Cash & Counseling

This national program introduced or expanded participant-directed personal assistance services in Medicaid

“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. It lets the individuals themselves decide how to best use the Medicaid dollars they are already entitled to.”—Tommy G. Thompson, HHS Secretary during the Cash & Counseling demonstration phase

Dates of Program: October 1996 to March 2009

Field of Work: Fostering the development of participant-directed home and community-based services for people with chronic disabilities

Problem Synopsis: Frail older adults and other people with disabilities who receive Medicaid faced many challenges in getting the personal assistance services—help at home with things like bathing, dressing, grooming, preparing meals, and housekeeping—they needed. At the same time, increased spending for long-term care led to the need for more cost-effective personal assistance services.

Synopsis of the Work: Cash and counseling, now called participant direction, is an approach to long-term care personal assistance services in which the government gives people cash allowances to pay for the services and goods they feel would best meet their personal care needs and counseling about managing their services.

The Cash & Counseling national program introduced or expanded participant-directed personal assistance services for frail older adults with disabilities and other people with disabilities in the Medicaid programs of 15 states. The program was a joint venture between the Robert Wood Johnson Foundation and the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services.

Cash & Counseling had a demonstration phase and a replication phase. During the demonstration phase, Arkansas, Florida, and New Jersey developed and implemented programs comparing the cash and counseling model with the traditional agency-directed model for delivering personal-assistance services. Participants were randomly assigned to the treatment group (cash and counseling) or the control group (agency-based personal-assistance services). Mathematica Policy Research, Inc., in Princeton, N.J., conducted a rigorous, independent evaluation of the demonstration program. During the replication phase, 12 states implemented the model developed during the demonstration phase. As the main users of personal assistance services, older adults were a key focus. The RWJF Board of Trustees authorized the program for $18 million.

Key Results

  • The 15 states enrolled about 13,500 Medicaid beneficiaries with disabilities in cash and counseling programs. All of the states have continued their participant-directed programs.

    The evaluation of the demonstration phase found:

    • Cash & Counseling significantly reduced the unmet needs of Medicaid consumers who require personal assistance services.
    • Cash & Counseling participants experienced positive health outcomes.
    • Cash & Counseling improved quality of life for participants and their caregivers.
    • Medicaid personal care costs were somewhat higher under Cash & Counseling, mainly because enrollees received more of the care they were authorized to receive. These increased costs were partially offset by other cost savings in institutional and other long-term care.
    • Cash & Counseling need not cost more than traditional Medicaid personal care programs if states carefully design and monitor their programs.
    • The Cash & Counseling national program created champions in the federal government for participant-directed services and contributed to the spread of these services through changes in policy, law, and regulation. For example, changes to policies of the Centers for Medicare & Medicaid Services and the Deficit Reduction Act of 2005 made it easier for states to offer participant-directed programs.

Participant direction is a movement that has transformed supportive services in many states across the country and many different payment systems.”—James R. Knickman PhD, former Vice President for Research and Evaluation at RWJF