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The Roger C. Lipitz Center for Integrated Health Care

Family Caregivers as Paid Personal Care Attendants in Medicaid

Roger C. Lipitz Center Issue Brief

Jennifer Wolff, Karen Davis, Mark Leeds, Lorraine Narawa, Ian Stockwell, Cynthia Woodcock

People with significant disabilities commonly rely on personal care assistance (human help) to undertake every day activities such as eating, bathing, dressing, toileting, or getting around inside. When needed, the availability and adequacy of personal care assistance is foundational to optimizing quality of life and allowing people with disabilities to remain living at home or in the community. Two-thirds of older adults with disabilities rely exclusively on unpaid personal care from family members or friends. (Freedman and Spillman 2014)  People with disabilities who are enrolled in Medicaid may self-direct personal care through home and community-based waiver programs or personal care optional benefits in which relatives, friends, or independent providers are compensated by the Medicaid program for the personal care that they provide. Self-direction of services in which family caregivers are compensated by Medicaid as paid personal care attendants raises several challenges for states with regard to oversight of quality and management of budget neutrality given the possibility that paid services may substitute for unpaid care that would have been rendered in the absence of compensation. This brief describes issues that relate to family caregivers as paid personal care attendants along three dimensions: (1) the history and context, (2) quality and budgetary implications, and (3) Community First Choice, with a focus on the state of Maryland, in particular.

Evolving nature of home and community-based services and self-direction in Medicaid

The structure of home and community-based services in state Medicaid programs has evolved over time, in part due to broader changes that relate to disability rights and federal mandates to ensure availability of community-oriented long-term services and supports. Nursing home and home health care have been covered Medicaid services since its inception. The state Personal Care benefit option was introduced in the 1970s. The Personal Care benefit option initially had a medical orientation in its structure: services were required to be prescribed by a physician, supervised by a registered nurse, and delivered in accordance with a service plan to meet activities of daily living (as opposed to instrumental activities of daily living) in a person’s place of residence. Over time, states sought to broaden the scope of the personal care optional benefit. Changes to the structure of the program in the 1990s afforded states flexibility to oversee the provision of personal care services using approaches other than nurse supervision, to use alternative approaches to authorize services other than physician prescription, and to provide services outside the home. (See: (O'Keefe, Saucier, Jackson, Cooper, McKenney, Crisp, and Moseley 2010) for more details)

The 1999 Supreme Court decision Olmstead v. L.C. affirmed the rights of persons with disabilities to live in the most integrated setting. As a result, Medicaid programs must provide community-based services for persons with disabilities who would otherwise be entitled to institutional services when (a) the state’s treatment professionals reasonably determine that such placement is appropriate; (b) the affected persons do not oppose such treatment; and (c) the placement can be reasonably accommodated, taking into account the resources available to the state and the needs of others who are receiving disability services.  In 1999, CMS released a state Medicaid Manual Transmittal that thoroughly revised and updated guidelines concerning coverage of personal care services to include assistance with both activities of daily living and instrumental activities of daily living and to clarify that all relatives except “legally responsible relatives” (spouses and parents of minor children) may be paid for personal care service provision to beneficiaries. The Manual also explicitly recognized that the provision of personal care services may be directed by the people receiving them. By 2011, 32 states covered personal care services under their Medicaid State plan and approximately 960,000 beneficiaries received services, including approximately 5,200 in the state of Maryland at a total cost of nearly $30 million, or $5,700 per person. (Ng, Harrington, Musemeci, and Reaves 2014)

In 1981, Congress authorized the waiver of certain Federal requirements to enable states to provide home and community services to individuals who would otherwise require institutional services reimbursable by Medicaid.  The waiver programs are alternatively called 1915[c] waivers after the section of the Social Security Act that authorized them. Under the 1915[c] waiver authority states may provide services not usually covered by the Medicaid program, as long as those services are required to prevent institutionalization. Services that are covered include case management, homemaker, home health aide, personal care, adult day health, habilitation, and respite care; neither the statute or CMS regulations further specify or define the scope of listed services and a wide range of services has been approved since the waiver authority became available. In 2011, 47 states and the District of Columbia operated 291 1915[c] waiver programs that served 1.5 million beneficiaries, including approximately 21,700 Medicaid beneficiaries in the state of Maryland at a cost of approximately $817 million, or $37,700 per person. (Ng, Harrington, Musemeci, and Reaves 2014)

Recent years have further expanded the authority of states to offer HCBS; features of self-direction vary by program (see Table). The Deficit Reduction Act of 2005 added the 1915[i] authority to allow states the option to offer a wide range of home and community based services to individuals who do not require institutional care without having to secure Federal approval of a waiver. The Affordable Care Act added the 1915[k] Community First Choice Option benefit. Under this new benefit, services and supports may be provided through an agency-provider model or “other” model in which participants or their representatives select, manage, or dismiss workers. States who provide services under this option receive a federal match that is 6% higher than other services. As of 2015 8 states, including Maryland, participate in this program. (See: (NORC 2014) for description of Maryland program)

Table. Features of Medicaid Home and Community Services Programs with Self Direction

 

State Plan Personal Care (1905[a](24))

1915[c] HCBS Waiver

1915[i] State Plan HCBS

1915[j] Self-Direction

1915[k] Community First Choice

Employer Authority

Allowed

Allowed

Allowed

Required

Allowed

Budget Authority

Not allowed

Allowed

Allowed

Required

Allowed

Cash Payments to Participants

Not allowed

Not allowed

Not allowed

Allowed

Allowed

Direction by Representative

Allowed

Allowed

Allowed

Allowed

Allowed

 

Hiring of Legally Responsible Individuals

Not allowed

Allowed

Allowed

Allowed

Allowed

Information and Assistance

Not required

Required

Required

Required

Required

Financial Management Services

Fiscal employer agent service only required

Required

Required

Required, except cash option

 

Availability of non-traditional goods and services

Not allowed

Allowed

Allowed

Allowed

Allowed

Comparability (only offer to certain target populations)

Cannot be waived

Can be waived

Can be waived

Can be waived

Cannot be waived

Institutional Level of care

Yes

Yes

No

Yes

Yes

Statewideness

Cannot be waived

Can be waived

Cannot be waived

Can be waived

Cannot be waived

Modified from Table 7-1 (page 182) O’Keefe (2010)

Quality and Budgetary Implications of Paying Family Caregivers as Personal Care Attendants

Although Medicaid prohibits the hiring of legally responsible relatives under the State Plan Personal Care option, states have discretion to allow payment to relatives, including legally responsible relatives (spouses and parents of minor children), for personal care services under a range of other Medicaid programs including the home and community-based optional waiver program 1915[c], “cash and counseling” 1915[j], and 1915[k] “community first choice attendant care benefit.”   Generally, to be a paid personal care provider, a legally responsible relative has to be providing services that a parent or spouse would not be providing for a non-disabled spouse or minor child; for example feeding a 15-year old child or bathing a spouse.  In general, representatives who direct services on behalf of Medicaid beneficiaries (e.g. beneficiaries with cognitive impairment) are not eligible to be paid.

As it is up to states to define the particular circumstances under which relatives will be paid to furnish services to participants within the broad parameters of Federal policy, the payment of family caregivers by Medicaid raises several important questions for states regarding how to structure consumer directed personal care services.  The first challenge relates to oversight responsibility to ensure the quality of care that is delivered to Medicaid beneficiaries and establishing training, qualifications, or credentialing requirements that must be met by family caregivers who are hired.  Second, substitution of paid for unpaid help by family caregivers raises budgetary considerations for states due to the potential for reimbursing family caregivers for services that would have been willingly provided in the absence of payment.  Third, the blurred line between family caregiver and paid personal care attendant presents challenges for interpreting labor laws given that family caregivers may provide care both on and off the clock. (Foster, Dale, and Brown 2007; Newcomer, Kang, and Doty 2012)

Oversight and Quality of Care

Free choice of providers is necessary for individuals to self-direct services and supports. However, Medicaid freedom of choice extends only to “qualified providers” and Federal Medicaid law requires that states establish required provider qualifications and enroll willing providers who meet such qualifications. Although qualifications must be reasonable and comport with state law, states have considerable latitude in establishing qualifications required of home and community services. Some states limit provision of personal care services to entities that are licensed as “home health agencies.” A central task for states interested in promoting self-directed services is an assessment of provider qualifications to determine who may qualify as providers. Provider qualifications may be expressed solely with the respect to the competencies and skills individual workers possess.  States also increasingly require individuals who would provide personal care services to undergo background checks against abuse/neglect registries. Little information is available about how states evaluate qualifications of family caregivers who are paid personal care attendants, although the 2013 National Inventory Survey on Participant Direction reported that programs commonly require certification (34% of programs) or training of workers (54% of programs) such as in CPR or HIPAA. (NRCPDS 2014)

Self-directed service models rely on needs assessment and service planning processes to help safeguard participant health and welfare and to ensure that services and supports enable participants to meet individual community living goals. The person-centered planning process is a critical component of self-directed service planning. Although states have considerable latitude in empowering individuals to manage authorized services as well as in determining the process by which the plan of care is developed, federal law requires that services that are received through HCBS waiver programs are provided pursuant to a plan of care. The methods used by states to perform the assessment vary greatly and often differ within a state according to the population served. Some states use a comprehensive assessment instrument to determine underlying factors that impact beneficiaries’ need for services such as cognition, vision, social function, mood, or behavior. 

Approximately 10 states include an assessment of family caregivers who serve as a personal care attendant within 1915[c] programs. (Kelly, Wolfe, Gibson, and Feinberg 2013) In these states, the information that is collected from the family caregiver affects the individualized care plan for the Medicaid beneficiary (e.g., to manage workloads, determine timelines of assessments, quantify hours authorized, set client budgets, create management and quality reports, evaluate client risks and outcomes) as well as to connect family caregivers to services and supports to meet their own needs. Questions posed in the family caregiver assessment may span multiple domains - 8 of 10 states that include an assessment of family caregiver in their Medicaid waiver programs include questions about family caregivers’ skills, abilities, and knowledge to assist the Medicaid beneficiary, 5 states ask family caregivers about training needs. Information about the use of family caregiver assessments within the Maryland Medicaid program were listed as “not available” in the referenced report. 

Fair Labor Standards Act

The Fair Labor Standards Act was enacted in 1938 to provide minimum wage and overtime protections for workers, prevent unfair competition among businesses based on subminimum wages, and to spread employment by requiring employers whose employees work excessive hours to compensate employees at one and ½ times the regular rate of pay for all hours worked over 40. The Fair Labor Standards Act did not initially protect workers employed directly by households in domestic service, such as cooks and housekeepers. Congress explicitly extended FLSA coverage to “domestic service” workers in 1974, amending the Act to apply to employees performing household services in a private home. However, the 1974 amendments created a limited exemption from both the minimum wage and overtime pay requirements of the Act for domestic service workers employed to provide “companionship services for elderly persons or persons with illness, injuries, or disabilities who require assistance in caring for themselves. This limited exemption of the FLSA remained unchanged until January of this year.

Federal rules implemented by the Department of Labor in January 2015 effectively eliminate the companionship exemption for workers, including family members, who provide personal assistance services in the home. The Department considers that these services are not “companionship,” but are “work” subject to the Fair Labor Standards Act, including federal minimum wage and overtime protections. Under this revised rule, workers employed by third party employers and a consumer (as in Medicaid consumer-direction programs) are covered when: 1. More than 20% of weekly hours are spent on help with ADLs or IADLs, 2. Housekeeping is performed for family members other than the client, and 3. Assistance for the client includes any medically-related tasks.  When any of the three conditions are met during a given week, workers must be paid the federal or state minimum wage, with all hours that exceed 40 hours paid at time and a half (except for live-in caregivers).

If the beneficiaries’ plan of care calls for more than a 40-hour workweek and the beneficiary chooses to rely on a single family caregiver, then that family caregiver would be eligible for overtime. Thus, adhering to FLSA protections raise a tension for states between ensuring budget neutrality (required for waiver programs) and adhering to the ability to meet a beneficiaries’ plan of care. (Weil 2014)  The 1915[k] Community First Choice program requires employers to adhere to the provision of the Fair Labor Standards Act and applicable Federal and state laws regarding income and payroll taxes, unemployment and workers compensation insurance, general liability insurance, and occupational health and safety. (see page 188, (O'Keefe et al. 2010)) 

Community First Choice

Community First Choice is an optional Medicaid State Plan benefit that was introduced in the Affordable Care Act. Community First Choice provides states a 6% point increase in their Federal Medicaid Assistance Percentage (FMAP) for providing home and community-based attendant services and supports. As a “State Plan” benefit, the option is available to states without the need for special waiver authority. States that take up this option are required to use a person-centered plan of services and supports that is based on an assessment of functional need that is agreed to in writing by the individual, or as appropriate, the individual’s representative. Individuals of all ages may be served through Community First Choice provided they receive Medicaid eligibility through State Plan eligibility rules, meet institutional level-of-care criteria, and either fall within an eligibility group that is entitled to receive nursing facility services, or have an income that does not exceed 150% of the federal poverty level. 

States must provide Community First Choice services and supports on a statewide basis and without regard to individual’s age, type or nature of disability, severity of disability (except with regard to level-of-care requirements), or the form of home and community-based services and supports that the individual requires to lead an independent life. State cannot target specific populations for inclusion or exclusion. However, they may set limits on the amount, duration, and scope of services so long as they are sufficient to reasonably achieve the purpose of the service and are applied without regard to individual’s age, type or nature of disability, severity of disability, or form of services and supports required to lead an independent life. Community First Choice has a strong self-direction component, meaning that regardless of service delivery model, individuals have control to the maximum extent possible of how, when, where, and by whom the personal care attendant services and supports are provided.

A 2012 GAO report found that although Medicaid officials are attracted to the enhanced federal matching funds available through Community First Choice, uptake is tempered by concerns about the potential inability to control expenditures given requirements that the option be offered statewide and the prohibition on state enrollment and utilization caps.  Additional concerns include limited staff availability to research or implement the program. (GAO 2012) As of December, 2013, eight states had decided to offer the Community First Choice Option in their Medicaid plan: Arkansas, Arizona, Oregon, California, New York, Montana, Minnesota, and Maryland.  These states are in various phases of implementing their Community First Choice programs. California has the most established program. An interim DHHS report states that 491,809 California Medicaid beneficiaries were served through the Community First Choice program in 2012; most had previously received services through the Personal Care State Plan optional benefit. (Sebelius 2014) More than 99% of individuals enrolled in the California Community First Choice were served through a self-directed model by the personal attendant of their choice; less than 1% received service through an agency model. 

Community First Choice in Maryland

Maryland currently relies on an agency model in its Community First Choice program. It employs a fiscal intermediary to provide financial management services. Voluntary training on attendant selection and oversight is provided through the Maryland Department of Disabilities in many formats including individual training, group training, and webinar on request.  Participants’ initial and annual assessments are conducted by a nurse or social worker from the local health department or a state contractor using the interRAI Home Care who prepares a recommended plan of care and enters information from the assessment and plan of care into the LTSS tracking system.  After eligibility has been established, participants select a supports planning agency. The supports planner schedules a face-to-face meeting with the participant and their representative to determine needs, goals, strengths, risks and preferences.  The supports planner accesses the recommended plan of care through the tracking system and uses the information with the participant’s input to help develop a plan of service using person-centered planning processes. The plan of service includes back-up plans to ensure participant’s health and safety, such as back up staffing, assistive technology, and training for the participant and their family. Due in part to the revised definition of companionship services under the FLSA, the state of Maryland will be moving to exclusive reliance on an agency model of care this year. 

Several types of providers may deliver personal assistance services in the Maryland Community First Choice program. Agency-based personal care attendants must be: 18 years of age or more, able to communicate in English, able to pass a criminal background check, certified in first aid and CPR, trained by the delegating nurse in all services identified in the plan of care. 

The Hilltop Institute examined interRAI assessments and MMIS2 claims data to develop a profile of the nearly 7,000 Maryland Medicaid beneficiaries who are enrolled in Community First Choice. (Stockwell 2015) Community First Choice participants are predominantly female (67%), dually eligible for Medicare (72%), and highly diverse across dimensions of age (see figure below) and race.  Maryland Community First Choice participants are White (42%), Black (42%), Asian (8%), and “other” (8%) race.  Community First Choice participants are about evenly divided by whether they receive less than 20 hours of care (n=3,780) or more than 20 hours of care from an informal caregiver (n=3,123; see Table). A minority of participants (15%) have no informal caregiver. Most (78%) informal caregivers are relatives, predominantly children (41%), parent or guardians (13%), spouses or partners (10%), siblings (7%), or other relatives (7%); approximately 6% of unpaid caregivers are nonrelatives. Maryland Community First Choice participants receive help with ADLs (59%) and IADLS (74%).  A minority report  that their informal helpers are unable to continue providing care (8%) or that their caregiver express feelings of distress, anger, or depression (12%), or are overwhelmed by their (the CFC participant’s) illness (17%).  Most Community First Choice participants report a supportive relationship with their family (86%). Approximately half (49%) of Community First Choice participants co-reside with their informal caregiver.

caregiver relationship

Percentage of CFC Participants

REFERENCES:

Foster, L, SB Dale, and R Brown. 2007. "How caregivers and workers fared in Cash and Counseling." Health Serv Res 42:510-32.

Freedman, V. A. and B. C. Spillman. 2014. "Disability and care needs among older americans." Milbank Q 92:509-41.

GAO. 2012. "Medicaid: States' plans to pursue new and revised options for home- and community-based services." edited by U. S. G. A. Office. Washington, DC.

Kelly, K, N Wolfe, MJ Gibson, and L Feinberg. 2013. "Listening to Family Caregivers: The Need to Include Caregiver Assessment in Medicaid Home and Community-Based Service Waiver Programs." AARP, Washington, DC.

Newcomer, R. J., T. Kang, and P. Doty. 2012. "Allowing spouses to be paid personal care providers: spouse availability and effects on Medicaid-funded service use and expenditures." Gerontologist 52:517-30.

Ng, T., C. Harrington, M. Musemeci, and E.L. Reaves. 2014. "Medicaid home and community-based services programs: 2011 data update." Kaiser Family Fundation, Washington, DC.

NORC. 2014. "ACA Section 2401, Community First Choice Option; Maryland State Plan Amendment Summary." Chicago, IL: NORC.

NRCPDS. 2014. "Facts and Figures: 2013 National Inventory Survey on Participant Direction." Pp. 14. Boston, MA: National Resource Center for Participant-Directed Services.

O'Keefe, J., P Saucier, B Jackson, R Cooper, E. McKenney, S. Crisp, and C. Moseley. 2010. "Understanding Medicaid Home and Community Services: A Primer." Pp. 253, edited by A. S. f. P. a. E. DHHS. Washington, DC.

Sebelius, K. 2014. "Report to Congress: Community First Choice Interim Report." Washington DC: DHHS.

Stockwell, I. 2015. "Maryland's Community First Choice Population: Demographics and Social Supports in Fiscal Year 2015." edited by J. Wolff.

Weil, D. 2014. "Joint employment of home care workers in consumer-directed, Medicaid-funded programs by public entities under the Fair Labor Standards Act." in Administrator's Interpretation No. 2014-2. Washington, DC: US DOL.

DOL BRIEF (Weil) describes economic realities for delineating who is an employer (consumer vs. state) and factors that influence whether an employment relationship or joint employment – Interesting examples of various programs are described.  http://www.dol.gov/WHD/opinion/adminIntrprtn/FLSA/2014/FLSAAI2014_2.htm

NORC brief on Maryland CFC program: http://www.medicaid.gov/medicaid-chip-program-information/by-topics/long-term-services-and-supports/home-and-community-based-services/downloads/md-cfc-spa-matrix.pdf

AARP overview of family caregiver assessment in Medicaid waiver programs: http://www.aarp.org/home-family/caregiving/info-11-2013/including-family-caregiver-assessment-in-medicaid-hcbs-waive-programs-AARP-ppi-ltc.html

ASPE Primer on Medicaid HCBS: http://aspe.hhs.gov/daltcp/reports/2010/primer10.pdf  (See Chapter 7 on Participant-Directed Services and Supports)

National Resource Center for Participant-Directed Services: http://www.bc.edu/schools/gssw/nrcpds/