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Lessons from the Implementation of Cash and Counseling in Arkansas, Florida, and New Jersey

Publication Date

U.S. Department of Health and Human Services

Lessons from the Implementation of Cash and Counseling in Arkansas, Florida, and New Jersey

Executive Summary

Barbara Phillips, Kevin Mahoney, Lori Simon-Rusinowitz, Jennifer Schore, Sandra Barrett, William Ditto, Tom Reimers and Pamela Doty

Mathematica Policy Research, Inc.

June 2003

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 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:


Many people have contributed to this report. Special thanks are due to the members of the Cash and Counseling program staff in Arkansas, Florida, and New Jersey who cheerfully answered our seemingly endless questions. Among them, Deborah Ellis of Arkansas, Lou Comer of Florida, and Carolyn Selick of New Jersey particularly deserve mention.

We are also indebted to the others we interviewed during our visits to Arkansas, Florida, and New Jersey, including senior officials of each of these states, staff of the counseling and fiscal agencies, and representatives of agencies providing traditional personal care.

We would also like to thank Patricia Ciaccio and Walt Brower, who carefully edited the report, and Marjorie Mitchell, who skillfully produced it.

Finally, we are deeply grateful to the people of Arkansas, Florida, and New Jersey who participated in the Cash and Counseling Demonstration, in either the treatment or control group. Without their willingness to join in this endeavor, none of this would have been possible. We have learned much from them.


About 1.2 million people receive disability-related supportive services at home through state Medicaid plans or home- and community-based waiver programs. Under state plans, services traditionally have been restricted to human assistance with personal care and homemaking provided by licensed agencies. Waiver programs have offered additional services, but coverage often has been limited, with a case manager deciding whether services were needed.

In contrast to these traditional service models, states are increasingly offering Medicaid beneficiaries and their families the opportunity to obtain supportive services from individual providers. This alternative is called "consumer-directed" care.

Cash and Counseling is an expanded model of consumer-directed supportive services. It provides a flexible monthly allowance (based on the consumer's care plan or on claims history) that consumers can use to hire their choice of workers, including family members, and to purchase other goods and services. Cash and Counseling requires that consumers develop spending plans showing how they would use the allowance to meet their needs for supportive services. It also provides counseling and fiscal assistance to help consumers manage their allowance and their responsibilities as employers. Consumers who are unable or unwilling to manage their allowance and responsibilities themselves can designate a representative, such as a family member, to help them or do it for them. These features make Cash and Counseling adaptable to consumers of all ages and with all types of impairments.

The Cash and Counseling Demonstration was implemented in three states--Arkansas, Florida, and New Jersey. Based on their experiences, this paper draws lessons on designing and implementing a Cash and Counseling program, to provide information useful to states thinking of adopting such a program.

Outreach and Enrollment. Cash and Counseling programs need the cooperation of agencies that provide traditional supportive services (for example, in obtaining information on care plans). However, outreach and enrollment through agencies that provide traditional home care services creates problems, since such agencies often are not supportive of a cash program.

Direct outreach, which targets eligible beneficiaries, works better than community education in generating enrollment. Family members of beneficiaries are often involved in the decision to participate, so outreach to them can also be useful. Easy-to-understand materials that address the language diversity of the Medicaid population are critical.

Home visits are a necessary part of the enrollment process, but advance preparation can reduce the need for repeat visits. Because family members and friends may serve as workers or representatives involved in the care of the beneficiary, they should be present at the home visit.

Allowing all interested, eligible beneficiaries to enroll is workable but might be costly. Considerable staff time could be required to obtain care plan information and calculate what the value of the allowance would be were the beneficiary to enroll. Enrollment cost per cash recipient will be high if all interested beneficiaries are allowed to enroll, but many of them drop out before receiving the allowance.

The Cash and Counseling model is attractive to substantial minorities of both elderly and nonelderly adults with physical disabilities, particularly the latter. It also appears attractive for children and adults with developmental disabilities.

Representatives. Many consumers need or want assistance with managing the allowance and name representatives, usually relatives already providing care, to help them. The role of the representative varies depending on the consumer's abilities, but consumers and representatives typically share decision making and management of services. Reportedly, nearly all representatives in the three Cash and Counseling programs served consumers' interests. Special forms of monitoring can limit conflict of interest when the same person serves as both a representative and a worker.

Spending Plans and Counseling. Consumer need for help in developing the spending plan does not indicate inappropriateness for a Cash and Counseling program.

Helping consumers develop spending plans can be time-consuming for counselors, and plans must be revised as consumer needs change. Advance preparation minimizes the number of counselor visits required for developing the initial spending plan; flexible plans reduce the need for revision; and software expedites paperwork, partly by minimizing errors in arithmetic.

Initially, counselors could be concerned that they will be held responsible for poor outcomes arising from consumer decisions (as case managers may be). States that initiate Cash and Counseling programs might want to emphasize that this is not the case.

Use of Allowance and Workers. Nearly all consumers use the allowance to hire workers, usually relatives or acquaintances. A Cash and Counseling program can improve access to care by tapping this labor supply.

Consumers who lack a relative or friend to hire often have difficulty recruiting a worker. States may wish to emphasize training counselors to assist such consumers with recruiting or to develop referral mechanisms (such as registries or informal lists of potential workers).

Consumers will terminate the employment of relatives and friends whose work is unsatisfactory. However, they may need support from counselors, especially when firing a worker who lives in the same household.

The flexibility of the Cash and Counseling allowance permits consumers to meet their needs better through the purchase of goods and services not available in the traditional system. Two examples are companion services for consumers with Alzheimer's disease and security systems for consumers with autism.

Fiscal Services. If fiscal services are provided at little direct expense to consumers, nearly all will rely on the fiscal agent for check writing and payroll functions (such as preparing and submitting tax returns). States may wish to encourage or mandate use of the fiscal agent as a means of preventing abuse of the allowance. However, organizations that provide fiscal services might need assistance with cash flow until they reach a "break-even" caseload.

Fiscal agents could have difficulty responding to the consumer's needs--including the need for clear, timely financial statements--especially early in the cash program, when caseloads are small. To help prevent such difficulties, states must, when selecting a fiscal agent, define the responsibilities of the agent and assess the ability of that agent to meet them.

Because the monthly allowance is paid prospectively, consumers will sometimes receive payment for which they have become ineligible. Procedures can be established to minimize overpayments and facilitate recouping of overpayments. Through administrative error, consumers will occasionally overspend their allowance; they can be allowed to reimburse the program over time from future allowance payments.

Prevention of Exploitation and Abuse. Consumer exploitation was very rare in Cash and Counseling. Most cases of potential exploitation were identified at the time of the initial counselor home visit and referred to adult protective services or to the traditional program before an allowance was paid. Periodic telephone calls and visits are adequate to ensure that recipients of the allowance are not exploited as their situations change.

Abuse of the allowance was nearly nonexistent in the three Cash and Counseling programs. Two reviews are critical to its prevention: (1) review of spending plans to ensure they contain only permissible goods and services, and (2) checking time sheets and check requests against plans. The requirement that consumers retain receipts is not needed to prevent abuse of funds managed by the fiscal agent. Though review of receipts could help prevent abuse of cash held by the consumer (including cash for incidental expenses), when the amounts involved are small (as is generally the case), such review may not be an effective use of counselor time.

Structure and Procedures for Counseling and Fiscal Services. Having multiple organizations that offer counseling and/or fiscal services could provide an alternative if one organization withdraws or performs unsatisfactorily. However, consumers do not necessarily value having a choice of counselors within a given area. If they are to do so, consumers must have information on which to base their choice.

Provision of counseling by agencies that provide traditional services is problematic, as such agencies may not be supportive of the program. However, case managers are more likely to support a cash program if they see that it benefits their clients, and may respond to demand from their clients that they provide counseling. States interested in implementing Cash and Counseling programs through traditional networks may need to devote considerable effort to securing the cooperation of these networks.

Full-time counselors appear to be more efficient than part-time ones, but the latter can function satisfactorily. When counselors are full-time, they master the complexities of an allowance program more quickly and are likely to develop their own techniques to assist consumers. However, a counselor can function satisfactorily only so long as his or her caseload is large enough to occupy a substantial portion of his or her time. Similarly, a counseling organization can function satisfactorily only so long as its caseload can keep one or two counselors busy part-time. However, such a situation is not ideal: counseling organizations in this situation struggle to supervise and support their counselors.

The time from enrollment to receipt of the allowance varies considerably; it can be reduced by developing mechanisms to help consumers identify workers (such as worker registries) and by efficient program structure and procedures.

One efficient structure combines counseling and fiscal services in one organization and makes counselors responsible for some fiscal tasks, thereby reducing the need for communication and coordination with respect to these tasks. An efficient approach to the review of spending plans entails (1) giving counselors full authority to approve plans that request only goods and services on a preapproved list, (2) requiring that counselors seek program office approval for items not on the list, and (3) conducting audits to ensure adherence to these procedures.

Program Costs. The costs of a Cash and Counseling program might be constrained in a number of ways. To limit the cost per recipient of the allowance, it might be necessary to "cash out" a care plan at a discount. (Discounting accounts for the fact that some of the services included in traditional care plans typically are not delivered, for example, because a client is hospitalized or an aide turns out to be a "no-show.") To prevent increases in care plan hours for cash recipients, reassessments may be assigned to independent parties rather than counselors, who might act as consumer advocates.

To avoid excessive counseling costs when the completion of the spending plan is delayed (possibly in addition to the cost of traditional services), the payment to counselors to assist with the plan can be limited, for example, by stipulating a fixed payment for that assistance. Costs for ongoing counseling can also be limited, for example, by capping counselor hours.

While improvement in access to care might be an important program goal under Cash and Counseling, overall costs could increase if access to care is improved, even if cost per month per recipient is constrained. Overall public costs could also increase if the availability of an allowance increases demand relative to that for traditional services.

Crosscutting Lessons. States can benefit from technical assistance in implementing a Cash and Counseling program. Assistance with fiscal issues could be the most important.

Cash and Counseling programs can be implemented successfully to serve populations with various disabilities and in various age groups. Moreover, other evidence shows that the great majority of consumers in each of the three Cash and Counseling programs were very well satisfied. While impact results are currently available only for Arkansas, disability-related health outcomes for treatment group members there were at least as good as those for control group members, and treatment group members were less likely to report unmet need and more likely to report satisfaction with their supportive services (Foster et al. 2003).

The states that have experienced Cash and Counseling firsthand have already decided that they want to make the program available permanently to all eligible Medicaid beneficiaries.

The Full Report is also available from the DALTCP website ( or directly at
Location- & Geography-Based Data
State Data
Temporary Assistance for Needy Families (TANF) | Cash and Counseling Demonstration