Case Studies of Six State Personal Assistance Service Programs Funded by the Medicaid Personal Care Option. II. Program History


Oregon began to address the problem of increasing nursing home enrollment in 1975 with a state funded program called Oregon Project Independence (OPI). Prior to this time, limited chore services were available only to people whose incomes were below poverty level, and people who could not access these services ended up in costly nursing homes or state-funded institutions. OPI provided PAS on a sliding fee scale through homecare agencies to people over 60. The program was administered through the local Area Agencies on Aging (AAAs). In 1977, soon after OPI was implemented, the Personal Care Option was added to the state Medicaid plan in order to access federal funding and provide similar services to people of all ages who met income eligibility requirements. This program was administered through the county social service offices. The state also began pre-admission screening, and expanded adult foster care and other community based residential care as an alternative to nursing home placement.

The AAAs and their advisory committees were a natural constituency for expanding and developing senior services, and they became the core of a politically powerful and organized advocacy group by the late 70s. They were instrumental in the passage of nursing home reform and elder abuse laws. These advocates began to address the duplication of effort and lack of coordination among community-based services for seniors, i.e., AAA services (OPI, senior centers, daycare, nutritional programs) and traditional 'welfare' services (Medicaid, personal care, Title XX chore service, adult foster care). The Commission on Aging formally organized the Governor's Commission on Senior Services, comprised of advocates, consumers, administrators and providers, to address these issues.

In the same period, the federal government was also growing concerned with increasing Medicaid expenditures, and was looking at new ways of increasing community based services in order to slow the number of people entering nursing homes. The Administration on Aging and HCFA developed demonstration Long Term Care Development Grants, which freed up institutional funds for community based services. They also created small Flexible Integration Grants (FIG), which provided funds to facilitate the transition to more coordinated service delivery systems. Oregon, which was already addressing these concerns at a state level, was a logical recipient of these funds.

A demonstration project was started in three counties; one county redirected funding using the LTC Development Grant, one county which made structural changes in the administrative system with a FIG, and one county restructured both administration and funding. The combination of integrating administration and targeting expenditures was very successful.

These results encouraged the Governor's Commission to develop legislation which in 1981 integrated the administration of senior services by creating the Senior Service Division of the Department of Human Resources. With this integration underway, the state successfully applied for the first of the new Medicaid Home and Community Based Waivers, a statewide extension of the LTC Development Grants created by the Omnibus Budget Reconciliation Act of 1981.

The new legislation called for a single entry point for all senior and disabled services. The agencies considered most appropriate for this function were the AAAs, but this meant integrating the informal AAA structures with the county welfare system. Most AAAs (90%) agreed to the transition, and in the remainder of the counties district offices were created for Senior Services.

This transition, from the passage of legislation to the creation of a single state agency with offices throughout the state, took place in less than a year. Friction between the major players were therefore inevitable. The state utilized a process called Negotiated Investment Strategy (NIS) within the Governor's Commission to address these concerns. Groups of five people were formed into four "tables" which represented each of the following groups: Senior Services, AAAs, service providers, elderly advocates, and disability advocates. These groups met regularly in full day forums to clarify the roles each group would play in the new system. This process facilitated consensus and clarified policy directions. The Commission continues to meet at least twice a year, and has remained an integral part of the planning, policy, and 36 budgetary process of the state.

In 1985, the Commission helped pass the Nurse Delegation Act, legislation which modified the state's Nurse Practice Act and allowed nurses to train and supervise providers in delivering many paramedical services. This legislation has not impacted the independent providers who provide the bulk of PAS under the waivers, but has allowed for more cost-effective provision of PAS in Adult Foster Homes and other residential programs.

With the implementation of the 1915C Waiver in 1981, the PCS program's caseload dropped to its current level of 300 people. The Waiver was viewed as a more flexible program, which allowed for independent providers as well as contract providers, and set income eligibility at 300% of SSI (rather than 100% for Personal Care). Senior Services has viewed Medicaid Personal Care as a funding fall-back option. If the state didn't have to reapply annually for the 1915C Waiver, Senior Services administrators said they would have phased out PCS altogether.

A special Medicaid 1915D Waiver for people over 65 was implemented in 1987. This has stabilized Oregon's funding: the Federal government apparently cannot deny a 1915D waiver application as it can for the 1915C waiver. The 1915D Waiver does not have the "cold bed" linkage of most waivers, which tie funding to utilization of existing nursing home slots. Funding is instead based on a formula which uses the state's 1976 expenditures for nursing homes as the base level, and then adds a yearly growth factor based upon the consumer price index and an estimate of the growth in the aging population (this generally amounts to 10.5% per year).

In 1988, PCS began to use certified nursing assistants (CNAs) from contract agencies exclusively. PCS has recently (February, 1990) been transferred to the Office on Medical Assistance (OMAP), a separate entity which may serve all divisions of DHR. It is hoped that this transfer will expand PCS in order to develop services for populations currently underserved in Oregon (i.e., children, MR, MI). PCS is already being used to supplement foster care for disabled children in the Children's Service Division (CSD) of DHR, and the use of these funds for children's services will probably increase.

Younger consumers and disability advocates had expressed concern that they had been marginalized by the state's primary focus on elderly people in the development of a long term care system. This was acknowledged in 1989, when the division was renamed Senior and Disabled Services (SDSD). Another table was added to the Governor's Commission representing younger consumers and disability advocates. A more substantive restructuring was begun in the fall of 1990. The "adult transfer" creates a single entry point for younger people with disabilities who prior to this point went to the AAAs and the local welfare offices. The AAAs will now serve people over 60, and Disability Service Offices will serve people under 60. People with disabilities who were receiving social services such as food stamps and cash benefits from the Division of Adult and Family Services (AFS) are being transferred to the Disability Service Offices of SDSD.

This transition was occurring at the time of the site visit, and the state faces some of the same issues in creating Disability Services Offices that they did in creating Senior Services Offices. The roles and expectations of the AAAs, the Adult and Family Services, and the new Disability Service Offices are still being defined. There are logistical problems and philosophical conflicts inherent in the restructuring process, and these have disrupted SDSD services. Nursing home placements have gone up in the past few months, and this is being attributed to new clients being "lost in the shuffle." The SDS is also discovering that 27% of their new clients are eligible for other community-based services, and are bracing for a jump in their caseloads for these services.

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