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Medicaid amendments allow states to offer more 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:
approval lasts for five years instead of having to be renewed every year,
they don't have to be cost-neutral, and
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.”
Developmental disabilities
In addition to 1915(i), the PPACA added a provision for health homes for individuals with developmental disabilities. “1915(i)can be an important companion to a health home,” said Poisal. “Individuals with mental illness can be served there too.” In addition to coordinating care, the health home would have to do the linkages to the various services, including those provided under 1915(i).
While it's true that health homes and 1915(i) can link to each other, “no one has sat down and drawn the connections,” said Manderscheid. “I would say the 1915(i) will bring you more traditional community-based services, while the health homes for the chronically mentally ill and the chronically ill will bring not only the traditional services, but also prevention and health promotion-what we talk about as wraparound services.”
Manderscheid said there is also interest in using 1915(i) plans for the developmentally disabled population. “They have been deinstitutionalized, but I don't think they have gone as far in terms of having jobs and having social support networks.”
The 1915(i) plans may be better options for those states that don't already have a rich array of services, because they allow states to enrich services to some of priority populations, said Manderscheid.
When the 2006 announcement about the original 1915(i) plans was released and only five states applied, there was a perception among states that the process was going to be “onerous,” said Manderscheid, adding that “the response in the PPACA is to make this easier, to increase flexibility. The PPACA is really about promoting equity in insurance and in care so that we can move toward more social justice in our country.”
California's example
California received approval from CMS for expanding Medicaid coverage up to 133 percent of poverty level now-and this includes a minimal mental health benefit. States that are considering a 1915(i) plan “are looking at it in terms of how broad or narrow they want the mental health benefit to be,” said Don Kingdon, PhD, deputy director of the California Mental Health Directors Association (CMHDA).
1915(i) plans may be better suited to those states that don't already have expanded benefits, said Kingdon. “In California, where counties provide the match, we may not want to limit the number of people in treatment,” she said. “That's the unknown in this.”
Typically, the federal government wants to see a fair amount of cost neutrality, said Patricia Ryan, CMHDA's executive director. “If they see California is well-funded, they may want to slow that cost growth down,” she said. “Today we are a non-risk recipient for mental health services-we are fully reimbursed.”
“The way our system is now, counties are at risk for putting up the match for dollars under the Medicaid program,” said Ryan. “If the state has to put up additional money, that will be a non-starter.”
It's unique that in California the counties provide the match. “For adult beneficiaries, counties are pretty much at risk for providing everything,” said Ryan. California already did this for the developmentally disabled population as a demonstration program, and “the state is still on the hook for that,” she said.
Treatment for developmental disabilities is already more home- and community-based than treatment for mental illness, said Ryan. “They're a little more focused on implementing Olmstead in that population,” she said. “Obviously we're going to be doing the same for those with serious mental illness.”
The federal Medicaid match depends on the population of the state, with the poorest states getting the highest matches. CMS is working on a 1915(i) notice of proposed rulemaking, which will be published sometime this year. But as Poisal said, states needn't wait for it to be published in the Federal Register-they are encouraged to contact CMS now to start on their applications.
Alison Knopf is a freelance writer. Behavioral Healthcare 2011 April;31(3):42-50
