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Medicaid amendments allow states to offer more services

April 1, 2011
by Alison Knopf
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1915(i) program approvals last five years, end cost caps for home- and community-based services

A new program will allow state Medicaid agencies to add home- and community-based services (HCBS) to their state plans. Examples of services that could be provided under the federal program include psychosocial rehabilitation services, peer support services, clinic services, and partial hospitalization.

The program-1915(i) state plan amendments-was established under the Deficit Reduction Act (DRA), effective in 2007. Last October, it was expanded considerably under the Patient Protection and Affordable Care Act (PPACA). Implementing regulations are currently being developed by the Centers for Medicare and Medicaid Services (CMS), but in the meantime the federal government is ready to help states move ahead to offer this benefit to Medicaid recipients. CMS is in the process of updating the 1915(i) application to reflect changes made under the PPACA. States that are interested in seeing the draft should contact their representative in the CMS regional office.

“There's a lot of flexibility for what states can offer,” said Kathryn Poisal, health insurance analyst for the Centers for Medicare and Medicaid Services, in an interview. “There's a whole host of services that can be assembled, including supported employment, personal care, and medication administration.”

The 1915(i) plans are similar to what states could provide under 1915(c) waivers, with three notable exceptions:

  1. approval lasts for five years instead of having to be renewed every year,

  2. they don't have to be cost-neutral, and

  3. states don't have to show that, without these services, beneficiaries would be institutionalized.

Internally, CMS describes 1915(i) as a “hybrid,” because it has some features that look like a waiver-it does need to be renewed every five years-and some that look like an amendment. The 1915(i) benefit is a state plan amendment, which means that the state is adding to what is it offering, not submitting a separate waiver application. A waiver is a temporary suspension of statutory Medicaid requirements; it must be cost-neutral and renewed every year.

“We feel strongly that 1915i will be a great tool,” said Poisal. “This is a great triumph. We've had 1915(c) waivers since 1981. We're pleased that now there's a permanent way of delivering these services.”

Moving out of institutions

“The intent of 1915(i) is to move the whole subject of home and community-based waivers to plan options, to get rid of cost ceilings which waivers have,” said Ron Manderscheid, PhD, executive director of the National Association of County Behavioral Health and Developmental Disability Directors (NACBHDD).

Since the Supreme Court's Olmstead decision in 1999, it has been against the law to institutionalize people just because of a disability such as a mental illness. Yet, truly moving people into the community “takes time, and it's complicated,” said Manderscheid. “In the state hospital, a person's total needs were met.”

“They may have been met poorly, but people had a group they lived with, they had a job, they had care, they had a place to live, they had all the essential ingredients of a life,” he added. “Then we went through deinstitutionalization and took it to community care, and we learned that now we have to put all these other things back together. “We are recreating a lot of the concepts of the state hospital in the community, and it's taken us 30 years to do this.”

The concept of the case manager-now called the care coordinator-has evolved to help patients access HCBS, said Manderscheid. “Now ‘home and community-based services’ means you need the care coordinator to coordinate all the services that allow you to stay in the community,” he explained. The key ingredients are housing, psychosocial support, and a job.

No caps

Under the 2007 version of 1915(i), states were allowed to cap the services financially. Under the PPACA version, they can't. That might seem like a disincentive to some states, especially in these financially difficult times. But Poisal stressed that fears about unlimited spending shouldn't discourage states from applying.

“It's still worthwhile to look at the opportunities that are afforded under 1915(i),” Poisal said. “If there are programs that the state is funding under state-only dollars, there may be opportunities to receive a federal match.”

Also under the new version, services must be delivered statewide. Under the 2007 version, states were allowed to deliver 1915(i) services only to certain geographic areas, such as a county.

The population to be served, however, can be targeted. “If they don't target the population they intend to serve, they need to streamline the services so they can meet the need,” said Poisal.

Some states are providing services to the uninsured with state-only dollars, but in 2014 when the Medicaid expansion provisions of the PPACA take effect, the federal match will kick in, said Poisal. “When we add the additional people to Medicaid, that will represent some financial relief.”

In 2014, single men at or below 133 percent of the poverty level will be covered by Medicaid, which will reimburse 100 percent of the services.

But it is only 2011, and states are already grappling with whether they can afford even the most basic benefits, applying to CMS for waivers that would sharply curtail Medicaid services. “States are making difficult budgetary decisions right now,” conceded Poisal. “But we are seeing a great deal of interest in 1915(i), and we hope states will see benefits.”