Second, services must be available statewide (i.e., the state cannot restrict the availability of the service to particular geographic regions). This is called the statewideness requirement.3 There are few exceptions to this statewideness requirement; targeted case management is a major one. Federal regulations also require that each Medicaid service be sufficient in amount, duration, and scope to achieve its purpose. Within this broad requirement, states have the authority to establish reasonable and appropriate limits on the amount, duration, and scope of each service.
Generally, when a state wishes to make home and community services available only to certain distinct groups of Medicaid beneficiaries (e.g., adults with physical disabilities) it must seek Federal approval of an HCBS waiver.4 This waiver authority permits states to waive both the comparability and statewideness requirements in order to target services to distinct groups of Medicaid beneficiaries. Once eligible for a waiver program, participants must be provided all of the waiver services for which they have a documented need, and the services must be available in all parts of the state covered by the waiver. The Affordable Care Act includes a provision waiving comparability for services provided under the State Plan §1915(i) authority, but services must be provided statewide to everyone who meets the eligibility criteria.5
Services That Cannot Be Offered under the State Plan. Some services may not be offered under a Medicaid State Plan because they have not been specified in either the authorizing legislation or implementing regulations. An example is home modifications, which explains why home modifications is one of the most common services offered under HCBS waiver programs.
HCBS Waiver Coverage to Complement or Expand State Plan Coverage. Through an HCBS waiver, a state may augment the services it provides under the State Plan. When a state retains the scope of a State Plan service but increases its amount, duration, or frequency, the service is considered an extended State Plan service. For example, a state may allow four home health aide visits each week under the State Plan Home Health benefit and allow three additional visits under an HCBS waiver. States must have established mechanisms to ensure no duplication of service provision or billing for State Plan and waiver services.6
Non-duplication. Federal policy provides that a state may not offer precisely the same service under an HCBS waiver that it offers under its regular Medicaid program. The reason for this prohibition is simple. People who participate in an HCBS waiver program are already eligible, by definition, to receive the full range of services available under the State Plan. While a waiver service may be similar in scope to a State Plan service, it would be considered an other service rather than an extended State Plan service if the method of service delivery (e.g., giving participants the ability to direct their services) differs under the waiver. States have added tasks to the scope of services covered under a State Plan in order to create a new waiver service that does not duplicate the State Plan service (see Box).
EPSDT Mandate. When children are served in an HCBS waiver program, states must take account of the mandate to provide enhanced Early and Periodic Screening, Diagnosis and Treatment (EPSDT) services. Federal EPSDT requirements mandate that Medicaid-eligible children receive all medically necessary services (listed in §1905(a) of the Social Security Act) that they require, regardless of whether such services are specifically included in the State Plan. Thus, medically necessary services for children who need them cannot be restricted to children who are waiver participants.
Redefining Services: State Example
Texas provides attendant services through its State Plan Personal Care program. The State expanded the scope of attendant services to be provided in its Community Based Alternatives waiver to include protective supervision as temporary relief for the primary caregiver, extension of therapy services, and the performance of nursing tasks delegated by licensed registered nurses. Because the new service--called Personal Assistance Services--differs from attendant services provided under the State Plan, waiver participants do not have to first obtain attendant services under the State Plan Personal Care program before receiving personal assistance services through the waiver program.
Service Objective.A state can only offer services that are materially related to the basic reasons a person needs long-term services and supports. This may seem obvious enough, but complicating issues sometimes arise. In the case of services provided under HCBS waivers, for example, a state may offer only services that are either necessary for people to avoid institutionalization or would be available to beneficiaries if they were in a facility. This provision takes no account of other services and supports--such as guardianship services and leisure activities--that might be desirable but cannot be considered necessary given the aims expressed in Federal law. This does not imply that the state is prevented from providing such services and supports; only that Federal Medicaid dollars cannot be used to purchase them.
Room and Board Expenses. Federal Medicaid dollars are not available to pay for the room and board expenses (i.e., housing, utilities, and food) of non-institutionalized persons, except in limited circumstances such as (a) out-of-home respite care, and (b) the room and board costs of a live-in caregiver. Federal financial participation (FFP) is available for room and board provided as part of respite care furnished in a facility that is approved by the state but not in a private residence.
The expectation is that individuals will use their own income and resources (e.g., Federal Supplemental Security Income [SSI] benefits and earnings from employment) to meet room and board expenses. The room and board exclusion can complicate the development of strategies to support individuals in their homes and community-based residential care settings. In contrast, room and board expenses are Medicaid-reimbursable in institutions, where individuals receive a significantly reduced SSI payment as a personal needs allowance ($30/month).
Obligations of Other Payers. Medicaid is deemed a payer of last resort. This means that if another public program or private third-party payer--such as a private health insurance plan--is obliged to provide a service to an individual, a state generally may not replace this funding with Medicaid dollars. For example, if two public programs such as Medicare and Medicaid cover the same service and an individual is eligible for the service in both programs, Medicare must pay first for the service. Medicaid can only pay once Medicare benefits are exhausted.
State Policy Goals and Objectives
Federal policies provide a framework within which states can weigh their options in deciding whether to offer a service under their Medicaid State Plan or through an HCBS waiver program. But a state makes its particular coverage choices in light of its own policy goals and objectives. Five major factors need highlighting in this connection.
State Budget Impact. States must balance their budgets on a regular basis--every year, for most states. This requirement can make states wary of offering services under their Medicaid State Plan, because Federal rules prohibit them from reducing services below the amount, duration, and scope needed to achieve their purpose, and from limiting the number of people who receive the service. While states can set the medical necessity criteria for State Plan services, they must serve everyone in the state who requests services and meets the criteria. Because they cannot predict how many individuals will qualify and how much it will cost to serve each person, spending for State Plan services is less predictable than for HCBS waiver programs.
Predictability of costs is the major reason why many states have used HCBS waiver programs to expand the availability of home and community services rather than through State Plan benefits, such as Home Health and Personal Care. HCBS waivers permit states to serve only a set number of beneficiaries that the state itself establishes for the waiver and to set individual cost limits for participants. States may also use an aggregate cost neutrality calculation to determine the total amount of funding available for waiver services. Compared to setting per capita limits for waiver participants, this approach gives states the flexibility to serve individuals with extensive needs who require more services than the average participant.
However, states that limit the provision of home and community services to HCBS waiver programs limit themselves to serving only a high-need population--those who meet institutional level-of-care criteria. By providing State Plan services (e.g., under the Personal Care, Rehabilitation, and/or the §1915(i) benefits), states can serve a population with lower needs and help individuals maintain--and/or slow the decline of--their health and functional status, thereby delaying the need for more costly services and supports.
Inclusiveness.When deciding whether to cover a service under the State Plan or an HCBS waiver program or both, states need to carefully consider how services provided in different programs can complement each other in furnishing people with disabilities the right amount and combination of services.
Target Populations. With a few exceptions, services offered under a Medicaid State Plan must be provided to all eligible individuals on a comparable basis.7 Thus, it can be difficult to vary services or service delivery approaches based on the needs of individuals who have specific impairments and specialized needs. It also can be easier for a state to craft a package of services and supports to meet the needs of specific groups than to seek a one-size-fits-all State Plan coverage design.
These considerations frequently lead states to select an HCBS waiver program as a vehicle for offering services to defined groups of individuals, because the service package can be designed to meet their distinct needs. The recently enacted §1915(i) HCBS State Plan option also permits states to target services to specific groups.
Maintaining a Unified Service Delivery System. While Medicaid is the major funding source for home and community services, it is frequently not the only one. In many states, distinct state-funded service systems or networks have evolved for specific target populations, for example, individuals who are elderly, who have a serious mental illness, or who have a developmental disability. One group for which states have historically not developed specific programs or service systems is people 18 to 64 years of age with physical disabilities--a group that is frequently underserved. Some states, such as Connecticut, have programs targeted to people who are financially ineligible for Medicaid but meet the states institutional level-of-care criteria.8
These state-funded service systems often play a crucial role in expanding home and community services for the groups they serve. But they vary considerably in the types and amounts of services they provide and the numbers of people they serve. It is important to maintain these service systems, but it is also important to ensure that they are integrated into a unified service delivery system for their particular target group. An effective way of achieving this integration for many states is the targeted approach permitted under an HCBS waiver program. This is a way of accessing Medicaid funding at the same time as ensuring consistency in financing and practice across an array of funding sources.
Eligibility.As discussed in Chapter 2, a state can qualify more individuals living in the community for Medicaid using an HCBS waiver program than it can under its State Plan because it has the option to use the more liberal financial eligibility rules used for institutions when determining eligibility for an HCBS waiver. Some individuals in the community who might not qualify for State Plan Medicaid benefits because they do not meet the income criteria, in particular, may be eligible for services under an HCBS waiver program, if the state uses institutional financial eligibility rules.
The following two sections, respectively, provide detailed descriptions of the home and community services that can be provided (a) under the Medicaid State Plan, and/or (b) through HCBS waiver programs.