QUEST Volume 11, Number 1, JANUARY/FEBRUARY 2004

New Medicaid Program Provides Cash

by Christina Medvescek

If you were eligible for a personal care assistant through Medicaid, would you rather: a) let the state assign you one from an agency; or b) be given the money and decide yourself how to meet your personal care needs?

For those who chose "b," theres good news in the form of a program that gives cash instead of standard agency services to eligible individuals. The program, called Cash and Counseling, was tested in three states beginning in 2000, and is being offered to 10 more states, thanks to the Robert Wood Johnson Foundation, the U.S. Department of Health and Human Services (HHS) and the U.S. Administration on Aging.

Astronomical Differences

First tested in Arkansas, Florida and New Jersey, Cash and Counseling gave monthly allowances to 6,700 elderly or disabled Medicaid enrollees, while a control group received traditional agency-directed services.

Within limits, Cash and Counseling participants could spend the money as they saw fit, including hiring family members and friends as caregivers, or buying assistive devices and making home modifications instead of getting services. Participants received counseling to help plan their purchases.

The program resulted in "astronomical differences" in consumer satisfaction, says Kevin J. Mahoney, project director and associate professor at the Boston College School of Social Work. Participants reported the program had a positive impact on their quality of life and family caregivers, resulted in fewer unmet needs and had no negative impact on their health.

Program participants had fewer complaints about their care workers performance and reliability, and were able to fire and rehire workers, not merely complain to an agency.

Among Arkansas participants was a mother being paid to care for her 20-year-old son with Duchenne muscular dystrophy. (See interview 27 at www.hhp.umd.edu/AGING/CCDemo/Products/AR.html.) The program was evaluated by Mathematica Policy Research of Princeton, N.J., which has posted results at www.mathematica-mpr.com/3rdlevel/cashcounseling.htm.

State Funding Available

States that dont win one of the next 10 Cash and Counseling grants can implement the program by applying for waivers through the Centers for Medicare and Medicaid Services, Mahoney recommends. Another new program, Real Choice Systems Change Grants for Community Living (www.cms.hhs.gov/systemschange), also can be used to switch to a cash-and-counseling approach.

Several bills now pending in Congress propose to give more choice and control to people with disabilities who use government benefits. They include: the Medicaid Community-Based Attendant Services and Support Act (MiCASSA), which mandates state Medicaid coverage of community services and support in certain cases; the David Jayne Medicare Homebound Modernization Act, which grants some recipients of home health care services the freedom to leave home; and the Inclusive Home Design Act, which requires minimum standards of accessibility in new housing.

President Bush has proposed a Money Follows the Person initiative, which is similar to Cash and Counseling but also provides federal funding for the first year of operation.

Bob Williams, co-director of Advancing Independence: Modernizing Medicare and Medicaid (AIMMM, www.aimmm.org), praised the "strength and beauty" of Cash and Counseling, saying it uses "limited Medicaid dollars in ways that best ensure independence and basic well-being."

But he cautioned that the approach works best if the individual already has a support network of family and friends to tap for assistance; and the monthly allowances are adequate and can be adjusted if needs change.

"One of my greatest fears," he told the health subcommittee of the House Energy and Commerce Committee this summer, is that at least some states will take advantage of consumer choice as a way to cut Medicaid costs.