Consumer-directed care offers choice and lower costs
Rapidly expanding initiatives pose risks for clients, caregivers
A national health care reform strategy may have fizzled earlier in the Clinton administration, but a revolution has been quietly taking place on the state level in the meantime. At least 30 states have initiated some form of consumer-directed care for Medicaid beneficiaries and other disabled and elderly citizens whose care is reimbursed with state funds.
An outgrowth of the independent-living movement, which began in the late 1960s and focused on the right of the disabled to participate fully in society, consumer-directed care puts client-beneficiaries in the driver’s seat of their clinical and social needs.
It works like this: States help individuals develop a life plan budget, pay them or a fiscal intermediary a cash equivalent of the budget’s overall cost, and allow them to directly employ service providers. This is sometimes referred to as a cash-benefit model.
Previously, most states entitled beneficiaries to standardized approved services and required them to obtain those services from state-sanctioned providers (also known as the vendor payment model).
Every state is different
Program specifics vary widely between states. Some, such as California, have had long-standing consumer-directed care components funded through state — not federal — Medicaid monies, or other state-controlled dollars. Others, like Arkansas, are just now entering the market with Health Care Financing Administration (HCFA) demonstration waivers and other grants.
Some programs only include the disabled or are more specific to the cognitively disabled, while others cover both the disabled and elderly. Operational procedures are also particular to each state.
After a few pioneering efforts, program implementation is now in high gear as states and the HCFA have become more sensitive to the needs of the disabled community — particularly young people — and are vigorously pursuing cost savings opportunities. Three Robert Wood Johnson Foundation (RWJF) grants designed to help at least 30 states restructure systems, plan programs, and evaluate the overall consumer choice process have especially encouraged implementation. HCFA also recently granted waivers to some states, relaxing regulations that prohibited direct payments to beneficiaries so that programs can expand by including federal dollars.
Advocates argue that such systems empower the elderly and disabled, allowing them to tailor and maintain authority over services that meet their needs and life circumstances. Consumer-directed care also results in a higher level of service and provides participants a better quality of life, all at a lower cost than the present system, supporters contend.
"It can work out just great for some clients. It’s a great way to save a bunch of money and give clients a lot of flexibility," says Jerry Crosby, BSN, RN, president of Kent, WA-based Professional Registry of Nursing. Crosby’s firm provides oversight and training to individual care providers under the auspices of Washington State’s Aging and Adult Services Administration.
Some home care providers and advocates for the elderly endorse the disabled and seniors’ rights to self-determination and top-level services, but counter that such initiatives expose society’s most vulnerable citizens to great financial and legal risks — even physical abuse.
"It’s penny-wise and pound foolish," says Jane M. Sullivan, president and chief executive officer of Always Caring, a private duty company located in Chicago. She is staunchly opposed to such programs.
Are employees properly protected?
Those sounding a cautionary note primarily cite inadequate protections against liabilities associated with employment tax and benefits, tort laws, and licensure and certification regulations. They question current mechanisms requiring individual caregivers to report income tax; for caregivers and client-employers to pay Social Security, federal and state unemployment insurance; and for either to obtain worker’s compensation coverage.
Their concerns are not unwarranted, according to some. "That is a criticism of the independent caregiver programs, that some don’t address those issues," says Linda Velgouse, deputy director of Independent Choices, a RWJF grant project, and director of consumer-directed services at the National Council on Aging, located in Washington, DC.
A number of states ensure Social Security, unemployment, and tax reporting by creating fiscal intermediaries that hold funds for client-employers, pay caregivers and withhold employment taxes on their behalf.
The Rhode Island-based CHOICES program, currently in the final stages of negotiation for a HCFA waiver, is one such example, according to Al Quattromani, associate director of the Division of Developmental Disabilities of the Rhode Island State Department of Mental Health, Retardation and Hospitals, in Cranston, RI.
Fiscal intermediaries receive vouchers in the name of clients, write checks to providers against the vouchers, and pay taxes when appropriate. Caregivers, though selected and directed by clients, are either self-employed or employees of private agencies, he explains. In other states, clients are considered employers.
States’ treatment of workers’ compensation and tort liabilities is more nebulous, according to Charles Sabatino, JD, assistant director of the American Bar Association Commission on Legal Problems of the Elderly in Washington, DC. Sabatino led a legal analysis of liability issues affecting consumer-directed personal assistance services in collaboration with the World Institute on Disability.
While the Social Security Domestic Employ- ment Reform Act of 1994 bolstered payment and reporting mechanisms and clarified personal assistant coverage under federal income tax, Social Security and unemployment compensation laws, no such legislation exists for workers’ compensation.
"Significant disparities and exceptions to coverage still unfairly apply to personal assistants under federal and state labor laws, particularly because of exceptions in coverage for domestic services’ and companionship services’ under the federal Fair Labor Standards Act and state workers’ compensation acts," adds Sabatino.
Many states haven’t addressed these exclusions "because they don’t have clout over state employment commissions who are not interested in increasing their rolls because of their own fiscal constraints," he notes.
Tort issues involving client-employers’ liabilities in the event of caregivers’ injury are also largely untouched, he says. Rhode Island, for example, is "still sorting through" worker’s compensation issues with the state labor department and has not yet specifically addressed tort liability, according to Quattromani.
There may be no immediate solution, according to John Gilliland, a health care attorney in Crestview Hills, KY.
"You have these two big social policies running smack into each other," he says "To benefit the disabled, you have to dismantle protections for employees. It’s probably not resolved easily — it’s not very pretty."
States offer client safeguards
Home care providers also expressed concerns that programs designed to empower the disabled and elderly may actually expose them to potential abuse. Not fully competent to make decisions for themselves, clients may be taken advantage of by caregivers without appropriate supervision, they explain.
"The eligible elderly are frail; they may be mentally incompetent and likely in a declining state," according to Mary Shantz, executive director of the Missouri Alliance for Home Care in Jefferson City, MO.
Yet, some can "put on a show" when meeting those reviewing their circumstances to "mask their mental deficiencies, but they’re confused and don’t remember writing checks or paying people," says Sullivan.
Aware of such concerns, state officials and program advocates argue that virtually all programs have safeguards to protect clients and enable them to make only those decisions they feel comfortable with.
Says Quattromani, "Our No. 1 concern is consumer safety, but people think it’s either one thing or another, and that just isn’t the way life is. [The decision making] is in degrees and involves just the things that are important to clients. For some, it’s choices of clothes; for others, it’s a career. The disabled population makes decisions the same way the rest of us do. . . . We all ask everyone for their input, but we hear consumer-directed.’ Suddenly, the consumer standing there alone, and it’s not that way. It’s very incremental at a pace where everyone’s comfortable where we can adjust and improve."
The Rhode Island CHOICES program involves a statewide resource network and a management services organization to "help with decisions and judgments, and see if people are capable of decisions. If they’re not, it’s not an option," Quattro-mani notes.
The state also requires criminal background checks and training for caregivers. Its small size and active disabled community create a strong informal safety net, he adds.
Research and program experience to date suggests that only some of those eligible to hire workers directly choose to do so. In a June 1997 survey, only 32% of elderly and disabled Arkan-sans who were eligible indicated a preliminary interest in a self-directed cash payment option over traditional services.1 Only about 5% of Rhode Island CHOICES enrollees have taken full decision responsibility, according to Quattromani. (See related article, p. 4.)
"It’s not the solution for everyone," Crosby admits. "Not everyone should be an independent provider and have an independent provider."
Still, those who decide to directly employ workers "need that option," according to Catalano.
Despite its current imperfections, consumer-directed care will be an increasingly important component of our health care system evolving to meet the needs of an aging population.
"The states doing this may be [an] intentional or secondary issue, but it’s driving competition and reducing costs. Unless they do it, there won’t be any health care dollars," according to Catalano.
While cost savings is clearly a state interest, "our goal is to reduce the rate of increase not necessarily to decrease the overall program cost. I believe that nationwide, states won’t spend less money, but will limit growth and put money where services are needed," Quattromani notes.
Reference
1. Simon-Rusinowitz, et. al. Health Care Financing Review. Determining Consumer Preferences for a Cash Option: Arkansas Survey Results 1997; 19(2): 73-96.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content