Feasibility of Expanding Self-Directed Services to People with Serious Mental Illness. 1.1. Background


Early Self-Directed Care Programs

The concept of consumer self-direction or "consumer direction" emerged out of the independent living and disability rights movements.4, 5, 6 A tenet of these movements is that persons with disabilities can live successfully in community settings if they are given adequate supports in the form of personal assistance services, assistive technologies, home modifications, and various other enabling products and services. Advocates also maintain that persons with disabilities should be afforded as much independence and autonomy as possible in decisions about the types, amounts, and sources of the personal assistance services they receive. Independence and autonomy in decision-making are thought to be critical in order to achieve the highest quality of care and the best match between the services that are provided and consumers' service needs,4 especially given that consumers' needs are constantly changing as their health status and life circumstances change.

Similar themes have been a mainstay of mental health consumer movements at least since the 1960s and "deinstitutionalization."7 Indeed, mental health advocates have consistently endorsed greater independence and control over treatment decisions by persons receiving mental health services.8 A contemporary statement of this position can be found in the 2003 final report of the PNFC on Mental Health.3 The PNFC concluded that autonomy and person-centered care are essential for successful transformation of the mental health service delivery system. Moreover, services must be geared to give consumers "real and meaningful choices" about treatment options and providers and must "not be oriented to the requirements of bureaucracies."3

The first generation of SDC programs predominantly served persons with developmental or physical disabilities. In 1993, the Robert Wood Johnson Foundation (RWJF) provided funding for the New Hampshire Self-Determination Project, a demonstration program for persons with developmental disabilities that included individual budgets and person-centered planning.9 The program enrolled 45 individuals and their families. In an independent project evaluation, Conroy and Yuskauskas compared 27 participants' quality of life at 18 months after they entered the program to quality of life at program entry.10 At 18 months post-entry, participants reported significantly greater quality of life in all domains except family relationships.

The RWJF subsequently funded self-determination initiatives in 18 additional states. Each state designed and implemented its own unique SDC model, but all the models included core elements such as person-centered planning, individual budgets, and personal assistance to help consumers manage their service plans. An independent pre-/post-entry evaluation of consumers' outcomes in six states' programs showed mixed findings across outcome domains and states.11 The most consistent finding was a significant improvement in consumers' quality of life. In a system-level evaluation of the RWJF self-determination initiatives,12 it was found that participants in some states had better options in relation to personal assistance services than did participants in other states, a consequence partly of state-specific policies that pre-dated implementation of the self-determination initiatives. As a result, the overall success of each RWJF self-determination initiative may have been impacted by many system features specific to the geographic locations of the programs.

Cash and Counseling

The Cash and Counseling Demonstration and Evaluation Project13 provided the first rigorous comparison of a SDC model to traditional care for disabled Medicaid enrollees. Beginning in the mid-1990s with grants from the RWJF and the Office of the Assistant Secretary for Planning and Evaluation (ASPE), the Cash and Counseling Demonstration was an experimental trial of the SDC approach for adults with disabilities, elders and children with developmental disabilities. Participants at program sites in Arkansas, Florida, and New Jersey were randomly assigned either to Cash and Counseling or to traditional agency services. Participants in the Cash and Counseling group received individual budgets, access to financial counseling, and other administrative supports.

The Cash and Counseling Demonstration and Evaluation Project resulted in several key findings.14, 15, 16, 17, 18, 19 Participation in Cash and Counseling resulted in fewer unmet personal care needs, greater satisfaction with services, and greater overall life satisfaction compared to participation in traditional agency services. Participation in Cash and Counseling also resulted in similar, and in a few respects, better health outcomes on average compared to agency-based care. Largely by increasing access to paid care, Cash and Counseling also increased home care expenditures. This increase was partially offset by savings from lower Medicaid expenditures for nursing home and home health care. However, total Medicaid expenditures per participant were greater in Cash and Counseling than in traditional agency care: the median differential over the first 2 years after enrollment in Cash and Counseling was 8 percent, with a range of 4-14 percent across states and target groups.19

Cash and Counseling also benefitted family caregivers. Caregivers were more satisfied with and confident in the care they provided and reported greater life satisfaction and better health compared to the caregivers of consumers receiving agency care.17 Monies paid to family member caregivers by participants for services rendered likely accounted for some proportion of these beneficial effects, though the magnitudes of these effects could not be quantitatively determined. The Cash and Counseling Demonstration and Evaluation Project led to the replication of Cash and Counseling sites in an additional 12 states beginning in 2004.13

Mental Health Self-Directed Care Programs

The first mental health SDC program (i.e., the first SDC program designed for persons with mental health disabilities), Florida SDC, was started in 2002 in northeastern Florida.20 Mental health SDC programs for persons with SMI were later formed in at least seven other states: Iowa, Maryland, Michigan, New Hampshire, Oregon, Pennsylvania, and Texas.a This initial wave of pilot and demonstration mental health SDC programs may or may not provide exemplary models for future implementations of mental health SDC on a larger scale. All of these programs put together have had only approximately 1000 participants, some of the programs were in operation less than 5 years before being disbanded, and very few programs used Medicaid as their primary source of financial support. These programs and the results of related program evaluations and other research will be described later in this report.

In mental health SDC programs consumers direct their own treatment planning and have control over an individual budget. Individual budgets may be used to purchase both traditional and non-traditional mental health goods and services, including professional training and education, transportation, clothing, gym memberships, and potentially many other types of goods and services. This authority to plan the spending of money allocated for one's treatment and to purchase non-traditional mental health goods and services, even if these goods and services are not reimbursable under a traditional reimbursement system, separates SDC from other person-centered mental health service delivery approaches. Another core attribute of SDC is that SDC program participants are permitted to contract for services with essentially any willing provider of a service, regardless of whether that provider would ordinarily qualify for reimbursement from Medicaid or managed behavioral health care plans.

The SDC approach could help address some of the most critical sources of consumer dissatisfaction with mental health care. It may permit consumers to circumvent rigidities in mental health payment systems that have historically impeded integration of mental health with substance use treatment and physical health care services; limited consumer choice of providers, services, and medications; prevented consumers from obtaining those supports that may be needed to live independently in the community; and discouraged innovation in service delivery, including greater adoption of recovery oriented services and practices.3, 21

Public mental health payment systems in many cases are not sufficiently flexible to accommodate individuals' preferences for providers and services and may stifle innovation in service delivery. With the aim of instituting uniform standards and public accountability, states and the Federal Government traditionally stipulate regulatory (e.g., professional training and licensing) requirements that mental health care providers must satisfy in order to be eligible for reimbursement for the care they provide. In addition, public mental health systems usually specify the services that can be provided, the schedule of fees paid to providers, the frequency of service encounters, and other aspects of mental health treatment. These rules often become restrictive over time because they do not change quickly or at all in response to scientific advances in mental health intervention, evolving conventions of best clinical practice, or changes in consumers' preferences. As a result, in traditional systems, consumers and their providers may be aware of newer, better, or preferred treatment modalities but are effectively prevented from accessing them due to rigidities in payment systems.

One situation that exemplifies the challenges resulting from payment system rigidities is the slow development of medical homes and other services that integrate supports needed by persons with co-occurring chronic mental and physical health conditions. Chronic medical conditions contribute to overall disability in at least half of all persons with mental health disabilities.24 Although the need for integrated primary care models, care coordination services, in-home supports, and other services for persons with complex mental and physical health conditions is widely recognized by health care providers and experts, payments for integrated physical-mental health care services in many systems are either prohibited or severely restricted. As a result of the greater purchasing flexibility in SDC, participants in SDC programs would, in principle, have an opportunity to re-direct mental health spending from traditional outpatient programs to innovative programs that offer integrated mental health and physical health care services.

In addition, the greater degree of discretion and flexibility offered by SDC to switch from one care provider to another could help promote "shared decision-making" in mental health clinical encounters.23 "Shared decision-making" denotes an interactive process in which clients and practitioners collaborate to make health care decisions.23 Evidence from research indicates that although many persons with SMI would like to participate actively in decisions about their psychiatric care, especially in relation to selection and use of psychiatric medications, most rate their current roles in decisions about psychiatric care as "passive."25 Mentalhealth SDC programs could alter the dynamics of interactions between mental health providers and clients, because SDC in principle expands participants' opportunities to change providers. The option to "fire" one's provider theoretically should improve clients' bargaining power with providers, and consequently would be expected to result in clients having greater input into decisions, if they so desire.

Health Care Reform and Medicaid

The numbers of public sector mental health care consumers will continue to grow in the next few years, as millions of additional Americans will obtain public health care coverage under the 2010 Affordable Care Act (ACA). The Congressional Budget Office estimates that by 2016 an additional 16 million non-elderly persons will enroll in Medicaid and the Children's Health Insurance Program (CHIP), raising the total number of non-elderly participants in these two programs to 51 million in 2016 from 35 million today.26 Based on these projected enrollments and the prevalence of persons with serious mental health problems in the uninsured population, it has been estimated that he number of non-elderly adult Medicaid enrollees with one or more serious mental health problems may nearly double (an estimated increase of 1.988 million persons or +91.5 percent), from 2.174 million to 4.162 million persons.27 SDC and other person-centered service delivery models may prove to be instrumental in managing the resulting growth in public mental health services utilization and in aligning the availability of services and providers with consumers' needs and preferences.

The 2010 ACA also creates new opportunities for financing SDC in public mental health systems. Using the 1915(i) Medicaid State Plan Option of the Social Security Act (SSA), a section first introduced as part of the 2005 Deficit Reduction Act, states can use Medicaid to reimburse providers of innovative HCBS without requiring that participants have an institutional level of need for care and without having to demonstrate that service expansions will be budget-neutral to Medicaid. However, few states have utilized the 1915(i) mechanism since it became law in 2005. The 2010 ACA removed regulatory barriers that may have prevented some states from using the 1915(i) mechanism. It also stipulated that states' 1915(i) plans must include a person-centered planning process and participating consumers should be offered the opportunity to self-direct some or all of their HCBS.28

The 1915(k) Community First Choice Option, which was added to the SSA by the ACA, is a new state plan option for the provision of community-based long-term care services in Medicaid to persons with incomes up to 150 percent of the federal poverty line who have an institutional level of need for care. Consistent with the decision of the 1999 U.S. Supreme Court in Olmstead v. L.C., this option will permit states to develop or enhance a comprehensive system of long-term care services and supports in the community rather than in institutions. States that utilize this option must offer choice through person-centered planning and self-direction.

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