The Federal Role in the Move Toward Consumer Direction. THE IDEA FOR "CASH AND COUNSELING"

10/01/2000

Interest within DALTCP in sponsoring a social experiment to test the limits of "consumer direction" via the mechanism of a cash benefit--the "Cash and Counseling" Demonstration and Evaluation--arose in late 1994 and early 1995. The impetus for the demonstration can be traced to the long-term-care proposals included in President Clinton's 1993 healthcare financing reform plan. Robyn Stone, who led the Health Care Reform Task Force's long-term-care working group had become, in the fall of 1993, the Deputy Assistant Secretary for DALTCP. Several DALTCP staffers (including Mary Harahan and myself) participated in the working group. Simi Litvak of WID was among a number of temporary consultants from outside the government who joined the working group. WID had long championed a cash benefit alternative to home-care services that would allow individuals who were eligible for publicly funded personal assistance services to become their own "case managers." At the same time, within DALTCP, both Robyn Stone and I had studied the use of cash allowances to finance home- and community-based services in other countries, and Mary Harahan had speculated, since her days as federal manager of the National Channeling Demonstration, about whether, for some percentage of severely disabled elders and their caregivers, a cash benefit or voucher might not be a less costly and more efficacious alternative to a case-managed service package.

The expanded home-and community-based services program that emerged as the key feature of the president's proposed legislation with respect to long-term-care services contained several provisions intended to enhance consumer choice and control. For example, states that accepted funding for these services under the enhanced federal matching rate proposed in the president's plan would also have had to agree to offer services through both consumer-directed and homecare-agency delivery modes. This requirement would have ensured access to a consumer-directed service-delivery model for beneficiaries both interested in and capable of self-directing, but at the same time, it would also have prevented states from pursuing cost-efficiency (or advocacy-driven ideology) to the point of imposing consumer direction on Medicaid beneficiaries who preferred and whose needs could be better met through professionally managed services. The proposed legislation also would have allowed states, at their discretion, to offer self-directing consumers maximum choice and control by providing benefits in the form of a cash allowance in lieu of specific defined services.

By October 1994, it had become clear that the bill containing the president's healthcare and long-term-care reform proposals would not pass Congress. Indeed, it appeared that, in the near term, no fundamental reforms of the long-term-care financing and delivery system were likely to occur at the federal level. Robyn Stone and the DALTCP staff who had served with her on the long-term-care working group began to consider how to prepare for the next round of serious debate about long-term-care reforms, which seemed likely to be postponed perhaps as much as a decade or so into the future. If there was any silver lining discernable in the dark cloud of disappointment following defeat of the president's long-term-care reform proposals, it was that the working group's efforts had brought some exciting ideas to the fore that could benefit from experimental testing, such as allowing states to offer beneficiaries in public programs a cash-benefit alternative to case-managed services for home- and community-based long-term care. Whereas DALTCP's interest in sponsoring a demonstration along the lines of Cash and Counseling grew directly out of the consumer-directed long-term-care reform proposals that were included the president's healthcare reform legislation, we recognize that many others outside the government made seminal contributions. Significant new ideas seldom originate from any single source, nor can they be credited to any one individual.

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