Wisconsin uses both the personal care option and the waiver program to cover services in residential care settings. In 1981, to decrease nursing home utilization, the state instituted a moratorium for nursing facilities and shortly after implemented an HCBS waiver program to provide services to persons residing in their own homes, supported apartments, and all types of residential care settings. The state's primary goal in using the Medicaid waiver to pay for services in residential care settings is to provide an alternative to nursing homes for people who cannot live in their own homes.
In 1988, Wisconsin amended its state Medicaid plan to provide coverage of personal care. The rationale for adding personal care to the state plan was that the Medicaid home health benefit, which paid for home health aides to perform nurse delegated tasks such as wound care, was not able to meet the personal care needs of many persons with disabilities. When personal care was added to the state plan, it was initially covered only in private homes.
In the 1990s, the state realized that there was inadequate funding to support the care of residents in Community Based Residential Facilities (CBRFs). At this time, personal care services provided in CBRFs was paid through the waiver program, the state's general revenue funded Community Options program, county funding, and federal social services block grant funding. However, these funding sources were not sufficient to meet the need, and people who were eligible for waiver services often faced long waiting lists. Therefore, the state decided to expand its personal care program to cover persons in CBRFs. Coverage in these settings was viewed as cost efficient because the state does not pay for room and board in CBRFs, as it does in nursing homes.
Initially, both waiver services and personal care under the state plan were provided only to residents of CBRFs with no more than eight beds. The state used small bed size as a proxy for "home-like" and did not want to encourage the payment of public money to quasi-institutional residential care facilities, i.e., those with more than eight beds. The bed restriction was recently increased to 20 beds, in part because some residents were being forced to leave their residence and move to one with eight or fewer beds in order to receive Medicaid services.