Understanding Medicaid Home and Community Services: A Primer, 2010 Edition. Child Foster Care


The provision of Medicaid services for children in foster care settings is permissible, typically through an HCBS waiver program. The waiver application does not include a definition for child foster care--it is subsumed under the waiver service called “residential habilitation” (see Box), as are group homes (discussed below).14

Definition of Residential Habilitation in HCBS Waiver Application

“Residential habilitation means individually tailored supports that assist with the acquisition, retention, or improvement in skills related to living in the community. These supports include adaptive skill development, assistance with ADLs, community inclusion, transportation, adult educational supports, social and leisure skill development, that assist the participant to reside in the most integrated setting appropriate to his/her needs. Residential habilitation also includes personal care and protective oversight and supervision.”

The method by which the costs of room and board are excluded from payment for residential habilitation is specified in Appendix I-5 of the Waiver application.15

Children’s foster homes are often the private homes of individuals licensed by the state to provide care to one child or a few children. These homes may serve children who are placed voluntarily or those under state protection. In either case, the home must meet the state’s licensing criteria. When foster homes serve “special” populations such as children with developmental disabilities, some states require providers to have training above and beyond what is required for a general foster care license. Children with serious emotional disturbances (SED) may also be served in child foster care. Detailed information about services for children with SED is the subject of a separate publication listed in the Resources section of this chapter.

Payments under the HCBS waiver cannot supplant funding under Title IV-E of the Social Security Act (hereafter called the Act) that pays for the basic foster home care and services for children in state custody. Waiver services to children in foster care can only supplement the basic services that must be covered under Title IV-E. According to Title IV-E regulations, “Foster care maintenance payments are payments made on behalf of a child eligible for Title IV-E foster care to cover the cost of (and the cost of providing) food, clothing, shelter, daily supervision, school supplies, a child’s personal incidentals, liability insurance with respect to a child, and reasonable travel for a child’s visitation with family, or other caretakers.”16

The HCBS waiver application instructions note that

Waiver services may be furnished to children in foster care living arrangements but only to the extent that waiver services supplement maintenance and supervision services furnished in such living arrangements and waiver services are necessary to meet identified needs of children. Waiver funds are not available to pay for maintenance (including room and board) and supervision of children who are under the state’s custody, regardless of whether the child is eligible for funding under Title IV-E of the Act. The costs associated with maintenance and supervision of these children are considered a state obligation. The costs associated with the treatment of these children may be Medicaid reimbursable [under either the State Plan or an HCBS waiver]. Depending on the nature of the treatment (i.e., habilitation), the costs of treatment may be eligible for Federal financial participation under a waiver.17

Utah and Wisconsin, among other states, cover foster care services under an HCBS waiver for children with “exceptional needs” (i.e., those requiring intensive assistance due to medical or behavioral support needs). See Box for Utah’s pro-visions pertaining to coverage of residential services under an HCBS waiver for children in foster care.

Utah’s HCBS Waiver Definition of Residential Services for Children in Foster Care

To ensure compliance with CMS payment requirements, Utah has established a prior authorization process and criteria to determine if children in foster care have exceptional needs that can be supported though the HCBS waiver program. In its approved HCBS Residential Services definition, Utah notes that, “For children in the custody of the Division of Child and Family Services (DCFS), the costs of basic and routine support and supervision are not covered as waiver services. Compensation for this routine support and supervision is covered by other funding sources associated with the DCFS. Children in DCFS custody are eligible to receive this service only after the provision of this service has been prior-authorized by the minor’s support coordinator. Such prior-authorization will occur only after it has been determined that the minor has exceptional care needs that materially affect the intensity or skill level required of the service provider.”

Utah defines a variety of medical and/or behavioral conditions that would qualify a child for this exceptional payment including, among other conditions, “… emotional or behavioral needs such as hyperactivity; chronic depression or withdrawal; bizarre or severely disturbed behavior; significant acting out behaviors; or, the minor otherwise demonstrates the need for 24-hour awake supervision or care in order to ensure the safety of the minor and those around him/her.”

The exceptional care criteria also includes a variety of medical needs, such as ostomy care or catheterization; tube feeding or supervision during feeding to prevent complications such as choking, aspiration or excess intake; frequent care to prevent or remedy serious conditions such as pressure sores; suctioning; assistance in transferring and positioning throughout the day; two or more hours of therapy per day; assistance with multiple personal care needs including dressing, bathing and toileting; complex medical treatment throughout the day; or, the minor has a complex and unstable medical condition that requires constant and direct supervision.

Utah further specifies that, “This service is intended to accomplish a clearly defined set of outcomes associated with the child’s habilitation that is outlined in their individual support plan. Services provided under this service definition are only those that are over and above the basic routine supports provided for through the DCFS.”18

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