Blog note, Gold Dome, Health Care, Linda Gorman, Politics

Don't gut one of the few Medicaid reforms that works for patients

The Colorado Consumer Directed Attendant Support Services (CDASS) program is a rare example of a budget neutral Medicaid reform that makes disabled Medicaid clients better off. Patients manage their own care, which means that they control funds that would normally go to businesses that provide attendant care.

When a disabled person enters Medicaid, a case manager creates an annual care budget by determining how many hours of health management, personal care, and homemaking services he will need in the next year. Health management services are budgeted at a flat rate of $28 per hour. Personal care and homemaking services are budgeted at a flat rate of $15 an hour. Eligible Medicaid clients may choose either traditional Medicaid or CDASS as a way to receive the care the state provides.

icon_blog_noteUnder traditional Medicaid, the care is provided by one of the attendant service businesses that contract with the state Medicaid program. The business determines how much it will pay employees, hires people, sends them to client houses, collects the budgeted hourly fee from the state, and keeps the remainder. Generally, people get the care they need. But sometimes businesses cannot staff all of the hours of care a client needs. Sometimes attendants are late. Sometimes they fail to show up at all. Sometimes they steal.

Under CDASS, clients control their care budget minus a required fee for financial management services. There is also a reduction of 10.75 percent because the state must account for “differences in costs incurred by agencies versus costs incurred by Program attendants” according to the state auditor. Clients hire, pay, train, and schedule their own attendants. They can fire people who perform badly and reward those who perform well.

Because CDASS clients spend their “own” money, they have a big incentive to pay less for their attendant care. On average, they paid $16.60 an hour for health maintenance services, $13.14 an hour for homemaker services, and $14.07 an hour for personal care services.

When CDASS clients pay less per hour, they can improve their health and make their difficult lives easier by buying more care. They can pay more for care on weekends and holidays so that relatively minor problems don’t develop into emergencies. They can also pay family members for providing care which helps reduce the burden that catastrophic illness and disability place on them.

CDASS participants say that this flexibility improves their health, and that the better care they get under it reduces other Medicaid costs like emergency room visits. Unfortunately, after two decades of program management, state government still cannot say whether this is true.

Even though CDASS clients do the work of a home health agency without getting paid for it (the 10.75 percent reduction), and they pay the required fee to the CDASS financial services manager, some government officials believe that the state should abandon its flat rate amounts in calculating care budgets. They think that CDASS client care budgets should be calculated using the average rate that CDASS clients pay rather than the $28 and $15 used to calculate care budgets under traditional Medicaid.

This approach is unfair. If the state is willing to pay home health agencies $28 an hour to provide care and to let private businesses keep any savings that they create, how is it right to force Medicaid clients who do the work of agencies to give up the savings that they create, especially if those savings are used to improve their health?

Linda Gorman directs the Health Care Policy Center at the Independence Institute, a free market think thank in Denver.

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