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Chapter 3. Guiding Principles for Successfully Enrolling People with Disabilities in Managed Care Plans

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Faced with growing caseloads, declining federal aid, and escalating health care costs, many states are electing to enroll high-cost people with chronic disabilities in Medicaid managed health and long-term service plans. They are doing so in an attempt to place program expenditures on a more sustainable course while simultaneously improving the quality and accessibility of services. NCD recognizes that managed care techniques can create a pathway toward higher-quality services and more predictable costs, but only if service delivery policies are well designed and effectively implemented—and achieve cost savings by improving health outcomes and eliminating inefficiencies, not by reducing the quality or availability of services. Designing and operating a managed care system for children and adults with chronic disabilities poses unique challenges given the highly diverse, wide-ranging health and long-term support needs of the population. These challenges multiply when a state attempts to create a unified system of acute health and long-term services that merges Medicare and Medicaid funding streams.

In the current state and federal policy environment, where reducing public expenditures is a primary aim of public policy, there is a significant risk that vulnerable people with disabilities will be the victims of poorly conceived and executed public policies that fail to meet their needs. If such results are to be avoided, it is essential that the principles articulated below are meticulously observed in designing and carrying out managed care initiatives involving people with chronic disabilities. Done right, all stakeholders will benefit.

Personal Experience and Outcomes

Reacting to a long history of dehumanization and disempowerment by the medical establishment, over the past 30 years, the disability movement in the United States has embraced the core principles of independence, societal integration, self-direction, and productivity. While sometimes expressed in different words, these principles form the foundation of the independent living movement for people with physical disabilities, the recovery model for people with mental illnesses and substance use conditions, and self-directed and family-centered supports for people with lifelong disabilities. These principles and the values upon which they are based should be preserved as people with chronic disabilities are transitioned to Medicaid managed care plans. The restructured service delivery system should be rooted in a contemporary understanding of the social, personal, and environmental factors that lead to poor health outcomes and isolation from the mainstream of American life. Moreover, managed services and supports should be built around and linked to existing community-based disability structures, such as independent living centers, recovery learning communities, and community-based developmental disabilities and mental health agencies.

Principle #1. Community Living

The central organizing goal of system reform must be to assist people with disabilities to live full, healthy, participatory lives in the community.

Medicaid expenditures on HCBS have risen steadily over the past two decades, as ever-increasing numbers of eligible people are supported in the community rather than institutional settings. As pointed out in chapter 2, federal-state Medicaid expenditures on HCBS climbed to $55.9 billion in FY 2009, while the proportion of overall LTSS expenditures devoted to HCBS reached 44 percent, up from 18 percent in FY1995. [i] The ascendancy of HCBS has occurred more slowly for certain segments of the population with disabilities. For older beneficiaries and adults with physical disabilities, noninstitutional Medicaid expenditures represented 36 percent of total LTSS outlays in FY 2009. By contrast, during the same year 66 percent of Medicaid LTSS expenditures for people with intellectual and developmental disabilities were supporting noninstitutional services. [ii]

Moreover, as pointed out in chapter 2, growth in noninstitutional expenditures has advanced much more rapidly in some states than in others, creating significant variations among states in the number and percentage of people served in HCBS versus institutional settings. In FY 2009, for example, the percentage of Medicaid expenditures devoted to noninstitutional services and supports ranged from 88.2 percent in New Mexico to 14.4 percent in Mississippi—a range of more than six to one. [iii] When the focus is limited to older adults and people with disabilities, Feder and Komisar report that average expenditures on noninstitutional services in the five lowest-ranked states constituted 11 percent of total LTSS outlays in FY 2009, compared with 63 percent in the five highest-ranked states. [iv]

Over the past decade, the Bush and Obama Administrations, in collaboration with Congress, have taken a number of steps to improve access to Medicaid-funded HCBS. These bipartisan efforts culminated in the inclusion of several provisions in the ACA designed to furnish states with incentives to serve people with chronic disabilities in HCB settings:

  • Section 2403 of the ACA extends the Money Follows the Person (MFP) Demonstration Program through 2016, setting aside $2.25 billion to fund MFP projects between FYs 2012 and 2016. Thus far, 42 states plus the District of Columbia have participated in the program, originally funded as Real Choice, System Change grants and later authorized as a separate grant program in 2005. States receive a temporary increase in their federal matching ratio for transitioning people from institutions to the community. These funds in turn are to be used to improve the state’s community service delivery infrastructure.
  • The State Balancing Incentive Payment Program, authorized under Section 10202 of the ACA, provides states with enhanced FFP for increasing the share of LTSS expenditures used to pay for HCBS. States with the lowest proportion of LTSS dollars devoted to HCBS are eligible to receive a 5 percent increase in their federal medical assistance percentage (FMAP) if they increase the proportion spent on HCBS services to at least 25 percent by October 1, 2015. States with HCBS expenditures of between 25 percent and 50 percent are eligible to receive a 2 percent bump in FMAP if they raise the percentage expended on HCBS to at least 50 percent by October 1, 2015.
  • Section 2401 of the ACA authorizes a new state plan option for community-based attendant services for qualified Medicaid recipients with incomes of up to 150 percent of the FPL, or up to 300 percent of the FPL for people meeting NF level of care criteria. This Community First Choice Option qualifies participating states to receive a 6 percent increase in their FMAP rates for such services, but they must offer services on an entitlement basis and maintain their prior level of fiscal effort. A number of other requirements are associated with this new coverage option, including a requirement that participants be afforded an opportunity to self-direct their services.
  • Section 2402 of the ACA amends the Medicaid Home and Community-Based Services State Plan Option by (a) allowing states to target benefits to particular groups of individuals with disabilities; (b) modifying income eligibility criteria; and (c) requiring states electing this coverage option to make services available statewide and on an entitlement basis (i.e., without imposing utilization or expenditure caps). The aim of these changes is to offer states a stronger incentive to adopt the HCBS state plan option. Even though states now have the option of targeting specific populations by applying need-based eligibility criteria, few states have taken advantage of the Section 1915(i) state plan option thus far, due mainly to the fiscal uncertainties associated with offering such services on an open-ended entitlement basis.
  • Two new CMS units created under provisions of the ACA (the Medicare-Medicaid Coordination Office and the Center for Medicare and Medicaid Innovation) are planning to approve a series of three-year demonstration projects beginning in the fall of 2012 to test innovative service delivery and payment models for people with chronic disabilities who are dually eligible for Medicare and Medicaid benefits. States selected to participate in this demonstration program may qualify for federal assistance in implementing components of their dual-eligible demonstration programs. Either an FFS or capitated payment model may be used as the basis for a state’s demonstration proposal. As of March 2012, more than half of the states had submitted preliminary or final proposals to participate in this demonstration program.
  • Section 2703 of the ACA established a new Health Home State Medicaid Plan Option to provide a comprehensive system of care coordination for Medicaid beneficiaries with two or more chronic illnesses or disabilities. Health home providers are responsible for coordinating and integrating all primary, acute, behavioral health, and long-term services for enrollees. The state FMAP rate for this new coverage option, which went into effect on January 1, 2012, is 90 percent for the first two years the state plan amendment is in effect. States exploring this option may qualify for federal planning grants of up to $500,000 to line up qualified home health providers, develop payment methodologies, and complete other preinitiation activities.

These and other statutory, regulatory, and administrative changes over the past two decades have shifted the focus of Medicaid policy from a medical orientation to encompass a strong emphasis on helping people with disabilities live full, inclusive, healthy lives in the community of their choice. It is essential that this emphasis be carried forward as people with disabilities are enrolled in Medicaid managed care plans. The overarching goal of providing such people with a coordinated array of medical and nonmedical supports is not only to promote health and wellness but also to improve the capacity of beneficiaries to live as independently as possible in fully integrated community settings.

Principle #2. Personal Control

Managed care systems must be designed to support and implement person-centered practices, consumer choice, and self-direction.

Historically, people with disabilities have been afforded few opportunities to control their own lives, in large part because service providers and the public at large doubted their capacity to make wise, well-informed decisions. We have learned in recent years, however, that the vast majority of people with disabilities are fully capable of directing their own lives, provided they receive the necessary information and support.

People with disabilities must be afforded the chance to control their own lives and choose services and supports consistent with their personal goals and aspirations. To accomplish this goal, Medicaid service policies and practices must be person-centered, and equal attention and resources must be assigned to meeting an individual’s health care and long-term support needs. The individual’s preferences must be honored, and the right of the individual to control his/her own life must be respected by offering a flexible array of high-quality, personalized services and supports from which to choose.

Person-centered Practices

Person-centered approaches are designed to (a) help an individual map out his/her life goals and identify the supports required to achieve them; (b) help an individual exert greater control over his/her life and live as independently as possible; and (c) promote social inclusion in the community. The provision of health care and long-term supports must be designed and delivered through a person-centered lens. Health services must be carefully synchronized with long-term supports based on a common set of goals and desired outcomes spelled out in each participant’s person-centered plan. The plan must enable the person to exercise decision-making authority over activities of daily living and health maintenance functions.

Person-centered planning (PCP) was formally introduced to federal Medicaid policy in May 2002 when CMS issued the Independence Plus waiver template, a set of policies, procedures, and an application form that states could use to submit family- and self-directed HCB waiver requests under Section 1915(c) or Section 1115 of the Social Security Act. [v]However, for more than a decade prior to the issuance of the Independence Plus waiver template, a number of states (with CMS’ approval) had employed PCP in their personal assistance/attendant care and Section 1915(c) waiver programs.

In November 2005, PCP and self-directed services became a discrete option under all HCBS waiver services when CMS released a revised set of instructions governing the operation of Section 1915(c) waiver programs that incorporated all of the key components of the Independence Plus template, including a requirement that the individual service plans be person-centered. [iv] In 2006, Congress added two new state plan options—one focused on HCBS and the other on self-directed attendant care services. [vii] PCP was a key statutory feature of both of these state plan options. The Money-Follows-the-Person Demonstration program, authorized under the same 2006 legislation, also mandates the use of PCP. [viii]

Today, the use of PCP is virtually ubiquitous in Medicaid-funded HCBS. Too often, however, person-centeredness ends with the preparation of a person’s individual plan, rather than extending into day-to-day service and support practices. Barriers to person-centered practices are deep-seated and no doubt will continue to be a major challenge as states enroll recipients of LTSS in managed care plans. Commenting on the difficulties involved, one well-known team of PCP trainers noted,

The problems do not lie in the quality of the people in the [service] system but in the system itself. There is no “value deficit” among the people who write the [person-centered] plans nor in the inherent qualities of the persons who are expected to implement them. The gaps occur with the systems in which both work. [ix]

Recognizing the inefficiencies of using multiple assessment tools as the basis for PCP, a number of states have adopted, or are planning to adopt, standardized, automated assessment tools for use with multiple populations and programs. Such tools aim to streamline and standardize the assessment process while simultaneously achieving greater equity in the distribution of finite resources systemwide. [x] Unless such instruments are adapted to the varied needs and aspirations represented within each target population, however, the danger is that assessment results will be a poor reflection of the real needs and aspirations of certain subpopulations and the focus on the whole person will be dissipated. Further research is needed to verify the “fit” between standardized assessment results and the medical and LTSS needs of various subpopulations of people with disabilities.

Another issue that needs to be addressed is how assessment results are interpreted and translated into individualized service plans, with the aim of ensuring that care team decisions and the resulting resource allocations are in keeping with the life goals and desired outcomes of the individual enrollee. For the past several years, Wisconsin, as part of its Family Care program, has been using a tool called the Resource Allocation Decision Method, a system for determining the most effective means of providing LTSS to achieve enrollee-defined goals and outcomes. [xi] States planning to enroll people with disabilities in managed LTSS plans should employ tools and strategies to ensure that the individual planning process is truly person-centered and outcome-oriented.


The concept of consumer-directed services dates back to the 1970s, during the early days of the disability rights movement in the United States. Consumer direction soon became a core operating principle of attendant care programs in California, Massachusetts, and other states and later migrated to the developmental disabilities sector under the banner of self-determination [xii] and to the mental health sector under the rubric of consumer- and family-driven care (although to date examples of self-direction remain sparse in the behavioral health arena). [xiii] As noted above, self-direction became a formal part of federal policy in 2002, although the basic concept had been used earlier in Medicaid-funded HCBS service. [xiv]

Under certain Medicaid authorities, a state must offer managed care enrollees with disabilities the option of overseeing their own direct services and supports and controlling their own budgets, consistent with the provisions of PCP. This option must include the exercise of control over services and supports related to critical life functions, including activities of daily living, health maintenance, community participation, and employment. In addition, people choosing to self-direct their services must receive the training and support needed to perform the required functions. To promote maximum independence, state officials and representatives of MCOs should join people with disabilities in advocating for amendments to overly restrictive nurse practice laws and regulations that limit the performance of tasks such as catheterization and g-tube management to registered nurses. Flexibility in these areas will open opportunities for creative approaches to self-directed supports, which, when directed by the affected individual, may greatly improve health outcomes and prove to be more cost-effective over the long term.

The role of a case manager changes when Medicaid recipients of LTSS choose to self-direct their services and supports. When an individual chooses the provider of service, the case manager frequently is asked to assume enhanced responsibilities for counseling, training, and monitoring the quality and appropriateness of services, while being less involved in direct decision making than traditionally has been the case within disability service systems. Counseling and support managers in Arkansas’ HCBS waiver program for adults with physical disabilities, for example, are responsible for introducing program participants to the key concepts of consumer direction and training people who choose to self-direct in recruiting, interviewing, selecting, supervising, evaluating, and dismissing personal attendants. [xv]

Individual Choice

A key aim of managed care is to replace high-cost services or programs with equally effective lower-cost alternatives. The intimate nature of long-term supports furnished to people with intensive needs requires the direct involvement of consumers in selecting the individuals to provide the services as well as the services to be delivered. Moreover, the use of family- and self-direction often opens up a considerably broader range of support options because family members, friends, and neighbors can be enlisted to perform tasks otherwise furnished exclusively by certified home health and personal care agencies. The ability to choose among a wide array of services and support alternatives is a key to the success of self-directed and person-centered services. For this reason, managed care plan enrollees should be permitted to choose among in-network providers as well as out-of-network providers who agree to abide by reasonable MCO stipulations governing payment rates and service coordination (see also a related discussion under Principle #8, Provider Networks).

Principle #3. Employment

For working-age adults with disabilities, employment is a critical pathway toward independence and community integration. Working-age enrollees, consequently, must receive the supports necessary to secure and retain competitive employment.

Competitive employment at prevailing wages not only enhances an individual’s sense of self-worth and economic well-being but often results in reductions—sometimes sharp reductions—in service costs and support needs. Employees also have opportunities to build relationships that strengthen their social ties with others and enable them to become contributing, valued members of the community. One key policy aim, therefore, must be to broaden employment among adults with disabilities by targeting supports and providing incentives that enable them to enter the workforce and retain a job once employed.

Multiple studies over the past 30 years have documented the cost-effectiveness of supported employment services for adults with significant, multiple disabilities. [xvi] In general, these studies have found that, over time, supported employment generates lower per capita costs and enhanced skill development and socialization compared with sheltered employment. In a comparison of matched groups of people with severe disabilities, Cimera found that the per capita cost of supported employment services ($6,619) was substantially lower than the per capita cost of sheltered workshop services when tracked across an entire (three-year) employment cycle. Stated differently, the funds required to maintain one sheltered employee in a workshop setting would finance nearly three supported workers in integrated employment settings. [xvii] In a later study of the cost of Medicaid long-term supports for adults with intellectual and developmental disabilities in Wisconsin, Cimera found that, over an eight-and-a-half-year period, the average cost of providing follow-along services to supported employees ($9,130) was more than three times lower than the average cost of maintaining similar people in center-based work settings ($32,353).Yet, when the hours worked by 22 people who engaged in both supported and center-based employment during the September 2009 were compared, he discovered that the costs of assisting supported employees was $8.01 per hour worked, compared to $13.40 for center-based employees. [xviii]

On average, people with intellectual disabilities who engage in integrated community employment earn more and cost less to support, regardless of where they live and whether they have secondary disabilities. By analyzing data on 104,213 people served by state vocational rehabilitation agencies between 2002 and 2007, Chimera discovered that supported employment participants who became successfully employed in community settings gained greater monetary benefits (i.e., wages earned) than the resulting monetary costs (i.e., forgone wages, taxes paid, reduction in subsidies) regardless of (a) their state of residence or (b) the number of disabling conditions. Cost efficiency, however, varied considerably across the country, ranging from an average benefit-cost ratio of 13.54 and a net monthly benefit of $561.04 in Washington to a ratio of 1.86 and a net monthly benefit of $217.92 in Wisconsin. [xix]

The benefits of integrated employment extend beyond enhanced earnings and lower support costs. Once employed, workers with disabilities contribute to the nation’s economic productivity and become taxpayers. Plus, numerous studies have noted the intangible benefits associated with employment. For example, through a series of semistructured interviews with people with psychiatric disabilities, Dunn and colleagues identified myriad benefits associated with paid employment, including enhanced pride and self-esteem and the chance to develop coping skills, which ultimately facilitated the process of recovery. [xx] In addition, an analysis of FY 2009–10 employment data on 11,292 people with intellectual and developmental disabilities in 16 states found positive benefits of work on personal and service-related choice, community participation, personal relationships, outcomes, safety, and other areas, as compared with people who were not employed. [xxi]

During December 2011, approximately 21 percent of working-age adults with disabilities participated in the labor force, compared with 69 percent of adults without a work-related disability. [xxii] Yet only a small fraction (1.2%) of the estimated $429 billion the Federal Government and the states expended on people with disabilities in FY 2008 was used to improve prospects for employment and economic independence. Indeed, more than 95 percent of federal-state disability expenditures paid for health care expenses and income maintenance benefits, with more than half the total (55%) devoted to health care spending (primarily Medicare and Medicaid payments) and most of the remainder (41%) to Social Security, SSI, and other government benefit payments. As the authors of this recent analysis pointed out, the existing “complex, many program model devotes far more spending on a safety net than on programs to directly advance the goals of ‘equality of opportunity, full participation, independent living, and economic self-sufficiency for people with disabilities as articulated in the 1990 Americans with Disabilities Act.’” [xxiii]

The provision of lifelong supports to people with disabilities represents a significant investment in their lives. From a public policy perspective, it makes sense to ensure that the services and supports that are offered are designed to enable people to become productive and contributing members of society to the fullest extent possible. One important step toward creating a twenty-first century health care and long-term support delivery system involves abandoning the caretaker model of disability policy that is embedded in many major government programs originating during the Eisenhower, Kennedy, Johnson, and Nixon Administrations. The focus of government policy instead needs to shift toward helping people with disabilities become more independent and productive, both socially and economically. Improving employment opportunities is an essential component of any successful strategy for achieving these goals.

Employment: Washington

For years, Washington has been recognized as a leader in creating integrated employment opportunities for adults with intellectual and developmental disabilities (I/DD). In 2009, 88 percent of adults receiving day and employment services through the state Division of Developmental Disabilities (DDD) were working in integrated employment settings, or more than four times the national average for all state I/DD agencies (20.3%).These results are the product of a conscious policy that Washington officials have pursued relentlessly over the past three decades in partnership with county officials, provider agencies, and consumers and family members.

Washington’s emphasis on employment outcomes began in the late 1970s with a series of value-based workshops attended by key state and county officials as well as day provider agency staff. One of the early results was the issuance of a set of county guidelines spelling out a process for achieving integrated employment outcomes. In 1985, DDD received a systems change grant from the federal Rehabilitation Services Administration that allowed it to refine the process of funding employment supports and establish statewide and county-specific outcome targets. After years of building a solid infrastructure for delivering employment supports, DDD adopted a policy in 2008 stating that “Supports to pursue and maintain gainful employment in integrated settings in the community shall be the primary service option for working age adults” (DDD Policy 4.11, as amended on September 15, 2011). The cost-effectiveness of the state’s emphasis on employment outcomes is underscored by the results of Cimera’s analysis of national data trends cited above.

DDD contracts with county developmental disabilities offices to administer state-funded day and employment services. Most counties, in turn, subcontract with private provider agencies to furnish services and supports to eligible people.

A flexible array of funding for supported employment and other community services is made available through four Medicaid HCBS waiver programs targeted to people with developmental disabilities. DDD also funds a wide array of training and technical assistance activities to promote continued employment-related learning activities through the Washington Initiative for Supported Employment (WISE). Last year, WISE completed three CMS-funded system change grant projects aimed at building careers and community involvement for adults with developmental disabilities.

In the spring of 2010, Washington was one of 15 states selected by CMS to receive a planning grant to design integrated services for dual eligibles. Officials of the state Department of Social and Health Services (DSHS) and the Health Care Authority (HCA) submitted a dual-eligible demonstration grant application to CMS in April 2012. This grant project will build upon the state’s prior managed care experience to phase in innovative service delivery and payment models that integrate physical and behavioral health services and long-term supports for people who are dually eligible for Medicare and Medicaid services. With the exception of about 900 residents of state-run Residential Habilitation Centers (state institutions), dual eligibles with developmental disabilities will be enrolled in the demonstration project and receive health care services through managed care plans, but DSHS will continue to furnish services provided through Section 1915(c) waiver programs to this population. The state’s proposal indicates that community-based DD waiver services were carved out of the demonstration because of “significant concern” among DD stakeholders “about health plan readiness to provide habilitative and employment services provided under state and federal Section 1915(c) authorities.” As the demonstration project is implemented, discussions will continue regarding the “competencies, outcomes and other factors” that need to be in place before HCB services for the population with DD can be transitioned to the integrated health plans.



John Butterworth et al., State Data: The National Report on Employment Services and Outcomes (Boston, MA: Institute for Community Inclusion, University of Massachusetts/Boston, Winter 2011),

John Butterworth et al., Pushing the Integrated Employment Agenda: Case Study Research in Washington State(Boston, MA: Institute for Community Inclusion, University of Massachusetts/Boston, June 2006),

J. Winsor et al., Employment Data Systems: Washington State’s Division of Developmental Disabilities (Institute for Community Inclusion, University of Massachusetts/Boston, March 2011),

Washington Initiative for Supported Employment, Building Careers and Community, Final Report: Person-Centered Planning Implementation Grant (February 2011),

Washington Department of Social and Health Services and the Health Care Authority, Design Proposal: HealthPlanWashington (formerly Pathways to Health:
A Medicare & Medicaid Integration Project) (April 26, 2012),

Principle #4. Support for Family Caregivers

Families should receive the assistance they need to effectively support and advocate on behalf of people with disabilities.

Family members play critical roles in supporting and advocating on behalf of people with disabilities. According to an AARP Public Policy Institute study, in 2009 there were approximately 42.1 million family caregivers in the United States providing care to senior citizens and other adults with limitations in activities of daily living. The estimated economic value of their unpaid contributions was roughly $450 billion in 2009, up from $375 billion in 2007. [xxiv] The continued growth in family caregiving is, in large part, a reflection of the changing demographics of the U.S. population and the growing cost of publicly and privately funded LTSS. The average lifespan in 1900 was only 47 years. Today, the average life expectancy of an American is 78 years, and demographers expect this figure to rise to 80 years by 2020. [xxv]

The growth in family caregiving for people with chronic disabilities applies across the age spectrum. The most recent data released by the University of Minnesota’s Rehabilitation Research and Training Center on Community Living indicate that 57.7 percent of people receiving publicly funded services for developmental disabilities (or 592,180 people) were living in the home of a family member in 2010, up from 51 percent (of 391,859 people) in 2000. [xxvi]

The renewed emphasis on person- and family-centered care (PFCC) has yet to be integrated within the changes occurring in health care and long-term service delivery systems, especially the move away from disease-specific and provider-focused models toward creating incentives to improve cross-system coordination, communications, and continuity of care. However, as these two trends merge, person- and family-centered models are likely to proliferate.

Under a person- and family-centered approach, health care and ongoing supports are based on the individual’s needs, goals, preferences, cultural traditions, family situation, and values. This approach places the individual and the family at the center of the care team, along with clinicians, direct support professionals, and the service coordinator, and seeks to deliver services and supports from the perspective of the individual and, as appropriate, his or her family. The conventional medical model of health care is organized around service providers, specific diseases, episodes of care, and visits to clinicians’ offices. In contrast, PFCC seeks to focus on the whole person, recognizing and supporting the social network within which the person with the disability lives. The aim is to help the person build and expand opportunities to lead a productive, meaningful life as an integrated and valued member of his or her community. [xxvii] A family-centered approach builds on the concept of person-centered services by emphasizing the essential role played by the family and, as such, is a logical extension of the disability rights movement. PFCC also takes into account the essential principles of supporting people with disabilities by building upon the strengths of family connections. [xxviii]

For people who experience disabilities early in life, it is important to keep in mind that the needs of family caretakers—like those of the person with disabilities—change over time. As these changes occur, the service delivery system must be prepared to modify the supports made available to the person, as well as to the family caretaker(s).

Given the growing shortage of trained workers available to provide direct, hands-on supports, the role of the family is likely to assume added significance in the years ahead unless government funding is substantially increased. It is, therefore, essential that states build into their managed care plans provisions to ensure that family members receive the information, counseling, training, and support they need to carry out their responsibilities. State and MCO policies also should permit family caregivers to be paid for providing services when such remuneration is in the best interest of the person with a disability and the family. [xxix]

Designing and Operating a Managed Care System

Managing a health care system is a complex undertaking involving an intricate web of relationships that must be effectively synchronized to achieve the desired results. Every operating component has to dovetail with other components if services and supports are to be provided in a timely, efficient, and effective manner. The need for well-conceived, detailed organizational and operational structures is underscored when health care and long-term supports for people with disabilities are placed under a single managed care umbrella based on a capitated payment structure. In addition to the challenges of coordinating the delivery services across service sectors, resources have to be equitably distributed between health care and long-term supports if “overmedicalization” of services is to be avoided.

Design features have to be worked out in advance, down to the minutest detail, and carefully monitored to ensure that the system continues to function as intended. The price of failure is measured in the lives of highly vulnerable service recipients. As the National Disability Leadership Alliance recently observed, “If states do not design [their managed care] programs well, beneficiaries with disabilities could, among other things, be denied needed coverage, lose continuity of care and services with their current providers and be forced to sacrifice consumer direction.” [xxx]

Principle #5. Stakeholder Involvement

States must ensure that key disability stakeholders—including people with disabilities, family members, support agency representatives, and advocates—are fully engaged in designing, implementing, and monitoring the outcomes and effectiveness of Medicaid managed care services and service delivery systems.

Active, open, and continuous dialogue with all affected parties offers the best prospects for creating and maintaining a service delivery system that meets the needs of people with disabilities. All participants must be confident that the transition to a managed care system will yield better outcomes for people with disabilities. The involvement of disability stakeholders should not end with approval of a state’s managed care plan. Instead, stakeholders should participate in monitoring implementation of the plan and provide feedback on system performance and needed plan modifications on an ongoing basis.

There are multiple reasons for states to involve disability stakeholders in designing and overseeing their managed care delivery systems. Among these reasons are that state officials can—

  • Obtain from Medicaid beneficiaries and disability service providers valuable insights into the strengths and weaknesses of existing payment and service delivery arrangements.
  • Gain an opportunity to explain their vision of a restructured service delivery system and the benefits to be derived by enrollees with disabilities and their families.
  • Obtain a grassroots perspective on dysfunctional aspects of current service delivery practices that need to be addressed, as well as effective practices that should be retained.
  • Help stakeholders prepare for the future by explaining how and when changes in service delivery and payment practices are likely to occur and how stakeholders are likely to be affected.
  • Forge ongoing relationships with stakeholder groups and enlist them as allies in resolving the inevitable roadblocks that will arise during implementation of the planned managed care program.

A variety of stakeholders should be involved in developing and vetting state managed care proposals, including program beneficiaries, advocacy organizations, providers of medical care and social supports, trade associations, unions, and, in some states, county governments. Each group can be expected to bring different goals and priorities to the table, and as a result, state officials will need to employ distinct strategies in reaching out to different target audiences. Efforts to promote understanding of the broad aims of the managed care initiative can be targeted to the general public and its elected representatives, while efforts to obtain input from specific groups of prospective plan beneficiaries may be accomplished best by arranging a series of more targeted forums. The messages a state crafts should be tailored to the principal interests of the particular group and aimed at answering the following questions: What are the target group’s principal values? What actions should members of the group take? What are the barriers standing in the way of the group taking such actions, and what information can you provide to counter arguments against doing so? What goals do the target group and the state share?

Target audiences differ and so do the methods available to reach these groups. Here are a few of the approaches states have used to engage stakeholders: [xxxi]

  • Focus groups are a useful means of obtaining firsthand feedback from beneficiaries and, where relevant, from their family members. States can bring together a group of beneficiaries who otherwise would be hard to reach by holding meetings at locations where such beneficiaries regularly gather (e.g., community health or mental health centers, churches) in various areas of the state.
  • Cross-stakeholder meetings can foster the cross-pollination of approaches to addressing issues of mutual concern. Diverse perspectives on a particular issue do not always emerge from large, general-purpose meetings, where a relatively small number of speakers tend to dominate the discussion. This limitation can be addressed by purposely bringing together stakeholders with differing perspectives on a selected set of topics. State officials need to think through the best way of organizing and conducting such sessions, however, if they are to be productive, including arranging times (e.g., evenings/weekends) and locations convenient for participating stakeholders.
  • Public webinars are an inexpensive way of conveying information to and receiving feedback from stakeholders. By using structured (e.g., PowerPoint) presentations followed by question-and-answer sessions, a state can tailor its communications to specific target audiences, involve stakeholders who are unable to travel, and accommodate the special communication needs of selected stakeholders. For example, in the spring of 2011, the California Department of Health Care held a series of public webinars for Medicaid beneficiaries with disabilities prior to activating a plan to transition people qualifying for benefits on the basis of age, blindness, or disability to managed health care plans.
  • Establishing project-specific Web sites where stakeholders can access the latest information on state-level planning and related managed care development activities. Oregon, for example, formed four cross-stakeholder work groups to advise state officials on the preparation of the state’s Medicare-Medicaid integration demonstration project. Information generated by these work groups, plus a variety of other documents related to the state’s planning activities, were posted on a Web site so interested citizens could stay abreast of developments.
  • A request for information (RFI) can be a useful method of gathering information on new models of care delivery, determining whether a proposed approach is acceptable to stakeholders, and eliciting information from organized constituencies. When the Massachusetts Division of Health Care Policy and Finance released an RFI on its under-65 dual-eligible project proposal in May 2011, more than 50 organizations, including a newly formed coalition of cross-disability advocates, responded to a series of questions posed by the agency. All responses to the RFI were posted on a special Web site, where they were available to be read by any interested citizen. The comments were used by Division of Health Care Policy and Finance officials in crafting the state’s demonstration proposal.

States, as well as the Federal Government, have an obligation to carefully review and act upon stakeholder input in a genuine and committed manner, rather than simply organizing a public input process to fulfill a federal regulatory requirement.

Stakeholder Involvement: Massachusetts

Disability stakeholders in Massachusetts have played an active role in shaping the state’s plans to launch a demonstration project to test new approaches to integrating the delivery and financing of acute health and long-term services to nonelderly adults with disabilities who are dually eligible for Medicare and Medicaid benefits. Key provisions of the proposal the state submitted to CMS in February 2012 were forged as a result of a series of meetings and public forums over two-year period involving disability advocates and officials of the state Executive Office of Health and Human Services (EOHHS).

Input from the disability community was coordinated by Disability Advocates Advancing Our Healthcare Rights (DAAHR), a statewide coalition of disability, elder, and health care advocacy groups formed in March 2011 to ensure that people with disabilities had a strong, unified voice in shaping health reform initiatives in Massachusetts. The following are among the most noteworthy products of the collaboration between DAAHR representatives and EOHHS officials:

  • A requirement that integrated care organizations (ICOs), the accountable entities within a restructured, capitated managed care system, establish relationships with organizations that are knowledgeable about recovery models and the delivery of integrated behavioral health services, including services to hard-to-reach subpopulations such as homeless people.
  • A requirement that ICOs contract with independent community-based disability organizations for independent living supports and LTSS coordinators. These LTSS coordinators, with no financial connections to the ICO, will function as part of an individual’s care team, with responsibility for ensuring that (a) the person receives the supports needed to live independently and (b) such supports are part of the care plan and dovetail with other plan components.
  • Stronger ADA compliance requirements, including physical accessibility standards and interpreters for people who are deaf, hard of hearing, or non-English speakers.
  • An enrollment phase-in process to ensure that state, federal, and ICO officials have adequate resources to work with plan members during the transition from FFS payments.
  • A requirement that enrollees qualifying for personal care attendant (PCA) services have the option of self-directing their services.
  • A decision to continue to pay for HCB waiver services, targeted case management services, and psychiatric rehabilitation state plan services on an FFS basis outside of (but coordinated with) the dual eligibles demonstration project.

While applauding these revisions and expressing appreciation for the cooperation of EOHHS officials, DAAHR has identified a number of additional modifications it would like to see made in the state’s proposal before it is approved. These changes are outlined in a March 25, 2012, letter to CMS.



Memorandum from J. A. Bigby, Executive Office of Health and Human Services, Commonwealth of Massachusetts, to M. Bella, Medicare-Medicaid Coordination Office, Centers for Medicare and Medicaid Services (February 16, 2012),

Letter from DAAHR cochairs Dennis Heaphy and Bill Henning to Melanie Bella, Office of Medicare and Medicaid Coordination, CMS (March 25, 2012),

Principle #6. Cross-Disability, Lifespan Focus

The service delivery system must be capable of addressing the diverse needs of all plan enrollees on an individualized basis, including, as applicable, children, adolescents, nonelderly adults, and seniors with physical disabilities, intellectual and developmental disabilities, traumatic brain injuries, mental illnesses, substance use disorders, and other types of severe, chronic disabilities.

The demographic and need profiles of Medicaid beneficiaries with disabilities are incredibly diverse. The types of services and supports required by an 85-year-old widow with advanced Alzheimer’s disease are entirely different from those needed by a teenager with significant behavioral and communication challenges caused by autism or another serious neurological disorder. Both may require specialized medical services and prescription medications in combination with ongoing personal assistance. But the composition and competencies of the team assembled to deliver those services will be radically different, as will the types of medical, psychological, pharmacological, and social interventions deemed appropriate. A key test of the potential effectiveness of a state’s managed care plan, therefore, is the extent to which it includes credible strategies for serving ALL subpopulations of Medicaid beneficiaries with disabilities who are to be enrolled in the plan. One-size-fits-all approaches will not work.

As pointed out in chapter 2, the nine million people who qualify for Medicaid benefits on the basis of disability include children and adults with traumatic brain injuries, physical, sensory, mental, and/or intellectual and developmental disabilities. In each instance, however, the functional impacts of the person’s disability as well as the types of interventions and ongoing supports he/she requires are influenced by such factors as the age of onset of the disabling condition, the nature and extent of any co-occurring conditions, the adequacy and appropriateness of services and supports that historically have been available (e.g., accessible medical facilities and equipment; durable medical equipment; paid personal care workers), and the resiliency of the informal support network surrounding the individual. Consequently, disability should be viewed as the product of complex interactions between social and medical factors, rather than a series of fixed diagnostic categories that predict the mix of interventions required.

Service needs are influenced by a host of factors other than a person’s diagnosis, including the age of onset and severity of the disability, whether other, co-occurring disabilities or chronic illnesses are present, cultural differences, and the capacity of family and friends to provide informal support and lend continuity to the person’s life. These factors, however, merely scratch the surface of the complexities involved. Within each broad category (age of onset, severity, co-occurring condition/chronic illnesses, and family support capacity), a significant number of factors come into play in crafting a treatment and support plan tailored to the needs and circumstances of the beneficiary. The fact that a person has a qualifying mental disorder, for example, tells little about the types and extent of interventions that may be required. The current edition of the Diagnostic and Statistical Manual of Mental Disorders, [xxxii] for example, identifies 297 mental disorders, each with its own unique signs, symptoms, and accepted treatment regimens. As with any health condition, diagnosing the nature of the person’s disorder is just an initial step in the process of assessing his/her needs and developing an individually tailored treatment and support plan. In addition to clinical assessment data, many social and environmental factors must be taken into account in determining the appropriate interventions. It is particularly important that people in need of LTSS receive a person-centered assessment of support needs in addition to any functional or diagnostic evaluations.

Among the major challenges of serving people with disabilities through a capitated managed care plan are (a) the establishment and maintenance of a robust provider network that is capable of addressing all of the diverse, wide-ranging treatment and support needs of enrollees with chronic disabilities (see discussion under Principle #8, Provider Networks); (b) the development of a sound methodology for establishing and adjusting capitation rates that accounts for all essential costs involved in treating and supporting the entire spectrum of needs among plan enrollees with disabilities (see discussion under Principle #13, Capitated Payments); (c) information and data to be gathered and reported to state and federal officials on encounters, service trends, system performance, and outcomes (see discussion under Principle #12, Information Technology); and (d) forging effective working relations with nonplan providers of services and supports to people with disabilities, including families, public schools, community mental health and substance use programs, vocational rehabilitation agencies, developmental disabilities agencies, and agencies serving people who are blind, deaf, or hard of hearing (see discussion under Principle #16, Coordination of Services and Supports).

Over the past 50 years, services to Americans with physical, mental, and intellectual/developmental disabilities have evolved along separate but parallel lines. The differences in the way services are organized, financed, and delivered today are both a reflection of the distinct characteristics and needs of discrete subpopulations as well as a product of the divergent social and political forces that shaped them. Creating a more integrated service delivery system that achieves efficiencies while retaining the best attributes of existing services will require time and extraordinary skills.

A state’s managed care plan must include administrative, financing, and service delivery arrangements that accommodate the wide-ranging service and support needs of distinct segments of the population with disabilities, including both primary and specialty health services and long-term supports. Where health care and LTSS are separately financed and administered, written agreements must be in place spelling out the collaborative steps each system will take to ensure that the health care and long-term support needs of beneficiaries are properly synchronized. Other approaches to cross-system coordination include using specially trained workers to perform bridging and navigational roles on service and support teams and training beneficiaries to gain access to needed services.

Principle #7. Readiness Assessment and Phase-in Schedule

States should complete a readiness assessment before deciding when and how various subgroups of people with disabilities should be enrolled in managed care plans. The assessment needs to occur at two levels: a global evaluation of the state’s readiness to move to a managed care system; and a more targeted assessment of the capabilities of selected managed care organizations to begin enrolling eligible individuals with disabilities in their plans. A state’s phase-in plans, in turn, should be based on the results of these assessments.

Existing disability service systems are highly complex, with administrative structures, operational capabilities, and funding mechanisms that vary widely from population group to population group and from state to state. Creating a unified financing and service delivery system capable of addressing the diverse health and long-term support needs of people with disabilities, consequently, is an enormously complicated undertaking. Managed care plan components, therefore, must be designed and implemented with great care if disastrous consequences are to be avoided.

Disability advocates and outside experts have raised serious concerns about several pending state proposals to convert existing disability services and supports to a managed care framework. [xxxiii] They point out that most managed care firms have had limited experience in serving people with chronic disabilities, especially in coordinating the delivery of health care and long-term supports to children and young to middle-aged adults with disabilities. For this reason, it is important that state officials work closely with disability stakeholders to assess existing methods of financing and delivering specialized services to subpopulations of people with disabilities encompassed by the plan (e.g., people with physical disabilities; children and adults with intellectual and developmental disabilities; people with serious mental illnesses and substance use disorders). An in-depth readiness assessment is especially important if a state’s ultimate goal is to administer Medicare- and Medicaid-funded health services and long-term supports under a single managed care umbrella.

The aim of the assessment should be to pinpoint modifications in existing administrative policies and practices that will have to occur prior to (and during) conversion to a managed care format. The results of the assessment should be used in establishing a synchronized implementation schedule. Consideration should be given to population-based or geographic-based phase-in schedules to ensure that adequate time and attention are devoted to essential implementation activities and compliance with related contractual obligations and state regulations. The purpose of a readiness assessment is to ensure that all of the essential pieces are in place before the transition to managed health services and/or long-term supports occurs.

The global evaluation should focus on potential barriers to serving identified subpopulations of people with disabilities. It should be carried out in partnership with officials from state disability agencies as well as other stakeholders and should include an examination of the adequacy of at least the following core elements of the state’s proposal:

  • The extent of disability stakeholder involvement in developing the state’s managed care proposal and the state’s plans for continuing such involvement during the implementation and ongoing operations of the program (see Principle #5: Stakeholder Involvement).
  • The strengths and weaknesses of the state’s existing HCBS network for addressing the needs of discrete segments of the population with disabilities targeted for inclusion in the planned managed care delivery system (see Principle #8: Provider Networks).
  • The state’s overarching system reform goals and strategies for addressing identified gaps and weaknesses in its existing HCBS network.
  • The existence (or lack) of valid and reliable instruments to assess the service/support needs of eligible people with disabilities and predict the resources likely to be required to address those needs (see Principle #18: Quality Management).
  • The strengths and weaknesses of the state’s plans to reduce its reliance on round-the-clock institutional care and emphasize individualized HCB supports (see Principle #9: Transitioning to Community-Based Services).
  • The availability of community housing to meet the varied needs of people with disabilities who are transitioning from institutions to the community or being diverted from institutional placements (see Principle #1: Community Living and Principle #15: Maintenance of Effort and Reinvesting Savings).
  • The state’s capacity to support family caregivers as critical actors in building a social network around individuals and helping them lead productive, meaningful lives as valued and participating members of the community (see Principle #4).
  • The state’s capacity to provide conflict-free service coordination (case management) for all people with disabilities who need assistance in developing, implementing, and monitoring the effectiveness of their person-centered plans (see Principle #16: Coordination of Services and Supports).
  • Evidence that sufficient state personnel (both in numbers and qualifications) will be available to implement, oversee, and regularly evaluate the operation of the state’s managed care system (see Principle #10: Competency and Expertise and Principle #11: Operational Responsibility and Oversight).
  • Plan provisions aimed at guaranteeing participants a choice among two or more health plans as well as the supports needed to participate fully in a PCP process and, if they choose, to self-direct their own supports (see Principle #2: Personal Control).
  • Plans for ensuring that managed care enrollees receive timely, complete, and accessible information on how to obtain needed services and the rights, privileges, and obligations that accompany participation in the state’s managed care program in accordance with Section 1932(b)(5) of the Social Security Act and 42 CFR 438.207 (see Principle #8: Provider Networks).
  • The state’s information-gathering and reporting capabilities, including a description of the data collection, management, and report generation capacity of the state, participating MCOs, and contractual service providers (see Principle #12: Information Technology).
  • The comprehensiveness of the state’s quality management strategy, including the methods and performance benchmarks to be used in assessing service outcomes, the quality and accessibility of services, the adequacy of health and safety safeguards, and compliance with the ADA (see Principle #18: Quality Management).
  • Provisions designed to safeguard the rights of program participants with disabilities, including appeal rights (see discussion under Principle #21: Right to Due Process and Principle #22: Grievance and Appeals).
  • Plan provisions to ensure the safe and effective transition of Medicaid beneficiaries from existing care/support arrangements to the state’s planned managed health and/or long-term support program.
  • Plans to evaluate the state’s proposed managed care program at regular intervals, summarize evaluation findings, conclusions, and recommendations, make such information available to the public, and take steps to rectify program weaknesses identified by such evaluations.

The results of a state’s readiness assessment should be incorporated into its request for waivers of Medicaid (and, where applicable, Medicare) law; CMS should use the findings and conclusions of the state’s assessment to determine whether to approve such waivers, as well as any terms and conditions that should be attached to the approval.

Once a state has obtained the necessary federal waivers to operate health and/or long-term supports under a managed care framework, it should conduct a readiness assessment of the selected MCOs before allowing them to begin enrolling people with disabilities. The general purpose of this review should be to determine whether the MCO (a) has the capacity to carry out all contractually specified functions effectively and efficiently, including data collection, management, and reporting; (b) has experience of providing a similar array of services and supports either in the state or in other states; and (c) has developed a broad enough provider network to address the service and support needs of all enrollees. The state should develop a standardized readiness review protocol to ensure uniformity in determinations concerning each MCO’s compliance with contractual requirements and their capacity to perform all required functions. The assessment should consist of a desk audit of informational materials furnished by the MCO, followed by an on-site review.

At a minimum, an MCO long-term services readiness review should include an assessment of the organization’s capabilities in the following areas:

  • PCP and service delivery, including risk assessment and mitigation actions aimed at ensuring safety without compromising a participant’s autonomy; and plan monitoring to ensure that adequate supports are in place to meet each individual’s needs and that such supports are delivered as planned.
  • Service/care coordination to ensure the seamless integration of supports across providers; and evidence that service coordinators are trained in, and supervised to carry out, person-centered delivery of services (see Principle #16: Coordination of Services and Supports).
  • A full description of the services and supports to be made available to enrollees and, where applicable, family members. This description should specify provider qualifications and the processes to be used to ensure that providers remain qualified. In addition, the MCO should spell out the procedures to be used in conducting criminal background checks of workers and establishing and maintaining abuse registries.
  • A clear delineation of service plan approval standards and processes.
  • Participant grievance and appeal processes.
  • The process of ensuring consumer choice among qualified providers and ensuring that enrollees have the option of self-directing their services, regardless of the severity of their disabilities.
  • Compliance with state policies governing the use of mechanical and chemical restraints as well as aversive and restrictive procedures, including the steps to be taken to minimize the use of such procedures.
  • A description of the system to be used in reporting and investigating critical incidents such as abuse, neglect, exploitation, injuries, the use of restraints, and aversive and other restrictive procedures.
  • Policies governing the administration of medications, including self-administered medications.
  • Policies governing advanced directives on the receipt of medical and psychiatric treatment, including the circumstances under which third party surrogate decision making is permitted.
  • A description of the MCO’s quality assessment and performance improvement plans, including the steps to be taken to (a) measure and monitor service access and quality; (b) summarize and report on monitoring results, including outcome data, to the state on a prescribed basis; (c) describe the discovery and remediation process to be used; and (d) describe the process for determining and carrying out quality improvement projects.
  • Specifications for developing and implementing corrective action plans required by the state, including the steps to taken to remediate identified deficiencies in plan performance.
  • A summary of the interagency operating agreement that the MCO has executed with local and areawide agencies assisting people with disabilities, including public school systems, mental health and developmental disabilities agencies, agencies serving people who are blind or deaf, vocational rehabilitation agencies, workforce investment boards, public housing agencies, and independent living centers.

MCOs should not be permitted to enroll participants in LTSS until they have satisfied the state Medicaid agency (and CMS through its MCO contract review authority) that the above requirements have been met.

Readiness Assessment: New Jersey

For more than a decade, New Jersey, unlike many other states, has enrolled most qualified low-income seniors and people with disabilities in Medicaid managed health care plans. So when state officials decided to consolidate multiple Medicaid funding streams under a single management structure, it seemed logical to add behavioral health services and long-term supports to the state’s existing contracts with Medicaid managed MCOs. In doing so, state officials decided to phase in these new MCO responsibilities based on the results of a readiness assessment conducted by the state Division of Medical Assistance and Health Services (DMAHS) in concert with officials from several state aging and disability agencies. The proposed phase-in schedule called for the following:

  • Shifting responsibility to the MCOs for overseeing the delivery of the following state plan services as of July 1, 2011: pharmacy services; adult and pediatric medical day care services; home health services for seniors and people with disabilities; and physical, occupational, and speech therapies and personal care assistant services. All of these services had previously been carved out of MCO contracts and paid for on an FFS basis.
  • Permitting Medicare Special Needs Plan services to be provided through Medicaid MCOs (and permitting auto-enrollment with a beneficiary opt-out option) as of January 1, 2012.
  • Adding NF and HCB services for seniors and adults with physical disabilities to MCO contracts as of July 1, 2012. Currently, NFs are offered as a state plan coverage, while HCB services are furnished through several Section 1915(c) waiver programs.
  • Shifting children’s behavioral health services, currently paid for by DMAHS, to the Children’s System of Care program managed by an administrative services organization (ASO) as of July 1, 2012.
  • Transferring responsibility for administering adult mental health and addiction services to a managed behavioral health organization (MBHO) as of January 1, 2013.
  • Mandating the enrollment of all non-dual-eligible seniors and adults with physical disabilities in MCOs, as of August 2011, for the receipt of primary and acute care services.
  • Mandating the enrollment of all dual eligibles in Medicaid MCOs for the receipt of primary and acute care services as of October 2011.

New Jersey officials concluded, based on the state’s assessment, that the prudent course of action would be to continue paying for LTSS on behalf of people with I/DD on a FFS basis, rather than shifting such services to the MCOs, until certain problems are addressed. Over the next five years DMAHS, in collaboration with the state Division of Developmental Disabilities (DDD), plans to—

  • Resolve current Medicaid eligibility and enrollment issues.
  • Rebalance the state’s reliance on institutional vs. HCB services.
  • Pursue opportunities to qualify for additional federal matching funds.
  • Develop statewide rate schedules that are not cost-based.
  • Adopt a systemwide assessment tool or develop and validate a state-specific tool.
  • Integrate existing DDD financial management systems with the state’s Medicaid management information system (MMIS).

In addition, while taking steps to integrate behavioral health services into managed health care plans, New Jersey officials decided to phase in risk-based, capitated payment systems for such services over the course of the proposed five-year demonstration period. Plans call for selecting a single, statewide MBHO during FY 2012, with implementation beginning on January 1, 2013. Initially, the state will share responsibility with the MBHO and the existing ASO for managing the service provider network for adult and child beneficiaries and will pay such providers. Then, over the course of the five-year demonstration period, increasing levels of responsibility and financial risk will be shifted to the MBHO. Consumers of I/DD, behavioral health, and addiction services and supports will continue to receive their primary and acute health services through four existing MCOs.

Many of the reforms New Jersey intends to pursue (including implementation of the timelines outlined above), along with myriad other operational and policy changes not discussed here, are subject to federal approval of a Section 1115 waiver/demonstration plan currently pending before CMS. The overarching aim of the state’s Comprehensive Waiver request is to consolidate a variety of Medicaid funding authorities under a uniform, streamlined management structure, thereby achieving enhanced systemwide efficiencies and cost-effectiveness in the delivery of health services and long-term supports.



State of New Jersey, Department of Human Services, in cooperation with the Department of Health and Senior Services and the Department of Children and Families, Section 1115 Demonstration Comprehensive Waiver (September 9, 2011),

Principle #8. Provider Networks

The provider network of each MCO should be sufficiently robust and diverse to meet the health care, behavioral health, and, where applicable, long-term support needs of all enrollees with disabilities. When a state plans to cover LTSS as part of its managed care initiative, its network must encompass both providers of institutional and HCB services. Each network should have a sufficient number of qualified providers, as well as fully accessible facilities and programs in each specialty area, to allow participants to choose among alternatives.

Beneficiaries with physical, sensory, behavioral, intellectual, and developmental disabilities require a far more varied set of providers and a wider range of services than the general Medicaid population—especially those beneficiaries who need preventive and acute health services as well as LTSS. The diversity of needs is a direct analog of the variety within the population with disabilities in terms of causation, age of onset, functional limitations, and co-occurring disorders (see related discussion in chapter 2 and under Principle #6). Consequently, states must carefully analyze the types of providers and service needs represented among the target population of enrollees, as well as current levels of access to providers and potential problems in ensuring network adequacy.

In addition, special attention is needed to ensure that service providers have the capacity and expertise to address the racial and ethnic diversity of populations targeted for services, as well as cultural and linguistic barriers to access. Steps must be taken to (a) establish and maintain adequate provider networks in rural areas of a state; (b) reach out to homeless people; (c) afford people with disabilities a voice in the selection of network providers (possibly through advisory bodies at the state and MCO levels); and (d) provide access to out-of-network services when necessary to enable enrollees to receive all needed services.

Section 1932(b)(5) of the Social Security Act specifies that a state must provide assurances acceptable to the secretary of Health and Human Services that each managed care service network “has the capacity to serve the expected enrollment” and

(A) “Offers an appropriate range of services and access to preventive and primary care for the population expected to be enrolled…and

(B) Maintains a sufficient number, mix, and geographic distribution of providers of services.”

Federal regulations implementing Section 1932(b)(5) of the Social Security Act (42 CFR 438.207) elaborate on the assurances a state must provide that its managed care contractors are in compliance with the above statutory requirements governing the range and capacity of available services.

To ensure that a complete range of services and supports are available to enrollees with disabilities, a state should— [xxxiv]

  • Identify the diagnostic characteristics and service use patterns among the various subgroups of people with disabilities who are targeted for enrollment in the plan.
  • Determine the most critical service needs among the target population and any problems they are likely to encounter in gaining access to such services.
  • Examine network adequacy in the context of the overall operation of the system of services, taking into account such related factors as payment rates and incentives, understanding the needs of the enrolled population, care coordination, linkages with other appropriate, non-network providers, and the views of system stakeholders.
  • Monitor adherence to quantitative and qualitative access standards.

MCOs responsible for providing LTSS should be required to accept into their networks community disability provider agencies currently serving people with disabilities who are targeted for plan enrollment (e.g., independent living centers, community developmental disability agencies, community mental health centers, recovery communities). These agencies typically have long-standing relationships with the people they serve and have forged a bond of trust that would be difficult to replicate—especially among people with a history of mental illness and brain trauma, for whom continuity of relationships is so critical.

Furthermore, enrollees in such plans should be free to choose out-of-network providers who agree to the MCO’s terms governing participation, including payment schedules, care coordination, and data collection/reporting requirements, on a single-case agreement basis. Limited networks remove one of the most effective, real-time quality assurance tools by restricting the number of providers available to beneficiaries. If enrollees are satisfied with the in-network care and support options available to them, the use of out-of-network options will be limited. But if the MCO’s network is inadequate or offers substandard care and support, enrollees will provide the MCO and responsible state officials with immediate feedback by seeking out-of-network providers.

Principle #9. Transitioning to Community-based Services

CMS should require states planning to enroll Medicaid recipients of LTSS in managed care plans to include within the scope of coverage both institutional services and HCB services and supports. This requirement should be built into CMS’s standard “terms and conditions” governing waiver approvals.

Over the past two decades, Medicaid expenditures on HCBS have grown at a faster pace than expenditures on long-term institutional services. Yet more than 1.5 million Medicaid beneficiaries continue to reside in NFs, and nearly two-thirds of Title XIX expenditures on LTSS for seniors and other adults with physical disabilities still occur in institutional settings (see details in chapter 2 and the discussion under Principle #1). [xxxv] As a result, it is important that states that are planning to shift the financing and delivery of long-term services to a capitated managed care format (a) develop capitation rates that wrap around both institutional and HCB services (see additional discussion under Principle #13) and (b) include explicit strategies for preventing unnecessary or premature institutionalization and facilitating the transition of eligible people from institutional to HCBS settings. Ensuring the inclusion of these elements in a state’s plan makes sense in both human and economic terms, since the net effect is to minimize the number of people who require services in the most expensive care settings. The author of a recently completed analysis of state Medicaid LTSS expenditures between 1995 and 2009 concluded that optimal systemwide savings are achieved in states choosing to gradually rebalance their financial commitments to institutional versus HCBS over a multiyear period. [xxxvi]

States planning to enroll people with severe disabilities in managed long-term services and supports (MLTSS) plans—whether enrollment is limited to Medicaid-only recipients or includes dually eligible beneficiaries as part of an integrated Medicare-Medicaid–funded plan—should design capitated payment methodologies that include incentives for serving people in HCB settings. Although experience in operating MLTSS plans remains limited, [xxxvii] several workable strategies for encouraging HCB services as part of a MLTSS plan have emerged: [xxxviii]

  1. Use the same reimbursement rate for institutional and HCB services. The average per capita cost of institutional services typically is considerably higher than that of HCBS. When a state establishes the same acuity-adjusted PMPM payment rate for institutional and HCB services, at-risk MCOs have strong incentives to avoid institutional placements and to transition NF and other institutional residents to HCB settings. New Mexico adopted this strategy when it launched its Coordination of Long-Term Services (CoLTS) program. The CoLTS program uses a blended payment rate that incorporates NF and HCBS payment data for all beneficiaries who meet nursing home level of care criteria. This payment rate is not adjusted when a beneficiary enters an NF; consequently, participating, at-risk health plans have strong incentives to provide the additional supports that high-need enrollees require to avoid admission to a nursing home or to transition from a nursing home to the community. CoLTS payment rates are renegotiated annually based on service patterns. Arizona uses a similar approach in managing its Arizona Long Term Care System (see discussion under Principle #13). [xxxix]
  2. Use partially capitated rates for institutional care. In situations where the state concludes that full-risk sharing would destabilize the finances of private health plans, partial capitation of institutional services may be an alternative. Health plans participating in Minnesota’s Senior Health Options (MSHO) program, for example, receive a blended PMPM payment rate that requires them to pay 180 days of NF care on behalf of any enrollee placed in an NF. After 180 days, the NF’s per diem costs are reimbursed directly by the state on an FFS basis. To encourage health plans to serve high-need beneficiaries in HCB settings, Minnesota pays plans a “nursing facility add-on” rate. This supplemental payment ceases when a beneficiary is placed in an NF, and the plan must cover the higher facility costs out of the previous revenues it has received from the state for the initial 180 days. [xl]
  3. Reward health plans with high community transition rates. In addition to holding health plans at full risk for NF admissions, the Arizona Long Term Care System (ALTCS) program employs an HCBS reconciliation process to encourage plans to return NF residents to the community with appropriate services and supports. The state establishes an assumed, plan-specific ratio of HCBS recipients to NF residents by geographic area. If a health plan serves a higher ratio of enrollees in HCB settings than the state benchmark, Arizona reimburses the plan for a portion of the savings achieved through a reconciliation process. Conversely, if a plan falls below the state-established target ratio, the state may recoup a portion of the differences in rates paid to the plan. [xli]
  4. States also must build into their MLTSS plans provisions designed to deflect institutional placements. Crisis intervention services, for example, are an effective means of avoiding institutional placements, especially for people experiencing behavioral crises. Among the services that should be part of any comprehensive intervention system are interdisciplinary crisis stabilization teams, peer-run crisis alternatives, and short-term, therapeutic homes where beneficiaries can stay until the behavioral episode subsides and they are ready to return to their permanent place of residence.

    Transitioning beneficiaries from long-term care institutions to HCB settings requires intentional planning and careful follow-through, as evidenced by the states’ collective experience in operating Money Follows the Person (MFP) demonstration programs. A recently released analysis of the MFP program found that monthly HCBS costs incurred during the first 30 days following placement in the community were anywhere from 20 percent higher to double the costs during subsequent months. Among the initial costs commonly incurred are housing rental deposits, transitional service coordination, the purchase of essential household goods and supplies, and the purchase of an initial supply of medications. MFP program managers, it is important to point out, report that these additional, up-front expenditures are critical to achieving higher transition rates and lower reinstitutionalization rates. [xlii]

    Other studies have found that 85 percent of early MFP participants have been able to live in the community for a year or more and self-report an improved—often substantially improved—quality of life one year after transition. [xliii] And, of equal importance, the average per capita cost of HCB services has been running 34 percent lower than NF costs for seniors and other adults with physical disabilities and 77 percent lower than intermediate care facility for the mentally retarded (ICF/MR) costs for people with developmental disabilities. [xliv]

    In recognition of the ADA requirements governing the “most integrated” living setting, as interpreted by the U.S. Supreme Court in its Olmstead ruling, [xlv] CMS should require states seeking approval to implement Medicaid managed LTSS to spell out in their proposals the steps that will be taken to prevent unnecessary or premature institutionalization and effectively transition eligible people with disabilities from long-term care institutions to HCB settings. These requirements should be spelled out in the terms and conditions accompanying CMS approval of the statutory waivers required to initiate the program.

    It is important to point out that the transition to community-based services is likely to involve changes reaching considerably beyond minimizing placements in traditional long-term institutional settings. CMS recently published a proposed rule that would narrow the types of living settings in which Medicaid-funded HCBS may be provided. [xlvi] In addition to ruling out nursing facilities, institutions for mental diseases (IMDs), and intermediate care facilities for people with intellectual and developmental disabilities (ICFs/DD) [xlvii] as qualified HCBS settings, the proposed rule identifies attributes that must be present for a setting to qualify, including the following:

    • The setting is “integrated in, and facilitates the individual’s full access to, the greater community, including opportunities to seek employment and work in competitive integrated settings, engage in community life, control personal resources, and receive services in the community, like individuals without disabilities.”
    • The setting is “selected by the individual among all available alternatives and identified in the [individual’s] person-centered plan.”
    • An individual’s “essential personal rights of privacy, dignity and respect, and freedom from coercion and restraint are protected.”
    • A person’s “[i]ndividual initiative, autonomy, and independence in making major life choices, including but not limited to, daily activities, physical environment, and with whom to interact are optimized and not regimented.”
    • A person’s “[i]ndividual choice regarding services and supports, and who provides them, is facilitated.”

    The proposed rule establishes further conditions applicable to provider-owned settings and requests public input on two additional criteria CMS is considering attaching to the definition of an HCB setting. The first additional criterion would add greater specificity to the attributes of a provider-owned or -controlled HCB setting, while the second would add that “receipt of any particular service or support could not be a condition for living in the unit” (i.e., residents would be free to select a provider other than the operator of the living unit to furnish their HCB services and supports).

    It seems clear that CMS intends to narrow the definition of an acceptable setting for providing HCBS in ways that would rule out many adult care homes, assisted living facilities, and other types of licensed residential care facilities in favor of home and homelike settings where residents have choices and control over their lives and relationships.

    Principle #10. Competency and Expertise

    The existing reservoir of disability-specific expertise, both within and outside of state government, should be fully engaged in designing service delivery and financing strategies and in performing key roles within the restructured system.

    State governments have lost more than 100,000 employees since the beginning of the Great Recession, while local governments have lost more than 500,000 workers over the same period. [xlviii] The depth of government job losses was tempered by the receipt of federal stimulus dollars from the middle of 2009 through the middle of 2011. But since federal stimulus aid ended, some state and local governments have been forced to lay off additional workers in order to balance their budgets, despite a rebound in state and local revenues.

    Human services agencies in some states have been hollowed out as a result of repeated personnel reductions, raising serious concerns about the capacity of their state Medicaid and affiliated agencies to oversee a capitated managed care system. It is not simply a question of having an adequate number of employees but also having employees with the specialized skills necessary to effectively administer such a system and ensure that it operates in the best interests of program enrollees. The types of positions states historically have had trouble filling—data system designers, managers and analysts, rate-setting specialists, and performance assessment system designers and managers—possess precisely the capabilities a state needs to operate a managed health care and long-term support system.

    Moreover, state disability agencies and private sector disability stakeholders have been relegated to the sidelines during the design and implementation of managed care delivery systems in a number of states. When a state fails to marshal the expertise at its disposal in fashioning and operating a Medicaid managed care service system for people with chronic disabilities, there are sound reasons to be concerned about the sustainability of the resulting system.

    State Medicaid officials should draw upon the knowledge and skills of their colleagues in state behavioral health, developmental disabilities, vocational rehabilitation, education, housing, transportation, and other agencies in designing a Medicaid managed care system that builds upon decades of experience in serving various subpopulations of people with disabilities. Lead responsibility for planning and overseeing the delivery of specialized services and supports to subpopulations should be assigned to these disability-specific agencies. CMS, in turn, should carefully scrutinize state managed care proposals to ensure that the state has articulated a well-thought-out strategy for making optimal use of the extensive knowledge and experience in disability services that exists within public and private sector agencies.

    Principle #11. Operational Responsibility and Oversight

    Responsibility for day-to-day oversight of the managed care delivery system must be assigned to highly qualified state and Federal Government personnel with the decision-making authority necessary to proactively administer the plan in the public interest.

    Managed care should not be viewed as a means for state policymakers to divest themselves of their constitutional and statutory responsibilities to ensure that recipients of publicly funded services and supports, as well as the general taxpaying public, are effectively served. State policymakers must ensure that (a) an adequate number of qualified state personnel are available to monitor the system and hold MCOs and their subcontractors accountable for their performance and (b) such personnel have the tools to carry out their responsibilities. It is vitally important that managed care contracts contain clear, unambiguous performance standards, operating guidelines, data reporting requirements, and outcomes expectations so that contractors and subcontractors can be held to contract specifications (see discussion under Principle #7).

    As noted above, severe budget pressures combined with antigovernment sentiment have led to a steady erosion of staffing levels and frequent leadership changes in state human services agencies over the past four years. A recent survey of state aging and disability agencies, for example, found that between February and November 2011, 10 states and the District of Columbia appointed a new state Medicaid director. The turnover in state aging and disability agencies was even more dramatic, with 40 new state agency directors assuming their positions during 2011. In addition, more than half of state aging/disability (A/D) agencies have restructured or were in the process of restructuring at the time the survey was conducted. Key reasons cited for these reorganizations included the need for administrative simplification and personnel reductions. Since the beginning of the recession in late 2007, 82 percent of state A/D agencies have experienced significant personnel reductions in a broader staff downsizing trend. [xlix] According to the U.S. Bureau of Labor Statistics, state government personnel rolls declined by 71,000 positions between November 2010 and November 2011. [l]

    These staffing reductions have occurred at a time when state Medicaid programs face unprecedented challenges, including the following:

    • A rapid growth in enrollments due to the weak economy.
    • Preparations for enrolling millions of new Medicaid beneficiaries beginning in 2014, at least in states that have decided to pursue the eligibility expansion authorized under the ACA.
    • The loss of federal stimulus dollars provided under the ARRA.
    • Per capita health care expenditures that are continuing to rise at a rate faster than the general economy. [li]

    Some states have responded to personnel reductions by assigning to private contractors functions traditionally carried out by government employees. Wisconsin is one such state. In a recently released study, the state Legislative Audit Bureau found that, as of June 2011, at least three times as many contract workers were performing Medicaid administrative tasks as were employees of the state Department of Health Services. Based on its findings, the audit bureau raised questions about the department’s capacity to oversee the performance of its contractors as well as the state’s $7.5 billion Medicaid program. [lii]

    Principle #12. Information Technology

    States, with assistance from HHS, should design, develop, and maintain state-of-the-art management information systems with the capabilities essential to operating an effective managed care delivery system.

    Information technology (IT) is an essential tool in administering and overseeing a managed health and/or long-term services delivery system. With access to such technology, data management functions that otherwise would require extensive person-hours to complete can be automated and performed far more efficiently. Given the size and complexity of the administrative tasks involved, an effective MMIS must have at least the following core capabilities:

    • An electronic recordkeeping system that allows authorized personnel to access the complete health care and, where applicable, long-term supports records of all plan enrollees instantaneously so treatment and intervention strategies can be effectively coordinated and sequenced.
    • A system for collecting and analyzing performance and outcome data as part of comprehensive quality monitoring and improvement system (see discussion under Principle #18).
    • An electronic system for reporting, tracking, investigating, and analyzing sentinel incidents (see discussion under Principle #18).
    • A system for gathering and analyzing encounter data and using such data to develop actuarially sound, capitated payment rates (see discussion under Principle #13).

    In February 2009, Congress enacted the Health Information Technology for Economic and Clinical Health Act as part of the American Recovery and Reinvestment Act (P. L. 111-5; better known as the stimulus legislation). The principal aim of this measure is to promote the adoption of electronic health records (EHRs) through federal incentive payments to hospitals, physicians, and other health care providers. These federal subsidies are expected to total as much as $27 billion over a 10-year period. [liii] The Affordable Care Act added further pressure on health providers to adopt electronic records by mandating that participants in various health delivery reform initiatives (e.g., accountable care organizations, medical home providers, independence at home demonstration sites) meet EHR standards.

    Spearheaded by the HHS Office of the National Coordinator of Health Information Technology, the Obama Administration has made significant strides in expanding the use of EHRs over the past three years. The percentage of physicians using EHRs in their practices doubled from 17 percent to 34 percent between 2008 and 2011, while office-based e-prescribing increased from 0.8 percent in December 2006 to 40.2 percent in September 2011. [liv]

    As high users of acute health care services, people with disabilities will be primary beneficiaries of the expanded use of EHRs. Still, to date the focus on EHR promotion efforts—including Medicare and Medicaid payment incentives—has been restricted to hospitals, physicians, and other providers of primary and acute care services. The promise of a seamless service delivery system for people with severe chronic disabilities who require a combination of acute health services and long-term supports will not be realized until the emphasis on employing modern health IT is extended to the long-term services sector and linked to the information systems of other critical disability service settings (e.g., early intervention programs, local school systems, vocational rehabilitation agencies). For example, family caregivers and providers of long-term supports are in a much better position to prevent repeated hospitalizations if they have access to detailed, timely information on prior hospital admissions.

    A variety of thorny issues will have to be addressed as EHRs become the norm. Among these issues are (a) ensuring the confidentiality of personal data as health IT becomes increasingly interoperable and (b) regulating personal access to records in ways that encourage people to play a more active role in managing services and maintaining their health and well-being. It will not be easy to maintain a reasonable balance between individual privacy and access to records. However, it will be worth the efforts required to resolve these issues.

    Principle #13. Capitated Payment Systems

    States electing to compensate managed care contractors through a capitated payment system should adopt a fair, equitable, and transparent methodology for calculating and adjusting PMPM payment rates. Capitation rates should be sufficient to allow a managed care contractor to recruit and maintain a robust provider network that (a) affords beneficiaries a choice between two or more qualified providers of any covered service and (b) is capable of addressing the full range of service and support needs among plan enrollees, including people with disabilities who require highly specialized health care and ongoing services and supports.

    Establishing capitated payment rates for people with chronic disabilities poses unique challenges. Existing Medicaid FFS rates in most states are low compared with Medicare and commercial rates, and people with disabilities often have extensive unaddressed service needs, making FFS rates an inadequate basis for establishing a system of capitated payments. Moreover, while state Medicaid agencies frequently have experience in establishing capitated payment rates for comparatively healthy children and adults (primarily those eligible for Temporary Assistance to Needy Families), this experience is likely to be of limited utility in setting capitated payment rates for beneficiaries with disabilities, whose health care and long-term support needs are far more extensive and costly.

    States electing to institute a risk-based, prospective payment system are required under Section 1903(m)(2)(A)(iii) of the Social Security Act and implementing CMS regulations (42 CFR 438.6(c)) to develop “actuarially sound” capitated payment rates. To meet this requirement, a state must develop a risk adjustment methodology using FFS claims data, encounter data, and diagnostic information to tailor the rates paid to health plans based on their aggregate enrollee profile. Risk-adjusted rates militate against adverse selection (i.e., the tendency to exclude enrollees who are difficult and expensive to serve) and poor quality of care, thereby ensuring that health plans serving high-need enrollees are not penalized. Obtaining accurate, reliable, and timely data is one of the major challenges to building an effective risk adjustment methodology.

    After reviewing available cost studies, researchers at the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured concluded that, while risk-based managed care arrangements for people with disabilities may increase budget predictability and result in savings down the road, in the near term, state Medicaid programs are unlikely to achieve savings due to the sizeable unmet needs among the target population, high initial utilization due to pent-up demands and improved care coordination, and up-front administrative costs. The authors also point out that “effective care coordination for disabled beneficiaries requires more intense and likely more expensive, multidisciplinary, team-based approaches that span health and social services, organizes and disseminates case information among providers and includes face-to-face case management with active and regular beneficiary outreach efforts.” [lv]

    A 2010 report by the U.S. Government Accountability Office concluded that “CMS has been inconsistent in reviewing states’ rate setting for compliance with the Medicaid managed care actuarial soundness requirements, which specify that rates must be developed in accordance with actuarial principles, appropriate for this population and services and certified by actuaries.” [lvi] More recently, Senator Charles E. Grassley (R-IA), ranking minority member of the Senate Finance Committee’s Health Subcommittee, has requested information from all state Medicaid directors concerning managed care rate-setting practices in their respective states. As Grassley notes in his letter to state Medicaid directors, “[i]f a [managed care] entity is paid too little…access to and quality of care provided to beneficiaries is jeopardized. If an entity is paid too much, scarce Medicaid resources are diverted away from providing services to beneficiaries.” [lvii]

    Capitated Payments: Arizona

    No state has more experience in administering Medicaid services under a fully capitated, at-risk payment system than Arizona. The state has used this approach to pay for services since becoming part of the federal-state Medicaid program in 1982.

    From the beginning, Arizona has operated Medicaid services under a Section 1115 research and demonstration program called the Arizona Health Care Cost Containment System (AHCCCS). The terms and conditions governing federal approval of the AHCCCS program permit the state to administer services under a capitated managed care format, provided it meets a wide variety of stipulations contained in its agreement with CMS. Initially, only primary and acute care services were covered under the AHCCCS program. But in 1987, Arizona received permission from CMS to add LTSS to the demonstration program.

    Organization and Delivery of Services. The Arizona Long-Term Care System (ALTCS) includes two components: services for frail elders and people with physical disabilities (EPD); and services to children and adults with qualifying developmental disabilities (DD). The benefit package for both components includes primary and acute health care, HCBS, behavioral health services, and long-term institutional services (NF and intermediate care facility services for people with intellectual disabilities and related conditions). Applicants for both ALTCS/EPD and ALTCS/DD services must be in need of institutional care in the absence of HCBS. ALTCS/EPD services are administered by the single state Medicaid agency (AHCCCS) and delivered through a statewide network of three private managed care contractors. ALTCS/DD services, in contrast, are administered by the Division of Developmental Disabilities, a unit of the state Department of Economic Security, under a single statewide contract with the AHCCCS agency.

    The Division of Behavioral Health Services (BHS), a unit of the state Department of Health, contracts separately with AHCCCS for the provision of mental health and substance abuse services to Medicaid-eligible people who require such services. These services are delivered through a statewide network of Regional Behavioral Health Authorities to ALTCS eligibles as well as other Medicaid beneficiaries. Because the ALTCS/DD benefit package includes behavioral health services, DDD, as the single statewide contractor, maintains a separate intergovernmental agreement with BHS for the provision of such services to people with intellectual and developmental disabilities, while behavioral health services are provided on an as-needed basis as part of the basic BHS/AHCCCS contract.

    Capitated Rate-Setting Methodology. AHCCCS managed care contractors (including DDD) and health plans (for acute care services) receive a flat, monthly payment on behalf of each member receiving Medicaid-funded services and supports. For ALTCS enrollees, this payment includes separately calculated amounts for primary and acute care services, behavioral health services (in the case of ALTCS/DD), LTSS, case management, risk and contingency, and administrative overhead. Habilitation services for ALTCS/DD participants, including employment, day activity, and residential, family, and in-home supports, make up a significant part of the LTSS portion of the rate. Capitation rates are actuarially certified and reflect negotiated decisions regarding the various rate components. The final, combined PMPM capitation rate is specified in AHCCCS’s contracts with the managed care contractors.

    ALTCS/DD capitation rates use both a rebase and rate update methodology that takes into account historical encounter data, financial statements, supplemental information from DDD, provider rates, state and national expenditure reports, and benchmark modeling. These experience adjustments also include state mandates, court-ordered programs, and other program changes.

    AHCCCS officials weigh the impact of emerging demand patterns and recent policy changes. For example, should DDD anticipate the expansion of developmental home services (small family homes for up to three people) to 300 additional people, these projections are taken into account in adjusting the PMPM capitation rate for the upcoming contract year. The anticipated needs are identified through the network plan and utilization trends. Conversely, should the legislature trim program benefits in order to balance the state budget, the reduced benefits are reflected in lower program capitation rates.

    DDD develops most HCBS rates using independent modeling. While rate-based payments to HCBS/LTSS providers are not capitated in the same manner as ALTCS/DD payments to acute health plans, the LTSS component of the combined capitated amount DDD receives from AHCCCS is a major factor in setting HCBS rates. The DDD Rate Book outlines the methodology used in developing model rates for the following elements of HCBS: home-based services; independent living services; day treatment and training services; developmental home services; professional services (physical therapy, occupational therapy, speech therapy); support coordination services; employment support services; specialized habilitation services; and transportation services. National and local data on wages, inflation, the cost of living in the state, and other factors are taken into account in building the “benchmark” rate, and, if DDD appropriations are sufficient, the benchmark rate is updated annually for inflation. The benchmark rate constitutes the model rate, while the adopted rate is the actual rate paid based on available fiscal year appropriations.

    Emphasis on HCBS. One consistent goal of the ALTCS program since its inception has been to promote the use of HCBS options. Two key features of the program offer managed care contractors incentives to emphasize HCBS. First, institutional costs are included in global capitation rates, thus providing

    contractors with a strong incentive to serve enrollees in HCBS settings rather than in more costly nursing homes or facilities for people with intellectual disabilities and related conditions. Second, AHCCCS establishes a yearly target percentage of total member months spent in HCB settings for each contractor. At the end of the year, contractors that exceed the percentage target share in the savings achieved by AHCCCS, while the state recoups a portion of payments from contractors that fall short of the target percentage. As a result of the consistent application of these policies over the years and a continuing emphasis on intervening early before support needs escalate, today three-quarters of ALTCS/EPD recipients and 99 percent of ALTCS/DD recipients receive LTSS in HCB settings.



    AHCCCS Contractor Operations Manual,

    Division of Developmental Disabilities, Rate Book (September 30, 2011),

    “AHCCCS Capitation Rates,”

    Principle #14. Continuous Innovation

    The Federal Government and the states should actively promote innovation in LTSS for people with disabilities.

    The U.S. health care system is undergoing substantial changes as policymakers seek to ensure that all citizens gain access to affordable health care. There is no shortage of proposals for improving the quality and cost-effectiveness of services to Medicare and Medicaid beneficiaries with chronic disabilities. But the vast majority of these proposals are aimed at improving the organization and delivery of preventive, primary, and acute health care services, while giving little attention to gaps and discontinuities in the nation’s LTSS system.

    The United States expends far more per capita on health care than any other advanced, industrialized nation, and yet, by most measures, health outcomes for its citizens are no better—and are sometimes worse—than those achieved in other developed countries. [lviii] One of the central aims of the ACA is to improve the quality and cost-effectiveness of health care services nationwide. In pursuit of this goal, the act includes a variety of provisions designed to identify, test, and disseminate information concerning new, more effective and efficient service delivery and payment models.

    Section 3021 of the ACA directs the secretary of HHS to create an Innovation Center within CMS. The purpose of this center, inaugurated in the fall of 2010, is to spearhead improvements in the delivery of Medicare, Medicaid, and CHIP services. During its first year of operations, the center launched 16 initiatives focused on improving patient safety, promoting the coordination of care across health care settings, investing in the transformation of primary care services, supporting bundled payment experiments, and addressing the complex health care and long-term support needs of people who are dually eligible for Medicare and Medicaid benefits. [lix] Funds set aside for these initial projects totaled more than $2.7 billion, with an additional $7.3 billion expected to be obligated for additional initiatives between now and FY 2019.

    No doubt, some people with disabilities will benefit from the projects being funded by the Innovation Center, especially the Financial Alignment Demonstrations for Dual Eligible beneficiaries. But the projects funded to date focus almost exclusively on innovations in financing and delivering primary and acute care services, with little or no attention directed toward parallel improvements in LTSS. Early in 2012, for example, the center selected 73 innovation advisors to help refine, apply, and sustain the technical skills necessary to drive system reform for the benefit of Medicare and Medicaid beneficiaries. None of the advisors, however, is affiliated with an institution responsible for furnishing LTSS to people with disabilities.

    The outlook is similar when one reviews expenditures on comparative outcome research. Congress set aside $1.1 billion for comparative clinical effectiveness research in the ARRA of 2009, splitting responsibility for administering these funds among the National Institutes of Health ($400 million), the Agency for Healthcare Research and Quality ($300 million), and the secretary of HHS ($400 million). A year later, as part of the ACA, Congress set up a trust fund to finance comparative effectiveness research and established a nonprofit corporation, called the Person-Centered Outcome Research Institute (PCORI), to administer these funds. The trust fund is to be capitalized through a $1 to $2 per member fee paid by public and private health plans. [lx] These fees, which take effect in plan years after September 30, 2012, are expected to generate approximately $2.5 billion in research funds through 2019. [lxi]

    The initial draft research agenda released by PCORI on January 23, 2012, identifies five areas where comparative effectiveness research is needed to support decision making, but does not single out specific diseases, treatments, or procedures for study. [lxii] There is no indication in PCORI’s initial plan that research related to the comparative effectiveness of alternative long-term service intervention strategies is contemplated.

    Building a strong, resilient community-based infrastructure to support people with disabilities is an essential part of creating a sustainable health care delivery system. But in the absence of a long-range, national commitment to researching and developing evidence-based service delivery and financing practices in the long-term services arena, it is difficult to envision how such an infrastructure can be created and sustained. Congress implicitly acknowledged this weak link by including in the ACA a nonbinding Senate resolution urging Congress to “address long-term services and supports in a comprehensive way that guarantees elderly and disabled individuals the care they need.” [lxiii] Until that promise is fulfilled, federal and state policymakers will face the challenge of instituting systemwide reforms without an adequate research foundation or sound methods of developing, testing, and evaluating the efficacy of new, potentially more effective strategies for financing and delivering LTSS.

    Principle #15. Maintenance of Effort and Reinvesting Savings

    CMS should rigorously enforce the ACA “maintenance of effort” provisions in granting health and long-term service reform waivers. Agency officials also should mandate that any savings achieved through reduced reliance on high-cost institutional care, reductions in unnecessary hospital admissions, and improved coordination and delivery of services be used to extend services and supports to unserved and underserved people with disabilities.

    Under the ARRA provisions, Congress conditioned the receipt of temporary increases in the federal share of Medicaid spending on a state’s agreement to maintain existing Title XIX eligibility levels through December 31, 2010. This maintenance of effort (MOE) requirement remained in place after the enhanced Medicaid matching ratios were extended for an additional year in 2010. Meanwhile, Congress, as part of the ACA, had decided to retain the ARRA MOE requirement until states established fully operational health insurance exchanges. [lxiv]

    States should not be permitted to use health reform waiver/demonstration programs to circumvent the statutory requirement (Section 2001(b) of the ACA) that they maintain Medicaid “eligibility standards, methodologies, and procedures” for adult beneficiaries through 2014 and for childhood beneficiaries through 2019. Congress should resist pressures to repeal the existing MOE requirement. [lxv] Current Medicaid law affords states a number of alternative ways of trimming program expenditures other than reducing program eligibility, including slicing provider payment rates and restricting optional state plan coverage. Indeed, during the recession, many states exercised these and other cost-containment strategies to hold down Medicaid spending in the face of tumbling revenue projections. There are better alternatives than dropping low-income beneficiaries from the Medicaid rolls.

    Excess Service Demand and Waiting List

    One approach being used by a growing number of states to improve the overall cost-effectiveness of Medicaid service delivery is to employ managed care techniques. As efficiencies are achieved, the resulting savings should be used to fill gaps in the Medicaid safety net. For example, hundreds of thousands of people with disabilities lack access to the high-quality health care and long-term supports they need, as evidenced by the long waiting lists for services in many jurisdictions. In 2009, 39 states reported that a total of 365,553 people were waiting to be enrolled in Medicaid HCB waiver services. Waiver programs targeted to people with I/DD had the longest waiting lists, totaling 221,898, followed by programs serving senior citizens and nonelderly adults with physical disabilities (107,563). [lxvi] One research group concluded that states would have to increase service capacity by an average of 25 percent to meet current demand for I/DD waiver services. [lxvii]

    These figures significantly understate the demand for LTSS, since eligibility for HCBS waiver services is limited to people who meet Medicaid financial eligibility and institutional need criteria. Moreover, HCBS waiver waiting list data mask the large gap in unmet demands for public mental health services because such a small number of nonelderly adults qualify for HCB waiver services due to the so-called IMD exclusion. [lxviii] Testimony before a Texas legislative panel suggests the magnitude of the gap. An official of the Mental Health and Substance Abuse Division of the state Department of Health Services told Texas lawmakers that the number of people on waiting lists for mental health treatment increased by 642 percent between 2004 and 2010 and now exceeds 10,000 people statewide. [lxix]

    It is imperative, therefore, that savings achieved through improved delivery of services and supports be redirected to assisting people who currently are denied access to essential health care and long-term supports. These efforts should be combined with other strategies, such as service delivery innovations and improved outreach and enrollment efforts, as part of a broader plan to close the service access gap.

    Principle #16. Coordination of Services and Supports

    Within a well-balanced service system, the delivery of primary and specialty health services must be effectively coordinated with any LTSS that an individual might require.

    The most appropriate organizational arrangement for coordinating health care and long-term supports will vary according to the needs of the individual as well as the population being served. Managed care enrollees with complex chronic health conditions should be assigned a health care coordinator with specialized knowledge and experience in assisting people with disabilities. The designation of a health care coordinator, however, does not preclude the need for a knowledgeable individual to assist in planning and monitoring a beneficiary’s long-term, community-based services and supports. Where health services and long-term supports are administered by a single MCO, enrollees receiving LTSS should be assigned an independent LTSS coordinator.

    Medical oversight of the treatment process is essential when the need for ongoing social or other supports is a direct consequence of untreated or ineffectively managed chronic health conditions, as often is the case for many older and chronically ill people. By contrast, the most pressing needs among the vast majority of younger people with physical, developmental, behavioral, and sensory disabilities is for assistance in establishing and maintaining a productive, rewarding life in the community, and gaining access to the services and supports that will enable them to stay healthy and engaged. The composition of MCO care teams should reflect these differences in enrollee need profiles.

    In recent years, various effective strategies have been developed to coordinate and integrate the delivery of physical and behavioral health services, including the colocation of acute health care and behavioral health services; the use of enhanced health homes; the integrated use of health IT (see also the discussion under Principle #12); disease management models; and unified primary care and behavioral health models. [lxx] These efforts are fueled by studies indicating that on average, recipients of public mental health services die 25 years earlier that other Americans. [lxxi]

    Case management has played a key role in the provision of Medicaid-funded HCBS since the program first began financing such services in the 1970s. In recent years, however, the functions performed by case managers have diversified as LTSS options expanded and the concept of self-directed services gained popularity. These changes are reflected in the proliferation of terms used to describe traditional and new activities falling under the general “case management” rubric—care manager, counselor, options counselor, caseworker, care coordinator, support coordinator, systems navigator, and community living specialist. The growing emphasis on self-direction within LTSS systems also has led to the introduction of new terms to describe a constellation of supports to people who choose to self-direct their services and supports—consultant, advisor, monitor, decision assistant, support team member, circle of support member, care guide, community guide, support broker, and resource manager. [lxxii]

    In addition, some states have chosen to assign case managers specialized roles. The decision to do so often is influenced by the type and level of reimbursement associated with a particular initiative. For example, some states claim Medicaid reimbursement for “transitional case management (or service/support coordination) services” in conjunction with their Money-Follows-the-Person demonstration program or State Balancing Incentive Program (SBIP). In such instances, the state’s aim is to ensure that people slated to move from a long-term care institution to a community setting receive more intensive guidance and support during the critical months preceding and following community placement. New Jersey, for example, covers “transitional case management services” under its Global Options waiver program for seniors and adults with disabilities. [lxxiii] A similar function also is built into the state’s Community Care waiver program for people with developmental disabilities to assist in transitioning residents of state-run developmental centers to the community as part of New Jersey’s Olmstead initiative.

    One of the key issues that must be resolved when a state chooses to cover LTSS as part of its managed care program is the methods to be used to ensure the provision of an appropriate, person-centered array of services and supports when care coordinators are employed by the MCO. Because care coordinators typically are employed by an MCO, which in turn receives fixed capitated service payments from the state, there are built-in incentives to limit the range and intensity of services made available to plan enrollees. A 2009 report by the CMS Workgroup on Managed HCBS pointed out that a state can minimize incentives to underserved enrollees through carefully crafted contract language requiring MCOs to report detailed quality data for use in pinpointing and rectifying such problems. [lxxiv]

    The ACA language authorizing the SBIP, however, mandates “conflict-free case management services” in states that choose to implement this new Medicaid authority. [lxxv] It also requires states to use a standardized assessment instrument and institute a No Wrong Door/Single Entry Point intake system. In its announcement concerning the availability of the SBIP, CMS pointed out that—

    The design of services, rate establishment, payment methodologies, and methods of administration…may all contribute to potential conflicts of interest. These contributing factors can include obvious conflicts such as incentives for either over- or under-utilization of services; subtle problems such as interest in retaining the individual as a client rather than promoting independence; or issues focused on the convenience of the agent or service provider rather than being person-centered. [lxxvi]

    “To mitigate any explicit or implicit conflicts of interest,” CMS states, “the independent agent [case manager] should not be influenced by variations in available funding, either locally or from the State.” Although not explicitly reflected in current policy, it seems likely that the concept of conflict-free case management services will migrate to other Medicaid HCBS funding authorities in the near future.

    As pointed out in Massachusetts’ dual eligibles demonstration project application, “community services are critical supports that enable people [with disabilities] to live independently and remain in their homes and communities.” [lxxvii]Addressing the need for an independent LTSS coordinator, the proposal goes on to state—

    It is essential that the care team has a designated resource with expertise in understanding the different kinds of LTSS needs and the resources available in the community to address them. Each care team will have access to an independent, qualified LTSS Coordinator from a community-based organization (CBO) such as an Independent Living Center (ILC), a Recovery Learning Community (RLC), an Aging Services Access Point (ASAP), [a] Deaf and Hard of Hearing Independent Living Services program, an Arc, or other key organizations expert in working with people with disabilities. ICOs [Massachusetts’ equivalent to an MCO] will contract with these CBOs to provide staff specifically trained to serve as independent LTSS Coordinators. [lxxviii]

    The assessment process should fully engage the enrollee and explore various factors bearing on the individual’s needs for both health care and LTSS, including the person’s living situation and vocational goals. Steeped in the culture of health care, MCO staff and network health providers may lack the cultural competency to provide person-centered care to people with complex behavioral, physical, sensory, intellectual, and developmental disabilities. That is why it is so important that a qualified, independent long-term services coordinator be involved in the assessment and service coordination process for people with disabilities.

    Managed Care Operating Components

    Certain components of Medicaid-funded services are especially important to beneficiaries with disabilities, including the availability of assistive technology and durable medical equipment, as well as the design and operation of a quality management system.

    Principle #17. Assistive Technology and Durable Medical Equipment

    Participants in managed care plans must have access to the durable medical equipment and assistive technology they need to function independently and live in the least restrictive setting.

    A state’s managed care plan must afford people with disabilities access to the durable medical equipment (DME) and assistive technology that they require to live the most independent, inclusive, and healthy lives feasible in their community of choice. Covered services must include professional assessments of a beneficiary’s need for such equipment as well as setup, maintenance, and user training.

    DME, including such items as wheelchairs, walkers, oxygen tanks, and related supplies, is a covered part of the Medicaid home health benefit (42 CFR 440.70(b)(3)) and also may be provided as part of other Medicaid-covered benefits, such as rehabilitative services (42 CFR 440.130(d)). Unlike Medicare, state Medicaid agencies are required by federal regulations to provide all medically necessary, nonexperimental DME and may not categorically exclude items without first individually assessing whether the item has a medical purpose. [lxxix] Medicare limits DME coverage to items for use only in the beneficiary’s home—a policy that is out of step with the country’s independent, community living movement. In contrast, Medicaid is authorized to purchase equipment and supplies necessary to assist recipients to function at home or in the community. Thus, for example, Medicaid is more likely to approve the purchase of heavy-duty wheelchairs that can be used both at home and to navigate around the community.

    As payers of last resort (42 CFR 433.139), state Medicaid agencies are obligated to “cost avoid” claims that may be reimbursed by a third party, such as a private health insurance plan or Medicare. As a result, beneficiaries who are eligible for both programs, or have third party insurance coverage, often experience lengthy delays in receiving equipment because Medicaid does not pay until after a written denial of payment has been received from Medicare or the private insurance plan. This is just one of several inconsistencies between Medicare and Medicaid policies that should be reconciled in order to create a seamless, integrated service system for dual eligibles. Other cross-program glitches include the following:

    • The tendency to purchase unnecessarily expensive or even inappropriate equipment by relying on self-interested DME suppliers to navigate the complexities of Medicare and Medicaid procurement policies.
    • The disruptions in DME supplier networks and purchasing routines that frequently occur when a Medicaid beneficiary becomes dually eligible for Medicare benefits and must shift to new Medicare-approved suppliers.

    To address these problems, (a) states should adopt streamlined procedures for co-managing Medicare and Medicaid DME benefits, similar to policies already adopted by New York and Connecticut; (b) Medicaid beneficiaries newly qualified for Medicare benefits should be granted transition rights that guarantee continued access to all Medicaid-reimbursed goods and services for a reasonable period of time; (c) CMS should revise Medicare coverage criteria to make DME coverage more consistent with the goal of promoting HCB living options; (d) CMS and the states should collaborate in creating straightforward fact sheets explaining coverage criteria for items where overlapping program policies create confusion; and (e) Congress should consider transferring all DME coverage for dual eligibles either to the Medicare program or the Medicaid program, while eliminating the Medicare in-home restrictions. [lxxx]

    Principle #18. Quality Management

    The state must have in place a comprehensive quality management system that not only ensures the health and safety of vulnerable beneficiaries but also measures the effectiveness of services in assisting people to achieve personal goals.

    In designing managed care systems for people with disabilities—especially for people requiring both acute health care services and long-term supports—CMS and the states should build upon improvements in quality managed practices reflected in policies governing Medicaid HCB waiver programs. This approach, developed over the past decade, is based on an ongoing, cyclical process of discovery, remediation, and improvements in seven major focus areas, with a strong emphasis on performance measurement and continuous quality improvement. [lxxxi]

    A state’s quality management (QM) system, at a minimum, should address the following:

    • System Capabilities. A state’s QM system must be capable of (a) continuously monitoring the performance of all managed care contractors and subcontractors and ensuring that prompt remedial actions are taken when deficiencies are identified; (b) reporting, tracking, investigating, and analyzing incident patterns and trends in order to pinpoint and promptly remediate threats to the health and safety of managed care beneficiaries (see discussion below); (c) assessing the quality of services and supports provided on an individualized basis using valid and reliable clinical and quality of life measures, such as morbidity, mortality, health-related incidents and deaths, reduced use of emergency care and high-cost inpatient services, quality of life, and individual and family satisfaction; and (d) preparing and issuing periodic statistical reports on personal outcomes and system performance, analyzing trends, and managing quality improvement initiatives.
    • Person-Centeredness. Monitoring strategies must be developed to ensure that (a) assessments and plans are person-centered; (b) services are delivered in accordance with the provisions of the plan; (c) services are tailored to achieve outcomes desired by the individual, meet the individual’s needs, and are modified as the individual’s needs change; and (d) people with disabilities are free of abuse, neglect, discrimination, and exploitation.
    • Stakeholder Responsive. A state’s quality management design should be shaped by the views of service participants and other key stakeholders (family members, program staff, regulators, and funders) if the system is to “balance quality assurance activities with consumer-centered quality improvement.” [lxxxii]
    • Qualified Personnel. A state must retain a sufficient number of qualified personnel to carry out the monitoring and enforcement activities spelled out in its QM plan efficiently and effectively.
    • Information Technology. State-of-the-art information management systems should be employed to assist state officials, MCOs, and individual service providers in monitoring the quality of services and supports provided to managed care beneficiaries.

    Incident Management

    Massachusetts has created, by statute, an independent state agency that is responsible for investigating alleged incidents of abuse involving adults with disabilities between the ages of 18 and 59. Called the Disabled Persons Protection Commission (DPPC), this agency screens all incident reports involving adults with disabilities, and decides whether to launch its own investigation or refer the case to another state agency for follow-up action under DPPC’s supervision. DPPC also is responsible for ensuring that adults with disabilities have access to protective services when they need it. In Massachusetts, the state Department of Children and Families has parallel responsibilities for investing child abuse cases, while the Department of Elder Affairs performs a similar function for adults 60 years of age or older. [lxxxiii]

    In Illinois, the state Department of Children and Family Services (DCFS) is responsible for investigating all cases of alleged child abuse. The investigative team may ask a child welfare nurse specialist to complete a health assessment and a health environmental safety assessment and make recommendations when the incident involves a child with special health care needs. In addition, the agency responsible for operating the state’s Medicaid HCB waiver program for medically fragile and technology-dependent children, the Division of Specialized Care for Children (DSCC) at the University of Illinois/Chicago, shares information with DCFS investigators on the unique vulnerabilities of children with special health care needs and coordinates hot line incident reporting and, when deemed necessary, places nurses caring for children with special health care needs on a state-maintained “watch list.” [lxxxiv]

    Performance and Outcome Measures

    In a recent report, the Kaiser Commission on Medicaid and the Uninsured (KCMU) emphasized the need for disability-specific measures of access and quality in order to ensure access to and coordination of the full range of services and supports needed by people with disabilities. “Widely used quality measure sets, such as the Healthcare Effectiveness Data Information Set (HEDIS) and the Consumer Assessment of Healthcare Providers and Systems (CAHPS),” the commission noted, “do not take into account, or include targeted measures that reflect, the special needs of people with disabilities. Nor have standard quality measures for LTSS been developed, a problematic gap in the context of efforts to integrate management of LTSS and acute health care.” [lxxxv]

    In early 2012, CMS released a set of core quality indicators for adult Medicaid beneficiaries, as mandated under the ACA. In doing so, however, CMS acknowledged the absence of measures related to chronic care management and coordination as well as HCB services and supports, indicating that existing measures in these areas do not meet scientific soundness criteria. CMS promised to assign priority to the development of such measures, [lxxxvi] a step that will require a major reorientation in the agency’s current activities and funding patterns.

    The need for more and better measurement tools was reinforced in the recent report of the Quality Measurement Workgroup of the Long Term Quality Alliance. The authors of the report noted that “further development of measures is necessary to assess aspects that contribute to quality for individuals and their families that are broader than clinical outcomes, including the measurement of outcomes such as quality of life, autonomy, relationships, compassion, social supports, and emotional well-being.” [lxxxvii]

    Creating such measures will not be a simple undertaking, given the diversity of needs among people with severe, chronic illnesses and disabilities (see discussion under Principle #6). The types of measures used to monitor pressure sores and falls and fractures among people with severe physical disabilities will be different from those used to assess the recovery rate of young adults with schizophrenia or the social adjustment of middle-aged people with profound intellectual disabilities. Clearly, as the authors of the recent KCMU report noted, access and quality measures need to be tailored to outcomes of greatest importance to people with specific medical conditions or types of disability. And, until a national consensus is forged around the measures to be used to monitor health and long-term service outcomes for defined groups of people with disabilities, assessing the quality and appropriateness of services will remain a major challenge for all system stakeholders.

    Beneficiary Rights and Protections

    A beneficiary-centered managed care plan can provide a pathway to improved health care, lower hospital admissions, more cost-effective use of available resources, and, for people with disabilities, a reduced reliance on long-term care institutions and other 24-hour congregate care settings. [lxxxviii] But when cost savings and administrative efficiencies are the primary goal, managed care can erect new barriers to care and offer perverse financial incentives that limit the care and support options available to high-need, vulnerable beneficiaries. It is critical, therefore, that a state’s managed care plan include strong beneficiary protections and that these protections be rigorously enforced.

    Principle #19. Civil Rights Compliance

    All health care services and supports must be furnished in ADA-compliant facilities and programs.

    Managed care enrollees with disabilities must have ready access to all services and sites where Medicaid services are provided. Such services and sites must fully comply with the requirements of the ADA and the Rehabilitation Act, including physical, cognitive, and sensory accessibility standards. Physical accessibility includes features such as accessible entry doors; accessible parking and pathways to the building; clear floor space and turning space in exam and activity rooms; positioning and transferring space in exam and activity rooms; accessible exam tables; patient lifts; staff assistance with transfers; accessible medical equipment; and health IT. In addition, all vehicles used to convey beneficiaries to and from service sites must meet ADA transportation accessibility standards.

    Wide accessibility gaps were found in a recent survey of primary health care facilities serving Medicaid beneficiaries in California. Mudrick and colleagues discovered that only 3.6 percent of the 2,389 primary provider facilities visited by the survey team had accessible weight scales and only 8.4 percent had adjustable examination tables. High rates of barriers were also found in bathrooms and examination rooms. Parking, exterior access, building access, and interior public spaces generally met access criteria, except for van-accessible parking. [lxxxix]

    MCO policies and procedures must promote ADA-compliant program accessibility, including modifications in program design features intended to accommodate populations with particular disabilities. Such modifications should include accessible equipment, information provided in alternative formats, appropriately trained personnel, and operational policies, recognizing that additional time may be required to interact with people with severe physical, behavioral, and intellectual disabilities.

    Services must be physically accessible and culturally and linguistically appropriate. Medicaid beneficiaries have a right to receive services, plus notices of eligibility and service denials, in a manner appropriate to their race, ethnicity, language, sex, disability status, sexual orientation, and gender identity, whether such services (and eligibility/service notices) are provided directly or through a contractor. Managed care contractors also must be held accountable for gathering necessary data on the race, ethnicity, and language of plan enrollees.

    In accordance with the provisions of Title VI of the Civil Rights Act and other federal and state laws, Medicaid MCOs should be required to prepare a language access plan spelling out requirements for their internal operations as well as for provider network agencies and practitioners. The plan should include provisions governing (a) specific training and certification requirements for interpreters, (b) the availability of “I speak” cards in provider offices, (c) training for providers in language access procedures and cultural competency, (d) procedures to ensure that callers on customer service lines with limited English proficiency receive interpreter services, and (f) identification of documents and correspondence that are subject to translation requirements. [xc]

    MCOs also must develop and maintain systems for communicating with people who are—

    • Deaf or hard of hearing. These systems may include the use of qualified interpreters, note takers, communications Access Real Time transcription services, written materials, telephone handset amplifiers, assistive listening systems, telephones compatible with hearing aids, closed caption decoders, open and closed captioning, Text Telephone (TTY), video displays, and exchange of notes.
    • Blind or visually impaired. MCOs and network providers should be required to comply with the ADA accessible route requirements, including Braille and raised character signage. Providers should also use one or more of the following systems to make information accessible: electronic documents; qualified readers; taped texts; audio recordings; Braille materials; large print materials; and assistance in locating items. Systems to communicate with people with speech impediments also should be available, including TTY, computer terminals, speech synthesizers, and communication boards.

    Principle #20. Continuity of Care

    Enrollees should be permitted to retain existing physicians, other health practitioners, personal care workers, and support agencies that are willing to adhere to plan rules and payment schedules.

    Continuity of health care and personal support arrangements are important, as is the sanctity of the relationships underlying such arrangements. Consequently, plan participants should be afforded opportunities to retain existing health practitioners and support personnel whenever possible; switch health practitioners, support staff, and health care coordinators when they are dissatisfied; and change managed care plans at periodic intervals. Beneficiaries should also be allowed to select a new primary care physician (PCP) at any time they are dissatisfied with their current physician and to have a medical specialist serve as their PCP when circumstances warrant.

    Voluntary or Mandatory Enrollment

    One of the key decisions a state must make in designing a comprehensive, risk-based managed care plan is whether to make plan enrollment voluntary or mandatory. Beneficiaries are offered more choices if enrollment is voluntary, but if too few people enroll then a managed health plan may be unable to spread the financial risks of high-cost health events and systemwide administrative costs across enough enrollees to sustain its operations. Some states have attempted to address this problem by (a) carving selected populations out of the plan or allowing them to enroll on a voluntary basis; (b) creating specialty health plans with provider networks capable of serving selected groups of high-need beneficiaries who cannot be effectively served through a general-purpose managed care plan; (c) mandating enrollment while allowing participants to opt out of a selected plan (or be auto-assigned to a plan) during an initial period (e.g., up to 90 days following initial enrollment) and at established intervals thereafter; (c) phasing in enrollments over an extended period to ensure a more orderly enrollment process; or (d) some combination of the preceding approaches. Various aspects of the enrollment and plan selection process are governed by federal managed care rules. For example, states electing to mandatorily enroll beneficiaries in comprehensive, risk-based plans are required to offer beneficiaries a choice between two or more competing health plans, except in rural areas where the Medicaid agency has received a federal waiver of this requirement (42 CFR 438.52).

    Another factor that states must take into account in designing their enrollment policies is continuity of services as people transition from FFS providers to managed care plans. States are required under federal managed care rules to try to preserve existing provider/enrollee relationships by attempting to enroll existing FFS providers in their provider networks (42 CFR 438.50). Often states attempt to facilitate the transition by requiring plans to reimburse FFS providers during a defined period or until a designated course of treatment is completed. Such provisions offer the managed care plan time to enroll these providers in its network or identify and enroll other qualified providers. Regardless of the strategies a state chooses, experience shows that ensuring continuity of care is a vital ingredient in successfully transitioning people with disabilities to at-risk, capitated managed care plans.

    Principle #21. Due Process

    Enrollees with disabilities should be fully informed of their rights and obligations under the plan as well as the steps necessary to access needed services, in accordance with the provision of Section 1932(b)(5) of the Social Security Act and 42 CFR 438.207.

    States should develop and implement an aggressive education and outreach strategy to ensure that all managed care plan enrollees (and potential enrollees) have accessible information concerning the services and supports available under the plan and how they may be accessed. The state’s strategy should include enlisting community-based disability organizations in developing and implementing the outreach plan. Accessible multimedia educational materials and training sessions should be geared to the various learning styles and comprehension levels of plan enrollees, and such sessions should be held across the state. Plan participants must receive accessible, meaningful, and clear notices about programs, services, and their rights, including enrollment rights and options, plan benefits and rules, coverage denials, appeal rights and options, and potential conflicts that may arise from relationships among providers, suppliers, and others.

    In the absence of meaningful notifications, important protections such as service and provider choices and appeals and grievance rights are far less effective. To be meaningful, a notice must be written at the comprehension level of the typical plan enrollee. The requirements for Minnesota’s Senior Health Options and Senior Care Plus programs, for example, specify that all notices must be understandable to a person who reads at a seventh-grade level. Clear written materials are particularly important in a coordinated care environment or where a close financial relationship exists between the provider of service and the entity responsible for paying for the services. In such situations, the provider may recommend care and support strategies based on the likelihood of coverage or the financial benefits it may derive instead of describing all of the options available to the enrollee. Procedures should be in place to ensure that enrollees are informed of all available service options so they can ask their care/support team to explore a particular option. Opportunities to seek second opinions or appeal service decisions also should be available to enrollees. [xci]

    Principle #22. Grievances and Appeals

    Grievance and appeal procedures should be established that take into account physical, intellectual, behavioral, and sensory barriers to safeguarding individual rights under the provisions of the managed care plan, as well as all applicable federal and state statutes.

    The plan should include procedures for ensuring the timely resolution of enrollee complaints and mechanisms to prevent people from being placed in jeopardy while disputes are being resolved. Appeals should comply with all existing Medicaid requirements, except in the case of plans serving dual-eligible beneficiaries, when Medicare provisions afford stronger protections to enrollees than Medicaid rules.

    Given the nearly 60 million people who rely on Medicaid for health care and long-term supports and the constant fiscal pressures to hold down costs, mistakes and unjustified service denials are inevitable. Consequently, resolving such situations “fairly and expeditiously is critical to the Medicaid program’s ability to achieve its coverage goals.” [xcii] Medicaid applicants and beneficiaries are entitled to adequate notice of state agency actions and a meaningful opportunity to have unfavorable administrative decisions reviewed with reasonable promptness.

    Medicaid applicants and recipients have a right to request a “fair hearing” on eligibility determinations and coverage issues. The same notice and hearing rights apply to disputes concerning whether an applicant is eligible for Medicaid services or an enrollee has a medical need for a particular Medicaid service, regardless of whether benefits are administered on an FFS basis or through an MCO. The fair hearing process must be accessible to applicants/enrollees with limited English proficiency and people with physical, intellectual, behavioral, and sensory disabilities. The Federal Government reimburses states for 50 percent of the costs of holding fair hearings. Appeal costs, however, are borne by the applicant, the beneficiary, or his/her advocates. All fair hearing decisions must be presented in writing, and applicants/beneficiaries must be notified of their right to file a judicial appeal in state court.

    In addition to the fair hearing process, Medicaid MCOs are required to establish a grievance process and an internal appeals process for enrollees who wish to challenge denials of service and payment for medical assistance services. Because payments are capitated and often participants are mandatorily enrolled, MCOs have built-in economic incentives to underserve enrollees. For this reason, a fair and effective appeals mechanism is especially important in a capitated managed care environment.

    An MCO is afforded flexibility in designing its internal appeals process as long as enrollees are given a reasonable opportunity to present evidence, allegations, and legal arguments in person as well as in writing. During the appeals process, federal regulations extend certain rights to enrollees governing timing, the content of required notices, and the time frames within which MCOs must resolve appeals. MCOs also are required under federal rules to maintain an expedited appeals review process. Furthermore, for appeals that are not resolved wholly in the enrollee’s favor, the MCO’s written notice of the appeal resolution must advise the enrollee of his/her right to request a state fair hearing. It is up to the state to determine whether enrollees are required to exhaust their internal avenues of appeal before requesting a state fair hearing. The standards for acting on state fair hearing requests are spelled out in federal regulations.

    Enrollee appeal rights should encompass the following transactions:

    • Enrollment in an MCO.
    • Assignment to a particular service provider, services/support coordinator, or care team.
    • Decisions regarding the provision of a particular service(s).
    • The inclusion, or absence, of specified provisions in a plan of care.
    • Requesting a second opinion or evaluation regarding eligibility for a service (to support an appeal).
    • The denial of coverage of a service.
    • Filing a grievance or complaint about the MCO or any of its contractual providers.

    The following safeguards should be built into the design of the appeals process: due process protections; clear notices in a language the enrollee understands; coverage of care pending resolution of the appeal; opportunities for expedited review; an established pathway to a review by an independent decision maker; and the right to appeal to an administrative law judge and, if necessary, a federal court. Regardless of the procedures governing the filing and prosecuting of appeals, the first step should be a meaningful notice informing the plan enrollee that he/she has been denied a service and providing the enrollee with sufficient information to form the basis of an appeal. [xciii]


    [i]. Eiken et al., Medicaid Expenditures for Long-Term Services and Supports.

    [ii]. Ibid.

    [iii]. Ibid.

    [iv]. Feder and Komisar, The Importance of Federal Financing to the Nation’s Long-Term Care Safety Net.

    [v]. Center for Medicaid and State Operations, Centers for Medicare and Medicaid Services, State Medicaid Directors’ Letter #02-009, May 9, 2002, with Sec. 1915(c) and Sec. 1115 waiver templates attached.

    [vi]. Centers for Medicare and Medicaid Services, Center for Medicaid and State Operations, Disabled and Elderly Health Programs Group, Instructions, Technical Guide and Review Criteria: Application for a Sec. 1915(c) Home and Community-Based Waiver (November 2005).

    [vii]. Sections 6086 and 6087 of the Deficit Reduction Act of 2005 (P. L. 109-171), adding Section 1915(i) and Section 1915(j), respectively, to the Social Security Act.

    [viii]. Section 6071 of P. L. 109-171.

    [ix]. M. W. Smull, M. L. Borne, and Helen Sanderson, “Becoming a Person-Centered System,” paper written for a Real Choice Systems Change grant project entitled “Building Person-Centered Organizations: Fulfilling the Promise of Person-Centered Planning” (Grant FY 2007 CFDA 93.779), cosponsored by Virginia Commonwealth University, Support Development Associates and the National Association of State Directors of Developmental Disabilities Services in cooperation with six state developmental disabilities agencies (April 2009).

    [x]. P. Black and K. Leitch, Analysis of State Approaches to Implementing Standardized Assessments (Olympia, WA: C E Reed and Associates, April 2012).

    [xi]. Wisconsin Department of Health and Social Services, “Family Care Resource Allocation Decision Method,”

    [xii]. Robert Wood Johnson Foundation, Program Results Report: Self-Determination for Persons with Developmental Disabilities—An RWJF National Program, January, 2004,

    [xiii]. President’s New Freedom Commission on Mental Health, “Executive Summary,” in Achieving the Promise: Transforming Mental Health Care in the United States (U.S. Department of Health and Human Services, Substance Abuse and Mental Health Administration, July 2003),

    [xiv]. For an extended discussion of self-directed supports, including the prospects of incorporating self-direction in Medicaid managed long-term services and supports programs, see the National Council on Disability’s companion white paper, The Case for Medicaid Self-Direction: A White Paper on Research, Practice and Policies Opportunities (under development).

    [xv]. Kaiser Commission on Medicaid and the Uninsured, Helping Consumers Manage Long-Term Services and Supports in the Community: State Medicaid Program Activities, Issue Paper (Washington, DC: Kaiser Family Foundation, February 2011).

    [xvi]. R. Baer, T. Simmons, R. Flexer, and C. Smith, “A Study of the Costs and Benefits of Supported Employment with Severe Physical and Multiple Disabilities,” Journal of Rehabilitation Administration 18, no.1 (1995): 46–57; R. W. Conley, F. R. Rusch, W. B. McCaughrin, and J. Tines, “Benefits and Costs of Supported Employment: An Analysis of the Illinois Supported Employment Project,” Journal of Applied Behavior Analysis 22 (1989): 441–7; M. Hill and P. Wehman, “Cost Benefit Analysis of Placing Moderately Severely Handicapped Individuals in Competitive Employment,” Journal of the Association for the Severely Handicapped 8 (1983): 30–8; J. Kregel, P. Wehman, G. Revell, J. Hill, and R. Cimera, “Supported Employment Benefit-Cost Analysis: Preliminary Findings,” Journal of Vocational Rehabilitation 14 (2000): 153–61; W. B. McCaughrin, W. K. Ellis, F. R. Rusch, and L. W. Heal, “Cost-Effectiveness of Supported Employment,” Mental Retardation 31 (1993): 41–8.

    [xvii]. R. E. Cimera, “The Cost Trends of Supported Employment Versus Sheltered Employment,” Journal of Vocational Rehabilitation 28 (2008): 15–20.

    [xviii]. R. E. Cimera, An Evaluation of the Long-Term Service Costs and Vocational Outcomes of Supported and Center-Based Employees in Wisconsin (August 2010),

    [xix]. R. E. Cimera, “The National Cost-Efficiency of Supported Employees with Intellectual Disabilities: The Worker’s Perspective,” Journal of Vocational Rehabilitation 33 (2010): 123–31.

    [xx]. E. Dunn, N. J. Wewiorski, and E. S. Rogers, “The Meaning and Importance of Employment to People in Recovery from Serious Mental Illness: Results of a Qualitative Study,” Psychiatric Rehabilitation Journal 32, no. 1: 59–62.

    [xxi]. National Core Indicators, What Work Means: What does NCI Tell Us About the Quality of Life of Adults with Intellectual and Developmental Disabilities Who are Employed in the Community? NCI Data Brief, No. 5 (Alexandria, VA, and Boston, MA: National Association of State Directors of Developmental Disabilities Services and the Human Services Research Institute, 2012.

    [xxii]. Office of Disability Employment Policy, U.S. Department of Labor, Web site,

    [xxiii]. D. Stapleton and G. Livermore, Costs, Cuts and Consequences: Charting a New Course for Working-Age People with Disabilities, Issue Brief No. 11-03, Center for Studying Disability Policy (Washington, DC: Mathematica Corp., September 2011).

    [xxiv]. L. Feinburg, S. Reinhard, A. Houser, and R. Choula, Valuing the Invaluable: 2011 Update—The Growing Contribution and Cost of Family Caregiving, Insight on the Issues, No. 51 (Washington, DC: AARP Public Policy Institute, June 2011). The estimate is based on the number of individuals providing care to adults with limitations in performing daily living activities during 2009.

    [xxv]. Ibid.

    [xxvi]. S. Larson et al., Residential Services for Persons with Developmental Disabilities: Status and Trends Through 2010(Minneapolis: University of Minnesota, Institute on Community Integration, Research and Training Center on Community Living, 2012); R. Prouty et al., Residential Services for Persons with Developmental Disabilities: Status and Trends Through 2000 (Minneapolis: University of Minnesota, Institute on Community Integration, Research and Training Center on Community Living, June 2001).

    [xxvii]. L. Feinberg, Moving Toward Person- and Family-Centered Care, Insight on the Issues, No. 60 (Washington, DC: AARP Public Policy Institute, March 2012).

    [xxviii]. Ibid.

    [xxix]. R. Cooper, Caring Families … Families Giving Care Using Medicaid to Pay Relatives Providing Support to Relatives with Disabilities (Alexandria VA: National Association of State Directors of Developmental Disabilities Services, June 2010).

    [xxx]. E-mail message from Joseph Issacs, vice-president for public policy, National Spinal Association, in transmitting NDLA’s “Principles for Providing Coordinated Quality Health Care in Medicaid Managed Care Programs for Those Living with Significant Disabilities,” March 22, 2012.

    [xxxi]. A. Lind, Communicating the Value of Integrated Care to Stakeholders, Issue Brief (Washington, DC: Center for Health Care Strategies, November 2011).

    [xxxii]. American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders: Fourth Edition (Text Revision) (Arlington, VA: American Psychiatric Association, 1994 (text revision 2000)).

    [xxxiii]. See, for example, Medicaid Reform Recommendations: Improving Services to Kansans with Developmental Disabilities (Topeka, KS: Interhab, August 23, 2011),; Health Policy Institute, Georgetown University, Proposed Medicaid Long-Term Care Changes Raise Host of Issues: Florida’s Experience with Medicaid Reform (Washington, DC: Jesse Ball DuPont Fund, January 2012), Florida%20Medicaid%27s%20Long-Term%20Care%20Program.pdf; Health Policy Institute, Georgetown University,Looking Ahead to 2012: What Changes Are In Store for Florida’s Medicaid Program? Florida’s Experience with Medicaid Reform (Washington, DC: Jesse Ball DuPont Fund, December 2011), floridamedicaid/pdfs/2011%20December%20Medicaid%20Brief%201%20FINAL.pdf.

    [xxxiv]. S. Felt-Lisk, J. Mittler, and A. Cassidy, Ensuring Special Needs Populations’ Access to Providers in Managed Care Networks: A Technical Assistance and Self-Assessment Tool for State Medicaid Agencies (Trenton, NJ: Center for Health Care Strategies, Inc., January 2001).

    [xxxv]. The number of people residing in ICF/MR facilities has declined steadily over the past decade (from 116,441 in 2000 to 87,560 in 2010), while the number living in large (16+ residents) ICFs/MR has declined at a steeper rate (from 130,767 in 1982 to 48,310 in 2010). In 2010, more than three and a half times as many people with developmental disabilities were receiving residential services paid for through the HCBS waiver program (306,009)—mainly in small (>6) community residences—as were residing in ICFs/MR. See S. Larson et al., Residential Services for Persons with Developmental Disabilities.

    [xxxvi]. H. S. Kaye, “Gradual Rebalancing of Medicaid LTSS Saves Money and Serves More People, Statistical Model Shows,” Health Affairs 31, no. 6 (June 2012).

    [xxxvii]. P. Saucier, “Overview of Medicaid Managed Long-Term Care,” presentation at a seminar on “Medicaid Managed Long-Term Care” sponsored by the National Health Policy Forum, April 25, 2008.

    [xxxviii]. S. Gore and J. Klebonis, Medicaid Rate-Setting Strategies to Promote Home- and Community-Based Services, Policy Brief (Trenton, NJ: Center for Health Care Strategies, Inc., May 2012).

    [xxxix]. Ibid.

    [xl]. Ibid.

    [xli]. Ibid.

    [xlii]. C. Irvin et al., Post-institutional Services of MFP Participants: Use and Costs of Community Services and Supports, Reports from the Field, No. 9 (Ann Arbor, MI: Mathematica Policy Research, The National Evaluation of the Money Follows the Person (MFP) Demonstration Grant Program, February 2012).

    [xliii]. J. Schurrer and A. Wenzlow, A First Look at How MFP Participants Fare After Returning to the Community, Reports from the Field, No. 7 (Ann Arbor, MI: Mathematica Policy Research, The National Evaluation of the Money Follows the Person (MFP) Demonstration Grant Program, July 2011); S. Simon and M. Hodges, Money Follows the Person: Change in Participant Experience During the First Year of Community Living, Reports from the Field, No. 6 (Arbor, MI: Mathematica Policy Research, The National Evaluation of the Money Follows the Person (MFP) Demonstration Grant Program, May 2011).

    [xliv]. C. Irvin et al., Post-institutional Services of MFP Participants, p. 3.

    [xlv]. In its 1999 ruling in Olmstead v. L.C. (527 U.S. 581 (1999)), the U.S. Supreme Court found that retaining people with disabilities in an institution when they could benefit from services in a more integrated setting violates the provisions of Title II of the Americans with Disabilities Act.

    [xlvi]. “Proposed Rules State Medicaid Plan Home and Community-Based Services,” Federal Register 77, no. 86 (May 3, 2012): 26362–406.

    [xlvii]. Rosa’s Law, 124 STAT. 2643, P. L.111-256, Oct. 5, 2010, removed the phrase “mental retardation” from federal statutes. P. L. 111-256 did not alter the statutory language authorizing ICF/MR services, but CMS, in recognition of the spirit of the law, now refers to such facilities as ICFs/DD.

    [xlviii]. CNN Money, “Brutal Losses in State and Local Jobs,” January 6, 2012.

    [xlix]. M. Cheek, M. Roherty, E. Cho, J. Walls, K. Gifford, W. Fox-Grage, and K. Ujvari, On the Verge: The Transformation of Long-Term Services and Supports (Washington, DC: AARP Public Policy Institute, in collaboration with the National Association of States United for Aging and Disabilities, and Health Management Associates, February 2012).

    [l]. Bureau of Labor Statistics, U.S. Department of Labor, “Table B-1, Employees on non-farm payroll by industry sector and selected industry detail,”

    [li]. National Association of State Budget Officers, The Fiscal Survey of the States, Fall 2011 (Washington, DC: National Association of State Budget Officers, 2011).

    [lii]. Wisconsin Legislative Audit Bureau, An Evaluation: Medicaid Assistance Program, Department of Health Services, Report No. 11-15 (December 2011).

    [liii]. Office of Public Affairs, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, “Fact Sheet: Electronic Health Records at a Glance” (July 13, 2010), Counter=3788&intNumPerPage=10&checkDate=&checkKey=&srchType=1&num Days=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&int Page=&showAll=&pYear=&year=&desc=&cboOrder=date.

    [liv]. The Office of the National Coordinator of Health Information Technology, U.S. Department of Health and Human Services, “Putting the I in Health IT,”

    [lv]. Kaiser Commission on Medicaid and the Uninsured, People with Disabilities and Medicaid Managed Care: Key Issues to Consider (Washington, DC: Kaiser Family Foundation, February 2012).

    [lvi]. U.S. Government Accountability Office, CMS Oversight of States’ Rate Setting Needs Improvement, GAO-10-810 (Washington, DC: U.S. Government Accountability Office, August 2010).

    [lvii]. Letter from Sen. Charles E. Grassley to all state Medicaid directors, February 23, 2012.

    [lviii]. Henry J. Kaiser Family Foundation, Health Care Spending in the United States and Selected OECD Countries (April 2011), OECD042111.cfm.

    [lix]. Centers for Medicare and Medicaid Services, One Year of Innovation: Taking Action to Improve Care and Reduce Cost, Annual Report of the Center on Medicare and Medicaid Innovation (January 2012),

    [lx]. Office of the Legal Counsel, U.S. House of Representatives, Compilation of the Patient Protection and Affordable Care Act, Section 6301, Print No. 111-1, 2nd Session, 111th Congress, pp. 664–81.

    [lxi]. Bloomberg News, “U.S. Panel Measuring Adequacy of Cures Lays Broad Agenda,” January 23, 2012.

    [lxii]. Patient-Centered Outcome Research Institute, Draft National Priorities for Research and Research Agenda (January 23, 2012),

    [lxiii]. Office of the Legal Counsel, U.S. House of Representatives, Compilation of the Patient Protection and Affordable Care Act, Section 2406, pp. 215–6.

    [lxiv]. Families USA, Maintenance of Effort Requirement Under Health Reform, Fact Sheet (Washington, DC: Families USA, March 2010).

    [lxv]. Republican Governors Public Policy Committee, A New Medicaid: A Flexible, Innovative and Accountable Future(Washington, DC: Republican Governors Association, August 30, 2011); Kaiser Health News, “Legislation Advanced to Repeal Medicaid Maintenance-of-Effort Provisions” May 4, 2012.

    [lxvi]. Kaiser Commission on Medicaid and the Uninsured, Medicaid Home and Community-Based Service Programs: Data Update, Issue Paper (Washington, DC: Kaiser Family Foundation, February 2011).

    [lxvii]. S. A. Larson, A. Ryan, P. Salmi, D. Smith, and A. Wuorio, Residential Services for Persons with Developmental Disabilities: Status and Trends Through 2010 (Minneapolis: University of Minnesota, Research and Training Center on Community Living, Institute on Community Integration, 2012).

    [lxviii]. Medicaid law excludes payments on behalf of residents of an “institution for mental diseases” (IMD). Lacking an institutional reference point, adults between the ages of 19 and 64 with a severe, chronic mental illness, therefore, are considered ineligible for Medicaid home and community-based waiver services.

    [lxix]. “Officials Testify About Gaps in Mental Health Services,” The Texas Tribune, May 9, 2012.

    [lxx]. C. Collins, D. L. Henderson, R. Munger, and T. Wade, Evolving Models of Behavioral Health Integration in Primary Care (Milbank Memorial Foundation (May 2010),

    [lxxi]. J. Parks, D. Svendsen, P. Singer, et al., Morbidity and Mortality in People with Serious Mental Illness (Alexandria, VA.: National Association of State Mental Health Program Directors, 2006).

    [lxxii]. Kaiser Commission on Medicaid and the Uninsured, Helping Consumers Manage Long-Term Services and Supports in the Community: State Medicaid Program Activities, Issue Paper (Washington, DC: Henry J. Kaiser Foundation, February 2011).

    [lxxiii]. Ibid.

    [lxxiv]. CMS Regional and Central Office Workgroup on Managed HCBS, Providing Long Term Services and Supports in a Managed Care Delivery System, Enrollment Authorities and Rate Setting Techniques: Strategies States May Employ to Offer Long Term Services and Supports through a Managed Care Delivery System, CMS Review Processes and Quality Requirements (Baltimore, MD: Centers for Medicare and Medicaid Services, December 2009).

    [lxxv]. Section 10202 of the Affordable Care and Patient Protection Act of 2010 (P. L. 111-148), as amended by the Health Care and Education Reconciliation Act of 2010 (P. L. 111-152).

    [lxxvi]. U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, Initial Announcement, State Balancing Incentive Payment Program

    [lxxvii]. Commonwealth of Massachusetts, Executive Office of Health and Human Services, Office of Medicaid, “State Demonstration to Integrate Care for Dual Eligible Individuals,” a proposal submitted to the Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, February 16, 2012.

    [lxxviii]. Ibid.

    [lxxix]. Centers for Medicare and Medicaid Services, State Medicaid Directors Letter, “Medical Equipment,” September 4, 1998.

    [lxxx]. K. Prindiville and G. Burke, Medicare and Medicaid Alignment: Challenges and Opportunities for Serving Dual Eligibles, Issue Paper (Washington, DC: National Senior Citizens Law Center, August 2011).

    [lxxxi]. Disabled and Elderly Health Program Group, Center for Medicaid and State Operations, Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, Application for a Section 1915(c) Home and Community-Based Waiver (Version 3.5): Instructions, Technical Guide and Review Criteria (Baltimore, MD: Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services, January 2008).

    [lxxxii]. R. Applebaum, B. Schnieder, S. Kunkel, and S. Davis, A Guide to Quality in Consumer Directed Services (Miami, FL: Scripps Gerontology Center, Miami University, August 2004).

    [lxxxiii]. G. Grossman, PowerPoint presentation, National Quality Forum on “Critical Incident Systems: Massachusetts Incident and Investigations System,” online seminar, March 8, 2012.

    [lxxxiv]. S. Scannell, National Quality Enterprise, “Critical Incident Management: Illinois Home and Community-Based Waiver Program for Medically Fragile and Technology Dependent Children,” online seminar, March 8, 2012.

    [lxxxv]. Kaiser Commission on Medicaid and the Uninsured, People with Disabilities and Medicaid Managed Care.

    [lxxxvi]. “Medicaid Program: Initial Set of Health Care Quality Measures for Medicaid-Eligible Adults,”Federal Register 77, no. 2 (January 4, 2012): 286–91.

    [lxxxvii]. H. M. Young, E. Kurtzman, M. Roes, M. Toles, and A. Ammerman, Measurement Opportunities and Gaps: Transitional Care Processes and Outcomes Among Adult Recipients of Long-Term Services and Supports, Quality Measurement Work Group Report (Washington, DC: Long-Term Quality Alliance, December 2011).

    [lxxxviii]. For additional information, see Long-Term Services and Supports: Beneficiary Protection in a Managed Care Environment (National Senior Citizens Law Center in collaboration with the Disability Rights Education Defense Fund, June 2012),

    [lxxxix]. N. R. Mudrick, M. L. Breslin, M. Liang, and S. Yee, “Physical Accessibility in Primary Health Care Settings: Results from California on-site visits,” Disability and Health Journal 5 (July 2012).

    [xc]. K. Prindiville and G. Burke, Ensuring Consumer Protections for Dual Eligibles in Integrated Models, Issue Brief (Washington, DC: National Senior Citizens Law Center, July 2011).

    [xci]. Ibid.

    [xcii]. M. Musumeci, A Guide to the Medicaid Appeals Process (Washington, DC: Kaiser Commission on Medicaid and the Uninsured, March 2012).

    [xciii]. Ibid.