Cash & Counseling: Empowering Choice, Improving Health

    • May 25, 2012

For years, Medicaid consumers with disabilities had limited choices about their care—and where they could receive it. Medicaid consumers with disabilities, including the frail elderly, usually had to decide whether to move to a long-term care institution. If they stayed at home, they often had to depend entirely on home health agencies to provide workers to come into their homes to help with daily living activities. And Medicaid consumers had little or no control over who provided this assistance.

In 1998, the Robert Wood Johnson Foundation (RWJF) and the U.S. Department of Health and Human Services (HHS) joined forces to provide eligible, disabled Medicaid participants with greater personal choice and control over their care, through an innovative program called Cash & Counseling.

Cash & Counseling provides these consumers with individualized monthly budgets and gives them a high degree of flexibility to hire (and fire) their own home health workers, who may be friends or family, to deliver daily assistance such as bathing, meal preparation, and transportation. This self-directed care option also allows participants to use their Medicaid funds to make modifications to their homes or vehicles, or to purchase items―such as touch lamps and lift chairs—that allow them to live independently.

The Cash & Counseling concept was first put to the test when Medicaid programs in Arkansas, Florida, and New Jersey were granted demonstration waivers from the Centers for Medicare & Medicaid Services—the HHS agency that operates Medicaid and Medicare―to provide this self-directed care option.

What started as a promising HHS grant program has had a positive impact for Medicaid consumers as well as for the state Medicaid agencies offering this option, according to a rigorous evaluation of the demonstration projects by Mathematica Policy Research.

Mathematica’s evaluation of the Cash & Counseling project confirmed that the self-directed care made available by the program does not cost more than traditional programs if states carefully design and monitor their programs. In addition, increased Medicaid personal care costs under Cash & Counseling were partially offset by savings in institutional and other long-term care costs.

And most importantly, the evaluation found that the Cash & Counseling program improved the quality of life for Medicaid beneficiaries, and for their caregivers and families. Because personal assistance services are delivered at home to people who are considered especially vulnerable, ensuring quality of care was a key concern. The program evaluation found that the self-directed care option did not increase adverse health outcomes and, in some cases, reduced the risk of those outcomes. In addition, Cash & Counseling received high marks from both the participants and their primary care givers.

RWJF President and Chief Executive Officer Risa Lavizzo-Mourey, MD, MBA, praised the success of the demonstration program. “The Cash & Counseling program offers Medicaid consumers flexibility and a sense of control over their care. This program is an important part of the Robert Wood Johnson Foundation’s longstanding mission to improve the quality of care for people with chronic conditions,” Lavizzo-Mourey said.

Tommy G. Thompson, HHS Secretary when the Cash & Counseling concept was first being tested, said that the demonstration projects proved that program participants were able to make good choices about their health and safety, improving their quality of life. “This approach gives people with disabilities more freedom and responsibility in the same way that all of us want to be in charge of our lives and our choices,” Thompson said. “It lets the individuals themselves decide how to best use the Medicaid dollars they are already entitled to.”

Medicaid recipients with disabilities who direct their own support services under Cash & Counseling report being more satisfied with their care. A participant in New Jersey’s program said that he was determined to continue to live on his own—despite coping with blindness, kidney disease, and impaired physical coordination after an accident. He said that the Cash & Counseling option allowed him to remain in his home rather than return to a long-term care facility. “I was in rehabilitation in a nursing home for six months after I was hit by a car,” he said. “I never want to go back. It’s not like living there; they just do what’s on their list for you, nothing more, and nothing less.”

Through Cash & Counseling, this New Jersey participant is able to hire people he knows and trusts to help him with daily living activities. His sister works for him in the mornings before she goes to her regular job and in the evenings on her way home. In addition, he was able to use his Medicaid funds to purchase a voice-activated microwave to prepare his own food; he could also buy voice-recognition software for his computer to shop online for groceries, clothes, and other necessities.

In Minnesota, an elderly Medicaid beneficiary who had a heart attack reported that his doctor had given him two months to live. In addition to his heart disease, he was diabetic and blind. He nonetheless managed to outlive his doctor’s projections, but needed around-the-clock care to do so. However, the person who knows him best—his wife—has been able to care for him, thanks to Minnesota’s self-directed care option for Medicaid beneficiaries–a direct result of the success of Cash & Counseling. For years, his wife had to juggle a full-time job along with her care-giving duties. The self-directed care option allowed her to quit her job to care for her husband full time, a move that significantly reduced the emotional and financial strain on the couple.

Due to its proven value to Medicaid consumers as well as to state Medicaid programs, options like Cash & Counseling are now available in all 50 states. Congress has passed legislation that allows states to offer this self-directed care option without applying for a waiver from HHS. Meanwhile, HHS has issued a proposed rule to allow more Medicaid consumers nationwide to direct their personal care services. By empowering these consumers with greater choice, Cash & Counseling created a cost-effective paradigm for improving the health of the disabled.