Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Building Flexibility into the Service Plan While Ensuring Equitable Budgets


In programs that allow participants to exercise budget authority, purchases must be clearly linked to an assessed need that is identified in the service plan.61 Typically, purchases either increase independence or address a personal care need. While some programs only allow participants to purchase personal care services, others allow them to purchase a range of services, including skilled nursing, rehabilitative therapies, and supported employment services.

The flexibility afforded to participants to purchase goods and services varies by program. Programs may require pre-approval of non-traditional services, such as purchase and maintenance of a service dog, or they may develop a list of allowable items and a prior authorization process to approve the purchase of items not on the list. Other programs allow participants significant flexibility and consider any purchase that fosters community inclusion as allowable.

States also can build flexibility into the service menu and individual service plans by combining certain services (e.g., personal care, homemaker, respite, non-medical transportation, and companion services) into one service category in the waiver application. This could allow participants to use their budgets to purchase the specific services they need to address their needs without having to formally alter the service plan.

Programs that allow participants broad discretion to purchase goods and services--within Federal parameters--must ensure that financial accountability is maintained through the application of consistent methods to determine both needs and allowable purchases to meet those needs. States must demonstrate to CMS that statewide procedures are in place to assess need and ensure access to services, even in states where counties or local entities play a strong role in the operation of the waiver.

Uniform use of a standardized assessment process--and training to ensure its consistent use--will enable states to ensure equitable funding of individual budgets and help them to determine whether budgets are being calculated accurately using a consistent method. It is also important that states implement procedures to ensure that funds go to enrolled or otherwise eligible providers.

The methods states use to perform the assessment vary greatly and often differ within a state according to the population being served. In programs serving persons with developmental disabilities, many states use standardized assessment processes and instruments that are nationally tested and accredited, such as the Supports Intensity Scale. In programs serving elderly persons and younger adults with physical disabilities, assessment instruments are generally state specific, but typically assess ADLs and IADLs, as well as nursing needs, cognitive impairment, and behavioral issues.62

A few states use the comprehensive Minimum Data Set–Home Care assessment instrument, which assesses multiple factors that determine the need for services, including cognition; vision; hearing and communication; mood/behavior; social functioning; informal support services; physical functioning (including IADLs and ADLs); continence; medical conditions and medications; and the living environment.63

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