U.S. Department of Health and Human ServicesU.S. Department of Health and Human Services
This report was prepared under contract #HHS-100-95-0046 between the U.S. Department of Health and Human Services (HHS), Office of Disability, Aging and Long-Term Care Policy (DALTCP) and the University of Maryland. For additional information about the study, you may visit the DALTCP home page at http://aspe.hhs.gov/daltcp/home.shtml or contact the ASPE Project Officer, Pamela Doty, at HHS/ASPE/DALTCP, Room 424E, H.H. Humphrey Building, 200 Independence Avenue, SW, Washington, DC 20201. Her e-mail address is: Pamela.Doty@hhs.gov.
This report could not have been written without the assistance of many people. It is Arkansas' story and we would especially like to thank the people of Arkansas who spoke to us; they were generous with their time and with their insights. Special thanks go to Suzanne Crisp, Sandra Barrett, and Debby Ellis of IndependentChoices who made our visit to Arkansas memorable. It has been a true pleasure to work with them over the course of the Cash and Counseling Demonstration. We would also like to thank Kevin Mahoney of the Cash and Counseling National Program Office; Pamela Doty of the Office of the Assistant Secretary for Planning and Evaluation, United States Department of Health and Human Services, and Seth Emont of the Robert Wood Johnson Foundation for the leadership they have provided and for their thoughtful comments on consumer direction generally and on Arkansas' demonstration. Our colleagues at Mathematica Policy Research, Inc., Randy Brown and Jennifer Schore provided helpful comments on earlier drafts. Patricia Ciaccio provided skillful editorial support and Marjorie Mitchell produced the report.
Consumer direction seeks to provide people with disabilities with more options and greater personal autonomy in determining how best to meet their care needs in a cost-effective manner. Cash and Counseling is one model of consumer-directed personal assistance services (PAS). Under the Cash and Counseling model, eligible people with disabilities receive a cash benefit. In turn, they assume responsibility for arranging and managing services to meet their personal assistance needs. They may hire workers privately and may receive assistance from counselors if they so desire.
The Robert Wood Johnson Foundation (RWJF) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the U.S. Department of Health and Human Services are sponsoring a demonstration and evaluation of Cash and Counseling, which includes a National Program Office at the University of Maryland, Center on Aging. The Centers for Medicare & Medicaid Services CMS) is assisting in the demonstration, primarily with technical assistance and waivers of federal Medicaid regulations. The demonstration has been implemented in three states: Arkansas, Florida, and New Jersey.
This report describes the design and implementation of Arkansas' model of Cash and Counseling--IndependentChoices--and draws lessons from the state's experience. The report is based primarily on in-person interviews conducted with Arkansas state officials, IndependentChoices' program staff, staff of agencies providing counseling and fiscal services under IndependentChoices, staff of agencies providing traditional PAS in Arkansas, and staff of advocate organizations. In this summary, we briefly describe the design and implementation of IndependentChoices, then draw lessons for future Cash and Counseling programs in Arkansas and other states.
The solicitation for demonstration proposals provided the basic outline for IndependentChoices. It stipulated that the cash benefit was to be provided in lieu of traditional PAS--provided either under the Medicaid state plan or under a Medicaid waiver--and was to cover a variety of goods and services.
Arkansas chose to "cash out" Medicaid PAS under its state plan but not to cash out services provided under a waiver program, ElderChoices, that provides additional services (such as homemaker, chore, and respite services) to elderly recipients of state plan services who meet the criteria for nursing home care. The decision not to cash out ElderChoices was made at least in part to avoid increasing opposition to the cash program from providers of traditional services, most importantly, the Arkansas Department of Health (ADH) and the Area Agencies on Aging (AAAs), which provided the great majority of both state plan and waiver services. Some of the AAAs strongly opposed the cash program.
Arkansas took a direct approach to reach beneficiaries who were eligible for Medicaid PAS and who expressed an interest in participating in the demonstration. Instead of working through providers of traditional personal assistance, the state hired nurses operating out of different regions of the state to conduct a community information campaign and then to enroll interested Medicaid beneficiaries. In addition, centrally located program staff conducted a direct-marketing campaign which included mailings to each beneficiary receiving state plan PAS services.
The state set up a toll-free telephone number for those interested in participating in the demonstration and a database that they used to verify eligibility for Medicaid PAS during the telephone calls. Contact information was transmitted electronically to the regional nursing staff, who telephoned and then visited interested consumers to enroll them in the demonstration. Consumers who wished to participate but who were unable to manage their own services, were allowed to name a family member or friend as a representative to act on their behalf if they were selected for the cash benefit.
The evaluation contractor, Mathematica Policy Research, Inc., randomly assigned half of the demonstration participants to the treatment group to receive the cash benefit and the other half to the control group to receive traditional services.
Arkansas attracted a large number of participants to the cash demonstration (although not as many as the original evaluation design called for). Ultimately, about 2,000 people participated in the demonstration (in the treatment and control groups combined), roughly 10 to 15 percent of the number of PAS recipients annually.
Arkansas based the amount of the cash benefit on the care plan. The amount was based on the current care plan for treatment group members who were already PAS recipients, and the outreach/enrollment nurses developed care plans for those new to PAS. Both types of care plans were cashed out at $8.00 an hour after "discounting." Discounting involves multiplying the care plan hours by the ratio of the cost of services actually received to the cost of services listed on the plan of care. It is intended to ensure the budget neutrality of the cash program by taking into account the fact that the amount of services received is generally less than the amount planned, (due, for example, to hospital admission of PAS recipients and insufficient supply of aides). Arkansas developed provider-specific discount rates for current recipients of PAS by comparing care plans and claims for the previous year for random samples of those served by various providers of traditional personal assistance. These provider-specific discount rates ranged from about .70 to .91. A rate of .91 was applied to the care plans of new recipients of personal assistance.
Arkansas drew up a broad list of goods and services covered by the cash benefit and required that consumers develop a plan for uses of the cash benefit before receiving any cash payments. Almost all consumers who received a cash benefit hired a worker with these funds, usually a family member or friend. Although the demonstration waiver permitted hiring of legally liable relatives (spouses and legal guardians of adults), Arkansas chose not to exercise this aspect of the waiver. Some consumers also purchased assistive equipment, personal care supplies, and nonprescription and prescription medications (when these medications were not covered by Medicaid). A few purchased materials to modify their homes, such as lumber for a ramp.
The state contracted with two human services organizations--each of which was to provide both counseling and fiscal services under IndependentChoices. One host organization was a for-profit organization with expertise in rehabilitation services. It became the counseling/fiscal agency for three-quarters of the state. The other host organization was a nonprofit organization providing schooling and supportive services to children and adults of all ages. It became the counseling/fiscal agency for the other quarter of the state. (A contract to provide counseling/fiscal services was also awarded to an AAA, but it withdrew shortly after operations began.)
Under IndependentChoices, counselors had a variety of responsibilities. They visited all treatment group members to help them prepare their initial cash management plans and approved revisions to these plans. The state permitted counselors to authorize the purchase of any good or service on a preapproved list, with review by state staff of any unlisted good or service. Counselors also advised consumers about the nonfiscal responsibilities of an employer, including hiring, training, supervising, and (if necessary) firing workers. In addition, counselors monitored the use of the cash and the condition of the consumer, speaking to consumers by telephone at least monthly and visiting them periodically. Consumers maintained receipts to document the uses of cash (except for discretionary funds to total no more than 10 percent of the benefit), and counselors carefully reviewed these receipts, thereby monitoring the uses of the cash. Also, counselors were responsible for reassessing the care needs of cash recipients every six months (or when events precipitated a change in need) and revising their care plans following reassessment. (The staff of traditional agencies was responsible for reassessing and revising the care plans of the recipients of their services.)
The fiscal services available to consumers under IndependentChoices were provided to them without charge and included preparation of payroll documents (including those pertaining to federal and state payroll taxes and state unemployment insurance) and check-writing and bookkeeping services. Consumers were required to demonstrate sufficient knowledge before assuming payroll responsibilities. Nearly all consumers chose to avail themselves of the fiscal services for payroll documents.
Arkansas paid the counseling/fiscal agencies a monthly management fee for each person assigned to the treatment group, with the amount of the fee reduced after every six-month interval (for two years). The fee was reduced based on the presumption that as a consumer's experience with self-management increased, reliance on counseling support would decrease.
The procedures developed for IndependentChoices were, on the whole, successful. Arkansas' experience suggests a number of lessons about operating a Cash and Counseling program.
Outreach and Enrollment. Direct mailings to recipients of Medicaid PAS appear to have been the most effective approach to generating participation. Direct mailings are more targeted and can be more precisely worded than newspaper articles and public service announcements. Program staff considered direct mailings more cost-effective than the other marketing techniques because they expended fewer resources responding to inquiries from those who proved ineligible for Medicaid PAS.
The Arkansas experience also suggests that a sizable staff is needed for simultaneous community information and marketing efforts. Arkansas staff mounted a community information campaign, but were unable to maintain this level of effort once enrollment began. Senior state staff mounted the marketing campaign even as they worked to implement the cash program day to day. Arkansas would have needed substantially more staff than it had resources to hire to simultaneously implement major community information, marketing, and enrollment efforts.
Arkansas enhanced the efficiency of the enrollment process by reducing paperwork, smoothing work flow, minimizing travel, and reducing multiple home visits in a given case, almost to the point of eliminating multiple visits. Having family members and friends present at the initial home visit was particularly important to minimizing multiple visits, both because family members and friends were potential representatives and workers and because they could answer questions that the consumer raised after the home visit.
Arkansas learned that the presentation of information was critical during enrollment. Staff had to actively combat the misunderstanding that the cash benefit would be treated as income for the purposes of determining eligibility for means-tested federal programs and determining federal tax liability. Another lesson was the importance of providing information in ways that people of limited reading ability could understand and framing answers to their questions in terms that they found meaningful. The state provided multiple opportunities for oral communication; written materials were insufficient alone.
Attractive Program Features. Program staff reported that consumers found the ability to hire family members to be the single most attractive feature of IndependentChoices. Having a family member as a worker provided consumers with security and peace of mind; they disliked having strangers come into their homes. Moreover, some consumers found it demeaning to have intimate personal assistance provided by a stranger. Other consumers had been dissatisfied with traditional PAS, finding the schedules inflexible or the aides unreliable. In some cases, traditional personal assistance agencies simply had been unable to supply aide services.
Unattractive Program Features. Participation in IndependentChoices was less attractive to ElderChoices participants, according to program staff. Since ElderChoices had not been cashed out, aides from that waiver program would still be coming to consumers' homes. Moreover, consumers participating in both programs often had a majority of their home care hours through ElderChoices, an artifact of a defunct state policy under which the maximum number of hours available under ElderChoices was included in the care plan before any PAS hours. As a result, cash benefit levels under IndependentChoices tended to be lower for consumers participating in both programs than for other PAS recipients. Since about a third of state plan PAS recipients also received ElderChoices services, the failure to attract them probably contributed to the difficulty Arkansas had in meeting the sample size targets of the evaluation.
According to program staff, other unattractive features of IndependentChoices included the amount of paperwork required and restrictions on the uses of the cash benefit, especially the restriction on hiring spouses. In addition, IndependentChoices tended to be less attractive to consumers who liked their current personal assistance aide. Random assignment (an artifact of the evaluation) was also an unattractive feature.
Counseling and Fiscal Services. One lesson regarding counseling services is that, for most consumers, quarterly monitoring visits are not necessary. IndependentChoices revised its initial requirement of a quarterly visit (to at least a semiannual visit) because it became clear that most consumers did not need visits quarterly, although a few required very frequent visits in the course of resolving particular problems.
Three major lessons about cash management emerge from IndependentChoices. First, counseling for cash planning is labor intensive--both for development of initial cash management plans and for revision of cash plans as consumers' needs and desires change. Second, counseling and fiscal issues are often closely associated. The issues that counselors address often have fiscal implications, and discussion of fiscal issues often reveals underlying counseling issues. Third, the Arkansas experience shows that most interested consumers--even those with limited formal education--can develop a cash management plan in a few weeks, provided that: they (1) have assistance from counselors, and (2) can identify a worker from among their family members and friends. Although counselors trained consumers to look for a worker in a "widening circle," those who were not able to identify a family member or friend as a worker reportedly were more apt to disenroll from the demonstration.
There are several possible reasons for the relative lack of success among consumers without family members and friends to serve as workers. First, those who hired workers from outside their family and friends did not experience one of the most attractive potential benefits of the cash program--avoiding having strangers come into the home. Second, the wages cash recipients offered may not have been sufficient to attract workers who did not know the consumer personally. Third, Arkansas and its counseling/fiscal agencies did not develop formal referral mechanisms for finding workers, although informal referral mechanisms began to develop relatively late in the demonstration.
In recent years, many traditional agencies have found it difficult to hire enough personal assistance aides to meet the demand. Thus, an important lesson of IndependentChoices is that Cash and Counseling appears to tap a new source of personal assistance workers--family members and friends who were willing to assist a loved one for a relatively low hourly wage but not interested in agency employment. Such family members and friends can help people who were not being served (or who were underserved) by the traditional program.
Another lesson of IndependentChoices is that dividing the responsibilities of the employer between the consumer and the fiscal agent can be successful. Consumers retained responsibility for timely submission of worker time sheets and fulfilled this responsibility successfully on the whole. Agencies were largely successful in implementing fiscal services. Consumers received their cash benefits and monthly statements in a timely way, and workers usually received their paychecks in a timely way.
Except for difficulty in recruiting workers from beyond the circle of family members and friends, consumers satisfactorily fulfilled the nonfiscal responsibilities of employers in hiring, training, supervising, and firing workers. Counselors played a major role in this success--partly by advising consumers and partly by treating consumers as "the boss" and thereby empowering them relative to their representatives, workers, and other family members.
Roughly half of the consumers in IndependentChoices named a representative to help them manage the cash benefit. An important lesson of Arkansas' experience is that representation is successful and a natural extension of the relationships that consumers already have and of the assistance they are already receiving. Under IndependentChoices, consumers who needed a representative generally identified that need themselves and selected their representatives wisely. Representatives almost invariably acted in the best interests of consumers, with family members taking a holistic view of consumers' situation and acting as consumer advocates.
IndependentChoices presents two major lessons with respect to monitoring to prevent abuse of the cash benefit and exploitation of consumers. Requiring receipts to document the uses of cash reportedly was instrumental in preventing the abuse of the cash benefit by empowering consumers and representatives to prevent their family members from using the cash benefit inappropriately. Counselors' careful observation for subtle changes in consumer behavior and a positive approach to correcting problems were key ingredients in preventing almost all exploitation of consumers and quickly resolving the handful of cases that did arise.
Budget Neutrality: Discounting, Counseling/Fiscal Fees, and Reassessment. Consistent with the federal requirements for the demonstration waiver, IndependentChoices was not expected to be budget neutral immediately. Rather, the cost per recipient per month for the cash program was to be brought in line with the comparable cost for the traditional program over the course of the five-year demonstration waiver. Analysis of the impact of IndependentChoices on costs must await the evaluation's analysis of claims. Nonetheless, this study provides some lessons about discounting, counseling/fiscal fees, and reassessment that should be helpful in designing budget-neutral Cash and Counseling programs.
The appropriate initial discount rates in Arkansas may have depended on two factors that were unknown when the state developed the initial discount rates and that were out of its control. First, the appropriate discount rates may differ from historic rates because the ratio of the cost of services received to the cost of services planned has changed. For example, as the labor market tightened in the full-employment economy of the late 1990s, it may have been harder for traditional agencies to find enough workers to deliver all the hours specified in the care plans. Second, discount rates developed for random samples of all PAS recipients may be inappropriate if those who choose to participate in the demonstration differ systematically from other PAS recipients. For example, PAS recipients who were underserved (or not served at all) in the traditional program had a greater incentive to participate in IndependentChoices. Assuming that the care plans of the underserved did not systematically understate their care needs, underservice would be associated with having a smaller fraction of planned care actually delivered (relative to the fraction for PAS recipients in general).
Arkansas' method of payment of counseling/fiscal agencies increased program cost and thus affected budget neutrality. The state paid the counseling/fiscal agencies a monthly fee for each consumer enrolled, regardless of whether the consumer had begun to receive the cash benefit. Consequently, the state incurred costs for both traditional services and counseling/fiscal services until a consumer began to receive the cash benefit and traditional services discontinued (or until the consumer disenrolled).
Another factor that may have affected budget neutrality is the possibility of different assessment procedures for treatment and control group members who were new to PAS. Although the outreach/enrollment nurses assessed and developed care plans for those new to PAS who were interested in the cash program, traditional agencies were not required to honor these care plans. Instead, they may have reassessed new recipients of PAS referred to the control group, which could result in different costs for the treatment and control groups.
Different reassessment procedures may have led to systematically larger amounts of care planned for cash recipients than for recipients of traditional services, and this may have increased the cost of the cash program relative to the traditional program. Faced with a shortage of aides, providers may have tended to avoid increases in the hours of care planned for recipients of traditional personal assistance (even in situations in which an increase was justified). In contrast, counselors may have tended to authorize an increase in care plan hours since the cash program was tapping a different supply of workers--the family members and friends of consumers.
Moreover, under IndependentChoices, the discount rate for care plans following reassessment of cash recipients (.91) was more generous, on average, than their initial discount rates (which ranged from .70 to .91). A more generous discount rate at reassessment may have the effect of increasing the cost of the cash program relative to the cost of the traditional program since the amount of the cash benefit would be increased when the reassessment care plan was cashed out.
Structure of IndependentChoices. Four important lessons emerge from the Arkansas experience about structuring a Cash and Counseling program. These lessons pertain to:
Contractual responsibility for counseling and fiscal services was combined under IndependentChoices. Indeed, the counselors were responsible for some fiscal activities, such as approving timesheets and purchase orders. The state program staff and the counseling/fiscal agencies felt that counseling and fiscal activities are so closely linked that combining them enhances efficiency. However, while day-to-day bookkeeping activities went smoothly, neither of the counseling/fiscal agencies was fiscally sophisticated when implementation began. For example, despite the technical assistance the National Program Office provided, both counseling/fiscal agencies erred initially by failing to refund excess withholding to consumers and workers. Possibly, the requirement that counseling and fiscal services be combined discouraged bids from organizations with more fiscal expertise but little or no human service expertise, as a joint bid would be required in that situation.
Under IndependentChoices, multiple counseling/fiscal agencies served different geographic areas of the state. Having multiple agencies was an important safety net for the cash program. It enabled program operations to proceed smoothly when the state did not receive an acceptable bid for counseling/fiscal services in one region of the state and when the successful bidder for another region dropped out of the cash program early. Simply having multiple agencies is not in itself sufficient to form a safety net; at least one agency must be in a position to expand to cover other regions of the state.
The orientation of host organizations may have been a fundamental strength underlying the successful implementation of the cash program in Arkansas. Neither focused on providing traditional home care. One organization's background was the provision of rehabilitation therapy, and a school was at the heart of the services provided by the other. The orientation of the host organizations (to rehabilitation and to schooling) may have been more consistent with the philosophy of consumer direction than was the orientation of traditional personal assistance agencies.
The successful implementation of IndependentChoices also may partly reflect the way in which the provision of counseling services was structured at the counseling/fiscal agencies. In each of them, counseling was provided primarily by full-time staff members who were responsible only for the cash program. Thus, counselors could focus their attention on implementing IndependentChoices without being distracted by other responsibilities.
Moreover, in both of the counseling/fiscal agencies, counselors initially had separate caseloads, but soon moved to shared caseloads. Shared caseloads are more efficient (reducing telephone tag with consumers and travel time) and allow counselors to apply their particular areas of expertise to address the needs of more consumers.
Agency Cash Flow. Counseling/fiscal agencies experienced serious cash flow problems early, before they had established reasonable caseloads. A simple solution to this problem may be for the state to provide new counseling/fiscal agencies with an up-front payment (to be recouped later).
Value of Counseling and Fiscal Services. The tenet of the Cash and Counseling model that distinguishes it from other models of consumer direction is the provision of services to help consumers manage the cash benefit. Some critics of this model argue that an unfettered allowance (for consumers to spend as they choose) would be preferable, as it is more consistent with the philosophy of consumer direction. Whatever the philosophical merits of an unfettered allowance, most Arkansas consumers seemed to accept the authority of the Medicaid program to impose restrictions on the use of public funds and expected to be asked to show receipts to document their adherence to these restrictions.
The counseling and fiscal services IndependentChoices provided appear to have benefitted consumers. Fiscal services were clearly attractive. Consumers were not required to use these services, yet the great majority did so.
The value of counseling services to consumers is more difficult to assess. In general, counselors seem to have empowered consumers, and counselor monitoring and a positive approach to problem solving seem to have been important in preventing exploitation of the consumer and abuse of the cash benefit. Nevertheless, consumers varied greatly in the amount of advice and training they needed from counselors. Some needed little or none, while other consumers needed a great deal of assistance, especially in the weeks and months in which they were developing a cash management plan and hiring workers. Counselors learned not to overwhelm these consumers with materials and information and to focus on what they needed to know. Overall, counseling seems to have been valuable--perhaps essential--to the success of the cash program in Arkansas.
Future Cash Program? Arkansas views a consumer-directed cash program as a valuable part of a package of programs designed to meet the needs of its citizens, and it is working to adopt a slightly revised version of IndependentChoices as a permanent program. At the time of our visit, the major revisions involved (1) cashing out the ElderChoices waiver (as well as the Medicaid state plan services); (2) less emphasis on outreach; (3) greater attention to training consumers to be employers, and (4) revising the payment structure for counseling/fiscal agencies to provide a one-time payment for developing the cash management plan, followed by a fixed monthly payment per cash recipient.
The Robert Wood Johnson Foundation (RWJF) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the U.S. Department of Health and Human Services (HHS) are sponsoring the demonstration and evaluation of Cash and Counseling. RWJF and ASPE co-funded a National Program Office for the demonstration at the University of Maryland, Center on Aging, and they co-funded the evaluation, while RWJF funded grants to the demonstration states. The demonstration required waivers of federal Medicaid regulation. The Centers for Medicare & Medicaid Services (CMS)--at that time, the Health Care Financing Administration (HCFA)--was responsible for these waivers. CMS took the lead role in developing and implementing the waiver terms and conditions (including budget neutrality), reviewing state demonstration protocols, and ensuring that all aspects of the state demonstrations were operational before they were implemented. This demonstration was implemented in three states: Arkansas, Florida, and New Jersey.1
Cash and Counseling is one model of consumer-directed personal assistance services (PAS). The goal of Cash and Counseling is to provide people with disabilities with more options and greater personal autonomy in determining how best to meet their long-term needs in a cost-effective manner. Under Cash and Counseling, eligible people with disabilities receive a cash benefit. In turn, they assume responsibility for arranging and managing services to meet their personal assistance needs. They may hire workers privately and may avail themselves of the assistance of counselors if they so desire.
This chapter provides the reader with the background information needed to understand Arkansas' implementation of the Cash and Counseling model, IndependentChoices. Section A provides a brief summary of personal assistance programs in the United States as planning for the Cash and Counseling Demonstration began. Section B provides a brief summary of the models of care being implemented at that time. Readers familiar with these programs and models of care may choose to skip ahead to Section C, which provides a brief description of the design of the Cash and Counseling Demonstration as envisioned by RWJF and ASPE. Section D describes the design of the evaluation, with special emphasis on the methodology for this process analysis. Finally, Section E provides a guide to this report.
People with disabilities often require personal assistance to remain in home and community settings. At the time that planning for the Cash and Counseling Demonstration began, HHS had estimated that more than 25 million children, working-age adults, and elderly people had a substantial limitation in physical, mental, or emotional function and required assistance at some level (Cameron and Firman 1995). Personal assistance was usually defined as assistance with tasks that people would normally do for themselves if they did not have a disability--tasks like personal maintenance and hygiene, mobility, household maintenance, child care, cognitive or life management activities, personal security, and communication (Litvak et al. 1987).
As planning for the Cash and Counseling Demonstration began, several public programs existed to provide personal assistance to people with disabilities. These programs included Medicaid personal care state plan optional benefit programs, Medicaid home- and community-based waiver programs, other programs funded by other federal revenues (for example, the Social Services Block Grant and the Older Americans Act), state general revenues, and local revenues.
The availability of these programs varied by state. Medicaid state plan personal care programs--an optional benefit under federal regulations--had become a major source of public funding for personal assistance services (PAS) by the mid-1990s (Doty et al. 1996; and Litvak and Kennedy 1991). The number of states with Medicaid state plan personal care programs had increased from 17 in 1982 to over 30 in 1996 (Health Care Financing Review Medicare and Medicaid Statistical Supplement 1996). While all states had Medicaid home- and community-based waiver programs at that time, these programs tended to be small and targeted to special populations (Litvak and Kennedy 1991).2 As a result, Medicaid state plan program expenditures were more important than Medicaid waiver programs as a source of assistance to adults with disabilities. Other federally funded personal assistance programs were limited in size because of funding constraints. The availability of state-funded programs also varied widely. Some states (including California for a number of years) relied heavily on state revenues to provide personal assistance, but more than a third of states did not use any state general revenue funds for this purpose (Justice 1993).
The traditional model of PAS and the consumer-directed model are distinct models for providing personal assistance.
As planning for the Cash and Counseling Demonstration began, most personal assistance in the United States was provided within a traditional model of PAS. The traditional model includes case management services to assess need, plan and coordinate services, and supervise personal assistance workers. About half of traditional programs required licensed vendor agencies to provide services, and the other half allowed clients to hire workers, including nonlicensed providers, privately (Litvak et al. 1987). Vendor-provided services and case management tended to limit client choice and control over PAS, as well as to increase the cost of providing personal assistance.
Critics of the traditional model of PAS have long argued that it is not well suited to meet client needs, values, and preferences. They argue that many clients, especially younger people with disabilities, do not want or need case management services. Furthermore, other clients may prefer that friends or family members provide assistance or prefer to seek services other than PAS (such as adult day care) to meet their needs.
By the time that planning for the demonstration began, some PAS programs had fostered client choice by allowing clients to hire, fire, train, and/or supervise workers. Among Medicaid personal care programs, however, the degree to which clients could manage their privately hired workers usually was limited. For example, the worker usually was paid by the program, not the consumer (Cameron and Lagoyda 1997). A survey of 12 Medicaid personal care programs that permitted privately hired workers found that most programs allowed clients to hire and fire their own workers, but only half allowed clients to train their workers, and only a quarter allowed clients to participate in paying their workers (Doty et al. 1996).
Consumer direction is rooted in the Independent Living Movement, which was originated nearly three decades ago by younger adults with disabilities who sought to lead more fulfilling and independent lives (DeJong 1979; Doty et al. 1996; and Litvak et al. 1987). To achieve greater independence, they struggled to take control of their PAS. The Independent Living Movement coincided with the consumerism movement, which led to the use of the term "consumer-directed" to describe the model of care the movement advocated (DeJong 1979; and Litvak et al. 1987).
Consumer-directed models aim to allow people with disabilities to direct the who, how, and when of service delivery (Litvak et al. 1987). When planning for the Cash and Counseling Demonstration began, the National Institute on Consumer-Directed Home- and Community-Based Care Systems (1996) had defined consumer direction as:
...a philosophy and orientation to the delivery of home- and community-based services whereby informed consumers make choices about the services they receive. They can assess their own needs, determine how and by whom these needs should be met, and monitor the quality of services received. Consumer direction may exist in differing degrees and may span many types of services. It ranges from the individual independently making all decisions and managing services directly, to an individual using a representative to manage needed services. The unifying force in the range of consumer-directed and consumer choice models is that individuals have the primary authority to make choices that work best for them, regardless of the nature or extent of their disability or the source of payment for services.
The level of consumer control within actual programs falls upon a continuum (National Institute on Consumer-Directed Home- and Community-Based Care Systems 1996; and Doty et al. 1996). An approach to judging where a program falls upon the continuum is to assess to what extent it includes the 10 characteristics of the Independent Living Model (see DeJong and Wenker 1979 and Litvak et al. 1987):
The National Institute on Consumer-Directed Home- and Community-Based Care Systems (1996) proposed a set of broader criteria for assessing the extent to which a program is consumer-directed. These criteria are the (1) ability of consumers to control and direct the delivery of services, (2) variety and type of service delivery options actually available to consumers, (3) availability of appropriate information and support, and (4) ability of consumers to participate in systems design and service allocation.
When planning for the Cash and Counseling Demonstration began, examples of consumer-directed programs in the United States included those in California (the largest in the country), Massachusetts, and Michigan. Each of these programs met 7 to 8 of the 10 characteristics of the Independent Living Model (Litvak et al. 1987).
In theory, a cash benefit represents a high level of consumer control on the continuum of consumer direction. Yet consumer control can be limited if the cash benefit is restricted (Kane 1996). Restrictions may include limitations on services covered. For example, while some private insurance plans pay cash to people with disabilities, others only cover expenses for a list of authorized services (Cameron and Firman 1995; and Freedman and Kemper 1996). Other restrictions involve who may be hired as workers. Hiring restrictions may include not permitting the hiring of close relatives and requiring that workers have specified credentials or fulfill preemployment training requirements.
When planning for the Cash and Counseling Demonstration began, most cash benefit programs in the United States were small (although the size varied). The Wisconsin Community Options Program is an example of the small programs operating at that time--it targeted only five percent of its caseload (or about 650 people) to receive a case-managed cash benefit; in contrast, the Michigan Home Help Program served more than 30,000 consumers at that time (Cameron and Firman 1995; and National Institute on Consumer-Directed Home and Community-Based Care Systems 1996).
When planning for the demonstration began (as now), federal statute prohibited direct cash payments with Medicaid funds. Thus, in the cash benefit programs then funded under Medicaid, clients did not receive direct cash payments to pay for personal assistance. Instead, states commonly paid wages directly to workers.
When planning for the Cash and Counseling Demonstration began, its designers saw payment of a cash benefit as having the potential to give clients the power to purchase services that best fit their long-term care needs and individual values. With cash, clients were expected to design individual service packages. They could purchase traditional case-managed PAS, hire workers privately, make home modifications, purchase equipment, or use adult day care or other home- and community-based services as alternatives to in-home personal assistance (Cameron 1995; and Kane 1996). They were in a better position to arrange for services at times that met their needs. They could also hire their friends and relatives if they believed that doing so was in their best interest. Depending on the level of the cash benefit, the cost of traditional services, and the cost of alternative services, clients might also be able to purchase more hours of services than they received from the traditional program. These changes were seen as having the potential to increase autonomy, better address unmet needs, and improve satisfaction--changes that might in turn result in improved functioning (Kane 1996).
In addition, at that time, reductions in public expenditures were viewed as being possible, as traditional case management services and administrative functions were eliminated under Cash and Counseling and clients took responsibility for managing their own services. If the cost of providing counseling were less than the cost of these traditional functions, savings would accrue. Savings might also accrue if the cost of paying cash benefits were less than the cost of processing claims. Also, the potential cost to the state of collective bargaining with personal assistance attendant unions and of liability actions against the state was eliminated (see, for example, Jackson 1994; Cameron 1995; Doty 1996; and Flanagan 1994).
At the time the Cash and Counseling Demonstration was being designed, states had relatively little experience with cash benefit programs. Therefore, public officials were concerned about possible abuse of the program. They felt that clients might be exploited by their relatives or workers or might not use their cash benefit for the intended purpose.
Some public officials were also concerned that a cash benefit might create more demand for services (the so-called "woodwork" effect), thus straining available resources.
Finally, there was concern that traditional PAS providers might object to Cash and Counseling because it might reduce their revenue and place them at a competitive disadvantage relative to privately hired workers. Traditional providers might also object on the grounds that potential workers would not be adequately trained or supervised. Finally, organized labor unions might not support Cash and Counseling because no collective bargaining entities exist to represent privately hired workers (Cameron and Lagoyda 1997).
The central question RWJF and ASPE posed for the demonstration was: How did Cash and Counseling compare to traditional case-managed PAS? This question was later expanded to consider Cash and Counseling compared to home- and community-based services, including personal assistance. States interested in participating in the demonstration were free to propose Medicaid programs funded under the optional plan benefit, Medicaid programs funded under home- and community-based waivers, or programs funded by state general revenues. These were the demonstration "feeder" programs. Existing consumer-directed programs were excluded.
RWJF and ASPE also stipulated an evaluation employing a rigorous randomized design. Thus, individuals participating in the demonstration were to be assigned either to a treatment group (to receive the cash benefit) or to a control group (to continue under traditional PAS or home- and community-based services). The effect of the requirement for a randomized design was to limit the demonstration to states with relatively large PAS or home- and community-based care programs or combinations of programs. Only in such states was it possible to obtain the sample sizes needed for the evaluation.
States were expected to include elderly people with disabilities, as well as younger adults with disabilities, in the Cash and Counseling Demonstration. Younger adults with disabilities have long advocated consumer-directed care. The issues in adopting a disability model for personal assistance for elderly people were being debated, and there was policy interest in extending such care to elderly people with disabilities (see, for example, Simon-Rusinowitz and Holland 1993; and Doty, Kasper, and Litvak 1996). The states could also choose to include children with disabilities in the Cash and Counseling Demonstration.
The solicitation anticipated that states would seek a waiver of the federal restrictions on cash payments under the Medicaid program. To grant such a waiver (as in demonstration waivers generally), HCFA imposed terms and conditions, including limitations on the potential impact of the demonstration on public costs. One term and condition required that the cash program impact the federal budget no more than the traditional program being "cashed out." That is, the cash program was required to be "budget neutral." HCFA's traditional approach to calculating budget neutrality involves comparing the monthly cost per recipient of the demonstration program and the traditional program. Another of the terms and conditions for the demonstration waiver limited the potential impact of the demonstration on public costs by limiting the number of new entrants to the PAS program. During the demonstration, the ratio of the number of new entrants to the number of current recipients was not to exceed the historical average.
The demonstration solicitation required that the cash benefit cover a broad range of services (such as equipment and home modifications) in addition to personal assistance workers. Furthermore, the solicitation anticipated that spouses and parents of minor children might be hired as personal assistance workers and that states would have to seek a waiver of the federal restriction on such hiring.
Consistent with the Cash and Counseling model, the demonstration solicitation required the provision of counseling services. These services were to help clients by giving them information and advice, teaching them, and providing support services, including assisting with payroll and bookkeeping activities. Demonstration states were free to decide exactly what counseling services to offer.
Seventeen states submitted bids in response to the solicitation for the Cash and Counseling Demonstration. Four states were selected: Arkansas, Florida, New Jersey, and New York. New York dropped out of the demonstration before beginning operations; its local social service districts had relatively little interest in participating.
This report on Arkansas is one of a series of three. Each report tells the story of the implementation of the Cash and Counseling model in a particular state.
Mathematica Policy Research, Inc. (MPR) is evaluating the Cash and Counseling Demonstration. The evaluation consists of two inquiries. These inquiries: (1) estimate the impacts of provision of a cash benefit in lieu of personal assistance or home- and community-based services, and (2) document and analyze the implementation of the Cash and Counseling model as it unfolded. These two areas of inquiry are interrelated, as impacts can be interpreted and generalized only in light of how the Cash and Counseling model was implemented.
MPR will consider impacts on consumers, caregivers, and public costs.
a. Planned Analyses
Cash and Counseling is expected to affect consumers' use of, unmet need for, and satisfaction with PAS. As a result, it may also affect their health and functioning. Because consumers purchase PAS on their own, rather than relying solely on agencies, they are likely to have more control over who provides their PAS, and how and when these services are delivered. Consumers may use different amounts or mixes of services than they would have received under traditional Medicaid PAS. They may also use their funds to buy equipment or devices to increase their independence. The greater flexibility that the cash benefit provides should reduce unmet need and improve satisfaction with PAS. If the quality of consumers' PAS improves, it may also improve independence and disability-related health. Although the expected effects of the program are to improve consumer outcomes, MPR will also assess whether any outcomes worsen.
Cash and Counseling could affect caregivers in several ways. Family and friends providing unpaid care to consumers prior to enrollment in the demonstration could face fewer demands on their time if consumers hire attendants or use the cash benefit to purchase assistive devices. If consumers mismanage the benefit, however, unpaid caregivers may need to provide more care than they did before. Likewise, unpaid caregivers' emotional stress may decrease or increase. MPR will also investigate the experience of caregivers who are hired and paid under the demonstration. The working conditions, job satisfaction, and physical and emotional strain that paid caregivers experience will be measured and compared to that of agency workers providing care to control group members.
MPR will estimate Cash and Counseling's effects on Medicaid costs for PAS alone and for all costs paid by Medicaid and Medicare. Costs for personal assistance may increase or decrease, depending on the monthly payment rates. Costs for other health care may also increase or decrease. If consumers receiving the cash benefit are more likely to receive care when they need it, they may have fewer falls or pressure sores (for example), and thus have lower costs. On the other hand, if recipients of the cash benefit hire workers who are less well trained than agency workers, consumers' health may suffer, resulting in higher costs.
Separate analyses of subgroups of consumers will be conducted if sample sizes for these subgroups are sufficient to yield adequate precision. Key subgroups of interest include groups of consumers defined by age and by the length of time the consumer has received PAS.
b. Major Data Sources for the Impact Evaluation
The main sources of evaluation data for the impact analyses are (1) telephone surveys with demonstration participants and their caregivers, and (2) Medicare and Medicaid enrollment and claims data. Individuals who agree to participate in the demonstration must complete a baseline telephone interview before they can be randomly assigned to the treatment or control group. Four months after enrollment, MPR interviews treatment group members to learn about their early experiences with the program. Nine months after enrollment, MPR interviews treatment and control group members to collect information on satisfaction, quality of care, quality of life, use of other formal and informal care, and health and functional status. Around the same time, unpaid caregivers identified at baseline are interviewed about the type and amount of care the unpaid worker provides, their relationship with the consumer, and their satisfaction with the paid care the consumer receives. Samples of paid workers identified in the nine-month survey are also interviewed about earnings and benefits, job satisfaction, and problems encountered on the job. Medicaid and Medicare claims and enrollment data will be used to study the cost of PAS, the use and cost of medical services, and the participation rate in personal assistance programs.
The evaluation includes a second component, which examines program structure and implementation. This process analysis, of which this report is a part, has two objectives. First, it documents demonstration operations and the context in which the demonstration operated for each of the three states (Arkansas, Florida, and New Jersey) participating in the Cash and Counseling Demonstration. Second, it develops lessons about designing and managing a Cash and Counseling program. Specifically, the process analysis seeks to address three major sets of questions:
How did Arkansas structure its Cash and Counseling program, and what led it to adopt this structure?
How did Arkansas implement its program? Did it implement it according to its plans? If not, how and why did it depart from its plans?
What lessons can we learn from the Arkansas experience about structuring and operating a Cash and Counseling program?
The process analysis is based primarily on three data sources. The primary source is in-person interviews conducted with:
State officials of the Division of Aging and Adult Services (DAAS) who were responsible for the cash program
Staff of IndependentChoices, including the program administrator, another member of the program staff in the central office, one of the outreach/enrollment nurses, and the certified public accountant who acted as a consultant to the state for fiscal activities
Staff of both of the counseling/fiscal agencies, including the directors of the agencies, administrators of the cash program at the agency, the counseling supervisors, two full-time counselors in each agency, and the bookkeepers at each agency (some of whom combined more than one role)
Staff of traditional providers, including the directors of two Area Agencies on Aging (AAAs) and of the Arkansas Department of Health
Two advocates for younger adults with disabilities (the AAA directors were interviewed as advocates for the elderly as well as traditional providers)
With the help of state program staff, we identified traditional providers and advocates who had long been involved with IndependentChoices and were knowledgeable about its design and implementation. One had been a vocal critic of the program. It was not possible to interview all of the counselors at the larger counseling/fiscal agency; we asked the program administrators to at the larger agency to identify counselors who would be able to generalize from their experiences and would be available to speak to us during our visit.
These interviews were semi-structured and relied on interview guides. The topics concerned the design, structure, and implementation of IndependentChoices and the attitudes of stakeholders toward the program. The interviews were conducted in spring 2000 in Little Rock and other parts of Arkansas.
The second source of information for the process analysis is demonstration documents, such as demonstration state protocols prepared for CMS, state quarterly reports to RWJF, and forms and materials for consumers and consultants. These documents were collected throughout the course of the demonstration and maintained in evaluation files.
The third data source is information obtained by the authors through participating in project meetings and telephone conference calls which included reports of project status and discussion of issues facing the Cash and Counseling states. The authors attended project meetings, which were held twice a year. One of the authors regularly participated in telephone conference calls with state project staff which were held weekly (later biweekly) throughout the demonstration. The status of the Cash and Counseling Demonstration in each state was reviewed at the meetings and on the telephone conference calls.
The primary limitation of the process analysis is that it relies to a large extent on the reports of those who were interviewed in person and the reports of state staff during telephone conference calls. The interviewees were extremely knowledgeable and their reports are certainly credible. Moreover, we have collected information on key topics from multiple perspectives in order to minimize the possibility of error based on misconception. Nevertheless, the report is based primarily on perception. When the quantitative analyses are complete, we will have additional evidence about some--but not all--of the issues considered in this report.
This report on the implementation of the Cash and Counseling model in Arkansas is presented in 11 chapters. Following this introductory chapter, Chapter II presents a description of the goals of the state and other key stakeholders and the approach that Arkansas adopted to critical issues in the design of its cash benefit program, IndependentChoices. Chapter III describes the process of selecting organizations to provide counseling and fiscal services and the organizations that Arkansas chose. Chapter IV is a description of outreach to develop community interest in the cash program. Chapter V describes the enrollment process for IndependentChoices. Chapter VI discusses the development and approval of cash management plans and the uses of cash. In Chapter VII, we describe the selection and functioning of representatives for consumers unable to manage the cash benefit themselves. Chapter VIII considers how consumers fulfilled their role as employers, with the assistance of counselors and bookkeepers. Chapter IX discusses monitoring and the lack of abuse of the cash benefit and exploitation of the consumer. Chapter X considers whether the demonstration was implemented as planned, summarizes lessons about the components of the project discussed in Chapters IV through IX, and describes the lessons of the Arkansas experience that cut across components of the program. Finally, Chapter XI looks at Arkansas' plans for the future and for an ongoing Cash and Counseling program.
The solicitation for demonstration proposals provided the basic outline for the Cash and Counseling demonstration programs. It stipulated that the cash benefit was to be provided in lieu of traditional Medicaid personal assistance services (PAS) services and was to cover a variety of goods and services to promote independence. Furthermore, counseling was to be provided to help consumers manage the cash benefit and perform the duties of an employer.
Many design decisions were required to flesh out the program that Arkansas proposed in response to the solicitation. Most of these decisions were made prior to the submission of Arkansas' proposal in February 1996 or during the design phase for the demonstration--that is, between October 1996 (when Arkansas received funding from the Robert Wood Johnson Foundation [RWJF]) through the end of November 1998. The following month (December 1998), demonstration operations began in full. For the reader's convenience, Table II.1 lists a few key dates for the design phase and the first months of operation.
| TABLE II.1. Key Dates of Design and Early Operations of the Cash and Counseling Demonstration in Arkansas | |
|---|---|
| Date | Event |
| February 1996 | Arkansas submitted proposal to RWJF |
| October 1996 | Arkansas received funding to begin to design its program |
| May 1998 | Arkansas began community information campaign |
| October 1998 | Centers for Medicare and Medicaid Services (CMS) readiness review completed |
| November 1998 | Direct marketing campaign begun |
| December 1998 | Arkansas began to enroll Medicare beneficiaries |
| January 1999 | First cash benefit paid to a beneficiary |
In this chapter, we first describe the state's goals for its Cash and Counseling program and the reaction of other important actors in the state to the prospect that a cash benefit would be available in lieu of Medicaid PAS. The rest of the chapter describes the major issues that arose in designing the Cash and Counseling Demonstration and Arkansas' approach to addressing these issues.
When Arkansas applied for a grant for the Cash and Counseling Demonstration in February 1996, it had two major personal assistance programs; both were part of its Medicaid program. These operated under (1) the state Medicaid plan, as an optional benefit under federal regulations; and (2) a home- and community-based waiver program for the elderly. The waiver program is called ElderChoices and is designed to "wrap around" the state plan PAS (that is, supplement these services) for those elderly community residents who require an institutional level of care. In addition, when the demonstration proposal was submitted, the Arkansas Spinal Cord Commission operated a small personal assistance program with state funding--Arkansas' only consumer-directed program at the time.
The host state agency in the Arkansas Cash and Counseling Demonstration was the Division of Aging and Adult Services (DAAS) within the state's Department of Human Services (DHS). DAAS also had primary responsibility for managing the ElderChoices waiver program. Other DHS divisions involved in the Cash and Counseling Demonstration included the Division of Medical Services (DMS), which had management responsibility for the state plan Medicaid program.
Despite major changes in state administration, the state executive branch remained committed to consumer direction from the time of preparation of the grant proposal throughout the course of implementation of Independent Choices. The grant proposal was submitted under a Democratic governor, who was succeeded by a Republican governor before the grant was awarded. During the four years following the submission of the proposal, four different individuals served as director of the DHS, but during this entire period, there was no change within the leadership at the DAAS.
During the months prior to Arkansas' decision to apply for a grant under the Cash and Counseling Demonstration, advocates for adults with disabilities in Arkansas had been pressing for the adoption of personal assistance programs that would give these adults more control over their services. In one incident, a leading advocate had chained himself to the governor's desk to draw attention to the needs of people with disabilities. The Cash and Counseling Demonstration offered Arkansas and the DHS an opportunity to seize the initiative by implementing a progressive program.
Arkansas had three immediate goals for its Cash and Counseling program. The first was to assess the extent of demand for such a consumer-directed program. The second was to test whether it could operate efficiently within the environment of the state of Arkansas. In other words, Arkansas wanted to test to what extent a cash program could fit "into the way the state does business."
The third goal was to assess whether a cash program could serve people with disabilities who were not being served by the traditional system of PAS. For the past few years, home care agencies in Arkansas had been unable to serve a minority of those who apply for PAS. Many of the people who went without services were residents of rural areas.
Several factors seem to explain the inability of home care agencies to serve all their clients. First, the unemployment rate was low, making it difficult for home care agencies to find workers, especially in rural areas where the supply of potential workers usually was small. Second, the time required to travel to rural areas made it prohibitively expensive for agencies to send workers from more urban areas to the homes of clients living in rural areas. Travel time to rural areas also limited the willingness of home care agencies to hire family members to care for clients. An agency's policy might be to send a nurse into the home periodically to supervise the worker, and the time required for nurses to travel to rural areas made such supervision expensive.3 Finally, some clients were dissatisfied with agency aides. A few "ran through" all the aides an agency had on staff. Some Medicaid beneficiaries did not want strangers to come into their homes to care for them.
Arkansas did not hope that its Cash and Counseling Demonstration would produce savings of state funds. The federal government grants demonstration waivers of the Medicaid regulations only to programs that are intended to be budget neutral, and the state of Arkansas shared the goal of constraining the cost of the cash program so that it was no larger than that of the traditional program. Cost saving, however, was not a state goal from the time the proposal was submitted. Prior to that time, the DMS within the DHS, had been interested in the potential of the cash benefit program to generate savings. However, the DAAS--which was to house the cash program--was less interested in generating savings. Senior program staff report that the DAAS position prevailed.
As the state host agency, Arkansas' DHS--especially the DAAS-was a major stakeholder in the Cash and Counseling Demonstration. As Arkansas was planning its program, the other major stakeholders in the state were the traditional providers of PAS and advocate organizations for elderly and younger adults with disabilities. During the planning of the demonstration, these counseling/fiscal services were chosen only after demonstration planning was nearly complete; thus, these organizations were not major stakeholders in the beginning.)
In the previous section, we described the goals of the DHS for the Cash and Counseling Demonstration. In this section, we describe the reactions of the other stakeholders to Arkansas' plans for a demonstration program.
a. Providers of Traditional PAS
The major providers of PAS in Arkansas were nonprofit or public entities, rather than for-profit entities. Roughly three-fourths of Medicaid PAS services in the state were provided by eight Area Agencies on Aging (AAAs), each serving a region of the state, and by the Arkansas Department of Health. The AAAs and the health department also provided other services, such as case management, home health services, and homemaker services--including services under the ElderChoices waiver. While other organizations also provided traditional PAS and waiver services, they did not have the political "clout" of the AAAs and the Department of Health. In addition, the AAAs were advocates for the elderly and closely tied to the state's unit of the AARP (formerly the American Association of Retired Persons).
While some AAAs were more critical of a cash benefit program than others, most of these agencies were resistant to the program early on. Shortly after the AAAs became aware that the proposal had been submitted, their representatives met with the governor and with senior officials of the state DHS and requested that the grant be declined. They also met with members of the Arkansas legislature and voiced their concerns (discussed in the next paragraph). While many members of the state legislature were supportive of the cash program, the AAAs might have succeeded in forcing the state to decline the demonstration grant were it not for the fact that the director of one AAA--himself a vocal critic of the cash program--was publicly discredited during this period. This event frustrated the AAA effort to persuade the state to decline the grant.
The AAAs were generally resistant to a Cash and Counseling Demonstration for several reasons. Because of their professional norms and in their role as advocates for the elderly, the AAAs were genuinely concerned about the health and safety of consumers receiving the cash benefit. They were concerned about the lack of professional training and supervision for workers under the cash program and about the possibility that family members or friends would exploit the consumer by accepting employment but not delivering care as agreed, leaving the consumer without needed care. Agencies were also concerned that consumers would abuse the cash benefit by spending it on goods and services unrelated to their need for personal care. In addition, some agency staff felt that it was unfair to exempt workers under the cash program from the regulations applicable to home care agencies. For example, agency workers were not permitted to assist clients by escorting or transporting them. Agencies were also concerned that consumers might hire away agency workers and about the possible loss of revenue if their PAS clients chose the cash program. As one agency director put it, "Well, good Lord, what if this caught on?" To put this last concern in perspective, one needs to understand that the original goal for the demonstration was to enroll roughly a fifth of all PAS clients served annually in the state.
As planning for the Arkansas cash program neared completion, not all AAAs continued to oppose it. Two AAAs mounted a joint bid to provide counseling/fiscal services in one region of the state, with one of them as subcontractor to the other. This bid was successful, although the AAAs provided counseling/fiscal services only for a short time (for reasons explained in Chapter III).
As noted earlier, the Arkansas Department of Health is also a major provider of traditional PAS in the state. While the director of the Department of Health was generally supportive of the cash benefit, some staff members at lower levels of the organization were resistant, for reasons similar to those of the AAAs.
Arkansas attempted to ameliorate the remaining concerns of the traditional providers. The Cash and Counseling National Program Office hired a prominent Arkansan who had long been involved with home care policy to assist in educating traditional providers and to build support among them. He spoke with executives of a number of the traditional providers.
By the time of our visit to Arkansas in the spring of 2000, the executives of most traditional providers had muted their criticism of the cash program. However, as described in Chapter IV, it appears that home care aides sometimes criticized IndependentChoices in an effort to persuade their clients not to leave traditional services to join the cash program.
b. Advocates
In the beginning, the advocate organizations for adults with disabilities (as opposed to advocates for the elderly) were strong and vocal supporters of Cash and Counseling. Their support waned somewhat over time, however, although they never became critics of the cash program. The erosion of support from these advocates was partly due to the state's decision not to allow payment to spouses as workers in the demonstration program--a decision that incensed one key advocate. The DAAS made this decision in light of the conservative political climate in Arkansas and determined opposition from providers of traditional PAS. At the time, all of the demonstration states, including Arkansas, were also facing lengthy delays in securing approval by the federal Office of Management and Budget (OMB) of the waivers of the Medicaid regulations. OMB's reluctance to grant the waivers was caused, in part, by the request for payment to legally liable relatives, including spouses and parents of minor children, in the demonstration program. (Prohibition of payment to legally liable relatives was later waived, but Arkansas did not reverse its earlier decision not to allow payment to legally liable relatives.)
Erosion of support for a cash program from advocates for adults with disabilities may also have been due, in part, to change in personnel. Early in the demonstration, a key leader of the Independent Living Movement who had actively supported a cash benefit left Arkansas to assume a position in a neighboring state. While the new leadership of the Independent Living Movement was generally supportive of the cash program, it was much less active on its behalf.
Finally, during the design phase for IndependentChoices, the Arkansas legislature authorized a new program to permit family members and friends of adults with disabilities to become Medicaid-certified providers of PAS and thus receive payment for caregiving. (The DAAS also manages this program, known as Alternatives.) Work to secure and implement the new Alternatives program may have blunted interest in IndependentChoices among advocates for adults with disabilities.
The funders and federal regulations--including the terms and conditions of the demonstration waivers--set parameters for the Cash and Counseling Demonstration. Within these parameters, Arkansas made many decisions about all of the major components of the Cash and Counseling model: eligibility and appropriateness, outreach and enrollment, services to be covered by the cash benefit, amount of the benefit, and counseling and fiscal services.
The solicitation for the Cash and Counseling Demonstration permitted states to cash out Medicaid state plan PAS or Medicaid home- and community-based waiver services.
Arkansas had both state plan PAS and waiver services under the ElderChoices program but chose to cash out only the former. It considered also cashing out ElderChoices but decided against that option because doing so would likely strengthen the opposition of the providers of traditional services. Both the AAAs and the Department of Health provided services under the ElderChoices as well as PAS.
After Arkansas had decided to cash out its state plan PAS, it needed to decide which beneficiaries of that program were inappropriate for Cash and Counseling and how to identify them so that they could be screened out. Determining who would be inappropriate for the program proved problematic, for two reasons. First, what characteristics could be used to identify inappropriate cases prior to enrollment? Arkansas initially planned to exclude cases in which consumers were expected to live only a short time, as several weeks were typically required to implement a cash plan. To prevent abuse of the cash benefit, Arkansas also planned to exclude consumers who had a history of substance abuse. However, it seemed unlikely that these two characteristics (terminal illness and history of substance abuse) were sufficient to identify many cases for which the Cash and Counseling program was inappropriate. For example, what characteristics might identify situations with a great potential for exploitation of the consumer? In deciding how to identify inappropriate cases, moreover, Arkansas also had to consider whether the consumer had a representative available to manage the cash benefit. Would the state require representatives in certain cases, and, if so, how were these cases to be identified? What criteria, if any, would be used to determine if a proposed representative was suitable to manage the cash benefit? Would an individual be permitted to serve both as a representative and a worker under the cash program? Would the state limit the use of representatives if the consumer appeared able to manage the cash benefit without assistance?
The second problem that arose was the legality of excluding those the state believed to be inappropriate. A structured process denying participation might not be legally defensible and thus open the state to liability if a consumer chose to contest exclusion from the program. For example, denying participation to someone because he or she had once been an alcoholic might not be defensible, regardless of the state's desire to prevent abuse of the cash benefit.
After considerable effort--much of it in concert with the other Cash and Counseling states, Arkansas abandoned the attempt to develop a formal process to exclude inappropriate cases. Instead of formal criteria and a formal, structured screening instrument, the states developed a process of self-screening for consumers and representatives. Arkansas developed two forms for this process. The first guided consumers as they thought about the responsibilities they would be taking on and encouraged them to assess their ability to carry out these responsibilities. The second form laid out the duties of a representative and was to be signed by those taking on this role. (Appendix A presents these forms.) Working in conjunction with the other Cash and Counseling states, Arkansas decided not to adopt a formal process for determining when a representative was required; nor did it adopt formal criteria to determine whether a given person was appropriate as a representative. Arkansas did specify that the same individual might not serve as both a worker and a representative. Serving as both a worker and a representative created a possible conflict of interest, since the representative's responsibilities would typically include signing worker time sheets and supervising worker activities. (Chapters V and VII discuss Arkansas' experience with this self-screening process.)
Outreach to the community was necessary to promote awareness of the Cash and Counseling Demonstration and to increase interest in participation. To be most effective, outreach had to focus on those eligible to enroll so that outreach and enrollment could be coordinated.
The state had to make two interrelated design decisions with respect to enrollment: (1) when these processes were to take place, and (2) who would be responsible for them. (These decisions, in turn, drove the optimal design for outreach.) The basic options for timing of enrollment were to allow consumers to enroll at any time or to require them to enroll at their periodic assessments for PAS. The basic options for responsibility for enrollment were for the state (or its designee) to contact beneficiaries directly or to rely on organizations already serving the target population. In the latter case, outreach might also be assigned to these same organizations. These options are considered in more detail next.
Enrollment at assessment (that is, as ongoing recipients of PAS are reassessed to determine the need for continuing care and as new applicants are assessed) had two important advantages. First, the care planning immediately following assessment was the source of the information needed to determine the amount of the cash benefit. Second, enrollment at assessment would generally spread enrollment over time and thus made the process more manageable for state staff. On the other hand, restricting enrollment to the time of assessment was problematic if outreach was to be conducted through direct contact with beneficiaries. If beneficiaries were required to wait for several months before being allowed to enroll, they were likely to lose interest in the cash program altogether.
Responsibility for outreach might be vested in providers of traditional services, other types of organizations, independent assessors under state contract, or state employees. Providers of traditional services might readily couple enrollment with assessment, as the latter is often their responsibility. For example, those conducting assessments might explain the cash program and leave reading materials on the program with the consumer. Consequently, relying on traditional providers to conduct outreach might be more efficient than independent contracting or hiring state employees--other things being equal.
However, objectivity, as well as efficiency, was an important consideration in selecting an approach to enrollment in the cash program. Staff members at traditional agencies in Arkansas who were resistant to the cash program might influence consumers not to participate. In addition, some independent assessors might perceive the cash program as threatening their professional norms (as was true for some in the traditional agencies). On the other hand, in an effort to reach enrollment targets, state employees might "oversell" the cash program to consumers who had limited interest in receiving a cash benefit.
Because of the opposition of the providers of traditional PAS services, Arkansas decided not to give responsibility for outreach or enrollment to these providers, and it divorced outreach and enrollment from the assessment process for which these providers were responsible. To identify interested consumers, Arkansas relied instead on direct mailings to consumers and on publicity, both of which invited consumers to telephone program staff for more information if they were interested in participating. Since interested consumers were required to take the initiative by making contact with the program, the state called its approach to outreach and enrollment, the "bubble up" approach. Consumers were allowed to enroll at any time, without regard to the assessment cycle. Staff members of traditional programs were not even asked to distribute material on the cash program. Arkansas also hired nurses as state employees to conduct community outreach and to enroll participants in the demonstration, thereby keeping close control of that function. Chapters IV and V describe the implementation of outreach and enrollment in Arkansas.
The solicitation for the Cash and Counseling Demonstration insisted that states permit the cash benefit to cover a broad range of goods and services--provided that the goods or services helped consumers to function more independently. The solicitation did not envision a Cash and Counseling program that provided unfettered cash, as in an income supplement program. Rather, it anticipated that consumers would be allowed to purchase only certain types of goods and services.
One key issue that arose with respect to the cash benefit was the method by which purchases would be authorized. With little debate, all of the Cash and Counseling states decided to require consumers to develop cash management plans indicating how the benefit was to be spent. There was considerable debate, however, on the procedures for review of cash management plans. A state might require its staff to review all cash plans or delegate authorization to do so to counselors (or their supervisors). Arkansas drew up a list of goods and services clearly covered by the cash benefit. The state permitted counselors to authorize the purchase of any goods or services listed, with review by state staff of any unlisted goods or services. The state wanted to limit its responsibility for review of care plans in the demonstration because it judged that state review would not be workable in an ongoing cash program were Arkansas to adopt one following the demonstration.
During the development of a cash management plan, the availability of goods and services from other public sources needed to be taken into account. It was not in the consumer's interest to use the cash to purchase services that were already available at no cost. Not only did the client incur an unnecessary expense if he or she purchased such goods or services, but the other program might be better able to assist the client. For example, a program focusing on equipment could offer advice on what type of equipment was best under different circumstances. To address this issue, Arkansas had counselors advise consumers about the goods and services available under other public programs during the development (and later revisions) of the cash management plan.
Another key issue was who would be eligible to be hired as a worker. As discussed earlier, Arkansas chose not to permit the hiring of spouses with the cash benefit, although that was allowed under the federal waivers for the demonstration.
In a cash program, the amount of benefit may depend on the consumer's level of need or on the level of an existing benefit. Using the existing benefit level is not an option for those new to the traditional program.
Arkansas based the amount of the cash payment on the level of need--defined as the number of hours of care authorized in the existing care plans of current clients of the Medicaid personal assistance program and on newly developed care plans for applicants. These care plans were designed to supplement any care being provided by family members or friends. Nurses employed by traditional providers were responsible for developing care plans for their clients. Instead of having traditional providers develop care plans for new applicants who were interested in the cash program, Arkansas had the outreach/enrollment nurses employed by the state do so. This approach limited the opportunity for traditional providers to dissuade consumers from participating in the cash program.
The timely availability of the information needed to set the cash benefit level was also an issue. Prospective participants cannot be expected to make a commitment to participate in a demonstration of a cash program without knowing the amount of cash they would receive under the program. Arkansas' solution was to request that the traditional agency fax a copy of the current care plan to the outreach/enrollment nurse before the initial enrollment visit. The nurse then calculated the cash benefit level from the hours in that care plan.
A major issue that arises in any program using care plans to set cash benefit levels concerns differences between the amount of service planned and the amount actually received. The amount of service received is generally less than the amount planned. (The care plan typically represents the maximum amount of care authorized; thus, the amount of care received does not exceed the amount planned.) Because the cost of the care received is generally less than the cost of the care planned, a discount rate must be applied to ensure that the costs of the cash program do not exceed the costs of the traditional program if the level of the cash benefit is to be based on care plans.
Care received is generally less than care planned for a variety of reasons. A client may be unexpectedly hospitalized and thus not available when an aide arrives. A home care aide may not appear for work when expected, or an agency may be unable to find enough workers to provide the care it had planned. Agencies sometimes plan for somewhat more care than they expect to render so that they can increase the amount of care without revising the care plan if the client's needs increase. That is, the total hours planned included a "hedge" against possible future increases in need.
Determining the discount rate needed to achieve budget neutrality can be difficult. The ratio of the cost of care received to care planned may differ for agencies and individual clients. As a result, using a single discount rate for all agencies and all clients may unfairly penalize some cash program participants. In addition, those interested in participating in the cash program may receive a different proportion of the care planned for them than participants in the traditional program as a whole. Yet, as a practical matter, those interested in participating in a cash program cannot be identified in advance so that a group-specific discount rate can be prepared.
Moreover, the discount rate needed to achieve budget neutrality may change over time as a result of changes in the ratio of the cost of care received to care planned for participants in the traditional program. That is, the appropriate discount rate may be a "moving target." The ratio of the cost of care received to care planned could change as a result of changes in home care policy or of changes in the home care industry. For example, a particular subgroup of clients might leave the traditional program for a new personal assistance program (such as Arkansas' Alternatives). In such a situation, the ratio of the cost of care received to care planned for the remaining clients of the traditional program could differ from the ratio prevailing before the new program was instituted. With changes in the business cycle, the unemployment rate might fall, causing the supply of aides to become more limited or the reliability of the aide workforce to fall and result in more "no-shows." Either type of labor market change could affect the ratio of the cost of care received to care planned, at least until agencies adjusted their care planning to conform to the changes in the labor supply.
Arkansas devoted considerable effort to developing a discount rate. Because it believed that some agencies had historically set care plan hours higher than other agencies, the state developed agency-specific rates. State staff collected care plans for samples of clients from agencies throughout the state. For the sample individuals, they compared the cost of care received during the period covered by the care plans to the cost of care planned. Because some smaller agencies did not respond to the state's request for care plan data, all smaller agencies were grouped and assigned a single discount rate. The discount rates ranged from 70 to 91 percent.
For those new to the Medicaid personal assistance program, Arkansas applied a minimal discount rate (91 percent) to the hours in the care plans developed by its nursing staff to determine the cash benefit level. It selected the rate at the upper end of the range that it observed among traditional agencies because its enrollment nurses were trained to plan for current care needs only, whereas (as discussed earlier) some traditional agencies apparently had been building in a hedge against possible future increases in need.
The discounted care plan hours were cashed out at $8.00 per hour. The difference between $8.00 and the hourly rate the state paid to traditional providers ($12.36) was used to cover the cost of counseling/fiscal services.
Arkansas faced several major issues concerning counseling and fiscal services. The state had to decide what counseling and fiscal services would be offered, how these services would be organized, and how they would be paid for.
a. What Services to Offer
Many features of counseling/fiscal services are intended to help consumers and may be used at their discretion. Others are intended to prevent abuse of the cash benefit and exploitation of the consumer and are mandatory. Arkansas had to decide which features of counseling/fiscal services would be offered and which would be mandatory. In particular, counselor assistance with development of the cash management plan might be discretionary, while counselor review and approval of the uses of cash might be mandatory. Counselor assistance with recruiting, hiring, training, and supervising workers might be discretionary, but the state might require that the fiscal entity prepare the appropriate tax and unemployment insurance forms (or ensure that the consumer did so). Periodic counselor contact with consumers might be mandatory to prevent abuse and exploitation, but the nature and frequency of such mandatory contact had to be determined. Furthermore, if a consumer declined to use fiscal services, the state might require that he or she pass a test on preparation of payroll documents to ensure that federal and state tax liabilities were met.
In addition to these basic services, a counseling/fiscal agency might perform a number of other services for consumers. These include maintaining a worker registry to help consumers identify workers to hire, assisting in securing background checks for potential employees, maintaining staff to serve as back-up workers if a consumer's regular workers are unable to care for him or her, and maintaining a peer support group. Counselors might also be responsible for enrollment and for reassessment of changes in the care needs of participants in the cash program.
The Arkansas design for IndependentChoices made three aspects of counseling/fiscal services mandatory. First, counselor review was required for the proposed initial cash plan and all subsequent proposed changes in the uses of cash that were inconsistent with the cash plan. Second, counselors were required to visit consumers quarterly and call them monthly to monitor their circumstances and use of the cash benefit. Third, consumers who chose not to use the fiscal services for preparation of payroll taxes and other documents were required to demonstrate knowledge of the preparation of these documents.
With respect to additional services, Arkansas required that counselors conduct reassessments for participants in the cash program but did not require counseling/fiscal agencies to provide background checks, a worker registry, back-up workers, or a peer support group. As indicated earlier, Arkansas hired state employees to conduct outreach and enrollment.
b. Organization of Counseling and Fiscal Services
Arkansas faced a number of options in deciding how to organize assistance for consumers receiving the cash benefit. First, it could separate counseling and fiscal functions, assigning them to different organizations, or combine counseling and fiscal functions in a single host organization (the Spectrum model). The major argument for separating the counseling and fiscal functions is the difference in the expertise required. The major argument for combining counseling and fiscal functions is that they are so closely linked that combining them enhances efficiency.
Second, Arkansas could choose to have one host organization serve the entire state (for counseling, fiscal services, or both) or to have regional host organizations. Having one host organization may take better advantage of economies of scale. If the consumer is to have an opportunity to choose among providers of assistance, however, multiple host organizations must be available. Moreover, a single host organization might not be able to cover all parts of a state. If Arkansas decided to have separate entities providing fiscal and counseling assistance, it might choose different numbers of host organizations for the two types of functions--such as a single statewide fiscal entity but multiple counseling entities from which consumers were allowed to choose.
Third, Arkansas could choose to integrate counseling and fiscal services with similar services already provided by existing organizations, or it could develop organizations whose primary or sole function was to provide counseling or fiscal services. The major arguments against integration were that the philosophy of consumer direction might conflict with the philosophy of existing organizations and that responsibilities for existing services might conflict with the assumption of new responsibilities under the cash program. These arguments seem to apply chiefly to counseling services. Thus, if Arkansas chose not to combine counseling and fiscal functions, it might develop separate organizations to offer counseling but integrate cash program fiscal services with existing fiscal services.
Arkansas chose to combine counseling and fiscal services. The state believed that combining these services would be advantageous because many counselor duties relate to uses of the cash. It also believed that the state could monitor the counseling/fiscal agencies more easily if the two functions were combined, since its travel and administrative costs would be reduced. While Arkansas permitted the integration of counseling/fiscal services into organizations already providing similar services, it was also open to the development of separate organizations.
Arkansas split the state into four regions and planned for a single agency providing both counseling and fiscal services in each region. It recognized that this approach limited consumer freedom of choice but noted that consumers were free to change counselors (within the counseling agency) if necessary. In addition, the state provided a toll-free number for complaints.
Arkansas based the regions for the cash program on the regions electing members to the U.S. Congress, modified to contain roughly equal numbers of PAS recipients. Arkansas deliberately picked regions that were not contiguous with the regions served by the eight AAAs in the state. By doing so, Arkansas ensured that AAAs would have to cooperate with one another to be selected to serve as host organizations for counseling/fiscal services.
c. Paying for Counseling and Fiscal Services
Another issue that Arkansas faced in designing the Cash and Counseling program was how to pay host organizations for the counseling and fiscal services they provided. First, the state had to decide whether the consumer was to be charged for nonmandatory services. For example, were consumers to be charged a monthly fee for bookkeeping and tax preparation if they chose to use fiscal services? The major argument against such consumer charges was that it might discourage consumers from using a service despite its benefit to them.
Second, Arkansas had to decide how to structure its payment for counseling/fiscal services. The basic options were a fee-for-service or capitated approach. One important issue regarding a capitated approach was that the level of counseling services required by a given consumer might decrease over time as he or she (or a representative) mastered the responsibilities of an employer. Under either a capitated or fee-for-service approach, it might be feasible to pay for some specific services under another authority, rather than including them in the blanket payment for counseling/fiscal services. For example, reassessment might be paid for as a separate Medicaid service, rendered by staff of the counseling entity or by someone outside of the cash program.
Arkansas decided in favor of a capitated approach to payment for counseling/fiscal services. The payment (labeled a management fee) fell over the course of two years, from a high of $115 a month during the first six months following demonstration enrollment to a low of $75 a month during the last six months of the two-year period.4 Because it wanted consumers to avail themselves of the counseling and fiscal services, Arkansas did not institute a consumer charge for bookkeeping and tax preparation services. In the next chapter, we describe the counseling/fiscal agencies that Arkansas selected.
The selection of the agencies to provide counseling and fiscal services marks the transition from the design of Arkansas' Cash and Counseling Demonstration to its operation under the program name of IndependentChoices. In this chapter, we describe the process Arkansas used to select counseling/fiscal agencies, the agencies themselves, and the procedures the state used to ensure the quality of counseling and fiscal services.
Arkansas issued a formal solicitation to select its counseling/fiscal agencies. The solicitation listed several criteria pertaining to the organization's business and fiscal experience. To help eliminate organizations that might not be viable, acceptable bidders were required to have been in business at least two years. Furthermore, they had to have a minimum of two years of experience in keeping payroll records and maintaining the confidentiality of these records. Acceptable bidders also had to have a certified public accountant available to consult with them about fiscal issues. Finally, bidders were notified that they would be required to provide a substantial financial bond if they were selected as a counseling/fiscal agency.
Arkansas also tried to use the formal solicitation process to ensure that successful bidders were committed to IndependentChoices. The solicitation indicated that the successful bidder would be required to send staff members to training sessions on the cash program before beginning to receive payment under the program.
Four proposals were received. The number of bidders may have been limited by the requirement to post a bond and by uncertainty about the number of clients who would choose to participate, leading to uncertainty about the cash flow to the counseling/fiscal agency under the cash program.
Awards were made to three bidders. (The fourth bidder, an Independent Living Center, was eliminated immediately because it proposed a management fee that exceeded the maximum provided for in the solicitation.) One of the three successful bidders was an Area Agency on Aging (AAA). The other two successful bidders were also organizations providing human services.
Despite the criteria in the solicitation emphasizing experience with payroll records, none of the four bidders specialized in payroll processing, and none proposed such companies as subcontractors. An organization providing fiscal services in other states had expressed some interest in submitting a bid as a subcontractor. While representatives of this group attended the bidder's conference, the group did not join in a proposal. Possibly, the requirement that counseling and fiscal services be combined discouraged bids from organizations with more fiscal expertise but little or no human service expertise, as a joint bid would be required in that situation.
One of the successful bidders to become a counseling/fiscal agency was a for-profit agency specializing in the provision of rehabilitation therapy. Staff members included health care professionals trained in speech, occupational, and physical therapy and in nursing. This agency was faced with cutbacks in the Medicare home health program and was looking for other business opportunities. It did not provide traditional Medicaid personal assistance services (PAS).
Another successful bidder was a nonprofit organization providing a variety of supportive services to children and to adults of all ages in an isolated and underserved rural county. Among its programs were infant day care, a school serving able-bodied children and children with physical disabilities, health care screening for children under Medicaid, and a small program providing traditional Medicaid PAS for adults. This organization responded to the IndependentChoices solicitation because it was looking for opportunities to expand services to individuals with disabilities and the elderly in the county it served. The counseling staff at this agency had a human services background, including extensive work in programs to help people with disabilities function independently.
The third successful bidder was the AAA, also a nonprofit agency, and a provider of Medicare home health care and traditional Medicaid PAS. (A second AAA was a subcontractor.) The AAA nursing staff members were to serve as counselors for the cash program in addition to their duties as case managers for the agency's Medicare and Medicaid programs.
The AAA withdrew from the cash program a few months after operations began, citing difficulty in maintaining cash flow. While the AAA had bid the maximum management fee allowed in the solicitation, the caseload in the cash program--and, consequently, the agency's cash flow from IndependentChoices--was small at that time. In addition, the agency had been experiencing financial difficulties as a result of federal reductions in coverage for another of its services, Medicare home health care. Its director did not want more financial risk.
Other factors also may have figured in the decision of the AAA to withdraw from the cash program. The AAAs are peer agencies that generally do not subcontract with one another, and the new relationship proved managerially cumbersome. In addition, the AAA nurse case managers might not have been committed to the cash program. State program staff perceived the behavior of the nurse case managers as "too prescriptive" and thus not in keeping with the philosophy of consumer direction. The slow buildup of cases once operations started may have contributed to this problem, as a nurse case manager may not have received his or her first cash program case until a number of weeks after completing training for IndependentChoices.
When the AAA withdrew, Arkansas asked one of the other counseling/fiscal agencies to expand its operations to include the region of the state that the AAA had been serving, and the agency agreed to do so. This agency was already serving two other regions in Arkansas, since the state had asked it to serve a region not covered by the three acceptable bids submitted. (Each of these three bids covered only one region of the state.) Expansion may not have been an option for the other counseling/fiscal agency, as the focus of its host organization was service to a particular county.
Consequently, for most of the demonstration, one counseling/fiscal agency served one region of Arkansas (roughly, the northeast quadrant), and another agency served the other three regions (the bulk of the state).
To ensure the quality of counseling/fiscal services, Arkansas provided training and technical assistance, established performance standards, and monitored agency performance relative to those standards.
Before operations under the cash program began, Arkansas provided training for counselors, with state program and enrollment staff members serving as trainers. While the training covered the philosophy of consumer direction, its focus was on procedures under IndependentChoices. For example, the curriculum covered the regulations on payroll taxes so that counselors could explain these responsibilities to consumers interested in managing their own cash benefit.
The state also gave the counseling/fiscal agencies considerable technical help in fiscal issues. This was necessary, as none of these agencies was sophisticated with respect to accounting or tax preparation. To assist the agencies with fiscal issues, Arkansas identified a certified public accountant who had extensive experience working with small organizations. He set up a basic chart of accounts and identified accounting software (Peachtree) that supported treating each consumer as a separate "minibusiness," with his or her own chart of accounts and income statement. Each consumer must be considered separately because separate payroll tax forms must be filed for each (as required by the U.S. Internal Revenue Service [IRS]). Both of the counseling/fiscal agencies adopted Peachtree as their accounting software, making it easier for the state to monitor their activities.
In addition, the National Program Office for the Cash and Counseling Demonstration assisted all the states and their counseling/fiscal agencies with fiscal issues. First, the National Program Office hired a consultant to work with the IRS on behalf of all of the demonstration states to resolve issues pertaining to the appropriate tax forms to be filed by a fiscal agent on behalf of a consumer. The National Program Office also hired a consultant to develop a consumer manual on federal and state fiscal issues (such as federal payroll taxes and state unemployment compensation regulations). This consumer manual was tailored to the laws and regulations of each state.
During training and the initial weeks of program operations in Arkansas, state program staff honestly discussed issues about which the state staff was uncertain with counseling/fiscal agency staff. Examples of such issues included the speed with which the caseload would build and the effects of the opposition of the traditional agencies. Counseling/fiscal agency staff reported that they appreciated the state's candor.
The IndependentChoices contracts for the counseling/fiscal agencies provided a number of standards to ensure the quality of counseling and fiscal services. Under IndependentChoices, counselor caseloads were limited to a maximum of 75 consumers (the typical caseload for case managers in the United States is about 50). Notice was required if a counseling and fiscal agency would not be able to complete an initial home visit with a consumer (to begin to develop the cash management plan) within seven days of receiving the referral. The contracts with the counseling/fiscal agencies required that the counselor meet with the consumer face-to-face at least once a quarter (this requirement was later relaxed). The contracts also required that the counseling/fiscal agency also maintain a complaint log, which was reviewed during on-site monitoring visits by state staff. This was in addition to a statewide toll-free number for complaints and a state-maintained complaint log. Finally, the contracts provided for an audit of the agency's financial records by a certified public accountant. The chief purpose of the audit was to ensure that funds were not being diverted from consumer accounts.
The two counseling/fiscal agencies organized their staff in similar ways, with some minor differences.
The counseling/fiscal agencies added counseling staff members over time, as caseloads increased. At the time of our visit, the smaller counseling/fiscal agency had two full-time counselors on its staff, and the larger agency had three full-time and three part-time counselors. One of the latter was also the counseling supervisor; the two other part-time counselors worked for the agency primarily on weekends.
In both of the counseling/fiscal agencies, counselors initially had separate caseloads. That is, they were assigned to assist different consumers. However, it soon became clear in both agencies that maintaining separate caseloads was unworkable. Consumers called to speak to a particular counselor, only to find that he or she was out in the field seeing another consumer. In addition, since caseloads were initially assigned as consumers enrolled, the homes of consumers in a given counselor's caseload were generally scattered across a wide area, making it difficult for the counselor to visit several consumers in his or her caseload during a single day. Both of the counseling/fiscal agencies moved to a shared-caseload approach. At one agency, a counselor kept a consumer until a couple of weeks after the cash benefit started. Thereafter, at the counselor's discretion, that person was moved to the shared caseload.
The shared-caseload approach had two major advantages. First, all counselors knew all the consumers and could respond to telephone calls from any of them or visit any of them (if nearby). Consequently, efficiency was increased as telephone tag and travel time were reduced. Second, the shared-caseload approach allowed counselors with particular expertise to respond to issues related to their area of expertise. For example, a counselor who was a nurse was relied upon when more complex health issues arose, and the speech therapist was expert on communication techniques. Case Example III.1 describes how the speech therapist brought these skills to bear. This second advantage of the shared-caseload approach is less likely to apply to very small counseling/fiscal programs, as they are less likely to have counselors with a variety of areas of expertise.
| Case Example III.1: Value of
Speech Therapy in Counseling The speech therapist had been trained in communication and cognitive therapy. She could analyze learning styles and employ different teaching approache |