Using Medicaid to Cover Services for Elderly Persons in Residential Care Settings: State Policy Maker and Stakeholder Views in Six States. I. Overview of Long Term Care System

The state has a process for determining where new nursing home beds will be allowed based on the nursing home occupancy rate in a given county. The statewide occupancy rate is approximately 72 to 74 percent.¹ The state also has a process for determining the proportion of nursing home beds allocated for Medicaid.

1. Gibson, M. J. and Gregory, S. R., Across the States 2002: Profiles of Long-Term Care, AARP, 2002.

In the 1980s, Texas implemented a demonstration waiver program called the Frail Elderly Program, which provided only attendant services. Texas was the only state that participated in the demonstration and in the early 1990s when the program ended, federal law permitted Texas to retain the program as a personal care option under 1929(b) regulations, which essentially allow higher income eligibility criteria (300 percent of SSI) than is used for other Medicaid state plan services. However, clients served under the program are not eligible for any other Medicaid services, e.g., primary and acute medical care, prescription drugs, and home health services.

Although the program was called Frail Elderly, the statute allowed the program to serve persons of all ages. In 2003, the State changed the name of the program to the Community Attendant Services Program. The program's eligibility criteria and services are the same as for the Primary Home Care program. It currently serves 30,000 persons.

There are two types of Medicaid in Texas: traditional and STAR. People in both programs get the same benefits. Under the traditional program, individuals get medical care from any doctor or provider who accepts Medicaid. Under the STAR program, the enrollee has one provider who coordinates and manages their care.

The STAR+Plus pilot program is a Medicaid pilot project operating since 1998. It is designed to integrate delivery of acute and long term care services through a managed care system. The project requires two Medicaid waivers--1915(b) and 1915 (c)--in order to mandate participation and to provide home and community services.

The project serves approximately 55,000 SSI aged and disabled Medicaid recipients in Harris County (Houston). STAR+PLUS provides a continuum of care with a wide range of options and increased flexibility to meet individual needs. The program has increased the number and types of providers available to Medicaid clients.

Participants may choose from two health maintenance organizations. Certain participants have a primary care case management option in addition to the two HMO choices. The HMO provides both acute and long term care services. STAR+PLUS Medicaid Only clients are required to choose an HMO and a Primary Care Provider (PCP) in the HMO's network. These clients receive all services--both acute and long term care--from the HMO.

Those also eligible for Medicare choose an HMO but not a PCP because they receive acute care from their fee-for-service Medicare providers. The STAR+PLUS HMO provides only Medicaid long term care services to dual eligible clients. Of the approximately 55,000 STAR+PLUS eligibles in Harris County, about half are "dually eligible" for both Medicaid and Medicare. The program has demonstrated significant savings, but there are no plans currently to expand it.

Community Care for Aged and Disabled (CCAD) is a state program that provides services in a person's own home or community for aged or disabled persons who are not able to take care of themselves, and who might otherwise be subject to unnecessary institutionalization or to abuse, neglect, or exploitation.

In addition to services provided through the waiver program and the personal care option, CCAD includes a number of home and community service programs funded by state general revenue funds and Title XX funds. Two of these programs cover services in residential care settings: Adult Foster Care (AFC) and Residential Care(RC). The state program serves approximately 200 people in AFC and 800 in RC each year. Reimbursement rates for services are less than those paid for waiver clients.

To be eligible for the Adult Foster Care and Residential Care programs through CCAD, individuals must be financially eligible for Title XX services or must meet the income criteria for Medicaid waiver services (300 percent SSI), and not have assets exceeding $5,000 for an individual and $6,000 for a couple. In calculating financial eligibility, a number of exclusions from income and resources are permitted. Clients keep a monthly allowance for room and board and personal and medical expenses, and the remainder of their income is contributed to the total cost of care. Applicants/clients must also score at least 18 on the Clients Needs Assessment Questionnaire and have the approval of the CCAD led unit supervisor. The applicant's needs may not exceed the facility's capability under its licensed authority.