Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. 2. Case Management


Medicaid gives states three ways to cover case management services: (1) targeted case management, (2) HCBS waiver programs, and (3) administrative claiming.45 This section discusses the advantages and drawbacks of each option in obtaining Federal financial participation.46 Some states cover case management services under their HCBS waiver programs and use the targeted case management option for Medicaid beneficiaries not receiving waiver services. For example, some states cover case management services in HCBS waiver programs for adults and children with developmental disabilities, and make targeted case management services available to individuals who have been wait-listed for the waiver services. Targeted case management services can also be made available to people who qualify for a state’s HCBS waiver program (in lieu of providing such services under the waiver program), as well as for individuals who do not participate in the waiver program.

Targeted Case Management

Advantages to States of Offering Targeted Case Management Services

  • The state is free to define the population that will be targeted.

  • The service may be offered to all Medicaid-eligible persons who need home and community services. Consequently, they may be made available without regard to type of service or funding source. This feature makes targeted case management a potentially very useful coverage option in establishing a broad-based coordinated service system.

  • The costs of targeted case management services are claimed at the Federal Medical Assistance Percentage, which in many states is significantly higher than the 50 percent matching rate that applies to administrative claiming (see below).47

  • A problem for case management covered under an HCBS waiver program is that FFP is only available once the person has entered the program. Thus, case management costs incurred in advance of enrollment are not eligible for FFP unless they are covered under targeted case management, administrative claiming, or under the HCBS waiver if they are begun before waiver participation but completed on the first day the person is enrolled in the waiver program. However, targeted case management services may be furnished irrespective of whether the person is enrolled in an HCBS waiver program, enabling most pre-enrollment costs associated with service coordination to be recouped.

  • Once states were severely limited in obtaining FFP for targeted case management services furnished to residents of institutions. This limitation arose from the concern that activities performed for institutionalized persons by case managers not on the facility staff would duplicate activities facilities are required to conduct on behalf of their residents.

    FFP is now available for targeted case management services to assist and arrange for residents’ transition to the community for up to 180 days preceding discharge. This policy enables a state to involve case managers earlier in the community placement process. FFP for such targeted case management services is available regardless of whether the person is enrolled upon discharge in an HCBS waiver program, receives other Medicaid home and community services, or is supported through alternative funding sources.48

    If the institutional resident does not transition, FFP can be secured by charging the targeted case management service as an administrative expense. In this case, the activity must be claimed as administrative case management, which is reimbursed at the 50 percent matching rate. (See Chapter 6 for a detailed discussion of Medicaid coverage of transition services, and the Resources section of this chapter for a link to a CMS State Medicaid Director Letter regarding the earliest date of service for which FFP can be claimed.)

  • When the targeted groups are those with serious mental illness or developmental disabilities, targeted case management enables a state to strictly limit who may be contracted to provide case management services. This is beneficial when service providers are to be limited to the case management authorities already established in state law, or where counties or other local entities such as Community Centers are responsible for the provision of case management services. It allows states to tie delivery of targeted case management services into their already established single point of entry systems. In contrast, when case management/service coordination is offered to these populations under an HCBS waiver program, Medicaid freedom of choice of provider rules apply and a state must allow HCBS waiver participants to obtain case management/service coordination from any qualified provider.

Drawbacks to States of Offering Targeted Case Management Services

  • Obtaining FFP for targeted case management requires “service claiming” (i.e., claims for reimbursement for a specific service delivered to a specific Medicaid recipient). Service claiming can generate considerable paperwork. It can also pose logistical problems in developing a reimbursement mechanism that enables the relevant authority to maintain base operation levels when the amount of case management varies individual-to-individual, month-to-month. The varying workload problem also arises when service coordination is offered as a distinct service under an HCBS waiver program.49

  • The necessity for service claiming can also make it difficult to obtain reimbursement for activities conducted on behalf of all recipients rather than distinctly for the benefit of a specific individual (e.g., staff development activities for case managers). Costs used in the development of the reimbursement rates must take into consideration staff time spent in general administrative activities such as intake, as well as training and travel.

  • Service coordinators often support individuals in ways that fall outside the scope of targeted case management activities for which FFP may be claimed. But, FFP for targeted case management services is not available for “direct services.” Examples are a case manager’s driving an individual to a doctor’s appointment (transportation) or helping the person manage their finances. Federal policy dictates that such direct services be claimed via other categories (e.g., making a claim for Medicaid transportation services).50 Having to assign some of the activities case managers routinely conduct on behalf of individuals to other categories creates administrative and billing complexity.

HCBS Waiver Coverage

FFP is available for the costs of case management when a state covers such services under its HCBS waiver program. This option differs little from targeted case management with respect to types of activities for which FFP may be claimed. The general interchangeability of these options is illustrated by the fact that all states operate HCBS waiver programs for people with developmental disabilities, but states divide about equally between those that use targeted case management coverage and those that cover service coordination as a waiver service.

Advantages to States of Covering Case Management as a Waiver Service

  • Covering case management as a waiver service tightly links availability of such services to the target population served through the HCBS waiver program. Thus, the scope of such coverage may be tied directly to the specific needs of the waiver population.

  • Covering case management as a waiver service enables a state to provide for more intensive service coordination for HCBS waiver participants than it might (for financial reasons) be prepared to offer a wider range of individuals.

Drawbacks to States of Offering Case Management as an HCBS Waiver Coverage

  • The service is limited to individuals enrolled in the HCBS waiver program.

  • Under an HCBS waiver, a state may not limit case management service providers to established case management authorities for anyone--including those with serious mental illness and developmental disabilities--as it can under the targeted case management option.

  • Claims for FFP may only begin once the person has been approved for admission to the waiver program. This prevents the state from being reimbursed for pre-enrollment case management expenses. However, some pre-waiver case management costs may be covered if (a) they are begun before waiver participation, but completed on the first day the person enrolls in the waiver; or (b) they occur in the 180 days preceding transition from an institution to the community.

Administrative Claiming

Administrative claiming takes advantage of a provision in Federal law permitting states to claim FFP for administrative expenses they incur in operating their Medicaid programs. Such expenses may include costs of intake, assessment, service planning, arranging Medicaid services for recipients, and overseeing service delivery--many of the activities typically performed by case managers.

Administrative claiming differs from the targeted case management and waiver alternatives in one important aspect: It may not be used to assist recipients to access non-Medicaid services--even though such services might benefit them. Case managers may work to coordinate access to all services in a care plan. But administrative claiming can only be used for the administration of the Medicaid program, as established by a time study or other method to apportion Medicaid and non-Medicaid costs.

Advantages to States of Using the Administrative Claiming Option for Case Management Activities

  • It is not necessary to bill for distinct activities on behalf of specific individuals, because administrative claiming is not service-based. Administrative claiming is usually accomplished by apportioning the costs an organization incurs between those attributable to Medicaid recipients and those attributable to non-recipients and/or other state or Federal non-Medicaid programs. While the cost apportionment process can be complicated, this does not always constitute an additional barrier, because some organizations must do cost apportionment in any case whenever they receive Federal funds for administering non-Medicaid programs.

  • Because administrative claiming does not have a rule requiring states to contract with “any qualified provider,” (as they must with State Plan services) the state can limit which entities can make an administrative claim for case management. This can be especially advantageous for states that operate a single point of entry system through human service authorities that also administer the provision of non-Medicaid benefits. For example, some states use administrative claiming for a range of case management functions that are not specifically covered under the case management service for waiver beneficiaries (e.g., eligibility determination; administrative functions involving case managers such as program planning, development, and outreach; and certain licensing and contracting functions).

  • Administrative claiming is consistent with models where a state has established, by law or regulation, a distinct network of local single point of entry/case management authorities.

  • The administrative claiming option for case management activities provides states with the capability of securing FFP for external case management services furnished to institutionalized persons that does not hinge on whether the person’s discharge from the facility is imminent. Administrative claiming may be employed to provide external oversight of the well-being of institutionalized persons, as well as to support “inreach” activities to provide information concerning the availability of home and community services.

    Administrative claiming may also span case management activities that are directly tied to arranging and assisting a person’s return to the community--over and above that provided by discharge planners--without respect to length of time involved. However, such activities must be tied to arranging Medicaid home and community services. The state Medicaid agency may obtain case management services for institutionalized persons via contract with a state program office or through local human services agencies. Organizing case management for institutionalized persons under the administrative claiming option may simplify use of Medicaid dollars to underwrite such services in comparison to other available service options.

Drawbacks to States of Using Administrative Claiming for Case Management Services

  • Federal reimbursement of administrative expenses is limited to 50 percent of allowable costs. In states where the service rate is greater than 50 percent, administrative claiming will yield less FFP.

  • Administrative claiming is limited to activities related solely to administration of a state’s Medicaid program. Thus, the costs of activities that assist individuals to access services not available in a state’s Medicaid program, such as housing, food, education, and employment, will have to come from state/ local dollars. Alternatively, states can use the targeted case management option to cover the activities that relate to the consumer’s needs but do not involve Medicaid services.

  • Individuals lose the protections contained in Medicaid law with respect to provider freedom of choice, since administrative claiming usually restricts service coordination activities to a single provider source.

States May Use One, Two, or All Three of the Case Management Authorities

Federal policy allows states to select the options or combinations of options that will be most effective in meeting the needs of individuals and families with long-term care needs. Federal policy does prohibit states from claiming the costs of the same activity of service coordination for the same individual under more than one alternative at the same time. But as long as this prohibition is observed, a state can use the three options to serve recognizably different purposes. For example, a state may combine service coordination as a distinct service for participants under HCBS waivers with targeted case management services for Medicaid recipients not being served by the waiver program. This allows the state to offer case management services under its State Plan that are more limited in scope than those offered under an HCBS waiver.

Wyoming takes advantage of this possibility by offering targeted case management to individuals wait-listed for waiver services, to help them connect with other sources of direct service assistance while awaiting waiver coverage.

Sometimes a state may want to add administrative claiming to the case management mix. Although administrative claiming may not be used to assist recipients in accessing non-Medicaid services, it has the advantage of allowing FFP claiming for certain services that are not claimable under targeted case management or an HCBS waiver--including outreach, quality assurance/quality improvement, operating automated data systems, and various state-level administrative activities.

View full report


"primer10.pdf" (pdf, 2.08Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®