29 

Relationship between provider type, payment mechanism and payment rate 29 


LIABILITY 31 
Who is the Employer 31 
Nurse Practice Acts 33 

QUALITY ASSURANCE MECHANISMS 34 
State Level Oversight 34 
Case Level Oversight 35 
Attendant Screening and Training 35 
Recipient Complaint Mechanisms 37 

PROGRAM DESIGN DISCRETION 38 
Household and Chore Tasks 38 
Service Location 40 
Exclusion of Service to those in institutions of more than four individuals 41 
Family Providers 42 
Physician Oversight 43 
Nurse Supervision 44 

ROLE OF PERSONAL CARE OPTION WITHIN THE STATE 45 
Site Visit States 45 
Who Is Underserved or Unserved 47 

TRENDS IN STATE UTILIZATION 49 
Growth rate of Participation 49 
Growth Rate of Expenditures, Recipients and Other Indicators 51 
Change in Service Availability and Service Limits 53 
Comparison of Growth Rate Across Funding Sources 54 
Shifting of Resources Among Different Funding Sources 55 

DISCUSSION 57 

REFERENCES 68 

APPENDIX A: Summary of Each Personal Care Program Based on 1984 and 1988 
Questionnaires 

APPENDIX B: The Effect of Government Funding Source on Personal Assistance Programs: 
A Summary of 1985 National Survey Data 

APPENDIX C: Chartbook of Tables from 1988 National Survey Data 

APPENDIX D: Chartbook of Program Comparisons by Funding Source on 1984 and 1988 
National Survey Data 


LIST OF TABLES 


Table 1 
Income Levels for Aged and Disabled Medicaid Recipients 
Living in the Community 12 
Table 2 
Percentage of People Served by Age Group 
in Site Visit PC-Option Programs 13 
Table 3 
Degree of Disability of Program Recipients 14 
Table 4 
Personal Care Option Recipients Per Aged and Disabled 
Medicaid Recipient By State 16 
Table 5 
Medically Related Tasks 18 
Table 6 
Percentage of PC-Option Programs with Various Levels of Service 20 
Table 7 
Percentage of PC-Option Programs with Various Service Maximums 
Expressed in Dollars Per Month 20 
Table 8 
Average Number of Hours Per Week Per Recipient By Provider 
Type 1984 and 1988 All Funding Sources 21 
Table 9 
Goals of the PC-Option Programs 23 
Table 10 
How Need For Service Is Defined and Assessed 26 
Table 11 
Percentage of PC-Option Programs Using Different Provider Types by Year 28 
Table 12 
Provider Benefits and Wages 29 
Table 13 
Type of Provider, Payment Mechanisms and Basis of Pay 30 


Table 14 
Who is the Employer? 31 
Table 15 
Case Level Oversight 35 
Table 16 
Who is Responsible for Attendant Screening? 36 
Table 17 
Nature, Extent and Source of Attendant Training 36 
Table 18 
Recipient Complaint/Grievance Mechanisms 37 
Table 19 
Proportion of Household/Chore to Personal Care Tasks 39 
Table 20 
Site of Service Provision: Transportation, Driving, Escort 40 
Table 21 
Service to Institutionalized Recipients 41 
Table 22 
Family Members Who Cannot Be Paid for Providing PAS 42 
Table 23 
Frequency of Physician Review/Reauthorization 43 
Table 24 
Frequency and Character of R.N. Oversight 44 
Table 25 
Who Is Underserved or Unserved in Each State PAS System 48 
Table 26 
Growth Rate of Participation in the Personal Care Optional Benefit by State 50 
Table 27 
Aggregate and Average per PC-Option Program Growth Rate of Expenditures 
and Recipients Between 1984 and 1988 Recipients Expenditures 51 


Table 28 

Growth Rate of Expenditures and Recipients of PC-Option Programs 

By State in 1984 and 1988 52 

Table 29 
Total and Average Per Program Growth in Hours 53 

Table 30 
Growth Rate of Various Program Indicators by Funding Source

 

Between 1984 and 1988 54 



EXECUTIVE SUMMARY 

The Purpose of this Study 

This study analyzes how states are using the Medicaid Personal Care Services Optional 
(PC-Option) benefit. Under the PC-Option, states may choose to include personal care 
services in their state Medicaid plans, but are not required to do so. The only federal 
requirements for the PC-Option are that personal care services be: 1) provided in the home, 
2) authorized by a physician in accordance with the recipient's treatment plan, 3) supervised 
by a registered nurse, and 4) provided by a qualified individual who is not a member of the 
recipient's family. The first requirement has been modified by federal legislation passed in 
1990 which allows states to offer services outside the home by 1994. There is great 
variability among states on interpretation of the other requirements. The states determine 
how physician authorization is obtained and what constitutes a treatment plan. States also 
determine the nature and scheduling of R.N. supervision, set qualifications for providers, and 
determine what types of family members are excluded from becoming paid service providers. 

In order to formulate long-term services policy, the Department of Health and Human 
Services contracted with the World Institute on Disability (WID) for this study to provide 
accurate "baseline" information to inform future policy decisions regarding the PC-Option. 
The data in this report (unless otherwise noted) is based on two national surveys of personal 
assistance service (PAS) programs conducted in 1985 and 1990 by WID, as well as site visits 
to six states which utilize the PC-Option. 

Research Findings 

The PC-Option programs fill different niches in the community-based personal 
assistance services (PAS) systems in every state. The programs range from those which are 
small and insignificant parts of the state's long-term services system to those in which the 
major or only source of PAS in the state is the PC-Option program. Even in states with a 
multiplicity of programs there are people who are unserved or under served: no state serves 
everyone who needs PAS. 

The target population for Medicaid PC Option programs is defined in each state by 
income, age, disability and other miscellaneous eligibility requirements. These populations 
may include children, working age adults and older people with physical, cognitive, and 
psychiatric disabilities. It seems that historical circumstances and the political clout of certain 
population groups have often determined which groups are served in a given state. The 
perceived needs of the target populations often influence the structure of the programs in 
terms of service mix, hours available, degree of oversight, etc. Determining who is actually 
being served by these programs is often difficult, due to the inconsistency of the management 


information systems (MIS) that are designed to collect demographic data. As states attempt to 
serve diverse and growing populations needing PAS, they may opt to expand existing 
programs or develop new ones. 

Most programs offer a basic core of ADL (Activities of Daily Living) and IADL 
(Instrumental Activities of Daily Living) services but chore, repair and maintenance services 
are rarely offered. Transportation and escort services, if offered at all, are usually limited to 
medical appointments. Almost half the PC-Option programs limit services to less than 40 
hours per week, regardless of level of disability. 

The provision of paramedical services, particularly "invasive procedures" (e.g. 
assistance with medications, injections, catheters or ventilators) is particularly problematic for 
PC-Option programs. Such services are usually not readily available to consumers who need 
them, due in part to legal restrictions set by state Nurse Practice Acts which usually prohibit 
non-licensed individuals other than family members from doing invasive procedures. State 
administrators often cite these laws, and concern over liability for negligence, as reasons for 
not providing paramedical services through their programs. 

Due to the lack of adequate paramedical, chore, transportation and escort services, the 
PC-Option programs in most states do not enable significantly disabled individuals to be full 
participants in their communities unless they have sufficient informal or voluntary assistance 
to fill in service gaps. This situation doesn't appear to be improving: between 1984 and 
1988 there was a slight decrease in the number of programs providing paramedical services, 
as well as a decrease in the number of programs offering services at any time during the day 
or week. 

There are several different ways in which personal assistance providers are employed. 
Independent or individual providers experience different conditions of employment depending 
upon the program and state. They may be considered self-employed or employed by the 
disabled recipient. Agency providers work for non-profit or for-profit agencies, and are 
generally considered the employees of the agency which hires them. Government agency 
providers fall into two different categories: civil service employees with the same wage scale 
and benefit packages as other government employees of similar skill and rank, and contract 
workers, employed by state and county governments on a primarily part-time basis with rates 
of pay, working conditions and benefits similar to those of independent providers. 

On the average, agency providers and government workers receive the best wages, 
and government civil service workers receive the most benefits. Independent providers are the 
most poorly compensated providers. There is a strong relationship between the number of 
hours an individual is able to receive from a program and the type of provider utilized: 
generally programs that use independent providers provide more hours of service. 

State administrators say that managerial concerns, such as liability, workers 
compensation, and tax withholding have shaped the structure of their programs in terms of 


provider type. Many states addressed these concerns by utilizing homecare agency providers, 
thereby shifting liability from the state to private agencies. Other states which utilize 
independent providers have developed different ways of dealing with withholding. Because 
there are advantages to using either type of provider, these issues become very complex. 
Both agency and individual providers have a role to play in a comprehensive system of PAS. 

There are a number of ways in which states and the federal government have tried to 
influence the quality of the PC-Option programs. These include: state-level oversight of 
overall program compliance standards, case level oversight, nurse supervision of attendants, 
attendant training and screening, and recipient complaint and grievance mechanisms. All 
states have some of these quality assurance mechanisms in place. Which mechanisms a state 
employs depends upon its philosophy or view of quality assurance. Some states emphasize 
quality assurance from "below", i.e. training the recipient to recognize quality and providing 
avenues for problems to be addressed, while others relied on quality assurance systems from 
"above", i.e. paper reviews and site visits. Still others limit their efforts to minimum 
compliance with regulatory requirements. 

In 1988, the Health Care Finance Administration (HCFA) proposed new regulations 
for the program in an attempt to more concretely define "personal care", service location, 
"home", provider, and the nature of physician and nurse involvement. HCFA collected 
comments on the proposed regulations, but has not promulgated new regulations. The degree 
to which the states meet the proposed HCFA criteria varies. Some would have to radically 
change their program to meet the proposed regulations. 

The PC-Option programs on the average experienced a high rate of growth. Seven 
states have added the PC-Option to their Medicaid plans since WID's first survey in 1984. 
Between 1984 and 1988, the number of recipients grew 65% and expenditures grew 144%. 
Average expenditures are growing at a faster rate than caseloads, possibly due to program 
changes such as provider wage increases, increases in administrative costs, more intensive 
case management, and an increase in more significantly disabled recipients requiring more 
hours of service. Though some programs tightened their per recipient service allowances and 
limited the times in which services were available, these restrictions usually failed to limit the 
overall growth in program expenditures. 

The Changing Role of the PC-Option in Home and Community-based Service Systems 

The Medicaid PC-Option has been a major source of public funding for home and 
community-based long-term services, and is currently experiencing significant growth at both 
a national and state level. In an era of shrinking state revenues, many states view the PC-
Option as one of the few vehicles left for leveraging federal dollars to expand PAS. 
Medicaid Waivers, despite their proliferation, have failed to bring PAS to most of the people 
who need it, as the waivers tend to be relatively small and targeted to special populations (i.e. 


federal figures indicate that two-thirds of waiver spending goes toward services for people 

with developmental disabilities). In many states the number of people served through purely 

state or Social Service Block Grant funded programs have declined because of new fiscal 

restraints. The Personal Care Option has therefore become the mainstay of many states' 

home and community-based services systems. 

The same fiscal climate which has contributed to greater utilization of the Personal 
Care Option has created pressure to contain PAS program costs. Despite the federal match, 
Medicaid services are increasingly viewed as "budget busters" because of their entitlement 
status, and are coming under legislative and executive scrutiny. States vary dramatically in 
the degree to which they limit access to services, but all programs are caught between the 
growing demand for services and the need to contain costs. 

The growth in caseloads and expenditures can also be attributed to expanding and 
diverse populations seeking services, i.e. children and adults (under and over age 65) with a 
variety of physical, cognitive, and psychiatric disabilities. One of the major questions raised 
by this study is whether -- or to what extent and by what means -- it is possible to 
accommodate the sometimes disparate needs of different populations in a single program. 

Traditionally, "long-term care", whether provided in nursing homes or in home and 
community-based settings, has been primarily associated with the needs of persons over 65 
who develop age-related functional disabilities as the result of chronic medical conditions, 
including Alzheimer's disease and other dementias. The Medicaid personal care option was 
originally modeled on an Oklahoma program that sought to augment the in-home services 
available to the disabled elderly by paying small stipends to individuals -- primarily friends 
and neighbors -- recruited by the care recipient or his or her family to supplement informal 
supports. 

Although the Oklahoma prototype and most subsequent PC-Option programs serve 
older people with disabilities, many programs have evolved which serve a sizable number of 
younger people. Most programs limit service to people with physical disabilities, although 
this is changing as more people move from institutions into the community. 

The growth in the number and types of people seeking home and community-based 
long-term services has been accompanied by growing political and economic scrutiny of 
existing service delivery systems. Disability rights advocates are increasingly demanding a 
service delivery system which facilitates independence and empowerment by maximizing 
consumer involvement in all aspects of PAS. They argue that consumers are the best 
qualified to assess how much service they need, what kinds of services they need, and when, 
where, and how these services should be delivered. They therefore prefer "independent 
providers" who are hired, supervised, and paid directly or indirectly by the consumer or 
his/her chosen surrogate. Until recently, advocates for seniors focused on expanding 
professional accountability and government regulations for Medicaid and Medicare services to 
ensure "quality" (which is largely defined as the lack of negative outcomes such as abuse and 


neglect), but recent research and advocacy efforts indicate that older people with disabilities 
are also concerned with autonomy issues. 

The type of system promoted by disability rights advocates is seen as a challenge to 
the traditional "medical model" of service delivery. That model defines personal assistance as 
a medical or medically-related need and puts certain types of medical and social service 
professionals (physician, nurses, and/or medical social workers) in charge of allocating and 
monitoring a limited range of services, usually provided via private or non-profit homecare or 
home heath agencies. Advocates for seniors have also voiced criticisms of the medical 
model, although on somewhat different grounds. Typically, they are concerned with the 
fragmentation of the financing and delivery system that results when coverage of "nonmedical" 
services is prohibited under medical insurance programs such as Medicare or 
Medicaid. 

Will the states be able to use the PC-Option to meet the needs of the diverse and 
increasingly vocal population demanding services, while trying to address their own 
managerial concerns? Does it make more sense to administer a multitude of programs with 
different administrations, eligibility requirements, and types of service delivery to serve the 
needs of different groups, or can a single program be developed which is flexible enough to 
respond to the needs and preferences of a heterogenous consumer population? The following 
problems and in the organization of PC-Option programs will need to be addressed in order 
to better serve all people who need personal assistance services. 

Problems with the Existing Programs 

The following problems are impeding states in their ability to serve the heterogeneous 
and expanding population which needs PAS. 

-The number of hours of service available may not meet the needs of the significantly 
disabled population. 

-The scope of services available may not meet the needs of the populations served. 
Particularly problematic for many consumers are the lack of supervision services, 
emergency services, and paramedical services. 

-Limits on the times services and locations in which services are provided often 
impede participation in the family, community, and workplace. 

-Income eligibility requirements limit service access, and discourage marriage and 
employment for consumers. 


-Family providers are not included in the repertoire of possible provider 
arrangements, despite the potential cost savings and desires of some consumers. 

-Utilization of independent providers is limited, despite the lower per unit cost and 
greater consumer control, because of liability concerns and withholding issues. 

-Consumers do not have a choice among provider modes. 

-Assessment of service quality is based on broad administrative standards instead of 
consumer experience. 

Increasing Access to Services 

Across the U.S. there is extraordinary variability in the number of people receiving 
necessary services. Some states make a concerted effort to provide personal assistance 
services to many of those who need it, while others provide very little. Some sort of federal 
action would probably be required in order to address these disparities. 

This report ends with a discussion of proposals for federal action. These include 
making personal care a mandatory Medicaid service, shifting a percentage of the current 
Medicaid expenditures from institutional services to home and community-based services, 
expanding the 1915(D) home and community-based waiver, and consolidating all Federal PAS 
programs into a block grant program which is indexed and does not require state matching 
funds. All of these proposals have drawbacks, but some sort of resolution of the access issue 
is imperative. As political, economic, and demographic pressures build, federal and state 
government will need to initiate a formal process of dialogue between administrators, 
legislators, providers, advocates and consumers. PAS is essential to a growing number of 
Americans, and a way must be found to provide these services. 


INTRODUCTION 


Purpose 

The purpose of this study was to learn how states are using the Medicaid personal care 
services optional (PC-Option) benefit.' Under the personal care benefit, states may provide 
personal assistance services to Medicaid-eligible recipients. The optional status of the benefit 
means that states may choose to include "personal care" services in their state Medicaid 
plans, but are not required to do so. If they elect to cover personal care, states are largely 
free to define these services as they see fit. The only federal restrictions specific to this 
benefit reiterate the statutory requirements that personal care "in the home" must be 
authorized by a physician in accordance with the recipient's treatment plan, supervised by a 
registered nurse, and provided by a qualified individual who is not a member of the 
recipient's family. States determine how physician authorization will be obtained and what 
constitutes a treatment plan. States also determine the nature and scheduling of R.N. 
supervision, set qualifications for providers and determine the degree of kinship which 
excludes a family member from becoming a paid care provider. Recently the in-home nature 
of the service was changed in the Omnibus Reconciliation Act of 1990. As a result by 1994 
Medicaid Personal Care Optional Services will be available to people outside the home. 

Although the personal care option has existed in Medicaid since the early days of the 
program, relatively few states elected to provide this coverage until the 1980s. As of FY 
1979, only ten states provided personal care, spending a total of $196 million. In FY 1982, 
seventeen states offered the benefit and expenditures had increased to $395 million. By FY 
1988, twenty-three states (including D.C.) reported offering such coverage. According to 
WID data, federal and state Medicaid expenditures for personal care services totaled about 
$1.6 billion in FY 1988. This is a 25% increase over 1987 expenditures.2 

The Medicaid personal care services benefit has never been formally evaluated.3 
Because there are so few regulations, there has, historically, been little federal oversight. 
Until recently, data on expenditures for personal care services were not routinely available 
because they were not reported separately from home health care expenditures. 

1 

This study was conducted as a result of a contract from the U.S. Department of Health and Human Services by the World 
Institute on Disability (WID) and supported with data from WID's National Institute on Disability and Rehabilitation Research 
(NIDRR) Grant #0008720314, an earlier Mott Foundation grant, and on-going research on PAS under the auspices of the Research 
and Training Center on Public Policy in Independent Living. 

2 

According to Health Care Financing Administration claims data, federal and state Medicaid expenditures for personal care 
services totaled about $1.2 billion in FY 1987. 

3

Palley and Oktay (1989) completed their seminal research on the PC-Option when this study began. Three other studies 
commissioned by the Commonwealth Fund informed much of the work in this project. Lewis-Idema et.al . (1990) did a phone survey of 
all the PC-Option programs. Charles Sabatino (1990) did site visits to programs using independent providers. Marshal Kapp (1990) 
looked at liability issues in relation to independent provider models of service delivery. One other study, done by Diane Justice et.al 
(1988) for the National Governor's Association, was also very useful. 


In order to inform the long-term care policy debate, the Department of Health and 
Human Services (HHS) contracted with the World Institute on Disability for this study to 
provide accurate "baseline" information on services already being funded by public programs, 
particularly the Medicaid Personal Care Optional programs. Information about the use of the 
Medicaid personal care benefit was seen by the Assistant Secretary for Planning and 
Evaluation (ASPE) at HHS to be particularly relevant for two current policy purposes: 

* To provide information relevant to regulatory decision-making; in particular, 
whether or not the coverage regulations for personal care services should be revised 
and, if so, in what ways. 
* To inform the ongoing policy debate about expansion of public funding for long-
term care services, particularly home and community-based care. 
Source of Information 

Statistical Analyses 

This report is based primarily on two national surveys of PAS programs conducted in 
1985 and in 1990 by the World Institute on Disability, as well as a series of six site visits 
conducted by WID between October, 1990, and February, 1991. (In the few places in the 
report where the WID information is supplemented by statistics from other sources, it is 
noted.) 

In 1985, WID interviewed administrators of 157 out of the 175 programs identified as 
providing PAS. Twenty of these programs provided PAS through the Personal Care Option 
of Medicaid. Included were programs that provided personal care and household assistance 
to people with disabilities on a continuing, respite or emergency basis. Not included were 
programs for people with only cognitive or mental disabilities. The data collected were 
demographic and descriptive information about the program based on program management 
information system output, written documents and administrator judgement. (See Appendix B 
for a full discussion of methodology and a copy of the questionnaire and/or Litvak, Heumann 
and Zukas, 1987.) 

In 1989, these same administrators were asked to complete a follow-up mail survey to 
determine the changes that had occurred since 1984. There was an 75% response rate for the 
programs interviewed in the first telephone survey. We also sent surveys to the 19 program 
administrators who refused to be interviewed in 1985, and four responded (21 %). Finally, 
we sent questionnaires to 58 programs which had been created since 1984, or which we did 
not know about in 1984. The response for these new programs was 48% (26 returned). The 
overall return rate for all PAS programs contacted was 68%. 

All 24 of the existing programs funded by PC-Option responded to the 1989 survey, 


due to intensive follow-up efforts made by the research team. Verification of which states 
actually utilized the PC-Option needed to be done because of discrepancies between the 1985 
WID survey, the 1985 and 1987 lists prepared by the Health Care Finance Administration 
(HCFA, 1985, 1987), and the list of programs developed by Lewis-Idema et. al. (1990). 
After extensive communication with state administrators, it was found that four states had 
added the PC-Option to their Medicaid plan (WV,ME,NC,WA) since WID's 1985 survey, 
and seven states identified at some point by HCFA as using the PC-Option had in fact not 
included the PC-Option in their state Medicaid plans (IN,KS,CA,ID,TN,AL,HI). 

The information gathered from these two surveys were analyzed in several ways. Key 
variables from both surveys were examined in the aggregate. Other analyses contrasted 
programs with different sources of government funding. The programs were divided into six 
groups: 1) those which received funding from the Medicaid Personal Care Option, 2) those 
which received funding from Medicaid home and community-based waivers, 3) those which 
received Social Security Block Grant (Title XX) funding, 4) those which received funding 
from the Older Americans Act (Title III), 5) those which received only state general funds or 
state rehabilitation funds (Title VII), and 6) those which received other sources of federal 
funding (i.e., Medicaid Home Health and other federal funds). It should be noted that all 
programs relied heavily on state revenues to augment the federal funds received. 1985 and 
1989 surveys were also compared in order to identify program changes among these funding 
source groups. 

Site Visits 

Site visits were conducted to six states which had Personal Care Option funded 
programs under Medicaid. The six states were chosen to represent different systems of 
service delivery, different provider arrangements, different sized programs, and different 
geographical areas. These sites were: Montana, Oregon, Michigan, Massachusetts, Maryland 
and Texas. The research team interviewed state administrators, state level advisory groups, 
state wide advocacy groups, county administrators, and local consumers and providers in the 
state capitol city and a city in another county near the capitol. The interviews were open-
ended based upon a preset format to cover in depth various aspects of the programs history 
and development. (See Kennedy and Litvak, 1991, for a fuller discussion of the site visit 
methodology.) 

POPULATION SERVED 

The target population for the Medicaid Personal Care Option programs is defined in 
each state by income, age, disability and other miscellaneous eligibility criteria. How these 
official regulations combine with program design and external factors to influence who is 
actually being served is difficult to document because program management information 
system (MIS) do not collect uniform demographic data. Responses to the 1985 survey 


regarding demographic data were so poor that these questions were not included in the 1989 

survey. Therefore the following discussion relies mostly on eligibility criteria augmented by 

demographic data whenever possible from the site visit states. 

In general, population targets, as expressed in eligibility criteria, are the result of both 
state economic concerns and the needs of disabled constituencies. For example, in Texas 
state administrators were responding to the need to control spending on nursing homes when 
they created the PC-Option program as an alternative for people in ICF-2 level homes. 

In contrast, in other states historical circumstances and political clout of certain 
population groups are a reason for differences in population targets. For example, families of 
people with mental retardation were active in the formation of the Michigan program, while 
people with severe physical disabilities and their advocates lobbied for and designed the 
program in Massachusetts. Each state is currently attempting to respond to new or changing 
constituencies. 

Income Criteria 

Most PC-Option recipients are aged or disabled individuals who access the program by 
meeting the eligibility criteria for the SSI (Supplemental Security Income) Program. 
Individuals cannot be eligible for SSI if they have an income higher than a certain level which 
is the same in every state, i.e. $368 a month for individuals and $553 a month for a couple in 
1989. (There is also an asset limit of $2000 for individuals and $3000 for couples). This 
income eligibility level is also the payment standard for SSI. Many states supplement this 
payment standard for individuals living in the community. As a result of this and several 
other provisions of Medicaid's convoluted income eligibility criteria, the actual income of 
individuals receiving the PC-Option varied considerably from state to state, from 51 % of the 
federal poverty level to 111 % for individuals, and from 49% of the poverty level for couples 
to 122% for couples (Table 1).4 

The strict income requirements and the disparity between single and couple income 
criteria in some cases discouraged program recipients from working and from marrying. The 
income eligibility requirements have led to a de facto exclusion of working people, and 
served as a work disincentive for current program recipients. The number of people taking 
advantage of section 1619 of the Social Security Act, which allows people to work and still 

Some of the PC-Option states allow people to meet a "Medically Needy' income standard that differs from the SSI income 
standard (Table 1). In most medically needy states the medically needy standard is somewhat higher than the SSI standard, but not in 
all of them. Medically-needy individuals must either meet the income and resource criteria for a state's medically needy program or 
..."have sufficient medical expenses to reduce their countable income to medically-needy income levels" (State Medicaid Information 
Center, p. 5). In addition, there are several states, called 209(b) states (after the section of the legislation covering this option) which 
have more restrictive income, resource or disability requirements than SSI for Medicaid eligibility. The 209(b)states with more 
restrictive income standards than SSI must allow for a spend-down to this standard even if the state does not have a spend-down 
provision. Hence PC-Option recipients in North Carolina and Utah have incomes that are below 74% of poverty, the SSI income 
standard. 


receive Medicaid benefits, appears to vary greatly from state to state. 

Age Groups Eligible and Served 

Most PC-Option programs (79%) claim they serve people of all ages, while some 
(21%) said they only serve people over the age of 18. The site visits suggest, however, that 
despite broad age eligibility criteria, some programs may emphasize service to one age group 
over another (Table 2). For example, the program in Massachusetts was designed specifically 
to serve young people with disabilities through the states's independent living programs, 
because this group was not being adequately served by the existing state programs (which 
were geared toward elderly people). Oregon has recently shifted its PC-Option program to 
target children with disabilities. 


Table 1. 
Income Levels for Aged and Disabled Medicaid Recipients Living in the Community (Percent 


of Poverty)* 
State Individuals Couples 

Alaska 111% 122% 
+Arkansas 74% 83% 
+Maine 76% 85% 
+Maryland 74% 83% 
+Massachusetts 102% 115% 
+Michigan 81% 90% 


-+Minnesota 77% 85% 
-Missouri 74% 83% 
+Montana 74% 83% 


-+Nebraska 86% 96% 
Nevada 82% 95% 


-+New Hampshire 77% 83% 
+New Jersey 100% 100% 
+New York 90% 98% 
-+North Carolina 51% 49% 
-+Oklahoma 88% 104% 
+Oregon 74% 83% 
South Dakota 74% 83% 
Texas 74% 83% 
Utah 63% 65% 


+Washington 80% 86% 
+West Virginia 74% 83% 
+District of Columbia 100% 100% 


* These estimates are based on 1987 data. The poverty level for 1988 was $481/month for an individual and $644/month for 
a couple. 
+ States which allow a spend down for medically needy "aged and disabled" (see footnote 4 for explanation). 
-"209(b)" states (see footnote 4). 
Source: Medicaid Eligibility for the Elderly in Need of Long-term Care. Edward Neuschler, Center for Policy Research, 
National Governor's Association, September 1987. 


Table 2. 
Percentage of People Served by Age Group in Site Visit PC-Option Programs 


Age Group 

State Year <18 18-65 >65 

Massachusetts 1989 8% 85% 7% 
(<21) (21-65) 

Michigan 1981 33% 67% 

(>60) 

Maryland 1984 2% 33% 65% 

Oregon 1988 27.8% 72.2% 
(<60) (>60) 

Montana* 1989 35% 60% 

Texas 1990 6.5% 23% 70.5% 

* Estimate by Westmont, Montana's statewide private provider agency 
Degree of Disability 

Programs developed individual functional assessments by ADLs, and/or number of 
hours and type of services needed. Minimum levels of functional limitation are set, and in 
some states these levels have been raised in order to contain program expenditures. These 
functional capacity guidelines are an indicator of the minimum level of severity of disability 
people must have to be accepted in a program. The Massachusetts program requires that 
people have the severest level of disability to enter the program (Table 3). Texas, Maryland, 
Oregon and Montana have tried to exclude those who only need assistance with IADLS or 
household maintenance functions. Unfortunately none of the site visit programs could give us 
data on the degree of disability of their recipients. 


Table 3. 

Degree of Disability of Program Recipients 

State Degree of Disability 

Massachusetts Need 10 or more hours per week of ADLs or 14 or more hours of ADLs and IADLs 

Michigan Need for ADL, housekeeping or chore services 

Maryland Limitations in ability to perform ADLs 

Oregon Child in foster care or adult needing assistance with at least 1 ADL on a low or intermittent 
hour basis 

Montana Limitation in ability to perform at least 1 ADL requiring hands-on personal care 

Texas Score of 24 or more on ADL functional assessment test and need for at least 6 hours of 
PAS 


Type of Disability 

Almost three-quarters of the programs reported that they serve people with all 
disabilities (physical, mental, cognitive and brain injury)(Appendix B, p. 19). However, 22% 
of the programs do not serve people with mental disabilities and 27% do not serve people 
with cognitive disabilities. 

During the site visits, these two populations were usually identified as those who "fell 
through the cracks" of community-based services, particularly if their primary PAS need was 
supervision. One of the reasons for exclusion of these groups was historical - many states 
have separate departments for people with mental illness and mental retardation. 
Massachusetts is currently struggling to adapt their program to meet the needs of people with 
mental retardation and cognitive disabilities. Maryland was the only program visited which 
currently offers supervision for people with cognitive or psychiatric disabilities. 

Other Eligibility Criteria 

There are other eligibility criteria for the PC-Option programs as well, some of which 
are controversial. In 1984, half of the programs prioritized people who were at risk of 
institutionalization (Appendix B, p. 20). Fourteen percent took into account whether family 
was available to provide services and would only take people whose families were unable or 
unwilling to provide service. A few programs said they targeted people in particular 


disability groups or those living alone. Twenty-three percent required that people be able to 
manage their own attendant. The latter became a major issue in Massachusetts, where DD 
advocates threatened to sue the state unless regulations were implemented in order to allow 
people with cognitive disabilities to use surrogates for management assistance. 

Size of the Program Relative to Potential Users 

The number of PC-Option recipients per 1000 aged and disabled Medicaid recipients 
in each state was calculated to arrive at a measure of the degree to which the PC-Option 
programs served the potential population of eligible Medicaid PAS users, i.e. participation 
rate. Table 4 indicates that in 1988 South Dakota, Arkansas, Michigan, Missouri, New York 
and Oklahoma had the highest participation rates while Maine, Massachusetts, New 
Hampshire and Oregon do not depend to any great extent upon their PC-Option program to 
serve the population needing PAS in their state. 


Table 4. 
Personal Care Option Recipients Per Aged and Disabled Medicaid Recipient By State (1988) 


State PC-Option Medicaid Disabled Aged and Participation 
Recipients 1988 Recipients >65 Medicaid Disabled Rate (per 1,000 
years old** Recipients** Medicaid Aged and 
Recipients Disabled 
Medicaid 
Recipients 
AK 94 2,554 3,105 5,659 17 
AR 16,539 49,460 48,346 97,806 169 
ME 241 19,380 19,596 38,976 6 
MD 4000 42,772 42,774 87,546 46 
MA 1518 102,223 88,148 190,371 8 
MI 33,000 93,239 156,420 249,659 132 
MN 1,787 46,161 29,980 76,141 24 
MO 22,000 63,506 60,784 124,380 177 
MT 736 6,217 8,203 14,420 51 
NB 515 16,560 11,942 11,942 43 
NV 300 6,195 6,077 12,272 24 
NH 55 8,539 5,093 13,632 4 
NJ na 57,753 80,119 137,872 na 
NY*** 89,395 343,608 323,003 666,611 125 
NC 3,765 75,054 58,718 133,772 28 
OK 14,028 54,665 33,596 88,261 159 
OR 300 20,881 22,631 43,512 7 
SD 3,282 8,107 7,155 15,262 215 
TX 31,266 215,591 131,093 346,684 90 
UT 200 7,096 8,703 15,826 13 
WA 5,864 48,490 57,879 106,369 55 
WV 7,500 24,854 33,147 58,001 129 
DC na 10,199 16,758 26,957 na 

* Combines Personal Care Services Program (79,198) and Long-term Care Project (10,197) 
** Source: Health Care Finance Administration 
*** New York has two different PC-Option funded programs 

SERVICES PROVIDED 

Most programs offer a basic core of ADL and IADL services, but only about half 
provide "paramedical services". Chore, repair and maintenance services are rarely offered. 
Transportation and escort is available mostly for medical trips. Between 1984 and 1988 there 
appears to be a decrease in programs allowing paramedical services and respite. The only 
growth has been in programs providing communication services. The PC-Option service mix 
is clearly not adequate to enable an individual to be fully self-sufficient, if necessary, living in 
the community. 

Personal Care Services 

The PC-Option Programs offered core personal care services, including feeding, 
bathing, dressing, ambulation, transfers, oral hygiene and grooming, and skin maintenance 
(Appendix C, pp. 22-23). Most offered menstrual assistance and bowel and bladder care. 
Fewer offered assistance with prosthetic devises, range of motion and foot care. Fifty-eight 
percent allowed assistance with medications, 38% offered assistance with respiration, 29% 
allowed assistance with catheter care, and 21 % allowed assistance with injections. The 
likelihood of a program providing these paramedical services using unlicensed providers 
dropped slightly between 1984 and 1988, which may suggest a growing concern over 
liability in this area. 

These findings were borne out by the site visits. Programs offered a basic core of 
personal care services, but there was wide variation on the provision of more invasive or 
"paramedical services". Montana has a very strict interpretation of medically related tasks, 
and only allows them to be provided by Home Health Aides who generally work for the same 
statewide homecare agency that provides PC-Option services (Table 5). In Texas, even 
though disability advocates successfully lobbied the State Board of Nurse Examiners to revise 
regulations in order to allow for delegation of paramedical tasks, the state and private 
agencies are unwilling to provide these services through the PC-Option. However one Texas 
agency said that they told attendants that they can do paramedical tasks on their own time 
without pay, if they so chose. Oregon, which also uses agency providers, developed the 
Nurse Delegation Act, which permits nurses to sign-off for non-certified attendants to do 
paramedical tasks. 

Programs using independent providers are usually more liberal on this issue. Both 
Michigan and Maryland allow administration of medications which would ordinarily be self-
administered if the individual were not disabled, but invasive procedures are not allowed. In 
Massachusetts, all paramedical procedures are theoretically allowed as negotiated between the 
assistant and the disabled individual. 


Table 5. 
Medically Related Tasks 


State Regulation 
Massachusetts Allows respiration care, catheterization, injections, medication administration, ROM, 
footcare as negotiated with recipient. 
Michigan Allows assistance with drugs which are "normally self-administered" 

Maryland Allows assistance with medication if "ordinarily self-administered" 

Oregon With R.N. approval as per Nurse Delegation Act allows foot nail care, external cleaning of 
catheter and bag, changing of ostomy bags, maintenance of bowel care, administration of 
medication, ROM. 

Montana Does not allow medically related tasks to be provided by non-Home Health Aides (HHAs) 

Texas Allows assistance with medication if "ordinarily self-administered" The state has revised 
regulations to allow nurse delegation, but this has not impacted the PC-Option program. 

HCFA proposed Personal Care Services are defined as "...those tasks directed at the recipient and or his or 
regulations her immediate environment that are medically related...but would not include skilled 
services that may be performed only by a health professional." 

Household Maintenance Services 

There are a core of household services that most programs offered, including meal and 
menu preparation and clean-up, light cleaning, laundry and shopping (Appendix C, p. 22). 
Errands, chores, heavy cleaning, and repairs were less likely to be provided. In some states 
these services were provided with state funds. Only one program, Massachusetts, allows 
personal assistants to assist individuals with their children or with paying bills and budgeting. 

Communication Services 

Roughly 30% of PC-Option programs reportedly allow providers to assist with 
paperwork or function as an agency liaison. A quarter allowed assistance with phone calls, 
interpreting or reading. Three programs allow assistance with handling money (Appendix C, 

p. 23). 

Transportation Services 

In 1984, most programs allowed for transportation and escort (Appendix B, p. 12), 
though several administrators noted that such services were limited to medical need. In 1988, 
when the question was phrased to make that distinction, fewer than 1/4 of the programs 
allowed for non-medical escort and transportation. Three-fourths allowed attendants to escort 
recipients to medical appointments but only 42% allowed attendants to drive the recipient to 
the appointment (Appendix C, p. 23). 

Short-term Services 

In 1984, 47% of the programs said they provided respite services (Appendix B, p. 
12). By 1988, this had declined slightly to 42%. In 1988 only 38% offered emergency 
services (Appendix C, p. 22). 

AVAILABILITY AND INTENSITY OF SERVICE DELIVERY 

Intensity of service delivery is a function of several factors, including the times of 
day, days of the week services are available, and the total amount of service hours allocated 
per program recipient. Of particular concern in recent years is the availability of services 24 
hours a day for people with high services needs such as high level quadriplegics or children 
who are technology dependent. 

Hours and Days Available 

In 1984, 82% of the programs reported that services could theoretically be arranged at 
any time (Appendix B, p. 15). By 1988, fewer programs (46%) said that attendants were in 
fact available 24 hours/7 days a week (Appendix C, p. 24). 5 Four of the programs which 
provided this data in both 1984 and 1988 had stopped offering services at any time. This 
means that people who have to be turned or suctioned at night, as well as people who simply 
want to get up or go to bed when they want, may not get the services at the time that they 
need them. 


The large drop in programs allowing services at times of the day or week when the individual may need them may be due to a 
difference in the way the question was worded in the two survey years. In 1988 administrators may have thought we were asking if 
they provide 24-hour-a-day services. 


20 
Service Limits 
Hours 
In 1984, over 70% of the PC-Option programs had specified service limits expressed 
either in dollars or hours or both. There appears to be an increase in PC-Option programs 
allowing for more than 40 hours per week (Table 6). Service limits do not necessarily 
translate directly into the actual number of hours an individual receives from a program, 
however. The average number of hours of PAS per week per recipient in the PC-Option 
programs (FY 1988) was only 11 hours. 
Table 6. 
Percentage of PC-Option Programs with Various Levels of Service Maximums Expressed in 
Hours Per Week 
Hours/Week Limit, 1984 (n=9), 1988 (n=17) 
0-20 33% 24% 
21-30 22% 29% 
31-40 22% 12% 
>40 22% 36% 

Dollars
In addition to hour limits, programs also set dollar limits on what they allowed to be 
spent for any one individual's PAS. Among the programs which set dollar limits, there 
appears to have been a decline between 1984 and 1988 in the percentage of programs with 
per recipient expenditure limits in the higher ranges (Table 7). 
Table 7. 
Percentage of PC-Option Programs with Various Service Maximums Expressed in Dollars Per 
Month 
Dollars Per Month, 1984 (n=6), 1988 (n=11) 
0-$500 50% 27% 
$500-1000 0 64% 
$1000-2000 50% 0% 
>$2000 0% 9%

Availability of services 24 hours/day 

Of special concern in the last few years has been availability of services for people 
who are significantly disabled. Interestingly, twenty-nine percent of the PC-Option programs 
in 1984 and 18% in 1988 stated no hourly or dollar limit. One could conclude that these 
programs allow for services 24 hours/per day. The site visits bolster this assumption. In 
Massachusetts there is a night rate for people who sleep in the disabled individual's home and 
act as a night attendant. There is even a distinction in the night rate based on the number of 
actual hours of hands on service the attendant performs. In Michigan there are 1800 
"exceptions" to state hour allowances, and some of these people are quadriplegic using 
ventilators who receive $2000/month from the PC-Option program. Maryland has 
experimented with a group living situation in a Baltimore public housing unit in which people 
pool their PAS allotments in order to pay a night attendant for the group. 

Relationship between provider type and hours of service 

There is a strong relationship between the number of hours an individual is able to 
receive from a program and the type of provider, when one looks at all the PAS programs 
(Table 8). Programs which use independent providers provide the most hours of service per 
recipient. 

Table 8. 
Average Number of Hours Per Week Per Recipient By Provider Type 1984 and 1988 All 
Funding Sources 

Uncombined Provider Programs* Combined and Uncombined Provider 
Programs 

Delivery Mode 1984 1988 1984 1988 

Independent 25 hours 22 hours 21 hours 20 hours 
(n=17) (n=14) (n=31) (n=28) 


Agency 16 hours 15 hours 13 hours 15 hours 
(n=22) (n=17) (n=41) (n=34) 


Government 3 hours 2 hours 10 hours 6 hours 
(n=4) (n=1) (n=30) (n=14) 


*The combined provider programs are ones in which two or three different providers are available through the program. 
The uncombined are ones in which only one type of provider is utilized by a program. 

Montana gives us a window on this issue because of its change from independent 
providers to a single agency provider. From 1987, when this change took place, to 1990, 


there was a reduction in the maximum hours allowed per client per week from over 100 
hours to 40 hours. This took place in response to the provider agency's need for 
administrative and withholding costs to be covered by their reimbursement rate. It may be 
that actual cost of the program to the state had been near the agency figures, but the 
administrative costs of the program were embedded in the larger government administrative 
structure. This is often the case with other programs as well, whether they are Medicaid 
funded or not. 

In conclusion, there has been a slight increase in the number of programs that say they 
will allow more than 40 hours of PAS for recipients who need that level of service. 
However, among programs which set per person expenditure limits, there has been a slight 
decline in the maximum monthly expenditures. It appears that less than 20% of the PC-
Option programs allow recipients to receive services 24-hours-day. There is a strong 
relationship between the number of hours an individual is able to receive from a program and 
the type of provider. In general, programs that use independent providers provide more 
hours of service. 

PROGRAM GOALS 

Description of Goals 

The answers we received in our survey questionnaires regarding program goals were 
not illuminating. In general, administrators said the programs goals were preventing 
institutionalization and keeping people in the community. No PC-Option program had the 
goal of enabling an individual to work. However, with the passage of Section 1619 of the 
Social Security Act, which allows SSI recipients to work and still maintain their Medicaid 
benefits if their income and assets do not exceed a certain amount, PC-Option programs can 
now enable individuals to go to work. 

Differences between the personal care option programs became much clearer from the 
site visit experience. In fact, the personal care option programs have different objectives 
from state to state. Table 5 reflects the goals stated by the site visit programs. These goals 
are a key to understanding why states have designed the program service package and other 
aspects of the programs the way they have. In each case, pressure has been brought to bear 
on the program either from within the state system or from advocates to expand the mission 
of the program in order to serve a broader population of people who need PAS. These 
program goals are not static, and as the constituencies are evolving and changing, so are the 
goals. 


Table 9. 
Goals of the PC-Option Programs 


State Program Goal 
Massachusetts To enable people with permanent or chronic disabilities to live in the community who 
might otherwise be institutionalized 
Michigan To keep people at home, encourage self-determination, authorize services "only to the 
extent necessitated by the individual's functional limitations," and maintain informal 
supports 
Maryland To support informal caregivers, and prevent or delay institutionalization 

Oregon To maintain the PC-Option as a stop-gap in case the state loses its waivers, and to serve 
disabled children in foster care settings 

Montana To help people stay in their own homes as long as they can rather than go into nursing 
homes 

Texas To provide "care to those who could not access custodial placement" when ICF-2 level 
programs were closed down and to maintain the Federal match for these people. 

Degree to Which Goals are Met 

Massachusetts 

The Massachusetts program has succeeded admirably in designing a program to help 
people with severe physical disabilities, who have the capacity for self-direction and can make 
the transition into community living. The program funds transitional living arrangements 
while people are learning to manage their own services, and training in how to manage an 
attendant and how to recognize and deal with changes in their medical status. The program 
allows up to 24 hours of service per day through the use of a night time wage. It allows 
attendants to provide paramedical services based on an arrangement between the provider and 
the recipient. Recipients generally seemed very satisfied with the program. Main difficulties 
appeared to be with the withholding arrangements. The program has been pressured to add 
the goal of assisting community living transitions for people with mental retardation as well. 
This is a new development, and it is too soon to know how well the program will meet this 
objective. 


Michigan 

Michigan has been successful at serving people who have family or other 
informal/volunteer supports available. However, those who have high hour needs and little 
support cannot get enough reliable assistance. According to county caseworkers, the program 
has succeeded in keeping people out of nursing homes. Michigan offers a very wide range of 
personal care services and some paramedical services, if they are directed by the recipient. It 
also allows attendants to provide a broad range of household and chore services, though it 
doesn't allow for non-medical escort and driving. The program does not provide emergency 
backup services. The service limit, $333 per month, is relatively low, but exceptions are 
allowed. Though more and more people with more severe disabilities are being maintained 
on the program, the average hours per week is only 17. Until recently when case 
management became more available, recipients were generally on their own in managing 
services. 

Maryland 

The original goal of this program was to support informal caregiving systems and was 
based on the Oklahoma model. Very early in the program's history, it became clear that the 
majority of people acting as providers under the PC-Option program had no personal 
connection to the recipient prior to employment. So the goal of using the program to support 
informal caregivers has never been met. The success in meeting the goal of prevention or 
delay of nursing home placement is difficult to assess. Maryland does have a low nursing 
home rate, but it seems unlikely that the PC-Option program was the cause of this. It 
appears that the real result has been that consumers are forced to make do with fewer hours 
of service than they need and/or find ways to supplement attendant wages. 

Oregon 

In Oregon the PC-Option program was housed in the Senior and Disabled Services 
(SDS) Division until 1990. SDS saw the PC-Option as incompatible with their goals of 
reducing the nursing home population, because it has an income eligibility limit far lower 
than that for Medicaid nursing home eligibility. They feel this has created a nursing home 
bias. Consequently the division relies more heavily on two waivers which have the same 
income eligibility as nursing homes. It moved the PC-Option program to the Office of 
Medical Assistance, where it is being used to serve children with disabilities. It is too soon 
to assess the success of meeting this new objective. In the meantime, SDS continues to use 
the PC-Option program to provide personal care services for a limited number of people on 
an intermittent basis. 


Montana 

Montana sees the PC-Option as helping people to stay out of nursing homes, and they 
point to the lack of increase in nursing home beds in Montana as a sign that they have 
succeeded. It may be that the existence of the waiver program has also contributed to this 
outcome. Advocates in the state are very anxious to push the personal care option program 
toward the goal of meeting the needs of people with severe disabilities who are capable of 
self direction. This would require a change in the degree of control consumers are allowed 
over hiring, training, supervising and firing their attendants, an increase in hours, and 
permission to receive personal assistance outside the home. 

Texas 

The Texas program was aimed at bringing Federal matching funds to the state in order 
to provide "care for those who could not access custodial placement" because the state closed 
the ICF-2 level nursing homes. In this, the program succeeded admirably. Over the years 
the program has raised its functional assessment criteria to weed out those who do not need 
personal care services of some kind. It offers most personal care services and 
household/chore services. The service limit is 30 hours per week, but advocates are pushing 
the state to raise these limits to better serve people who are more significantly disabled. 
Beside the low limits on hours per week, it has no requirements that the homecare agencies 
provide emergency backup services, although changes are currently being made in this area. 

In general, one may conclude that the goals the states set for these programs have 
framed the development of the programs. As noted earlier, however, as times change and 
new populations come forward demanding services, programs have evolved and will continue 
to evolve to address the need in some fashion. 

ACCESS CONTROL MECHANISMS 

Access to programs is controlled in a variety of ways. Some of them are spelled out 
in program eligibility criteria covering such things as income and age eligibility and numbers 
of ADL deficits. Others are a result of the existence or lack of certain program features such 
as recipient outreach programs, service limits (defined in terms of hours or money), times 
when services are available, or types of services allowed (such as paramedical, emergency 
back-up or supervision). Others involve deliberate prioritization of people. Still others 
involve external factors such as unavailability of providers in rural areas or in wealthy areas. 
Finally, program managers may deliberately set population target priorities to control access. 


Eligibility Limits to Access 

The formal eligibility criteria regarding assessment for service need varied among the 
PC-Option programs visited (Table 10). The assessment of need process ranges from very 
formal needs assessments with cut-off points (Texas) to very informal assessments based on 
professional judgement (Maryland). In Oregon the assessment was more comprehensive, but 
it used professional judgement as to which programs could fill which needs for service. 

Table 10. 
How Need For Service Is Defined and Assessed 


State Definition and Method of Assessment 

Massachusetts Need 10 or more hours per week of ADLs or 14 or more hours of assistance with ADLs 
and IADLs based on Occupational Therapist (OTR)/Registered Nurse (RN) team in-home 
assessment of functional limitations 

Michigan Need for personal care services based on functional assessment by DSS adult services 
worker 


Maryland Limitations in ability to perform ADLs based on professional judgement by Nurse case 
monitor in recipient's home. 


Oregon Child in foster care needing ADL support based on RN assessment of total care needs or 
adult needing assistance with at least 1 ADL with need for low or intermittent hours of 
skilled Personal care as assessed through comprehensive assessment of person's total needs 
using the CAPS assessment tool by Area Agency on Aging (AAA) or Disability Service 
Office caseworkers. 

Montana Limitation in ability to perform at least 1 ADL and need for hands-on personal care (not 
just supervision), based on functional assessment by agency RN. 

Texas Score of 24 or more on ADL functional assessment test, need for at least 6 hours of PAS 
and state case manager/state nurse supervisor judgement 

Program Features Limiting Access 

Service limits, service availability, income eligibility criteria, and limited outreach 
function to limit access to the programs (Table 10). Income eligibility was mostly based on 
people being SSI recipients or at that income level. 

If there is a ceiling on the number of hours provided or the amount of money allowed 
per recipient, people with high needs and no other source of support either cannot be on the 
program or are forced to make do with far fewer hours than they need (i.e. Montana, 
Maryland and Texas). If there is a lower limit to service, e.g. 6 hours per week in Texas, 10 
hours per week of ADLs or 14 hours/week of ADLs and IADLs as in Massachusetts, this 
eliminates the people who need very few hours a week. 


If certain services are not offered, some people may not be able to use the program. 
For example Texas and Michigan do not provide emergency back-up services, so people who 
are significantly disabled and not able to go even one day without service cannot safely be on 
the program. People who need high hours of service, or at least someone on call 24 hours a 
day, find that the Maryland, Oregon, Montana and Texas programs are not adequate and may 
remain in nursing homes or hospitals. Until recently, the Massachusetts program limited 
access to only those who were able to manage their own attendant. 

A major limiting program feature can be the absence of outreach programs to potential 
recipients. Universally it appears that outreach processes are informal and depend on word of 
mouth and the knowledge of professionals who come in contact with disabled people. In 
some cases programs made some effort to contact discharge planners, service providers and 
disability groups to inform them of the program's existence. In only one state, Montana, was 
there a formal outreach campaign carried out and that was done for the new waiver program. 
The results of this were that as people learned about the waiver for older people they also 
learned that the Medicaid department had another program for people who are not eligible for 
the waiver. As a result the number of people on the PC-Option program increased 
dramatically. If one can generalize from this case, it appears that a major way programs 
limit access is through not informing the general public of the existence of programs. 

Referrals between state administrative units (e.g. departments, divisions) appear to be 
uncommon. For example, after Oregon reorganized the state bureaucracy and combined 
income support and PAS eligibility determination functions into the same division, there was 
an increase in the number of people accessing PAS services, as new cases suddenly were 
identified. 

External Factors Limiting Access 

External factors also work to limit the program's population, and these differ from 
state to state as well. For example, until recently the only way to access the PC-Option 
program in Massachusetts was through one of six centers for Independent Living (ILCs). 
This meant that if one did not live near a center, one had to travel to get services. In 
addition, some people may not know about or may not feel comfortable accessing services 
through ILCs. The lack of a large population of people willing to work for low wages has 
drastically limited access to the program in certain areas of Maryland. In many states, there 
are disparities between rural and urban access to PAS. It appears that programs that use 
agency providers in rural areas (e.g. Texas and Montana), or which have involved case 
managers which train recipients to be good managers (e.g. Maryland), may do a better job of 
helping rural recipients recruit providers. 


Population Target Priorities 

Some of the programs have deliberately set out to limit access in order to reduce 
expenditures. In the face of the current budget crisis (1991), Michigan has dropped from the 
program people who receive purely chore services because they are solely state funded. 
Maryland has proposed dropping all level I (those needing only 1 visit per day) recipients 
though there has been a large backlash to this proposal. Texas increased the limitation 
requirements in order to meet budget constraints but still insure that people who need 
personal care services would be included. 

The ability of states to use all these gatekeeping and access control mechanisms in 
order to control the number of people in their programs is circumscribed by political factors. 
In some states, disability advocates effectively counter efforts to limit access to what tend to 
be very popular programs(despite their limitations). 

DELIVERY MODE 

There are several different ways in which providers are employed. These are 
commonly referred to as delivery modes. Agency providers work for non-profit or for-profit 
agencies and are generally considered the employees of the agency which hires them. 
Independent or individual providers have different conditions of employment depending upon 
the program and state. They can be considered self-employed, employed by the disabled 
recipient or employed by the state for purposes of some types of income withholding and not 
for others. Government agency providers fall into two different categories. Some civil 
service employees experience the same wage scale and benefit packages as other employees of 
similar skill and rank. More recently governments have begun employing PAS providers on 
a contract basis. These are generally part time workers who are not part of the civil service 
personnel pool. Their rates of pay, working conditions and benefits are similar to those of 
independent providers. PC-Option programs tended to use either independent providers or 
agency providers (Table 11). The number of programs using government civil service 
employees as providers dropped considerably.6 

Table 11. 
Percentage of PC-Option Programs Using Different Provider Types by Year 


Year Independent Providers Agency Providers Government Providers 

1984 60% (n=12) 45% (n=9) 40% (n=8) 

1988 46% (n=11) 63% (n=15) 19% (n=4) 

6This drop in use of government civil servants may be spurious because the 198.5 survey did not distinguish between civil service 
and non-civil service employees. 


Benefits and Wages 

The delivery mode impacts the wages and benefits offered to attendants. Agency 
providers and government workers receive the best wages and government workers clearly 
receive the most benefits (Table 12). Independent providers continue to be the most poorly 
compensated providers. 

Table 12. 
Provider Benefits and Wages 


Provider Type 
Independent Agency Government 
Providers Providers Workers 
1984 1988 1984 1988 1984 1988 
Average 
hourly wage $3.89 $4.59 $5.12 $6.02 $3.93 $8.00 
Low $ .42 $1.70 $3.40 $3.35 $3.85 $4.66 
High $8.25 $8.30 $9.00 $11.00 $4.00 $8.00 

Average 
number of 
benefits .8 .9 3.0 2.7 5.0 4.0 

Low 0000 10 

High 337 878 

Relationship between provider type, payment mechanism and payment rate 

The three examples encountered on the site visits illustrate only some of the variations 
of arrangements possible for independent providers (Table 13). Massachusetts has different 
rates for night and day attendants and compensates workers at a higher rate than all the other 
programs. It also pays additional amounts for work on holidays. Michigan has a straight 
hourly minimum wage rate which includes the employer and employee share of FICA. 
Maryland pays by the level rather than having an hourly rate, although there is a tendency for 
nurse supervisors, who do much of the recruiting, to translate the levels into about $5 per 
hour. No state or federal tax withholding is done by any of these states. 

There are other state programs, such as California's Title XX funded In-Home 
Supportive Services Program, which do withholding for independent providers. These states 
are vulnerable to suits regarding who is the employer (this issue is discussed below). 


Being an agency-employed provider does not necessarily guarantee attendants better 
working conditions. As one can see in Table 9, there are major differences in pay and 
benefits for agency providers. Texas agencies which operate on a state defined rate provide 
the bare minimum in wages and benefits, while Montana's single agency contractor pays 
somewhat better wages and benefits. 

Table 13. 
Type of Provider, Payment Mechanisms and Basis of Pay 


State 
Provider Type Payment Mechanism Basis of Pay Payment Rate 
and Benefits 
MA 
Independent Intermediary agency 
cuts the check, attendant 
paid by disabled 
individual 
Hourly rate which 
varies for day, night 
and night hands-on 
service 
$7.50/hour day rate, $15.00 
per night, additional pay 
for hands-on PAS at night, 
No benefits 
MI Independent State cuts dual party 
check requiring 
attendant and disabled 
individual signature 
Hourly rate $3.35/hour, FICA withheld 
if arranged between 
attendant and recipient 
MD 
Independent State Medicaid agency 
pays provider directly 
Four levels of pay 
based on number of 
visits and type of 
disability 
$10/one visit, $20/two 
visits,$25/day, No Benefits 
OR Agency 
Participating agency 
pays provider 
Hourly rate $3.65-$10/hour, FICA, 
worker's compensation, 
unemployment, 
transportation costs 
MT Agency 
Contract agency pays 
provider 
Hourly rate $4.65/hour, FICA, 
worker's compensation, 
unemployment, vacation, 
sick leave, health insurance, 
transportation costs 
TX Agency 
Participating agency 
pays provider 
Hourly rate $3.35 - $4.41/hour, FICA, 
unemployment, some 
agencies provide workers 
compensation and 
transportation costs 


LIABILITY 

Many state administrators suggest that concerns over liability have shaped the direction 
of their programs. There are two types of liability that seem to be of importance: 1) 
Liability or responsibility for withholding federal (i.e. FICA, federal unemployment) and state 

(i.e. worker's compensation and disability) taxes, and 2) Tort Liability or legal responsibility 
for attendant negligence. Utilizing homecare agency providers is the major way to shift 
liability away from the state. States which utilize independent providers have different ways 
of defining who is the employer. 
Concerns over tort liability have impacted the provision of "paramedical" services in 
many states, along with state nurse practice act regulations. These regulations describe what 
tasks come under the supervision of registered nurses and which do not. Any program that 
does not follow nurse practice acts is vulnerable to fine and possibly litigation from the state. 

Who is the Employer? 

Each state must address these liability issues by determining who can be considered 
the legal employer of the attendant. States have answered this question in different ways 
(Table 14). 

Table 14. 
Who is the Employer? 


State Regulation 

Massachusetts Attendant is an independent contractor in the employ of the Medicaid recipient 

Michigan Recipients are the employers for purposes of withholding. Assistants are either self 
employed or domestic workers in the employ of the recipient. 


Maryland Attendants are self employed 

Oregon Attendants are employees of homecare agencies 

Montana Attendants are employees of homecare agency 

Texas Attendants are employees of homecare agencies 

In the case of programs like the ones in Oregon, Montana and Texas, the homecare 
agency is the employer and, presumably, is liable for state and federal withholding. 
However, the degree of withholding appears to vary. In Texas, for example, the homecare 
agencies are not required to pay worker's compensation, although some agencies do so 


voluntarily. In general, one of the major reasons some states decide to utilize homecare 
agency providers is to shift liability away from the state. One of the site visit states, 
Montana, was so concerned that the state might be deemed the employer (and therefore be 
required to provide government worker benefits to attendants) that it switched from an 
independent provider mode to a statewide homecare agency model of service provision (see 
Kennedy and Litvak, 1991 for details). In general, the issues of liability and who is the 
employer is clear in the case of agency employees. The agency carries liability insurance and 
does all the withholding. 

States which utilize independent providers have different ways of defining who the 
employer is. None of the three site visit states which use independent providers have been 
sued for attendant negligence, and the state administrators do not seem overly concerned with 
this issue. However, the economic and administrative responsibility for tax withholding is a 
major concern. In Michigan, the recipient is the employer and the attendant is an 
independent contractor. The recipient receives a two party check from which s/he is to 
withhold the employer's share of FICA and from which the employee is to set aside his/her 
share. Theoretically, the recipient files a Federal 1099 form every three months with the 
employer share of social security. In practice, this rarely happens. The development of the 
two party check system appears to be a way for the state to avoid responsibility for federal 
income tax withholding. The state sets a per person expenditure cap to avoid being required 
to reimburse for federal unemployment insurance. The Department would like to automate the 
reimbursement system and do payroll deductions, but the start up cost and policy 
ramifications are seen as prohibitive. (See Kennedy and Litvak, 1991, for fuller discussion of 
the Michigan program). 

Massachusetts PC-Option attendants are also independent contractors in the employ of 
the Medicaid recipient. Like Michigan, the system is coming under scrutiny by the IRS. 
The Massachusetts Centers for Independent Living (CILs) function as flow-through agencies 
for attendant wages. The recipient receives the check and pays the attendant. The IRS is 
asking the CILs to send in 1099s on all the attendants, but only some CILs are currently 
complying. Without the 1099s, the IRS would not know who is employed as an attendant 
under the program. Neither Michigan nor Massachusetts withholds workers compensation or 
disability. 

In contrast to both Massachusetts and Michigan, the state of Maryland does send in 
1099s for all the attendants it has registered under the program. The attendant is seen as self-
employed. The state has been very careful to maintain the "level of care" payment system in 
order to avoid the appearance of being the attendant employer. The state has held onto the 
system which pays $10 a day for one visit, $20 for two visits, and $25 a day for anyone 
needing a 24 hour/day live-in. They have maintained this "level of care" system, even 
though the state agrees that it has led to extreme shortages of qualified providers and cannot 
accommodate recipients who are significantly disabled unless they live together in congregate 
housing and share attendants. The state of Maryland has been sued over worker's 
compensation, and it was deemed not liable because the state does not set wages and hours. 


There is no easy solution to this issue, because there are advantages and disadvantages 
to using agency and independent providers. On the plus side independent providers generally 
cost less because there is no agency overhead rate to be paid. Critics like Sabatino (1990, p. 
24) maintain, however, that if the independent providers were flanked by the necessary 
management and training supports to maintain quality, the independent provider mode would 
not be cheaper. Disability advocates claim that the advantage of independent providers is that 
they are less professionalized and more amenable to training and supervision by the disabled 
user of their services. 

Conversely, agency providers are more costly per hour because of agency overhead 
rates which may amount to as much as 100% for every hour provided. According to 
consumers, agency providers tend to be more responsive to professional goals and agency 
supervision than to recipients' wishes. 

It seems most likely that both types of providers have a role to play in a 
comprehensive system of PAS. New solutions for withholding and liability protection need to 
be explored for independent providers. One possibility, for example, is the formation of a 
state-wide association of independent providers which would purchase group liability and 
health insurance for its members. States can also reimburse recipients for what they expend 
on purchasing individual workers compensation insurance. 

Nurse Practice Acts 

As noted above, also involved in the liability issue is the question of nurse practice 
acts. Presumably they serve to protect providers against liability claims and are meant to 
insure quality. However, disability advocates and administrators have observed that these 
regulations increase the cost of PAS by unnecessarily "medicalizing" tasks that family 
members are routinely taught to do and require recipients to have a multiplicity of providers 
coming into their home. Moreover, relying on medical professionals may impede the 
independence of consumers. 

In Montana, the Nurse Practice Act is scrupulously observed by the statewide 
homecare provider agency. In Oregon they have passed a Nurse Delegation Act to allow the 
nurse to sign off for non-certified attendants to do paramedical tasks. Even though in Texas 
changes were made in the regulations promulgated by the state board of nurses to allow 
physicians to delegate paramedical tasks to paid attendants, the state does not allow physician 
delegation under the PC-Option program. 

Some of the independent provider model programs are more liberal on this issue. 
Both Michigan and Maryland allow administration of medications which would ordinarily be 
self administered if the individual were not disabled. However, invasive procedures are not 
allowed. In Massachusetts all paramedical procedures are allowed as negotiated between the 
assistant and the disabled individual. 


QUALITY ASSURANCE MECHANISMS 

There are a number of ways in which states and the federal government have tried to 
influence the quality of the PC-Option programs. These include: state level oversight of 
overall program compliance standards, case level oversight, nurse supervision of the 
attendant, attendant training and screening, and recipient complaint and grievance 
mechanisms. All states have some of these quality assurance mechanisms in place. 

Which mechanisms a state employs depends upon their philosophy or view of quality 
assurance. States vary greatly in their approaches to quality assurance. Some states 
emphasized quality assurance from "below", i.e. training the recipient to recognize quality 
and providing avenues for problems to be addressed. Others have relied heavily on quality 
assurance systems from "above", i.e. paper reviews and site visits. Some states limit effort 
to minimum compliance with regulatory requirements. 

In Massachusetts, quality assurance rests on: 1) extensive training of the disabled user 
in attendant management techniques, the elements of quality service, and health condition 
self-monitoring and, 2) attendant wages which appear to be high enough to attract a pool of 
workers. Quality assurance in the Michigan program appears to rest more on the fact that 
families are the main providers of services and are considered to be responsible for service 
quality monitoring. The Maryland system rests on the independent nurse case monitors. Texas 
and Montana have designed systems in which Medicare licensed homecare agency nurses are 
the main guarantors of quality, in conjunction with very close agency oversight by the state. 

State Level Oversight 

All but one of the site visit states which have provider agencies performs some sort of 
oversight of these agencies. Texas has an intensive top-down compliance monitoring system 
to evaluate provider agencies. In addition, state-funded prior approval nurses determine 
medical need and monitor consistency of reporting between physician referral, state case 
managers service plan and agency R.N. assessment. There is no system like this within the 
Massachusetts Department of Public Welfare (DPW). Instead, DPW relies on the Department 
of Rehabilitation for this function as part of its review of Independent Living Center activities 
(most of the provider agencies are ILCs). In Montana, the state does a compliance review of 
administration and providers in its single, state-wide provider agency. The state monitors 
turnover, training, billing and orders. 


Case Level Oversight 

States vary in the method and frequency of case level monitoring (Table 15). At one 
end of the continuum is Massachusetts, which uses R.N.s contracted to Centers for 
Independent Living and other "provider" agencies to do home visits once a year, but 
considers the trained recipient to be the mainstay of case level quality assurance. Michigan 
uses state employed R.N.s for paper reviews, and assumes that most recipients, even though 
they receive no training, are capable of monitoring their own services. For those who are 
new to the program or are more significantly disabled, Michigan uses case managers who do 
home visits. At the other end of the continuum are Montana, Oregon and Maryland and 
Texas. Texas uses state employed R.N.s for paper reviews, but in addition requires provider 
agency R.N.s to conduct unscheduled visits to recipient homes every two months. Similarly 
Montana, Oregon and Maryland depend heavily on agency or self-employed R.N.s to do 
frequent home visits. 

Table 15. 
Case Level Oversight 


State Nature of Case Level Oversight 
Massachusetts Intensive peer training on attendant management and monitoring health care for new 
recipients; Annual scheduled home visit by R.N. from Center for Independent Living (CIL) 
or other provider agency 
Michigan Case management for those with multiple providers, high service needs, poor informal 
networks, potential for abuse or neglect, and new cases; Annual state R.N. paper review 
Maryland Home visit by self-employed nurse case monitor or county health nurse every 2 months 
Oregon Agency R.N. home visit every 3 months for foster children and every 6 months for adults 
Montana Homecare agency nurse supervisor unscheduled visit every 2 months 
Texas Agency RN home visit every 60 days, social worker home visit every six months, random 
on-site inspections to monitor agency compliance by state nurses 

Attendant Screening and Training 

Determining provider qualifications is done primarily through screening attendants 
before they are employed (Table 16) and/or training them afterward (Table 17). Again, the 
method used depends primarily on the program's philosophy. Those which see the consumer 
as being the judge of quality, i.e. Massachusetts, leave these matters mostly to the recipient. 
Maryland screens independent providers by checking people's social security numbers against 
a list it maintains of people fired from nursing home jobs; the state also checks references and 
requires a physical exam. Even with all these checks the quality of attendants appears to be 
very poor in Maryland, based on consumer, advocates and nurse case manager statements. 
We heard no such complaints in Massachusetts. In the other states that use agency providers, 
the agencies do the reference checks. Texas does a criminal check as well. 


Table 16. 
Who is Responsible for Attendant Screening? 


State Responsible Party 
Massachusetts Recipient screens attendants 


Michigan Recipient screens attendants 

Maryland State screens for past history of being fired from nursing home jobs, checks references, 
requires physical examination 


Oregon Agency screens 

Montana Agency screens 

Texas Agency calls employer and personal references. State runs a criminal check to screen for 
felony convictions 

Massachusetts and Maryland are different in their approaches to training as well 
(Table 17). Given their commitment to consumer control, they see the training of the 
attendant as the prerogative of the recipient. The Maryland program, which is not based on a 
consumer control ideology, requires the nurse case monitor to train the attendant on the job. 
Texas, which relies on agency providers, also allows for on-the-job training by the agency 
nurse, who must certify the aide as competent before services are initiated. Oregon and 
Montana specify hours of training required and, to some extent, dictate content. 

Table 17. 
Nature, Extent and Source of Attendant Training 


State Description of Training 
Massachusetts Recipients responsible for training 
Michigan Recipients responsible for training 
Maryland Attendant trained on the job by Nurse Case Monitor 
Oregon State provides 120 hour Certified Nurse Assistant Training for agency providers 
Montana 8 hours of initial classroom training, plus 8 hours in-service every year plus on-the-job 


training by homecare agency R.N. 
Texas Attendant trained on the job if necessary by agency R.N. 



Recipient Complaint Mechanisms 

Complaint procedures and appeal and grievance mechanisms are the most formal way 
that recipients have to address problems regarding service denial, assessments of need and 
problems with service delivery. States' complaint and grievance mechanisms which bring 
quality problems to the attention of program officials vary, as do the degree to which they 
prepare and inform recipients to be able to exercise these rights. 

Table 18. 
Recipient Complaint/Grievance Mechanisms 


State Mechanism 

Massachusetts Recipient responsible for monitoring own service. Can appeal for review by another 
Independent Living Center. Recipients extensively trained in attendant management and self 
monitoring for health changes. 

Michigan Recipients responsible for monitoring own service and speaking up. Can complain to 
service workers who authorize service. 


Maryland Recipients can complain to the Nurse Case Monitors or to the state for a formal review. 

Oregon Recipients may complain to State case workers and agency RNs. The state considers the 
case workers to be consumer advocates. The Oregon Disabilities Commission runs a toll 
free hotline for consumer complaints and independent living centers also provide consumer 
advocacy. State does a consumer satisfaction survey. 

Montana Quarterly recipient satisfaction survey. Recipient complaints received by nurse supervisor. 
The state has a formal appeals process if recipient cannot resolve issue with homecare 
agency staff. 

Texas Client may seek formal resolution of conflicts through a meeting of recipient, attendant, 
caseworker, agency R.N. supervisor, and state prior approval nurse. 



PROGRAM DESIGN DISCRETION 

Section 42 CFR 440.170(f) of the Medicaid regulations authorizes States to provide 
personal care services as an optional state plan service. This section states that "personal care 
services in a recipient's home... [be] prescribed by a physician in accordance with the 
recipient's plan of treatment and provided by an individual who is -- (1) Qualified to provide 
the services; (2) Supervised by a registered nurse; and (3) Not a member of the recipient's 
family. 

There are no other regulations, just "Guidelines", which states have more or less been 
willing to follow (HCFA, 1979). As a result, states have exercised a great deal of discretion 
and flexibility in designing Medicaid personal care services benefits under the existing 
Medicaid statue and regulations. 

In 1988, HCFA proposed new regulations for the program in an attempt to more 
concretely define "personal care", service location, "home", "provider", and the nature of 
physician and nurse involvement (HCFA, 1988). HCFA collected comments on the proposed 
regulations, but has not promulgated them in final form. The interview protocol used during 
the site visits asked interviewees what the impact of these regulations would be on the state 
program. What follows are several tables and discussion regarding how freely the states have 
interpreted the original PC-Option regulations and a comparison to the proposed regulation 
standard. 

Household and Chore Tasks 

HCFA proposed that household and chore services can only be provided as directly 
related to personal care needs, and cannot constitute more than one third of the total time 
expended per visit (Table 19). Documentation of adherence to this formula was seen as 
untenable by several state administrators, regardless of the degree to which their programs 
offered household and chore services. 

Enforcement of this regulation would change some programs more than others. 
Michigan and Maryland appear to allow household tasks to people without hands-on personal 
care needs. This may be because these programs were originally social services which 
provided housekeepers for a small number of hours per week. Michigan's program until 
recently allowed homemaker services and even guide dog maintenance to people without daily 
ADL needs. The Maryland program allows for supervision for people who need cognitive 
assistance rather than hands on personal care. 

Administrators at the other sites felt that HCFA regulations, although they might be 
difficult to enforce, posed no threat to their current system of service delivery. Montana, for 
example, has developed very strict regulations which do not allow housekeeping tasks unless 


they are accompanied by at least one personal care task. Massachusetts administrators said 
that their current caseload receives such high levels of personal care that holding the 
attendants to providing personal care during 2/3 of each visit would probably not make any 
difference in the program. Given that the Oregon Program is only used for short-term 
personal care, the proposed regulations would have no impact. Texas provides no chore 
services and only allows housekeeping services for people who use personal care. 


Table 19. 
Proportion of Household/Chore to Personal Care Tasks 


State Regulation 
Massachusetts Program serves only people with severe disabilities who need extensive personal care as 
well as homemaker/chore services. 
Michigan Allowed chore and homemaker services, guide dog maintenance for people without daily 
PAS needs. 
Maryland Allows supervision if related to ability to perform ADLs. 
Oregon Does not use PC-Option to provide household/chore services. 
Montana Only provides homemaking if in conjunction with at least one personal care task. Does not 
allow supervision as a personal care task. 
Texas Only people with personal care needs (including meal preparation) get homemaker services. 

 

HCFA Proposed Household and chore services can only be provided as directly related to personal care 

 

Regulationsneeds, and are not to constitute more than one third of the total time expended per visit. 


Service Location 

HCFA proposed that services only be provided in the home or in connection with 
brief services outside the home for medical exam or treatment or shopping to meet health care 
or nutritional needs. In general it appears that states have interpreted this even more 
narrowly than HCFA proposed. Massachusetts allows for escort and driving for medically 
related travel, a term it defines more broadly than HCFA proposed. In the past, Montana 
allowed attendants to accompany recipients outside the home, but when administrators heard 
of several rulings in other states which held against this, they changed the Montana 
regulations to not allow recipients to be accompanied by attendants outside the home at all. 

It is interesting that several of the site visit states did not even allow for trips to the 
doctor. In Maryland medical escort is allowed but apparently attendants refuse to escort 
recipients on medically related trips because there is no mileage reimbursement and no hourly 
pay to compensate them for having to wait long hours in the clinics and doctor's offices 
where Medicaid is accepted. It should be pointed out that several of the site visit states allow 
attendants to accompany recipients outside the home under their waiver programs, e.g. Texas, 
Montana, Oregon. Significantly disabled people need such services to avoid being 
institutionalized in their own homes. Changes in this area are certain to occur in 1994 when 
states will be allowed to provide services outside the home as a result of the 1990 Omnibus 
Reconciliation Act. 

Table 20. 
Site of Service Provision: Transportation, Driving, Escort 


State Regulation 
Massachusetts Allows escort and driving for medically related travel, including laundry, food and 
shopping. 
Michigan Does not allow medical transportation. Assistance with shopping is allowed. 
Maryland Only escort to medical appointments allowed, but program does not reimburse mileage. 
Oregon No transportation/driving/escort allowed. 
Montana Does not allow attendant to accompany recipient outside the home. 
Texas Allows medical escort. 

 

HCFA Proposed Services can only be provided in the home or in connection with brief services outside the

 

Regulationshome for medical exam or treatment or shopping to meet health care or nutritional needs. 


Exclusion of Service to Those in Institutions of More Than Four Individuals 

HCFA proposed the exclusion of services for people living in institutions serving more 
than four people (e.g. Board and Care Homes, group homes). Instituting this ruling would 
have major impact in several states which use personal care option funds to supplement 
payments to adult foster care, i.e. Massachusetts, Michigan, Montana and Oregon (Table 9). 
Oregon has foster care arrangements that are larger than 4 people, and the PC-Option is used 
there. Maryland, Michigan and Montana use personal care monies to supplement board and 
care arrangements, though Maryland only allows the PC-Option to provide for those in homes 
of no more than 4 people. Oregon and Montana use their personal care option provider 
agencies to provide PAS in assisted living situations. Massachusetts is considering this also 
for people living in what Massachusetts calls rest homes. Montana uses their PC-Option 
providers in group homes as well. In contrast, Texas does not use personal care option funds 
for any people residing in congregate housing. 

Table 21. 
Service to Institutionalized Recipients 


State Regulations 
Massachusetts Allows adult foster care payment for personal care as a supplement to the regular allotment. 
State considering use in congregate housing for people with AIDS and in "Rest Homes" 
(Level III Nursing Homes). 
Michigan Allows in licensed residential care facilities, adult foster care (Board and Care of 6-12 beds) 
and homes for the Aged of <100 beds. 
Maryland Allows for high need recipients in small Board and Care homes or other congregate 
arrangements of <5 people. 
Oregon Uses PC-Option in foster care homes which are larger then 4 people and in "assisted living 
arrangements" (single apartment congregate meal arrangements) 
Montana Allows in apartment complexes for older people, Board and Care and in Foster and Group 
Homes 
Texas Does not allow in congregate living settings 

HCFA Proposed Exclusion of services for institutions serving more than four clients (e.g. Board and Care 
Regulations Homes). 


Family Providers 

The HCFA definition of family in the proposed regulations was long and exhaustive. 
As can be seen in Table 10, only one state, Montana, uses the definition of family that was 
contained in the HCFA proposed regulations. Maryland adds aunts, uncle and cousins. 
Michigan has the narrowest definition of family. All the states exclude spouses from being 
paid providers. Even though this seems to be universally accepted, many advocates for 
people with disabilities feel it is a poor regulation. In addition, in many of these states if one 
has a spouse able to provide PAS the state will not pay a non-family member to be a 
provider. This, combined with strict eligibility requirements, has resulted in people not 
getting married or even getting divorced in order to receive some paid attendant services. 

Table 22. 
Family Members Who Cannot Be Paid for Providing PAS 


State Regulation 
Massachusetts Child, spouse, parent, son-in-law, daughter-in-law 
Michigan Spouse, parent of child <18 years old 
Maryland Spouse, sibling, parent, child, in-laws, step parents, step children, cousins, nieces, aunts, 
uncles 
Oregon Spouse, Parent of child <18 years old 
Montana Uses Proposed HCFA definition of family 
Texas Spouse, legal guardian 

Proposed Exclusion of family providers, defined as: husband, wife, parent, sibling, adoptive child, 
Regulations adoptive parent, stepparent, stepchild, stepbrother, stepsister, father-in-law, mother-in-law, 
son-in-law, daughter-in-law, sister-in-law, brother-in-law, grandparent, grandchild 


Physician Oversight 

HCFA defined the nature of physician involvement to review and reauthorize of the 
plan of treatment at least every six months. Only one state, Texas, required physician review 
every six months, as proposed by HCFA. Instituting this regulation would appear to create 
the most difficulty for Michigan, which had physicians review their orders on an as needed 
basis. 

Table 23. 
Frequency of Physician Review/Reauthorization 


State Regulations 
Massachusetts Yearly reauthorization 
Michigan Physician review as needed 
Maryland Annual physician review 
Oregon Annual physician review or as needed 
Montana Annual physician review 
Texas Physician review every six months 

 

HCFA Proposed Physician must review and reauthorize plan of treatment at least every six months. 
Regulations 


Nurse Supervision 

HCFA's proposed regulations specified a visit by a registered nurse or "licensed 
practitioner of the healing arts" to the consumer every three months to assess health status, 
need for PC services, quality of services, and to review plan of treatment. Michigan again 
had the most liberal interpretation of this part of the original regulations, only requiring an 
annual paper review by the nurse. Massachusetts requires an annual visit. The other site 
visit programs require frequent nurse visits. In two states, Maryland and Texas, even more 
frequent visits are required. 

Table 24 
Frequency and Character of R.N. Oversight 

State Regulations 
Massachusetts R.N. visit annually 
Michigan R.N. paper review annually 
Maryland R.N. case monitor visit every 2 months. Annual eligibility review by state R.N. 
Oregon R.N. visit every 6 months for adults, every 2 months for children 
Montana R.N. visit every 3 months 
Texas R.N. visit every 60 days 

HCFA Proposed A registered nurse or "licensed practitioner of the healing arts" visit the consumer every 
Regulations three months to assess health status, need for PC services, quality of services and to review 

plan of treatment 

In summation, it appears that the proposed HCFA regulations would change some 
programs more than others. Massachusetts and Michigan, for example, would have to 
radically change their programs to meet the proposed regulations. Montana's program 
already adheres to many of the proposed regulations. However, even the states which 
comply with some or most of the proposed regulations would have difficulty documenting that 
compliance for a federal monitoring agency, and several state administrators expressed 
serious reservations about the value of imposing new federal requirements on their programs. 


ROLE OF PERSONAL CARE OPTION WITHIN THE STATE 

Site Visit States 

The PC-Option programs fill different niches in the spectrum of community-based 
PAS in every state. The program in Oregon is a small and insignificant part of the state 
Long-term Services spectrum. In Massachusetts it is also small and serves the niche of 
significantly disabled people who are capable of self-direction, but it is being expanded to 
people with cognitive disabilities as well. In Maryland the PC-Option is large but it functions 
alongside another large program for older people that is more generous in services provided. 
In Texas the very large PC-Option is also flanked by a program for older people and a clutch 
of small gap filling programs. In Montana and Michigan the PC-Option is the major program 
in the state with few other programs to serve other groups. 

Oregon 

In Oregon, the PC-Option is an extremely small part of the PAS system. It provides 
very few hours of service a week to working age and older adults needing intermittent 
personal care using agency providers. In addition, disabled children in foster homes are just 
beginning to be served. 

The PC-Option is a relatively insignificant part of Oregon's overall thrust to keep 
people out of nursing homes and serve them either in the community or in congregate living 
which allows for more consumer control. The PC-Option program was moved out of the 
Senior and Disabled Services (SDS) Division into the Medical Assistance program in 1990. 
SDS Division oversees two large waivers, a 1915D waiver for older people and a 1915C 
waiver for younger people. SDS Division staff prefer waivers because they do not have an 
institutional income eligibility bias. (Oregon has opted to make the waivers have an income 
limit that is 300% of SSI, equal to that of the nursing home income limit, rather than the 
regular Medicaid income level of 100% of SSI.) 

Montana 

There are several programs providing PAS services in Montana. The Title III 
program is the largest in the state (between 3000-4000 people in FY1989) but it provides very 
few hours of PAS per recipient. The Personal Care Option Program served 1333 people in 
FY 1989. While it is not the largest program it provides significantly more hours of service. 
There is a waiver (617 people in FY 88-89) which mostly serves older people but has seven 
slots reserved for younger people who are significantly disabled. It provides more hours of 
services and a wider variety of services than the PC-Option and includes case management. 
There are long waiting lists to get in the waiver. 


Michigan 

In Michigan the PC-Option is the largest program in the state (27,558 people in 
FY1990). Michigan Department of Mental Health also uses the personal care option to serve 
people in adult foster care, group homes, and board and care facilities. In addition, there is a 
Title III program that serves older people with incomes higher than the Medicaid eligibility 
level. It provides homemaker, chore and home health aide service but for only a few hours a 
week per person. There are two waivers targeted at children: one for medically fragile 
children and one to deinstitutionalize children eligible for Intermediate Care Facilities for 
people with Mental Retardation (ICF-MRs). The Michigan Rehabilitation Commission runs a 
small project which enables working age people with high PAS needs to work and still 
receive financial subsidies for PAS from the state. This program has not grown in years. 
Michigan is committed to removing all people under 65 from nursing homes, and the PC-
Option program is a key part of that effort. 

Massachusetts 

Massachusetts PC-Option program is very small (1175 people in FY1990) and was 
originally started to serve a particular niche, i.e. significantly physically disabled people with 
low incomes who can learn to be totally self-managing. Administered by six Independent 
Living Centers, the program also provides services to those who work through two programs, 
the Massachusetts Rehabilitation Commission Program (approximately 160 people in FY 
1989) and the Common Health Extra Program (100 consumers in FY 1990). Under Common 
Health Extra, a state funded Medicaid Buy-In plan implemented in 1989, the working 
individual pays a low monthly premium, and the state provides all the services the individual 
would ordinarily receive under Medicaid if the individual were still income eligible for 
Medicaid, including PAS. The size of the premium also varies according to the number of 
benefits the individual requires. For example, people who have health insurance connected 
with their job which does not cover PAS or durable medical equipment or medical 
rehabilitation services can pay a smaller premium than those who need all these benefits plus 
regular medical and hospitalization coverage. The Massachusetts Rehabilitation Commission 
program, which charges on a sliding fee basis for PAS, has admitted no new people since the 
Common Health Extra Medicaid Buy-In was instituted. 

People with mental retardation and physical disabilities are beginning to be served 
under the PC-Option through other administering agencies as well as the ILCs, so the size of 
the PC-Option should change as the cognitively disabled population gets incorporated into this 
program through a surrogacy model. Older people in Massachusetts are served by the Area 
Agencies on Aging with a waiver for people needing personal care but with incomes above 
the Medicaid eligibility level for Massachusetts. Advocates maintain that there are still 
significant numbers of people with mental retardation in extremely costly institutions, and 
many older people in nursing homes because there are not enough community-based services. 


Maryland 

In Maryland there is a large program (3407 people in FY1989) that delivers primarily 
chore services through the state, on a sliding scale basis, to older people. This program 
provides more hours than the PC-Option program at a higher hourly attendant wage rate. It 
has a large waiting list because it is not an entitlement. As it targets more significantly 
disabled people, less significantly disabled people are being removed from the program. This 
program also has a higher income ceiling than the PC-Option. The PC-Option serves more 
people (5254 in FY 1989) who are more significantly disabled and poorer, and provides a 
narrower range of services with a very low rate of pay. The Department of Vocational 
Rehabilitation provides PAS for 37 people who are employed or employable. There are three 
small Medicaid waivers for older people, technology dependent children and cognitively 
disabled people leaving institutions (ICF-MRs). 

Texas 

Texas has a number of programs, though the PC-Option serves the most people. 
There are five state agencies that are involved in administering 20 PAS programs in the state. 
The PC-Option served 32,500 primarily older people in FY 1990. The Family Care 
Program, funded by state monies, serves those with a higher income level with fewer 
medical restrictions though at recipients are at a similar level of disability to the PC-Option 
population (23,000 people in FY 1989). There is a small state-funded voucher program 
providing recipients $300 per month for disability related expenses including PAS. There is a 
small client-managed attendant services program in five cities. There are 3 shared attendant 
sites funded by Title XX (TXX) and the state. The Texas Rehabilitation Commission 
administers a state-funded PAS program for employed people in some cities. The 
Department on Aging provides Title III funded homemaker services. Finally, Texas has three 
small waivers for people with developmental disabilities, for people with mental retardation, 
and for children using medical technology. 

Who Is Underserved or Unserved 

Given the multiplicity of programs, the question arises as to who falls through the 
cracks of this complex web of programs in each state. Site visit respondents had varying 
answers from state to state, but there were commonalities as well (Table 25). No state serves 
everyone who needs PAS. Massachusetts is the only state that has no disincentives to 
employment. Maryland is the only state allowing supervision as a PC-Option service for 
people with mental retardation or mental disabilities. And no state serves older people with 
incomes above poverty very well. They receive intermittent services through Title III 
programs if they exist at all. 


Table 25. 
Who Is Underserved or Unserved in the Each State PAS System 


State Who Are Unserved or Underserved 

Massachusetts 

Michigan 

Maryland 

Oregon 

Montana 

Texas 

*People with cognitive or psychiatric disabilities 
*People needing <10 hours/week of PC or <14 hours/week of homemaker plus personal 
care 
*Older people forced into nursing homes for lack of more community-based services 

*People needing 24 hour supervision 
*Couples, one of whom is able to provide PAS 
*People who are forced to use informal support from dysfunctional families 
*People with cognitive or psychiatric disabilities 
*People who need daily nursing care in addition to PAS 
*People who want to work 

*People needing more than 4 or 5 hours of PAS per day 
*People who want to work 
*People who don't meet strict income eligibility 

*People without informal supports and with high hour needs 
*Older people in retirement communities without services 
*Children who need 24 hour nursing 
*People who want to work but have high PAS costs 
*People <65 with cognitive or mental disabilities who need a lot of community services in 
addition to PAS 

*People needing more than 40 hours per week 
*People needing supervision in addition to their hours of PAS 
*People needing 24 hour nursing services 
*Working age disabled people 
*People who want to work 

*People who cannot be left even one day without assistance 
*Those who need more than 30 hours a week 
*People who need supervision rather than hands-on ADL assistance 


(-1 


TRENDS IN STATE UTILIZATION 

As of 1988 there were 23 states that used the PC-Option to deliver services through 24 
programs. New York has two different PC-Option funded programs. Between 1984 and 
1988, one program (which served only people with vision disabilities) in Massachusetts 
ceased operating and five new programs were started, i.e. Alaska, Maine, North Carolina, 
Washington and West Virginia. This represents a net increase of four programs since 1984.

Ti 

Other trends in state utilization can be described by the growth in the rate of 
participation, expenditures, recipients, and other service indicators between 1984 and 1988. 
Changes in the PC-Option programs can also be looked at in relation to the changes in 
programs funded by other funding streams and in the shifting of state PAS resources from 
funding stream to funding stream. 

Growth Rate of Participation 

The PC-Option programs varied in the growth of rate of participation, i.e. the rate of 
increase in the proportion of aged and disabled Medicaid recipients receiving PAS through the 
Medicaid PC-Option (Table 26). The states with a decrease in the number of PC-Option 
recipients per 1000 aged and disabled Medicaid recipients were Minnesota and South Dakota. 
All other states had a growth in participation. Nebraska, Missouri and Arkansas all had huge 
jumps in the number of Medicaid aged and disabled recipients being served by the PC-Option 
programs. As none of these states was included in our site-visit group, we are unable to 
explain why these changes occurred. 


Table 26. 
Growth Rate of Participation in the Personal Care Optional Benefit by State 


Rate of Participation 1984 Rate of Participation 1988 Growth Rate of 
(per 1000) (per 1000) Participation 
State 
Alaska na 17 na 
Arkansas 54 169 213.0% 
Maine na 6 na 
Maryland 20 46 130.0% 
Massachusetts 7 8 14.3% 
Michigan 104 132 26.9% 
Minnesota 137 24 -82.5% 
Missouri 39 177 353.9% 
Montana na 51 na 
Nebraska 7 43 514.3% 
Nevada 23 24 4.3% 
New Hampshire 2 4 100.0% 
New Jersey na na na 
New York 85 125 47.1% 
North Carolina na 28 na 
Oklahoma 92 159 72.8% 
Oregon** na 7 na 
South Dakota 304 215 -29.3% 
Texas 62 90 45.2% 
Utah 10 13 30% 
Washington na 55 na 
West Virginia na 129 na 
District of Columbia 65 na na 
MEAN 103% 
Source of Medicaid recipient data: Health Care Finance Administration 


Growth Rate of Expenditures. Recipients and Other Indicators 

In the aggregate, between 1984 and 1988, there was a 65% increase in numbers of 
recipients and a 144% increase in the expenditures for the PC-Option program (Table 27 
below). The average number of recipients in each program grew by 37.5% during that 
period, and each program's expenditures grew by 102% on average. During this period there 
was a 47% increase in the average annual expenditures per recipient. Given that there was 
only a 14% increase in the Consumer Price Index between 1984 and 1988, the growth in 
expenditures per recipient must be explained by other factors. A part of the answer is that 
during the period of 1984-1988 there was an increase in provider wages in all categories 
(Table 12 above). Other reasons for the growth in expenditures may be increases in 
administrative costs, more intensive case management, and an increase in more significantly 
disabled recipients requiring more hours of service. 

Table 27. 
Aggregate and Average per PC-Option Program Growth Rate of Expenditures and Recipients 
Between 1984 and 1988 

Recipients Expenditures 

Year Number of Estimated Average per Estimated Average per Average 
Programs Total Program Total Program Annual per 
(1000) (1000) (mils.) (mils.) Recipient 

1984 20 160 8 $714 $35.72 $4,463 
1988 24 264 11 $1,740 $72.51 $6,591 

Growth Rate 20% 65% 37.5% 144% 103% 48% 

Source: Average per program data from Appendix D, Tables 1, 3 and 7. Data in this table are based on average per 
program means multiplied times the number of programs in each year. 

The growth rate in recipients per program varied, from a decrease of 85% in 
Minnesota to an increase of 232% in Nebraska (Table 28). Expenditure growth rates varied 
from -81 % in Utah to an increase of 491% in Montana and 397% in New Jersey. One 
suspects that the growth in the latter two programs was accompanied by a large increase in 
recipients, but that data was unavailable. Not all caseloads and expenditures varied in the 
same direction. In seven states (Arkansas, Maryland, Massachusetts, Michigan, Nebraska, 
Oklahoma, and Utah) the rate of growth of recipients outstripped the growth in expenditures. 
In some cases the difference was quite large, i.e. Oklahoma, Utah and Nebraska. 


Table 28. 
Growth Rate of Expenditures and Recipients of PC-Option Programs By State in 1984 and 


1988 
Recipients 
Expenditures (Total) 
Growth 1984 1988 Growth 
State 1984 1988 Rate ($1000) ($1000) Rate 
AK /a na 94 na na 250 na 
AR /b 5,205 16,539 218% 10,201 24,552 141% 
ME /a na 241 na na 396 na 
MD 1,468 4,000 172% 4,000 7,600 90% 
MA 500 defunct na na 
MA 584 1518 74% 5,655 12,850 127% 
MI /b 22,000 33,000 50% 63,000 81,000 29% 
MN 11,951 1,787 -85% 5,292 8,904 68% 
MO/b,c 4,448 22,000 167% 9,191 26,114 184% 
MT na 736 na 400 2,362 491% 
NE 155 515 232% 750 1,428 90% 
NV 243 300 23% 510 1,020 100% 
NH 33 55 67% 304 891 193% 
NJ na na na 1,502 7,460 397% 
NY /b 4283 10,197 138% 24,904 94,000 277% 
NY 52,400 79,198 51% 458,200 1,179,830 157% 
NC /a na 3,765 na na 12,905 na 
OK 7643 14,028 84% 34,400 35,000 2% 
OR/b,d na 300 na na 18,976 na 
SD 4000 3,282 -18% 1,834 2,690 47% 
TX 14399 31,266 117% 46,424 108,983 135% 
UT/b,e 141 200 42% 939 183 -81% 
WA /a na 5,864 na na 34,000 na 
WV /a na 7,500 na na 4,000 na 
DC 900 na na 3,600 na na 
TOTAL 130,353 211,321 80% 671,106 1,665,394 144% 
a-e: defined nex page 


There was a large growth rate in total hours of PAS delivered by the PC-Option 
programs, and a large increase in average hours of service delivered per program (Table 29). 
These increases are greater than the growth rate in recipients, suggesting that more 
significantly disabled people are receiving services. 

Table 29. 
Total and Average Per Program Growth in Hours 


Year Number of Programs Estimated Average per Program 
Total (millions)* 
(millions) ** 
1984 20 142.4 7.12 
1988 24 337.7 14.07 
Growth Rate 20% 137% 107% 

* Source: Appendix D, Table 5 
** Computed by multiplying number of programs by the average per program houts because data were not available for all 
programs. 

Change in Service Availability and Service Limits 

Eighteen percent of the PC-Option programs have stopped making services available 
whenever they are needed during the day or the week (Appendix D, Table 11). There has 
been an average decrease of one hour per week per recipient in the maximum hours programs 
allow. And there has been an average decrease of $300 per year in the maximum allowance 
per recipient. All of these figures indicate a general trend toward limiting service to 
recipients over the period from 1984 to 1988, a period of fiscal crisis in the states. Yet even 
with these restrictions, there has still been an overall increase in hours of service delivered 
and program expenditures per recipient, as noted above. 

/a: Programs started after 1984. 

/b: Mixed PC-Option programs, i.e. ones that are combined with other funding streams and in which the two could not be 
separated. 

/c: The Missouri PC-Option program was combined with other programs between 1984 and 1988 

/d: In 1984 in Oregon, the data we have could not distinguish between the PC-Option and Waiver Programs and treated 
them as a single program. In 1988 these could be split and were treated as separate. 

/e: Utah went from a mixed (Title XX and TXIX-PC-Option) to only PC-Option between 1984 and 1988. All TXX 
recipients were put into a separate program which accounts for the large decline. 


Comparison of Growth Rate Across Funding Sources 

Between 1984 and 1988, programs with different sources of funding grew at different 
rates. Programs funded by Medicaid waivers on the average exhibited more growth in the 
period between 1984 to 1988 than any other funding source (Table 30). The PC-Option 
programs showed high average growth in expenditures but less average growth in numbers of 
recipients. Title XX/Social Service Block Grant (SSBG) Programs had high average growth 
in numbers of recipients, expenditures and expenditures per recipient, but experienced only a 
small average growth in hours delivered per program. Programs funded solely by state 
revenues declined on the average in terms of recipients, hours and expenditures, suggesting 
that states are cutting programs that have mostly state funds. Title III programs also showed 
a decline. 

Table 30 
Changes on Key Variables Between 1984 and 1988: Average Growth Rates Per PAS Program 
by Funding Source Group 

FUNDING SOURCE 
Indicator TXIX PCTXIX 
WAIVER SSBG TIII STATE 
OPTION 
Average Annual 102% 312% 96% -14% -45% 
PAS Program 
Expenditures 
Average PAS 39% 202% 302% -14% -56% 
Caseloads 
Average Total Hours of 107% 379% 8% 1% -14% 
PAS Provided 
Average Program 1% 50% 81% -52% 19% 
Expenditures Per 
Recipient 
Mean Change in -1.0 hours -.7 hours 0 
Maximum Hours/ 
Recipient/Week 
Allowed 
Mean Change in $300 $1,900 $200 $1,000 
Maximum 
Expenditures/Year/ 
Recipient Allowed 


Shifting of Resources Among Different Funding Sources 

Between 1984 and 1988 eleven programs appeared to have shifted funding sources. 
Two of these had actually consolidated with other programs which had different funding 
sources. Two state funded programs began to use Medicaid waiver funds, and another had 
begun to use the PC-Option. The remaining five programs shifted between the Title XX, 
Title III, State and Other groups. Because data was collected covering only two points in 
time, it is difficult to describe overall trends in shifting among the funding sources. But more 
specific information gathered during the site visits illuminates this issue. 

Until the recent downturn in Massachusetts' economy, the state did not pursue Federal 
matching monies to any great extent. That is changing, however, as advocates realize the 
potential of accessing Medicaid PC-Option money for serving people with physical disabilities 
and mental retardation and as the aging constituency presses for more use of the Medicaid 
waiver. 

In Oregon the state provided some in-home services through the Area Agencies on 
Aging, but this was inadequate to meet the need. It pursued Medicaid funding, first in the 
form of the PC-Option and later in the form of Waivers, as a way of reducing its Medicaid 
expenditures on nursing homes. Currently it is using the PC-Option to augment state 
expenditures on foster care for disabled children, again as an alternative to institutionalization. 

Four site visit programs grew out of Title XX programs at the time that Congress 
capped the program and turned it into a block grant. Montana deliberately switched the 
program to Medicaid in 1977 when Title XX was capped, in order to access Federal 
matching funds for the personal care that it was already providing. The switch was not 
effective in leveraging federal dollars until Montana contracted with a statewide provider 
agency to deliver services. Montana has also developed a Medicaid waiver to further 
leverage federal dollars serving people who are more significantly disabled. 

The Maryland PC-Option program grew out of a Title XX program targeted at people 
who were the least disabled and who had friends and neighbors who could be paid a small 
amount to look in on them. There has been much pressure on the program to create higher 
levels of pay in order to serve more significantly disabled individuals. Rather than expand 
the PC-Option, the state prefers to use the waivers to target very specific populations, e.g. 
technology dependent children, institutionalized people with mental retardation. 

Texas also shifted its Title XX program into Medicaid when Title XX funds ceased to 
expand, in order to gain the Federal match. In the future, the state administration is looking 
to the waivers and to section 1929 of the SSA to fill in gaps. They see this as a way to target 
populations without having to create entitlement programs which cannot limit the populations 
served. Michigan's program also started as a Title XX program which was switched to 
Medicaid in 1980. 


In summation, it appears that many states have decided that the only way to leverage 
Federal funds for PAS service growth is through Medicaid. States see the Medicaid waivers 
as a way to expand service for small groups and the PC-Option as a major federal funding 
source for larger programs. 


DISCUSSION 

The Changing Role of the Medicaid Personal Care Option 

The Medicaid personal care (PC) option has been a major source of public funding for 
home and community-based long-term services. Moreover, it is currently experiencing 
significant growth at both a national and state level. Since WID's first survey of personal 
assistance service (PAS) programs in 1984, at least seven new states added the PC-Option to 
their Medicaid plans, and other state administrators and legislators throughout the country are 
closely examining this funding source. Between 1984 and 1988 the number of recipients 
grew 65% and expenditures grew 144%. This growth is due in part to the pervasive fiscal 
shortfalls in many states. 

In an era of shrinking state revenues, many states view the PC-Option as one of the 
few vehicles left for leveraging federal dollars to expand PAS. Medicaid Waivers, despite 
their proliferation, have failed to bring PAS to most of the people who need it, as the waivers 
tend to be relatively small and targeted to special populations (i.e. federal figures indicate that 
two-thirds of waiver spending goes toward services for people with developmental 
disabilities). In many states the number of people served through purely state or Social 
Service Block Grant funded programs have declined because of new fiscal restraints. The 
Personal Care Option has therefore become the mainstay of many states' home and 
community-based services systems. 

The same fiscal climate which has contributed to greater utilization of the Personal 
Care Option has created pressure to contain PAS program costs. Despite the federal match, 
Medicaid services are increasingly viewed as "budget busters" because of their entitlement 
status, and are coming under legislative and executive scrutiny. States vary dramatically in 
the degree to which they limit access to services, but all programs are caught between the 
growing demand for services and the need to contain costs. 

The growth in caseloads and expenditures can also be attributed to expanding and 
diverse populations seeking services, i.e. children and adults (under and over age 65) with a 
variety of physical, cognitive, and psychiatric disabilities. One of the major questions raised 
by this study is whether -- or to what extent and by what means -- it is possible to 
accommodate the sometimes disparate needs of different populations in a single program. 

Traditionally, "long-term care", whether provided in nursing homes or in home and 
community-based settings, has been primarily associated with the needs of persons over 65 
who develop age-related functional disabilities as the result of chronic medical conditions, 
including Alzheimer's disease and other dementias. The Medicaid personal care option was 
originally modeled on an Oklahoma program that sought to augment the in-home services 
available to the disabled elderly by paying small stipends to individuals -- primarily friends 
and neighbors -- recruited by the care recipient or his or her family to supplement informal 
supports. 


Although the Oklahoma prototype and most subsequent PC-Option programs serve 
older people with disabilities, programs have evolved in many states which serve a sizable 
number of younger people. Massachusetts in particular serves predominantly a working-age 
population. Oregon's PC-Option is unique in targeting only disabled children. Michigan, 
Montana and Maryland serve people with cognitive disabilities, and Maryland also serves 
some people with psychiatric disabilities. Most programs limit service to people with 
physical disabilities, although this is changing as more people move from institutions into the 
community. 

The growth in the number and types of people seeking home and community-based 
long-term services has been accompanied by growing political and economic scrutiny of 
existing service delivery systems. Disability rights advocates are increasingly demanding a 
service delivery system which facilitates independence and empowerment by maximizing 
consumer involvement in all aspects of PAS. They argue that consumers are the best 
qualified to assess how much service they need, what kinds of services they need, and when, 
where, and how these services should be delivered. They therefore prefer independent 
providers who are hired, supervised, and paid directly or indirectly by the consumer or 
his/her chosen surrogate. Until recently, advocates for seniors focused on expanding 
professional accountability and government regulations for Medicaid and Medicare services to 
ensure "quality" (which is largely defined as a lack of negative outcomes such as abuse and 
neglect), but recent research and advocacy efforts indicate that older people with disabilities 
are also concerned with autonomy issues. 

The type of system promoted by disability rights advocates is seen as a challenge to 
the traditional "medical model" of service delivery. This model defines personal assistance as 
a medical or medically-related need and puts medical and social service professionals 
(physician, nurses, and/or medical social workers) in charge of allocating and monitoring a 
limited range of services, usually provided via private or non-profit homecare or home heath 
agencies. Advocates for seniors have also voiced criticisms of the medical model, although 
on somewhat different grounds. Typically, they are concerned by the fragmentation of the 
financing and delivery system that results when coverage of "non-medical" services is 
prohibited under medical insurance programs such as Medicare or Medicaid. 

For example, in the early 1980's HCFA sought to take disallowances against New 
York's PC-Option program for providing homemaker/chore assistance to some elderly 
persons determined to need help because they lived alone but who did not require "hands on" 
personal care. An administrative law judge ruled, however, that the regulatory definition of 
"personal care" was sufficiently ambiguous to support New York's interpretation. 

Proposed HCFA regulations published in 1987 would have prohibited such coverage, 
on the grounds that such individuals' need for home attendant services is purely "social" 
rather than "medical". The same regulations would also have strictly limited (to one-third of 
the total time) the level of amount of time that personal care attendants under the PC-Option 
could be put into performance of homemaker/chore services. The proposed regulations 


elicited considerable negative commentary from state agencies as well as advocacy groups, 
and were never promulgated. 

Compared with other Medicaid services, the PC-Option is relatively unconstrained by 
federal regulatory requirements or prohibitions and, therefore, open to definition by each state 
that elects to include coverage of personal care in its state plan. In this study, the data 
analyses suggest and the site visits confirm the extraordinary variability among states which 
use the PC-Option. Federal regulations specify only that personal care services in the home 
must be 1) prescribed by a physician, 2) supervised by a registered nurse, and 3) provided by 
a "qualified" individuals who are not members of the recipient's family. States have tended 
to interpret these requirements according to their own predilections. 

Moreover, states that consider themselves hamstrung by federal regulations may 
appeal to Congress to enact legislative relief. Minnesota did so successfully in 1990. When 
the phrase "in the home" was interpreted by HCFA as meaning limited to the home, state 
officials asked a Senator to get Medicaid law rewritten to permit the provision of services 
outside the recipient's home. In establishing a statutory basis for the personal care optional 
benefit, OBRA 1990 specified that Minnesota could immediately begin covering personal care 
provided outside the home and that all states would be permitted to do so as of 1994. 

Will the states be able to use the PC-Option to meet the needs of the diverse and 
increasingly vocal population demanding services, while trying address their own managerial 
concerns such as liability, income tax withholding, and worker's compensation? Does it 
make more sense to administer a multitude of programs with different administrations, 
eligibility requirements, and types of service delivery to serve the needs of different groups, 
or can a single program be developed which is flexible enough to respond to the needs and 
preferences of a heterogenous consumer population? The following sections outline some of 
the problems in the organization of PC-Option programs that need to be addressed in order to 
better serve people who need personal assistance services. 

Current Limitations of PC-Option Programs 

1. The number of hours of service available may not meet the needs of the significantly 
disabled population. 
A variety of service limits restrict program utilization for people with more significant 
functional limitations or specific service needs. Limits in the type and amount of services 
may preclude potential consumers from seeking program services, even if they are technically 
eligible. If existing PAS programs do not meet their needs, such individuals may have to be 
served in costly and restrictive institutions. The most common reason cited for service caps 
is cost containment. However, institutional placement or development of separate programs 
for people with high service needs is unlikely to save state revenues. While acknowledging 


the need for management of program expenditures, states should consider allowing the 
relatively small number of people who require up to 24 hours of PAS per day to receive this 
level of service. Unless service allocations reflect the actual need of the consumers, 
programs may be "penny wise but pound foolish". 

2. The scope of services available may not meet the needs of the populations served. 
Particularly problematic for many consumers is the lack of supervision, emergency 
services, and paramedical services. 
PC-Option programs tend to offer a core of basic personal and household tasks (e.g. 
feeding, bathing, dressing, ambulation, transfers, oral hygiene and grooming, skin 
maintenance, light housekeeping, laundry, meal preparation and cleanup). Other tasks (e.g. 
emergency services, supervision, paramedical services, non-medical escort and transportation, 
assistance with childcare, heavy cleaning and maintenance) are often not considered 
appropriate personal assistance services, even though people may need such services to live 
independently. 

a. Emergency services 
Many programs do not offer emergency services, due in large part to the logistical 
staffing problems involved. Some programs which contract with provider agencies are able 
to offer such services, because agencies can designate one or more employees as emergency 
attendants. Programs which utilize independent contractors have more difficulty effectively 
providing emergency services, but may allow for emergency hiring of contract agency 
providers or maintain lists of available independent providers. The efficacy of different 
systems of emergency service provision merits further examination. 

b. Supervision services 
Support services for people with cognitive and psychiatric disabilities are rarely 
provided. However, states should consider expanding the definition of personal care to 
include people who need supervision (rather than hands-on assistance) in order to perform 
personal care and household tasks. Currently PAS is provided to people with psychiatric 
disabilities under the PC-Option in Maryland, and this appears to be an effective way to 
reduce costly hospitalization. 


c. Paramedical services 
The provision of paramedical services or "invasive procedures" (e.g. assistance with 
medications, injections, catheters or ventilators) is particularly problematic for PAS programs 
in general. There has been a slight decline in programs offering paramedical services, 
because nurses' aides and home health aides are too expensive to provide paramedical 
services on a daily basis, and attendants are not allowed to provide these services due to legal 
restrictions set by state Nurse Practice Acts (Sabatino, 1990). 

Nurse Practice Acts usually prohibit non-licensed individuals other than family 
members from doing invasive procedures. State administrators often cite these laws, and 
concern over liability for negligence, as reasons for not providing paramedical services 
through their PAS programs, but people who need such service on a daily basis may not be 
able to live in the community because of such restrictions. 

A few states have worked directly with state nursing boards, consumers, advocates, 
providers, and state officials to modify the Nurse Practice Act or related regulations. In 
Oregon, for example, regulations were promulgated which allow nurses to delegate 
paramedical tasks to attendants after specific training for those tasks. Massachusetts explicitly 
allows the consumer to train an attendant to provide paramedical services. 

Several programs tacitly acknowledge that program recipients may receive services 
technically excluded by state statute, but these programs do not attempt to enforce such 
service restrictions. Administrators of these programs say that the actual risk of successful 
negligence lawsuits is relatively low, and the state has simply decided to assume the liability 
risk. However, a more systematic resolution of this issue is required for all states to address 
the paramedical needs of consumers. Collaboration with state and nursing boards and 
national professional groups is clearly the first step in such a resolution. 

3. Limits on the times services are provided and the locations in which services are 
provided often impede participation in the family, community, and workplace. 
Restrictions on the times and locations in which services are provided limit the 
independence of consumers. Provision of personal assistance services is usually restricted to 
the home. Transportation and escort services, if available at all, are usually limited to 
medically related trips. People without other informal supports may become essentially 
confined to their homes because of such restrictions. Recent changes made in the Omnibus 
Budget Reconciliation Act of 1990 will allow service provision outside the home, but states 
should be encouraged to adopt these changes immediately. 


4. Income eligibility requirements limit service access, and discourage marriage and 
employment for consumers. 
Although Medicaid by definition is directed to low-income Americans, eligibility 
requirements can be modified to help a greater number of people with disabilities to access 
essential services, and allow people who are receiving these services to become employed and 
establish long-term relationships. 

Some states have developed programs with state funds to overcome income restrictions 
inherent in Medicaid funding, but fiscal shortfalls are prompting many of these programs to 
be capped or cut, and efforts are being made to move people receiving services onto state 
Medicaid rolls. To facilitate this, all states should be encouraged to institute "spend-down" 
programs to Medicaid income eligibility, and allow disability related expenses (including 
PAS) to be included in the spend-down formula. 

Federal legislation could also be considered which would allow states to use the 
Medicaid waiver and nursing home standard of up to 300% of SSI to determine eligibility. 
Income eligibility for PC-Option services would then be comparable to that of Medicaid 
subsidized institutional placement. 

Many programs assess spousal income when determining eligibility, which may cause 
recipients who marry to become ineligible for benefits. In some programs, non-disabled 
spouses are required to provide unpaid PAS. In a few programs, consumers living with non-
disabled spouses or family are deemed ineligible for any services. These types of regulations 
place an extraordinary burden on family systems, and constitute a form of discrimination 
against PAS consumers. Eligibility requirements should be modified to assess only individual 
income, and consumers should be allowed to live with non-disabled family members while 
receiving services. 

Income restrictions often act as de facto work disincentives for PAS recipients. 
Because they would lose benefits and be forced to purchase PAS privately, many consumers 
simply cannot afford to become employed. The implementation of section 1619 of the Social 
Security Act has allowed SSI recipients who start working to maintain publicly funded 
benefits (including PAS) until their earnings exceed the value of these benefits, but at this 
point awareness and utilization of section 1619 is quite limited. Rehabilitation agency 
personnel and other service professionals will need training and support to see that this 
regulation is effectively utilized, and modifications will need to be made to the regulations 
themselves, notably increasing asset limits. Additional expenditures for provision of PAS to 
people who work will probably be offset by the tax revenues generated by these individuals. 


5. Family providers are not included in the repertoire of possible provider 
arrangements, despite the potential cost savings and desires of some consumers. 
The PC-Option precludes family providers, but there is much variability in how 
"family" has been defined. Although this regulation was intended to contain program costs 
by avoiding payment of volunteer providers, there are some situations in which paid family 
providers are cost-effective and preferable to the consumer. In some geographical areas, 
there may be no one else available and willing to provide needed services. In other cases, 
language may be a barrier and family members may be the only people available and capable 
of providing the type of service required. 

Some consumers will choose to have their PAS provided by a family member. 
However, in many cases, because reimbursement is not available or attendant reimbursement 
rates are too low, consumers are forced to rely on family members. Family providers should 
not be a cost control mechanism, but should be an available option. 

6. Utilization of independent providers is limited, despite the lower per unit cost and 
greater consumer control, because of liability concerns and withholding issues. 
Independent providers (IPs) are an essential part of any PAS delivery system. 
Because IPs are hired and managed primarily or exclusively by the consumer, they are 
generally more responsive and accountable to the consumer. They tend to have a lower per 
unit cost than agency or government providers, although some analysts have argued that the 
cost savings are achieved in part by elimination of administrative support, and transfer of 
management responsibilities to the unpaid and usually untrained consumers. The lower cost 
and the potential for greater consumer control make IPs particularly suitable for people with 
high service needs. 

Despite cost savings and the preferences of many consumers, some states have stopped 
using independent providers. Others are face considerable difficulties in maintaining their 
commitment to using them. The main problem for the states which use IPs involves 
responsibility for employee benefits and withholding of federal and state taxes. Independent 
providers may be considered self-employed, employed by the disabled recipient or employed 
by the state for purposes of some types of tax and benefit withholding. 

Convoluted strategies are being used to avoid dealing with withholding in order to 
avoid being deemed the employer of IPs. Income and social security tax is often not paid on 
attendant earnings, and there is often no clear designation of responsibilities regarding 
unemployment and worker's compensation. The IRS and state labor boards are questioning 
the validity of these employer relationships, and some states have responded by shifting to 
agency providers to avoid the risk of being designated as legally responsible for benefits and 
withholding. 


Another commonly cited impediment to use of IPs is concern over liability for 
attendant negligence. Even though few states have actually experienced any litigation, many 
state administrators say that liability concerns have impacted the design of their systems. 

Because of the clear advantages of the IP mode, organizational and legal solutions to 
the problems in employing IPs need to be developed. A dialogue with the IRS should be 
established to explore ways to address tax withholding. The American Bar Association or 
state affiliate could be contacted to assess the actual frequency of liability cases and 
recommend ways in which states can resolve the liability issues. Perhaps attendant 
associations could be established to provide group attendant liability insurance. Such an 
association could also be the basis for other group benefits. Service recipients could also 
apply for individual worker's compensation, and the cost of the insurance could be included 
in the recipients' financial allotment. It is also important to look at ways consumers can be 
assisted to use the IP mode, i.e. support services, emergency services, and consumer training 
in attendant management. 

7. Consumers do not have a choice among provider modes. 
Researchers, administrators and advocates agree that a single provider type will not be 
able to meet the needs of all people who need PAS. However, most programs use only one 
type of provider, and those which use more than one usually base the decision on 
administrative factors (county and state regulations, geographic location of consumer, cost 
guidelines) rather than consumer choice. 

There are advantages and disadvantages associated with each provider mode. The 
lower cost and the potential for greater consumer control make IPs an attractive choice for 
many consumers, but effective use of this provider mode requires management skills on the 
part of the consumer, as well as emergency and support services (attendant registries, 
assistance with screening, hiring and firing of attendants). Family providers may also be a 
cost effective choice for consumers with informal support systems. Agency providers may be 
useful in situations where individuals need fewer hours of assistance, because agencies can 
coordinate a relatively small number of staff to provide this level of service to a large number 
of people. For people who cannot or choose not to hire and manage their attendants, agency 
providers may be preferable. Government providers may offer a more stable workforce. 

The administrative challenge is to design a program with sufficient flexibility that most 
or all of these provider modes are options available to the consumer. While acknowledging 
that the administration of such programs would be complicated and possibly costly, many 
states might reduce overall costs by bringing a multiplicity of different programs for different 
populations under a single administrative structure. 


8. Assessment of service quality is based on broad administrative standards instead of 
consumer experience 
There is an ongoing debate among policy makers and program administrators on how 
to define and assess service quality. In the absence of any standards of quality, many states 
have developed minimum compliance standards assessed by state evaluation teams, often 
composed of medical professionals. Such standards are usually developed without consumer 
input, and therefore reflect administrative concerns rather than the actual experience of 
service recipients. Quality in such programs is defined as low incidence of negative outcomes 

(e.g. reported cases of negligence), and compliance with regulations. Such measures may 
bear little or no relation to actual experiences of consumers. 
Some states have tried to address this problem by involving consumers in the process 
of quality monitoring. A few provide training to the recipient or his/her family in order to 
recognize quality services. Peer training in Massachusetts appears to increase both service 
quality and consumer satisfaction. Others provide ombudsmen, consumer hotlines, conflict 
resolution, and appeal procedures. 

Several states have established advisory boards which include consumers, but these 
boards often have little power to impact program policy, and board members are not 
compensated or reimbursed for transportation, PAS, or disability related expenses. A 
genuine commitment to the participation of consumers, advocates, family members, and 
providers will need to include administrative and financial recognition of the contributions of 
program advisors. 

In all states, a primary impediment to quality is the lack of an adequate pool of 
available attendants. Low pay and benefits lead to constant turnover among attendants. 
Many consumers must endure a poor quality of service because the alternative is no service at 
all. A recognition of the value of PAS as an alternative to isolation, dependence, and 
institutionalization will necessarily require financial recognition of the demanding job 
performed by the PAS provider. If a responsive, high quality system of home and 
community-based services is established, the savings in terms of reduced institutional 
placements, lower utilization of medical professionals, and increased productivity among 
consumers should offset the cost of maintaining an adequately paid attendant workforce. 

If policy makers are going to make informed decisions about expanding services, 
improving quality, and containing costs, they will require good information about PAS 
programs. Without such information, programs are often developed and modified in response 
to short-term political pressures rather than long-term needs of the consumers. This current 
research project was also complicated by inconsistencies and inadequacies in the data reported 
by each of the states. Programs should be required to document basic fiscal and demographic 
data in a uniform manner. 


Conclusions 

Across the U.S. there is extraordinary variability in the number of people receiving 
necessary services. Some states make a concerted effort to provide personal assistance 
services to many of those who need it, while others provide very little. Some sort of federal 
action would probably be required in order to address these disparities. 

A number of different proposals for federal action are currently being discussed. One 
strategy is to make personal care a mandatory Medicaid service. This is in fact on the verge 
of occurring, but in a way that has given rise to many ambiguities. In OBRA 1990, statutory 
language (apparently intended to accommodate Minnesota's desire to provide personal care 
outside the home) refers to personal care (including the regulatory requirements, now revised 
to explicitly permit provision of services outside the home) as a part of the definition of 
"home health services". This took effect immediately for Minnesota, and will be 
implemented nationally in 1994. Because home health is a required service, insofar as all 
states must make home health coverage available to Medicaid eligibles who qualify for 
nursing facility care, this statute appears to make personal care mandatory. It is unlikely that 
this was the intent of the legislators who drafted the legislation: 

How the OBRA 1990 legislation is interpreted could have a profound impact on states 
currently utilizing the PC-Option, as well as those that do not. Some state administrators of 
PC-Option programs are concerned that the linkage between personal care and home health 
could mean that PAS providers must be certified home health agencies. However Minnesota, 
which is currently bound by the OBRA 1990 statute, has not established any linkage between 
its home health and personal care programs (in terms of eligibility, services provided, service 
limits, etc.) and continues to use independent providers. 

A different approach to increasing Medicaid recipients' access to PAS is to shift a 
percentage of the current Medicaid expenditures from institutional services to home and 
community-based services. According to Reilly et. al. (1990) 40.7% of all Medicaid 
payments were for services to long-term care facilities (including ICF-MRs as well as nursing 
homes) in 1989. The national advocacy group ADAPT (American Disabled for Attendant 
Programs Today) is probably the most vocal proponent of this strategy, demanding that 25% 
of current federal nursing home expenditures be redirected to PAS. 

States can now reallocate long-term service expenditures through the 1915(D) home 
and community-based waiver. This gives states the option to interchange funding for nursing 
home and home and community-based services for aged and disabled Medicaid recipients in 
return for states' acceptance of capped federal matching funds for all such care provided. 
The 1915(D) waiver provision provides for annual increases in the funding cap to be indexed 
according to inflation and elderly population growth. To date, only Oregon (which was 
responsible for getting the 1915(D) waiver authority enacted into law) has elected this option. 


Another alternative which would require new legislation is to consolidate all Federal 
PAS programs (i.e. Waiver, PC-Option, Title III PAS, and currently expended Social Service 
Block Grant monies) into a block grant program to states which is indexed to some measure 
of annual growth and does not require state matching funds. This grant would need to be 
accompanied by additional federal funding, based on estimates of the gap between what is 
needed to serve the target population (defined by ADL deficits and income) and what is 
currently being spent. It could help eliminate the differences in administration and eligibility 
determination among state programs, without creating a new open-ended federal entitlement 
with unpredictable costs. However, although the states would initially benefit from this infusion 
of funds and lack of federal requirements for matching state revenues, they could 
find that meeting growing demand for services will require greater and greater infusions of 
state monies if indexing failed to provide enough funding to keep pace with demand. 

All of these proposals have drawbacks, but some sort of resolution of the access issue 
is imperative. As political, economic, and demographic pressures build, federal and state 
government will need to initiate a formal process of dialogue between administrators, 
legislators, providers, advocates and consumers. PAS is essential to a growing number of 
Americans, and a way must be found to provide these services. 


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