Long-Term Care
Federal Oversight of Growing Medicaid Home and Community-Based Waivers Should Be Strengthened Gao ID: GAO-03-576 June 20, 2003Home and community-based settings have become a growing part of states' Medicaid long-term care programs, serving as an alternative to care in institutional settings, such as nursing homes. To cover such services, however, states often obtain waivers from certain federal statutory requirements. GAO was asked to review (1) trends in states' use of Medicaid home and community-based service (HCBS) waivers, particularly for the elderly, (2) state quality assurance approaches, including available data on the quality of care provided to elderly individuals through waivers, and (3) the adequacy of federal oversight of state waivers. GAO is recommending that the Administrator of CMS take steps to (1) better ensure that state quality assurance efforts are adequate to protect the health and welfare of HCBS waiver beneficiaries, and (2) strengthen federal oversight of the growing HCBS waiver programs. Although CMS raised certain concerns about aspects of the report, such as the respective state and federal roles in quality assurance and the potential need for additional federal oversight resources, CMS generally concurred with the recommendations.
From 1991 through 2001, Medicaid long-term care spending more than doubled to over $75 billion, while the proportion spent on institutional care declined. Over a similar time period, HCBS waivers grew from 5 percent to 19 percent of such expenditures--from $1.6 billion to $14.4 billion--and the number of waivers, participants, and average state per capita spending also grew significantly. Since 1992, the number of waivers increased by almost 70 percent to 263 in June 2002, and the number of beneficiaries, as of 1999, had nearly tripled to almost 700,000, of which 55 percent were elderly. In the absence of specific federal requirements for HCBS quality assurance systems, states provide limited information to the Centers for Medicare & Medicaid Services (CMS), the federal agency that administers the Medicaid program, on how they assure quality of care in their waiver programs for the elderly. States' waiver applications and annual reports for waivers for the elderly often contained little or no information on state mechanisms for assuring quality in waivers, thus limiting information available to CMS that should be considered before approving or renewing waivers. GAO's analysis of available CMS and state waiver oversight reports for waivers serving the elderly identified oversight weaknesses and quality of care problems. More than 70 percent of the waivers for the elderly that GAO reviewed documented one or more quality-of-care problems. The most common problems included failure to provide necessary services, weaknesses in plans of care, and inadequate case management. The full extent of such problems is unknown because many state waivers lacked a recent CMS review, as required, or the annual state waiver report lacked the relevant information. CMS has not developed detailed state guidance on appropriate quality assurance approaches as part of initial waiver approval. Although CMS oversight has identified some quality problems in waivers, CMS does not adequately monitor state waivers and the quality of beneficiary care. The 10 CMS regional offices are responsible for ongoing monitoring for HCBS waivers. However, CMS does not hold these offices accountable for completing periodic waiver reviews, nor does it hold states accountable for submitting annual reports on the status of waiver quality. Consequently, CMS is not fully complying with statutory and regulatory requirements when it renews waivers. As of June 2002, almost one-fifth of waivers in place for 3 years or more had either never been reviewed or were renewed without a review; for an additional 16 percent of waivers, reports detailing the review results were never finalized. Regional office personnel explained that limited staff resources and travel funds often impede the timing and scope of reviews. While regional office reviews include record reviews for a sample of waiver beneficiaries, they do not always include beneficiary interviews. The reviews also varied considerably in the number of beneficiary records reviewed and their method of determining the sample.
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Report to Congressional Requesters:
United States General Accounting Office:
GAO:
June 2003:
LONG-TERM CARE:
Federal Oversight of Growing Medicaid Home and Community-Based Waivers
Should Be Strengthened:
Quality Assurance in Medicaid Waiver Services:
GAO-03-576:
GAO Highlights:
Highlights of GAO-03-576, a report to congressional requesters
Why GAO Did This Study:
Home and community-based settings have become a growing part of
states‘ Medicaid long-term care programs, serving as an alternative to
care in institutional settings, such as nursing homes. To cover such
services, however, states often obtain waivers from certain federal
statutory requirements. GAO was asked to review (1) trends in states‘
use of Medicaid home and community-based service (HCBS) waivers,
particularly for the elderly, (2) state quality assurance approaches,
including available data on the quality of care provided to elderly
individuals through waivers, and (3) the adequacy of federal oversight
of state waivers.
What GAO Found:
From 1991 through 2001, Medicaid long-term care spending more than
doubled to over $75 billion, while the proportion spent on
institutional care declined. Over a similar time period, HCBS waivers
grew from 5 percent to 19 percent of such expenditures”from $1.6
billion to $14.4 billion”and the number of waivers, participants, and
average state per capita spending also grew significantly. Since 1992,
the number of waivers increased by almost 70 percent to 263 in June
2002, and the number of beneficiaries, as of 1999, had nearly tripled
to almost 700,000, of which 55 percent were elderly.
In the absence of specific federal requirements for HCBS quality
assurance systems, states provide limited information to the Centers
for Medicare & Medicaid Services (CMS), the federal agency that
administers the Medicaid program, on how they assure quality of care
in their waiver programs for the elderly. States‘ waiver applications
and annual reports for waivers for the elderly often contained little
or no information on state mechanisms for assuring quality in waivers,
thus limiting information available to CMS that should be considered
before approving or renewing waivers. GAO‘s analysis of available CMS
and state waiver oversight reports for waivers serving the elderly
identified oversight weaknesses and quality of care problems. More
than 70 percent of the waivers for the elderly that GAO reviewed
documented one or more quality-of-care problems. The most common
problems included failure to provide necessary services, weaknesses in
plans of care, and inadequate case management. The full extent of such
problems is unknown because many state waivers lacked a recent CMS
review, as required, or the annual state waiver report lacked the
relevant information.
CMS has not developed detailed state guidance on appropriate quality
assurance approaches as part of initial waiver approval. Although CMS
oversight has identified some quality problems in waivers, CMS does
not adequately monitor state waivers and the quality of beneficiary
care. The 10 CMS regional offices are responsible for ongoing
monitoring for HCBS waivers. However, CMS does not hold these offices
accountable for completing periodic waiver reviews, nor does it hold
states accountable for submitting annual reports on the status of
waiver quality. Consequently, CMS is not fully complying with
statutory and regulatory requirements when it renews waivers. As of
June 2002, almost one-fifth of waivers in place for 3 years or more
had either never been reviewed or were renewed without a review; for
an additional 16 percent of waivers, reports detailing the review
results were never finalized. Regional office personnel explained that
limited staff resources and travel funds often impede the timing and
scope of reviews. While regional office reviews include record reviews
for a sample of waiver beneficiaries, they do not always include
beneficiary interviews. The reviews also varied considerably in the
number of beneficiary records reviewed and their method of determining
the sample.
What GAO Recommends:
GAO is recommending that the Administrator of CMS take steps to (1)
better ensure that state quality assurance efforts are adequate to
protect the health and welfare of HCBS waiver beneficiaries, and
(2) strengthen federal oversight of the growing HCBS waiver programs.
Although CMS raised certain concerns about aspects of the report, such
as the respective state and federal roles in quality assurance and the
potential need for additional federal oversight resources, CMS
generally concurred with the recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-03-576.
To view the full product, including the scope and methodology, click
on the link above. For more information, contact Kathryn G. Allen at
(202) 512-7118.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
Waivers Are Vehicle for Dramatic Growth in Medicaid Home and Community-
Based Services:
Information on State Quality Assurance Approaches for Waivers Serving
the Elderly Is Limited, but Quality Concerns Have Been Identified:
CMS Guidance to States and Oversight Of HCBS Waivers Are Inadequate to
Ensure Quality Care:
Conclusions:
Recommendations for Executive Action:
Agency and State Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: Suggested CMS Definitions of Home and Community-Based
Services in Waivers Serving the Elderly:
Appendix III: Medicaid Long-Term Care Expenditures, by Type and State,
Fiscal Year 2001:
Appendix IV: Number of Beneficiaries Served by HCBS Waivers for the
Elderly and in Nursing Homes, by State, 1999:
Appendix V: Number of HCBS Waivers for the Elderly, Beneficiaries,
Expenditures, and per Beneficiary Expenditures by State, 1999:
Appendix VI: CMS HCBS Quality Initiatives:
Appendix VII: Beneficiary Samples for and Duration of Regional Office
Reviews of 15 State Waivers Serving the Elderly:
Appendix VIII: Comments from the Centers for Medicare & Medicaid
Services:
Tables:
Table 1: States with Highest and Lowest per Beneficiary Expenditures
for State HCBS Waivers Serving the Elderly, 1999:
Table 2: Quality Assurance Mechanisms States Reported Using in HCBS
Waivers Serving the Elderly:
Table 3: Quality Assurance Mechanisms Frequently Cited in Waiver
Applications and Current Annual State Reports for HCBS Waivers Serving
the Elderly:
Table 4: Frequently Cited Quality-of-Care Problems Identified by CMS
Regional Offices or States in HCBS Waivers Serving the Elderly:
Table 5: HCBS Waivers That Had 10 Years or More Elapse without Ever
Having a Regional Office Review or without a Review Prior to the Last
Waiver Renewal, as of June 2002:
Table 6: Status of CMS and State Monitoring for the 15 Largest HCBS
Waivers Serving the Elderly:
Table 7: Number and Specialty of CMS Regional Office Staff Assigned to
Oversee HCBS Waivers:
Table 8: Services States May Include in Their Medicaid Home and
Community-Based Services Waiver:
Figure:
Figure 1: Percentage Distribution of Medicaid Long-Term Care
Expenditures, Fiscal Years 1991 and 2001:
Abbreviations:
CMS: Centers for Medicare & Medicaid Services:
FTE: full-time equivalent:
HCBS: home and community-based services:
HCFA: Health Care Financing Administration:
HHS: Department of Health and Human Services:
ICF/MR: intermediate care facility for the mentally retarded:
United States General Accounting Office:
Washington, DC 20548:
June 20, 2003:
The Honorable Charles E. Grassley
Chairman
Committee on Finance
United States Senate:
The Honorable John B. Breaux
Ranking Minority Member
Special Committee on Aging
United States Senate:
Over the last decade, states have increased their support for long-term
care services in individuals' homes or in other community-based
settings--such as adult day care, adult foster care homes, and assisted
living facilities--as an alternative to care in nursing homes and other
institutions. For many vulnerable elderly and nonelderly individuals
with physical, developmental, or cognitive disabilities, these
alternative settings and services are seen as preferable to
institutional care. Most state funding of long-term care is through
Medicaid, the federal-state health care program for certain low-income
individuals. Medicaid home and community-based services (HCBS) waivers,
authorized under section 1915(c) of the Social Security Act, are the
primary means by which states provide noninstitutional long-term
care.[Footnote 1] Waivers allow states to limit the availability of
services geographically, target specific populations or conditions,
control the number of individuals served, and cap overall expenditures-
-actions not usually allowed under the Medicaid statute. The Centers
for Medicare & Medicaid Services (CMS)--the federal agency that manages
Medicaid--reviews and approves states' requests for these waivers and
also is responsible for ensuring that states have necessary safeguards
to protect the health and welfare of individuals receiving services
through waiver programs.[Footnote 2]
Despite the growing use of HCBS waivers, concerns have been raised
about the quality of care provided through waivers serving both elderly
and nonelderly populations. Newspaper exposés and some state audit
reports have chronicled serious health and welfare concerns in waiver
programs across the country. Because of continued growth in the numbers
of people served through HCBS waiver programs and concerns about the
quality of care, you asked us to review (1) trends in states' use of
such waivers, particularly for the elderly, (2) state quality assurance
approaches for waivers serving the elderly, including available data on
the quality of care provided to beneficiaries, and (3) the adequacy of
CMS's oversight of state waiver programs for the elderly as well as
those for other target populations.
To identify trends in states' use of waivers, we analyzed CMS and state
reports that contained data on waiver beneficiaries, expenditures, and
services. To identify those waivers that serve the elderly, we compiled
a list of HCBS waivers with "the aged" or "aged and disabled" as their
target populations. Throughout this report, we refer to this universe
of waivers as those "serving the elderly." To assess state quality
assurance activities for waivers serving the elderly, we analyzed (1)
data on quality assurance approaches from state waiver applications and
their most recent annual reports to CMS, (2) the oversight findings
reported by states in their annual waiver reports, and (3) CMS regional
office waiver reviews and state audits of waivers completed from
October 1998 through May 2002.[Footnote 3] For a more in-depth
perspective on states' quality assurance approaches for waivers serving
the elderly, we conducted structured interviews with state officials
and staff in South Carolina, Texas, and Washington. We selected these
states because they operate some of the largest HCBS waivers for the
elderly that have been in effect for 5 years or longer. We did not
attempt to assess the effectiveness of their quality assurance
approaches. To determine the adequacy of CMS oversight of state waiver
programs for the elderly as well as those for other target populations,
we obtained relevant data from officials at CMS headquarters and
conducted structured interviews with all 10 CMS regional offices on
their waiver review activities and staffing as of June 2002. See
appendix I for a detailed discussion of our scope and methodology. We
conducted our review from November 2001 through June 2003 in accordance
with generally accepted government auditing standards.
Results in Brief:
Total Medicaid spending for long-term care increased from $33.8 billion
in fiscal year 1991 to $75.3 billion in fiscal year 2001, with a
growing share spent on services through home and community-based
waivers as an alternative to care in institutions such as nursing
homes. Expenditures for services through HCBS waivers increased from
$1.6 billion in fiscal year 1991 to $14.4 billion in fiscal year 2001,
growing from 5 percent of all Medicaid long-term care spending in
fiscal year 1991 to 19 percent in fiscal year 2001. Over roughly the
same time period, the number of HCBS waivers increased from 155 to 263,
with 77 serving the elderly as of June 2002. Every state except Arizona
operates at least one waiver for the elderly. From 1992 to 1999, the
total number of persons served through waivers nationwide nearly
tripled to 688,152 and the number of beneficiaries served by waivers
for the elderly more than doubled to 377,083. In two states, Oregon and
Washington, HCBS waiver services have replaced nursing homes as the
dominant means of providing long-term care to the elderly under
Medicaid. Nationally, average Medicaid expenditures per beneficiary in
waivers serving the elderly increased from $3,622 in 1992 to $5,567 in
1999; average spending per beneficiary in 1999 ranged from $1,208 in
New York to $15,065 in Hawaii, reflecting differences in the type and
amount of services provided under different waivers.
No nationwide data are available on states' quality assurance
approaches or the status of quality of care for beneficiaries served by
waivers for the elderly, but concerns have been identified about the
quality of care provided under many of these waivers. Because CMS has
not provided detailed guidance to states on federal requirements for
HCBS quality assurance systems, the information available to CMS that
should be considered before approving or renewing waivers is limited.
Thus, state waiver applications and annual waiver reports that we
reviewed for waivers serving the elderly often contained little or no
information on state quality assurance approaches. For example, 11
applications for the 15 largest waivers serving the elderly identified
three or fewer specific quality assurance approaches, and none
mentioned important approaches such as complaint systems or enforcement
tools. Moreover, 18 of 52 state annual waiver reports that we reviewed
contained no information on approaches used to help ensure quality.
Where information was provided, the most frequently cited quality
assurance approaches included (1) audits or reviews of case management
agencies, (2) state agency reviews of waiver providers or direct-care
staff, and (3) state licensure, certification, or standards for some
waiver providers. Although CMS regional office and state reviews
identified few if any specific cases of harm to waiver beneficiaries,
the reviews for the majority of waivers serving the elderly with
available relevant detail had one or more problems related to quality
of care. Among the most commonly cited problems were (1) failure to
provide authorized or necessary services, (2) inadequate assessment or
documentation of beneficiaries' care needs in the plan of care, and (3)
inadequate case management. For example, one recent CMS regional office
review found that more than one-fourth of a state's waiver
beneficiaries had received none of their authorized personal care
services. However, the consequences for the beneficiaries were not
identified in this review. Since many state waiver programs did not
have a recent CMS review, as required, or the annual state waiver
report lacked the relevant information, the extent of quality-of-care
problems is unknown.
CMS guidance to states and oversight of HCBS waivers is inadequate to
ensure quality of care for waiver beneficiaries. CMS has not developed
detailed guidance for states on appropriate quality assurance
mechanisms as part of the waiver approval process, and initiatives
under way to generate information on state quality assurance approaches
do not address this problem. In addition, the agency has not fully
complied with the statutory and regulatory requirements that condition
the renewal of HCBS waivers on (1) states submitting required annual
reports that include information on state quality assurance approaches
and deficiencies identified through state monitoring and (2) CMS's
conducting and documenting periodic waiver reviews to determine whether
states satisfied requirements for protecting the health and welfare of
waiver beneficiaries. Many state annual waiver reports submitted to CMS
regional offices for waivers serving the elderly were not timely and
lacked required information on quality assurance and state monitoring.
As of June 2002, 228 HCBS waivers for all target populations had been
in place for 3 years or longer and should have been reviewed by CMS
regional offices. However, 42 waivers serving approximately 132,000
beneficiaries either had never been reviewed or were renewed without a
review. For 36 additional waivers, reviews were conducted, but the
reports summarizing the findings were never finalized, raising a
question as to whether any weaknesses were identified and, if so, had
been corrected. CMS regional office personnel informed us that limited
staff and travel resources impeded the timing and scope of reviews.
While regions' reviews included an examination of beneficiary records,
we found that the reviews varied considerably in the number of
beneficiary records reviewed and their method of determining the
sample, raising a question about the extent to which findings could be
generalized. In addition, they did not always include beneficiary
interviews. Although updated in 2001, CMS guidance for conducting
waiver reviews does not address key operational issues such as an
adequate sample size or the sampling methodology to provide a basis for
generalizing review findings.
To better ensure that state quality assurance efforts are adequate to
protect the health and welfare of HCBS waiver beneficiaries and to
strengthen federal oversight, we are recommending that the CMS
Administrator (1) establish more detailed criteria regarding the
necessary components of an HCBS waiver quality assurance system, (2)
require states to submit more specific information about their quality
assurance approaches prior to waiver approval, (3) ensure that states
provide sufficient and timely information in their annual waiver
reports on their efforts to monitor quality, (4) develop guidance on
the scope and methodology for federal reviews of state waiver programs,
and (5) ensure allocation of sufficient resources for conducting
thorough and timely reviews of quality in HCBS waivers and hold
regional offices accountable for completing such reviews. Although CMS
raised certain concerns about aspects of our report, such as the
respective state and federal roles in quality assurance and the
potential need for additional federal oversight resources, the agency
generally concurred with our recommendations.
Background:
The jointly funded federal-state Medicaid program is the primary source
of financing for long-term care services.[Footnote 4] About one-third
of the total $228 billion in Medicaid spending in fiscal year 2001 was
for long-term care in both institutional and community-based settings.
States administer this program within broad federal rules and according
to a state plan approved by CMS, the federal agency that oversees and
administers Medicaid. Some services, such as nursing home care and home
health care, are mandatory services that must be covered in any state
that participates in Medicaid. Other services, such as personal care,
are optional, which a state may choose to include in its state Medicaid
plan but which then must be offered to all individuals statewide who
meet its Medicaid eligibility criteria. States may also apply to CMS
for a section 1915(c) waiver to provide home and community-based
services as an alternative to institutional care in a hospital, nursing
home, or intermediate care facility for the mentally retarded (ICF/
MR).[Footnote 5] If approved, HCBS waivers allow states to limit the
availability of services geographically, to target services to specific
populations or conditions, or to limit the number of persons served,
actions not generally allowed for state plan services. States often
operate multiple waivers serving different population groups, such as
the elderly, persons with mental retardation or developmental
disabilities, persons with physical disabilities, and children with
special care needs.
States determine the types of long-term care services they wish to
offer under an HCBS waiver. Waivers may offer a variety of skilled
services to only a few individuals with a particular condition, such as
persons with traumatic brain injury, or they may offer only a few
unskilled services to a large number of people, such as the aged or
disabled.[Footnote 6] The wide variety of services that may be
available under waivers includes home modification, such as installing
a wheelchair ramp, transportation, chore services, respite care,
nursing services, personal care services, and caregiver training for
family members. CMS's waiver application form for states includes a
list of home and community-based services with suggested definitions.
States are free to include as many or as few of these as they wish, to
include additional services, or to include different definitions of
services from those supplied with the form. See appendix II for a list
of services provided through the HCBS waivers serving the elderly and
CMS's suggested definitions of these services.
To be eligible for waiver services, an individual must meet the state's
criteria for needing the level of care provided in an institution, such
as a nursing home, and be able to receive care in the community at a
cost generally not exceeding the cost of institutional care.[Footnote
7] States are responsible for determining the specific financial and
functional eligibility criteria used, conducting the necessary
screening and assessment, and arranging for services to be provided.
Factors that states use in assessing functional eligibility for nursing
home care and for waiver services include the individuals' medical
condition and their degree of physical or mental impairment. Other
factors that states generally consider, and which may affect the
states' ability to provide care in the community at a cost not
exceeding that of institutional care or to adequately protect
beneficiaries' health and welfare, include the mix of services needed
by the individual, the availability of needed services, the cost of
services, the need for home modification, and the availability of
family members or other caregivers.[Footnote 8]
In order to receive federal funds for waiver services, a state must
submit an application to the Secretary of Health and Human Services
(HHS) that identifies the target population, specifies the number of
persons that will be served, and lists the services to be included. In
addition, states are required to provide certain assurances that
necessary safeguards have been taken to assure financial accountability
and to protect the health and welfare of beneficiaries under the
waiver.[Footnote 9] Federal regulations specify that the state's
safeguards for the health and welfare of beneficiaries must include (1)
adequate standards for all providers of waiver services and (2)
assurance that any state licensure or certification requirements for
providers of waiver services are met.[Footnote 10] CMS requires that a
state's waiver application include documentation regarding the
standards applicable for each service provider. If the only requirement
for a particular provider is licensure or certification, the state must
provide a citation to the applicable state statute or regulation. If
other requirements apply, the state must specify the applicable
standards that providers must meet and explain how the provider
standards will ensure beneficiaries' welfare. Finally, states must
annually report on, among other things, how they implement, monitor,
and enforce their health and welfare standards and the waiver's impact
on the health and welfare of beneficiaries.
Initial waiver applications and amendments to initial waivers are
reviewed and approved by CMS headquarters. CMS's 10 regional offices
have primary responsibility for reviewing and approving applications to
renew waivers and amendments to renewed waivers. If CMS determines that
a waiver application meets program requirements, including sufficient
documentation to indicate that necessary safeguards are in place to
protect the health and welfare of waiver beneficiaries, it will approve
an initial waiver for a 3-year period. Subsequently, waivers may be
extended for additional 5-year periods.
Section 1915(c)(3) of the Social Security Act provides that, upon
request of a state, HCBS waivers may be extended, unless the Secretary
of HHS determines that the assurances provided during the preceding
term have not been met.[Footnote 11] Among the assurances that the
state makes are that necessary safeguards have been taken to protect
the health and welfare of waiver participants and that the state will
submit annual reports on the impact of the waiver on the type and
amount of medical assistance provided under the state Medicaid plan and
on the health and welfare of recipients. Regulations implementing
section 1915(c) provide that an extension of a waiver will be granted
unless (1) CMS's review of the prior waiver period shows that the
assurances the state made were not met and (2) the state fails to
provide adequate documentation and assurances to justify an
extension.[Footnote 12] In its explanation of this regulation, HCFA
indicated that a review of the prior period is an indispensable part of
the renewal process.[Footnote 13]
Reviews of waiver programs for which a renewal has been requested are,
therefore, expected to occur at some point during the initial 3-year
period, and at least once during each renewal cycle. CMS guidance on
the reviews calls for on-site visits that include an examination of
beneficiary and provider records as well as interviews with state
officials. If a state's efforts to protect the health and welfare of
waiver beneficiaries are determined to be inadequate, CMS officials
told us that the agency can either bar the state from enrolling any new
waiver beneficiaries until corrective actions are taken or terminate
the waiver.
According to a recent CMS-sponsored review, oversight of waivers is
often decentralized and fragmented among a variety of agencies and
levels of government, and rarely does a single entity have
accountability for the overall quality of care provided to waiver
beneficiaries.[Footnote 14] Some waiver service providers are regulated
by state licensing agencies, some are certified by private
accreditation organizations, and others operate under terms of a
contract or other agreement with a state agency. While the state
Medicaid agency is ultimately accountable to the federal government for
compliance with the requirements of the waivers, it may delegate
administration of the waivers to state units on aging, mental health
departments, or other departments or agencies with jurisdiction over a
specific population or service. About one-third of waivers for the
elderly are administered by an agency or department other than the
Medicaid agency, most often the state unit on aging.[Footnote 15] These
agencies may then contract with local networks, agencies, or providers
to provide or arrange for beneficiary services.
Waivers Are Vehicle for Dramatic Growth in Medicaid Home and Community-
Based Services:
Medicaid-covered HCBS services have become a growing component of state
long-term care systems, with most of the growth accounted for by
substantial increases in the number of HCBS waivers and the
beneficiaries served through waivers. In a few states, these waivers
are beginning to replace nursing homes as the dominant means for
providing long-term care to the elderly under Medicaid. Over the past
10 years, total Medicaid long-term care spending has more than doubled-
-from $33.8 billion in fiscal year 1991 to $75.3 billion in fiscal year
2001. However, the share of spending for institutional care declined
from 86 to 71 percent, while the share spent for home and community-
based care grew from 14 to 29 percent.
Most of the growth in home and community-based care spending under
Medicaid can be accounted for by HCBS waivers. Total Medicaid home and
community-based care spending grew from $4.8 billion in fiscal year
1991 to $22.2 billion in fiscal year 2001, while spending for waiver
services grew from $1.6 billion in fiscal year 1991 to $14.4 billion in
fiscal year 2001. As shown in figure 1, waiver spending grew from 5
percent of all Medicaid long-term care spending in fiscal year 1991 to
19 percent in fiscal year 2001. In all but two states--California and
New York--and the District of Columbia, over one-half of Medicaid home
and community-based services spending in fiscal year 2001 was through
waivers, with a much smaller portion going to nonwaiver mandatory home
health care or state plan optional personal care services.[Footnote 16]
See appendix III for a summary of Medicaid long-term care expenditures
by type and state.
Figure 1: Percentage Distribution of Medicaid Long-Term Care
Expenditures, Fiscal Years 1991 and 2001:
[See PDF for image]
Note: GAO analysis of HCFA Form 64 data as reported by Brian Burwell,
Steve Eiken, and Kate Sredl in Medicaid Long Term Care Expenditures in
FY 2001 (The MEDSTAT Group, May 10, 2002). The figure includes data
from 49 states and the District of Columbia.
[End of figure]
Both the number and size of HCBS waivers have grown considerably over
the past 20 years. Every state except Arizona operates at least one
such waiver for the elderly.[Footnote 17] In 1982, the first year of
the waiver program, 6 states operated HCBS waivers. By 1992, 48 states
operated a total of 155 HCBS waivers. As of June 2002, 49 states and
the District of Columbia operated a total of 263 HCBS waivers, with 77
serving the elderly. The average waiver for the elderly served 3,305
Medicaid beneficiaries in 1992 and 5,892 beneficiaries in
1999.[Footnote 18] In 1999, 15 states served more than 10,000 persons
in their waivers for the elderly, an increase from only 4 states in
1992.
The total number of HCBS waiver beneficiaries--elderly and nonelderly-
-nationwide nearly tripled from 235,580 in 1992 to 688,152 in 1999, the
most recent year for which data were available. The number of
beneficiaries served in waivers for the elderly more than doubled from
155,349 in 1992 to 377,083 in 1999. Over this same period, the number
of Medicaid beneficiaries who used some nursing home care during the
year grew by only 2.5 percent from 1.57 million to 1.61 million
beneficiaries. By 1999, waivers for the elderly were serving 19 percent
of all Medicaid beneficiaries served either in a nursing home or
through an HCBS waiver for the elderly, an increase from 9 percent in
1992.[Footnote 19] In two states, Oregon and Washington, more elderly
and disabled Medicaid beneficiaries were served in HCBS waivers in 1999
than were served in nursing homes. Appendix IV includes the number of
Medicaid beneficiaries served by HCBS waivers for the elderly and in
nursing homes in each state.
In 1999, the average per beneficiary expenditure in HCBS waivers
serving the elderly was $5,567, an increase from $3,622 in
1992.[Footnote 20] However, the average per beneficiary expenditure for
such waivers varied widely across states, reflecting differences in the
type, number, and amount of services provided under waivers in
different states. As shown in table 1, among those states with waivers
serving the elderly in 1999, per beneficiary expenditures ranged from
an average of $15,065 in Hawaii to $1,208 in New York. In Hawaii, one
such waiver that provided an average of 85 hours of personal assistance
services per month to 91 percent of beneficiaries of that waiver had an
average cost of $10,893 per beneficiary. A second Hawaii waiver that
provided adult foster care, residential care, or assisted living for
waiver beneficiaries had an average cost of $16,958 per beneficiary. In
contrast, New York's waiver for the elderly did not include personal
care or residential services; the primary benefits included social work
services, personal emergency response systems, and home-delivered
meals. Appendix V provides summary information on states' HCBS waivers
for the elderly, including per beneficiary expenditures.
Table 1: States with Highest and Lowest per Beneficiary Expenditures
for State HCBS Waivers Serving the Elderly, 1999:
United States; Average expenditures per beneficiary: $5,567;
Number of beneficiaries: 377,083.
States with highest per beneficiary waiver spending:
State: Hawaii; Average expenditures per beneficiary: 15,065; Number of
beneficiaries: 923.
State: New Mexico; Average expenditures per beneficiary: 14,151; Number
of beneficiaries: 1,404.
State: North Carolina; Average expenditures per beneficiary: 13,778;
Number of beneficiaries: 11,159.
State: Alaska; Average expenditures per beneficiary: 12,015; Number of
beneficiaries: 712.
State: West Virginia; Average expenditures per beneficiary: 11,213;
Number of beneficiaries: 3,470.
States with lowest per beneficiary waiver spending:
State: Michigan; Average expenditures per beneficiary: 2,632; Number of
beneficiaries: 6,328.
State: Iowa; Average expenditures per beneficiary: 2,517; Number of
beneficiaries: 3,994.
State: Missouri; Average expenditures per beneficiary: 2,224; Number of
beneficiaries: 20,821.
State: Massachusetts; Average expenditures per beneficiary: 1,919;
Number of beneficiaries: 5,132.
State: New York; Average expenditures per beneficiary: 1,208; Number of
beneficiaries: 19,732.
Source: CMS.
Notes: GAO analysis of annual state waiver report data (HCFA Form 372)
as reported by Charlene Harrington in Medicaid 1915(c) Home and
Community-Based Waivers: Program Data, 1992-1999 (San Francisco,
Calif.: University of California, San Francisco, August 2001).
[End of table]
All states in this table except Hawaii operated one waiver serving the
elderly in 1999. Hawaii operated two waivers, one that served 288
beneficiaries at a cost of $10,893 per beneficiary and a second that
served 635 beneficiaries at a cost of $16,958 per beneficiary.
Information on State Quality Assurance Approaches for Waivers Serving
the Elderly Is Limited, but Quality Concerns Have Been Identified:
No comprehensive nationwide data are available on states' quality
assurance systems for or the quality of care provided through HCBS
waivers, including those serving the elderly. In the absence of
detailed federal requirements for HCBS quality assurance systems,
states' waiver applications and annual reports often contained little
or no information on the mechanisms used to ensure quality, raising a
question as to whether CMS had adequate information to approve or renew
some waivers. More than half of the waivers serving the elderly for
which we were able to obtain a CMS waiver oversight report, an annual
state waiver report, or a state audit report identified oversight
weaknesses and quality-of-care problems. Frequently cited quality-of-
care problems included (1) failure to provide authorized or necessary
services, (2) inadequate assessment or documentation of beneficiaries'
care needs in the plan of care, and (3) inadequate case management. We
were unable to analyze over one-third of waivers serving the elderly
because they lacked a recent regional office review, the annual state
waiver report lacked the relevant information, or they were too new to
have annual state reports.
States Use a Variety of Waiver Quality Assurance Approaches in Waivers
Serving the Elderly, Yet Some States Provide Limited or Incomplete
Information to CMS:
Although the state waiver applications and annual waiver reports we
reviewed for waivers serving the elderly identified more than a dozen
quality assurance approaches, many contained little or no information
about how states ensure quality.[Footnote 21] For example, 11
applications for the 15 largest waivers serving the elderly identified
three or fewer quality assurance mechanisms and none of these 11
waivers mentioned important approaches, including complaint systems or
sanctions. Eighteen of 52 state annual waiver reports that we reviewed
contained no information on the mechanisms used to help ensure quality.
Moreover, when waiver applications and annual waiver reports did
contain some information, the information was often incomplete. Our
work in South Carolina, Texas, and Washington identified additional
quality assurance mechanisms that were not listed in their waiver
applications or annual reports, suggesting that such documents may
understate the nature and extent of their oversight approaches. As a
result, CMS's understanding of how these states ensure quality in the
waivers may be incomplete.
States Use a Variety of Quality Assurance Mechanisms:
Information provided to CMS in state waiver applications and annual
reports identified a variety of mechanisms used to protect the health
and welfare of beneficiaries in waivers serving the elderly. Table 2
describes 14 quality assurance approaches that states reported using in
HCBS waivers for the elderly. Some of these approaches focus on the
waiver beneficiary, such as case management or beneficiary satisfaction
surveys. Other approaches are focused on providers, including licensure
and inspections, corrective action plans, sanctions, and program
manuals. States may require that certain providers be licensed or
certified or meet other requirements contained in state laws or
regulations. Such providers are generally subject to periodic
inspections that may include a review of beneficiary records to
determine whether the records meet program standards. A third set of
quality assurance approaches focuses on waiver program operations,
including internal or external evaluations of the waiver program,
supervisory reviews of waiver beneficiary assessments and plans of
care, and audits or reviews of case management agencies.
Table 2: Quality Assurance Mechanisms States Reported Using in HCBS
Waivers Serving the Elderly:
Quality assurance mechanism: Beneficiary-oriented mechanisms:
Quality assurance mechanism: Case management; Description:
Case management includes assessing
the beneficiary's needs, developing the plan of care, arranging for the
delivery of services, monitoring the beneficiary, and conducting
periodic reassessments of the beneficiary's needs and modifying the
plan of care as needed.
Quality assurance mechanism: Beneficiary satisfaction surveys or
interviews; Description: A survey
instrument or other tool is used to measure waiver beneficiaries' views
about their waiver services and the extent to which services are
meeting their long-term care needs.
Quality assurance mechanism: On-site visits of beneficiaries;
Description: On-site visits may be
conducted by program officials other than the beneficiary's case
manager to observe services being provided and gather information about
the care provided.
Quality assurance mechanism: Complaint systems; Description:
Systems to accept, investigate, and
track the status of waiver beneficiaries' or others' complaints
regarding the waiver program.
Quality assurance mechanism: Provider-oriented mechanisms:
Quality assurance mechanism: Licensure, certification, or other state
standards; Description: States
require that certain providers be licensed, certified, or meet other
requirements contained in state law or regulation. Providers are
generally subject to periodic inspections that include a review of
beneficiary records to determine if they meet program standards.
Quality assurance mechanism: Provider or direct care staff reviews or
audits; Description: State program
officials conduct reviews of waiver providers or individual caregivers
to determine whether waiver-specific requirements were met. Such
reviews involve reviews of beneficiary records and other provider
documentation as well as individual beneficiary interviews.
Quality assurance mechanism: Corrective action plans; Description:
List of actions that the provider
agrees to take to return to compliance with federal or state
standards.
Quality assurance mechanism: Sanctions and penalties; Description:
Depending on the severity of the
violation, actions available to penalize the provider for not complying
with federal or state standards.
Quality assurance mechanism: Training and technical assistance;
Description: Ongoing, continuing
education for case managers and waiver providers to ensure competency
in delivering and monitoring the care of waiver beneficiaries.
Quality assurance mechanism: Program manuals; Description:
Distribution of rules, policies,
procedures, or standards to waiver providers.
Quality assurance mechanism: Program-oriented mechanisms:
Quality assurance mechanism: Case management agency review or audit;
Description: Reviews of agencies
responsible for case management of the HCBS waiver, including a review
of a sample of case managers' records to ensure timeliness and
completeness.
Quality assurance mechanism: Supervisory review of beneficiary
assessments or plans of care; Description: Beneficiary-oriented
mechanisms: Review conducted by case managers' supervisors or at the
state level of documents related to waiver beneficiaries' assessed
needs and identified services.
Quality assurance mechanism: Analysis of automated waiver program data;
Description: Review or monitoring of
electronic version of client data, such as assessments, reassessments,
and care plans.
Quality assurance mechanism: Internal or external evaluation of waiver
program; Description: Program review
of the procedures for waiver beneficiary assessments, development of
plans of care, and delivery of waiver services; review may be conducted
by state agency officials or by contractor.
Source: CMS.
Note: GAO analysis of the most recent waiver application for the 15
largest HCBS waivers serving the elderly and the most recent annual
state reports for 52 waivers serving the elderly submitted to CMS
regional offices as of July 2002.
[End of table]
States Provide CMS Limited Information about Their Quality Assurance
Approaches:
Because CMS has not provided detailed guidance to states on federal
requirements for HCBS quality assurance systems, the waiver
applications and annual reports submitted by states to CMS for waivers
serving the elderly often contained little or no information on state
mechanisms for ensuring quality, raising a question as to whether CMS
had adequate information to approve or renew some waivers.
* Waiver applications. Our review of the most current waiver
applications for the 15 largest waivers serving the elderly found that
many states provided CMS limited information about how they plan to
protect the health and welfare of beneficiaries.[Footnote 22] Eleven of
the 15 states cited three or fewer quality assurance mechanisms. For
example, New York's application only contained information about the
state licensure and certification requirements for its waiver services.
None of these 11 applications included well-recognized quality
assurance tools such as complaint systems, corrective action plans,
sanctions, or beneficiary satisfaction surveys. The remaining 4 states
each identified six to eight quality assurance approaches, including at
least one of these four important tools. As shown in table 3, the two
mechanisms most frequently cited by states were (1) licensure for some
HCBS waiver providers, such as home health agencies and residential
care providers, and (2) case management.
Table 3: Quality Assurance Mechanisms Frequently Cited in Waiver
Applications and Current Annual State Reports for HCBS Waivers Serving
the Elderly:
Quality assurance mechanism: Case management agency reviews or audits;
Waiver application: number of states citing mechanism (n=15 largest
state waivers for the elderly): 8; Annual state report: number of
states citing mechanism[A]: (n=40 states): 30.
Quality assurance mechanism: Waiver provider or direct-care staff
reviews or audits; Waiver application: number of states citing
mechanism (n=15 largest state waivers for the elderly): 1; Annual state
report: number of states citing mechanism[A]: (n=40 states): 24.
Quality assurance mechanism: Licensure, certification, or other state
standards; Waiver application: number of states citing mechanism (n=15
largest state waivers for the elderly): 15; Annual state report: number
of states citing mechanism[A]: (n=40 states): 22.
Quality assurance mechanism: Waiver beneficiary satisfaction surveys or
interviews; Waiver application: number of states citing mechanism (n=15
largest state waivers for the elderly): 2; Annual state report: number
of states citing mechanism[A]: (n=40 states): 21.
Quality assurance mechanism: Case management; Waiver application:
number of states citing mechanism (n=15 largest state waivers for the
elderly): 12; Annual state report: number of states citing
mechanism[A]: (n=40 states): 20.
Quality assurance mechanism: Training and technical assistance; Waiver
application: number of states citing mechanism (n=15 largest state
waivers for the elderly): 0; Annual state report: number of states
citing mechanism[A]: (n=40 states): 20.
Quality assurance mechanism: On-site visits of waiver beneficiaries;
Waiver application: number of states citing mechanism (n=15 largest
state waivers for the elderly): 1; Annual state report: number of
states citing mechanism[A]: (n=40 states): 16.
Quality assurance mechanism: Complaint systems; Waiver application:
number of states citing mechanism (n=15 largest state waivers for the
elderly): 1; Annual state report: number of states citing mechanism[A]:
(n=40 states): 13.
Quality assurance mechanism: Supervisory review of waiver beneficiary
assessments or plans of care; Waiver application: number of states
citing mechanism (n=15 largest state waivers for the elderly): 7;
Annual state report: number of states citing mechanism[A]: (n=40
states): 11.
Quality assurance mechanism: Corrective action plans; Waiver
application: number of states citing mechanism (n=15 largest state
waivers for the elderly): 2; Annual state report: number of states
citing mechanism[A]: (n=40 states): 9.
Quality assurance mechanism: Sanctions and penalties; Waiver
application: number of states citing mechanism (n=15 largest state
waivers for the elderly): 1; Annual state report: number of states
citing mechanism[A]: (n=40 states): 7.
Quality assurance mechanism: Analysis of automated waiver program data;
Waiver application: number of states citing mechanism (n=15 largest
state waivers for the elderly): 1; Annual state report: number of
states citing mechanism[A]: (n=40 states): 4.
Quality assurance mechanism: Internal or external evaluations of waiver
program; Waiver application: number of states citing mechanism (n=15
largest state waivers for the elderly): 0; Annual state report: number
of states citing mechanism[A]: (n=40 states): 4.
Quality assurance mechanism: Waiver program manuals; Waiver
application: number of states citing mechanism (n=15 largest state
waivers for the elderly): 0; Annual state report: number of states
citing mechanism[A]: (n=40 states): 4.
Source: CMS.
Note: GAO analysis of the most recent waiver application for the 15
largest HCBS waivers serving the elderly and the most recent annual
state reports for 52 waivers serving the elderly submitted to CMS
regional offices as of July 2002.
[A] We reviewed 70 annual state waiver reports from 49 states and the
District of Columbia. Fifty-two of these annual reports from 40 states
contained some information about states' monitoring processes for HCBS
waivers serving the elderly. States may have more than one HCBS waiver
serving the elderly.
[End of table]
* Annual waiver reports. Compared to waiver applications, annual state
waiver reports identified more quality assurance mechanisms for waivers
serving the elderly. The quality assurance mechanisms states' annual
reports cited most frequently included (1) audits of case management
agencies, (2) reviews of provider or direct-care staff, (3) licensure
and certification of providers, (4) beneficiary satisfaction surveys or
interviews, (5) case management, and (6) training and technical
assistance. As shown in table 3, these six mechanisms were mentioned by
at least half of the 40 states that provided such information.[Footnote
23] However, as was the case with most of the 15 waiver applications we
reviewed, complaint systems, corrective action plans, and sanctions
were identified less frequently. For example, only 13 of the 40 states
identified complaint systems for waivers serving elderly beneficiaries
as a monitoring tool in their annual waiver reports.[Footnote 24]
Responding to beneficiary complaints is a key element in protecting
vulnerable nursing home residents and home health beneficiaries.
Moreover, 18 of the elderly waiver reports (26 percent) from 12 states
did not include a description of the process for monitoring the
standards and safeguards under the waiver, as required on the reporting
form.
State officials in South Carolina, Texas, and Washington informed us
they use a wider range of quality assurance mechanisms in their waiver
programs than were described in either their waiver application or
their annual state waiver report. Officials in Washington informed us
they use 12 of the 14 mechanisms identified in table 3, yet they
included only 2 of these on their application and 3 in their most
recent annual report. For example, Washington operates a complaint
system for waiver providers but did not refer to this approach in its
waiver application or annual report. On the other hand, only Washington
included reviews or audits of case managers or case management agencies
in its application or annual report, yet all three states provided
information on their use of this quality assurance tool during our
interviews. States' formal reports to CMS on their quality assurance
mechanisms may therefore understate the nature and extent of their
oversight approaches.
State Oversight and Quality Issues in Waivers Serving the Elderly Have
Been Identified by CMS Regional Offices and States:
Although information on the quality of care provided in the 79 waiver
programs serving the elderly is limited, state oversight problems were
identified by CMS regional offices or states in 15 of 23 waivers and
quality-of-care problems in 36 of 51waivers that we were able to
examine.[Footnote 25] We were unable to analyze findings related to 28
waivers serving the elderly for various reasons: they lacked a current
regional office review or a waiver review report was never
finalized,[Footnote 26] the annual state waiver report lacked the
relevant information, or the waivers were too new to have an annual
state report. Because of incomplete information and the absence of
current reviews for many of the active waivers, the extent of quality-
of-care problems is unknown.
State Oversight Weaknesses:
CMS regional office reviews or state audits identified weaknesses in
state oversight for waivers serving the elderly in 15 of the 23 waivers
we examined. In some cases, the waiver programs did not have essential
oversight systems or processes in place. For example, in the case of a
Virginia assisted living waiver that had over 1,250 beneficiaries, the
Philadelphia regional office found several state oversight problems,
including (1) no system in place to track the completion of the
required annual resident assessments, (2) insufficient monitoring to
ensure that beneficiaries were cared for in settings able to meet their
needs, (3) insufficient monitoring to ensure that state standards were
met for basic facility safety and hygiene, and (4) failure to inspect
medication administration records sufficiently to ensure that
medication was being dispensed safely and by qualified staff. The
regional office identified serious lapses in Virginia's oversight of
the waiver and the protection of beneficiaries, resulting in both
medical and physical neglect of waiver beneficiaries. On the basis of
the regional office review findings, HCFA allowed the waiver to expire
in March 2000. In other cases, states may have had an oversight system
or process in place, but they were determined to be inadequate. Five
state audit agency reports we reviewed identified inadequate monitoring
systems in state waiver programs. For example, Connecticut had a policy
in place for monitoring and evaluating its HCBS waiver program, but,
from January 2000 through March 2001 it conducted no quality assurance
reviews of the agencies it contracted with to coordinate and manage
services for waiver beneficiaries.
Quality-of-Care Related Problems:
CMS regional office reviews and states' annual waiver reports
identified quality-of-care related problems in 36 of 51 HCBS waiver
programs for the elderly that we were able to examine. Specifically,
they found weaknesses in the delivery of key elements of home and
community-based services that could affect waiver beneficiaries' health
and welfare (see table 4). Typically, the reports did not provide
sufficient detail to demonstrate the impact of these weaknesses on
waiver beneficiaries. Consequently, few, if any, specific cases of
beneficiary harm were identified.
Table 4: Frequently Cited Quality-of-Care Problems Identified by CMS
Regional Offices or States in HCBS Waivers Serving the Elderly:
Problem area: Provision of authorized or necessary services; Example:
Beneficiary not receiving services identified as being needed; Number
of 51 waivers in which problem was identified: 20.
Problem area: Plan of care; Example: Beneficiary's care needs not
addressed in plan of care; Number of 51 waivers in which problem was
identified: 20.
Problem area: Case management; Example: Case manager for HCBS waiver
program not providing ongoing assessment and monitoring of waiver
beneficiaries or inadequate follow-up of changes in beneficiaries' care
needs; Number of 51 waivers in which problem was identified: 20.
Problem area: Staffing; Example: Insufficient number of staff to
provide adequate care or staff not having appropriate credentials or
training to provide care; Number of 51 waivers in which problem was
identified: 12.
Problem area: Assessment; Example: Beneficiary's needs not assessed or
reassessment not completed in a timely manner; Number of 51 waivers in
which problem was identified: 11.
Problem area: Documentation of service delivery; Example: Incomplete
record of waiver services provided to beneficiary; Number of 51
waivers in which problem was identified: 8.
Problem area: Training; Example: Case managers identified as needing
additional training on Medicaid eligibility; Number of 51 waivers in
which problem was identified: 8.
Problem area: Quality assurance or quality of care; Example: HCBS
waiver program lacked a formal quality assurance system; poor quality
of care or services were identified; Number of 51 waivers in which
problem was identified: 7.
Problem area: Medication; Example: Unable to document that facilities
providing care to waiver beneficiaries dispensed medication safely and
by qualified staff; Number of 51 waivers in which problem was
identified: 4.
Source: CMS.
Notes: GAO analysis of CMS regional office final waiver review reports
for HCBS waivers serving the elderly issued from October 1998 to May
2002 and the most recent annual state waiver reports for 51 waivers
serving the elderly.
[End of table]
Fifteen waivers serving the elderly had no problems identified in their
regional office reviews or annual state reports; the remaining 36
waivers had problems related to quality of care. When both the CMS
regional office and the state identified a waiver as having the same
type of problem, we counted that problem only once.
The most frequently identified quality-of-care problems in waivers
serving the elderly involved failure to provide authorized or necessary
services, inadequate assessment or documentation of beneficiaries' care
needs in the plan of care, and inadequate case management.
* Provision of authorized or necessary services. Identified problems
included (1) services identified in plans of care not rendered, (2)
inadequate nutrition provided to waiver beneficiaries, and (3)
discontinuation of services without adequate notice to beneficiaries.
For example, CMS's Dallas regional office found that significant
numbers of Oklahoma waiver beneficiaries did not receive personal care
services from their direct-care provider--4,303 beneficiaries (27
percent) received none of their authorized personal care services and
7,773 beneficiaries (49 percent) received only half of their authorized
services. While the consequences for beneficiaries were not identified
in this review, failure to provide authorized needed services may
result in harm and could affect the continued ability of beneficiaries
to be cared for at home.
* Plan of care. Issues included plans of care that (1) insufficiently
addressed the needs of waiver beneficiaries, (2) were not completed or
updated appropriately, and (3) were missing from beneficiaries' files.
In the review of one of the Florida waivers, CMS's Atlanta regional
office staff found several instances where needs identified through
individual assessments, including significant changes in waiver
beneficiaries' conditions, were not addressed in the plan of care, a
situation that could lead to beneficiaries not receiving the necessary
services. Without an appropriate plan of care to direct the type and
amount of services to be delivered, the waiver beneficiary may not
receive an adequate level of care.
* Case management. Examples of case management problems included case
managers who (1) were unaware of beneficiaries having lapses in
delivery of care, (2) were not always aware of procedures or protocols
for reporting abuse, neglect, or exploitation, (3) failed to complete
resident assessments--service plans were either incomplete or
inappropriate, and updates to plans of care were late, or (4) did not
always appear to have a clear understanding of service definitions or
requirements of the waiver or Medicaid program.
CMS Guidance to States and Oversight Of HCBS Waivers Are Inadequate to
Ensure Quality Care:
CMS has not developed detailed guidance for states on appropriate
quality assurance approaches as part of the initial waiver approval
process. Moreover, although CMS oversight has identified some quality
problems, it does not adequately monitor HCBS waiver programs or the
quality of care provided to waiver beneficiaries for waivers serving
the elderly as well as those serving other target populations.[Footnote
27] CMS does not hold its regional offices accountable for conducting
and documenting periodic waiver reviews, nor does CMS hold states
accountable for submitting annual reports on the status of quality in
their waivers. As of June 2002, about one-fifth of the 228 waivers in
place for 3 years or more had either never been reviewed or were
renewed without a review.[Footnote 28] We found that the reviews varied
considerably in the number of beneficiary records examined and the
method of determining the sample, potentially limiting the
generalizability of findings. According to CMS regional office staff,
the allocation of staff resources and travel funding levels have at
times impeded the scope and timing of their reviews. In addition, some
regional office staff told us that limited travel funds have resulted
in the substitution of more limited desk reviews for on-site visits and
in the conduct of reviews with one staff member when two would have
been preferable.
CMS Lacks Detailed Guidance for States on the Necessary Components of a
Quality Assurance System:
CMS has a number of initiatives under way to generate information and
dialogue on quality assurance approaches, but the agency's initiatives
stop short of (1) requiring states to submit detailed information on
their quality assurance approaches when applying for a waiver or (2)
stipulating the necessary components for an acceptable quality
assurance system. CMS recognizes that insufficient attention has been
given to the various mechanisms that states could and should use to
monitor quality in their waiver programs. As described in appendix VI,
the initiatives CMS has under way include identification of strategies
that states are currently using to monitor and improve quality in home
and community-based care, distribution of a guide on quality
improvement and assessment mechanisms for states and regional offices,
and provision of a variety of technical assistance and resources to
states. The agency also has implemented a new HCBS waiver quality
review protocol for use by regional offices in assessing whether state
waivers should be renewed.[Footnote 29] Regional office staff told us
that some states have begun to modify their approaches to quality
assurance in HCBS waivers based on the use of the new waiver review
protocol. For example, Washington officials established a new quality
assurance unit within the agency that oversees its waiver for the
elderly. In May 2002, CMS also introduced a voluntary application
template for its new consumer-directed HCBS waiver that asks for a
detailed description of states' quality assurance and improvement
programs, including (1) the frequency of quality assurance activities,
(2) the dimensions monitored, (3) the qualifications of quality
assurance staff, (4) the process for identifying problems, including
sampling methodologies, (5) provisions for addressing problems in a
timely manner, and (6) the system for handling critical incidents or
events. While these CMS activities are intended to facilitate the
development of HCBS-related quality assurance approaches, they do not
constitute a consistent set of minimum requirements and guidance for
states' use to obtain approval for their HCBS programs.
CMS Is Not Holding Regional Offices or States Accountable for Oversight
of HCBS Waiver Quality:
In addition to the lack of detailed guidance for states, CMS is not
holding its own regional offices or states accountable for oversight of
the quality of care provided to individuals served under HCBS waivers.
CMS regional offices are expected to conduct periodic waiver reviews to
determine whether states are protecting the health and welfare of
waiver beneficiaries. Annual state reports are required by statute, and
CMS regulations indicate that they are intended to play a key role in
determining whether a waiver should be renewed.[Footnote 30] We found
that regional offices are neither conducting waiver reviews prior to
renewal nor obtaining complete annual state reports in a timely manner.
As a result, CMS has not fully complied with the statutory and
regulatory requirements that condition the renewal of HCBS waivers on
states fulfilling their assurances that necessary safeguards are in
place to protect the health and welfare of waiver beneficiaries.
CMS Regional Offices Often Are Not Conducting Timely Reviews of State
HCBS Waivers:
Most CMS regional offices have not conducted timely reviews of the
state agencies administering waivers serving the elderly and other
target populations or completed reports to document the results of
their reviews. Periodic on-site reviews are used to determine, among
other things, whether a state is ensuring the health and welfare of
waiver beneficiaries. Guidance from CMS headquarters instructs the
regional offices to conduct reviews before the first renewal of a
waiver at the end of 3 years and within 5 years for subsequent waiver
renewals.
Eighteen percent of all HCBS waivers (42 of 228) that have been in
place for 3 years or more as of June 2002 either have never been
reviewed by the regional offices or had not been reviewed prior to
their last waiver renewal. Approximately 132,000 beneficiaries were
served by these 42 waivers in 1999. Fourteen of the 42 waivers--serving
approximately 37,000 waiver beneficiaries in 1999--have had 10 or more
years elapse without a regional office review (see table 5). CMS's
Dallas regional office was responsible for 9 of these 14 waivers. Over
a 10-year period, a regional office should have conducted at least two
reviews for each waiver. The New Mexico AIDS Waiver, initially approved
in June 1987, has been in place the longest without ever being
reviewed--15 years. CMS officials were aware that regional offices had
not reviewed some waivers but were unaware of the extent of the
problem.
Table 5: HCBS Waivers That Had 10 Years or More Elapse without Ever
Having a Regional Office Review or without a Review Prior to the Last
Waiver Renewal, as of June 2002:
[See PDF for image]
Source: CMS.
Note: GAO analysis of data provided by CMS, June 2002.
[A] The number of HCBS waiver beneficiaries is based on 1999 HCFA Form
372 data. See Harrington, Aug. 2001.
[B] Author's estimate. See Harrington, Aug. 2001.
[End of table]
As of June 2002, based on an analysis of the most recent regional
office review that occurred prior to October 2001 for each of the
waivers, we found that 23 percent of the review reports (36 of 158) in
over half of the regional offices had not been finalized.[Footnote 31]
CMS requires its regional offices to prepare a final report on each
HCBS review to document their findings, recommendations, and the state
response. Without such a final report, there is no formal document to
indicate whether a state has fulfilled the required assurances,
including those related to the health and welfare of waiver
beneficiaries. The New York regional office did not finalize 11 of its
12 reviews, dating back to 1998, and the San Francisco regional office
did not finalize 7 of its 13 reviews, 1 of which was for a review that
occurred in 1990. Without a final report documenting the review
results, CMS cannot be assured that, if problems were identified, they
were appropriately addressed.
CMS Does Not Obtain Timely and Complete State Annual Waiver Reports:
Many state annual waiver reports submitted to CMS regional offices are
neither timely nor complete. During the interval between regional
office reviews, the required annual state waiver reports provide key
information on how states monitor beneficiaries' quality of care and on
any quality-of-care related problems. According to regional office
officials, states routinely fail to submit these annual reports within
the required time frame--within 6 months after the period covered. In
August 2000, officials in CMS's Philadelphia regional office reported
that they had current annual state reports for less than half (11 of
28) of the waiver programs in their region. Our review of the most
recent annual state reports for 70 of 79 HCBS waivers serving the
elderly confirmed that producing these reports remains a problem: (1)
reports for more than a third of the waivers were at least 1 year late-
-the most recent report from one of Louisiana's HCBS waivers was for
calendar year 1997, (2) reports for approximately one-fourth of the
waivers provided no information on whether deficiencies had been
identified through the monitoring processes,[Footnote 32] and (3) five
reports indicated that deficiencies had been identified but provided no
additional information about the nature of or response to the problems.
[Footnote 33] CMS headquarters has no central repository for annual
state reports but is in the process of establishing a centralized
database for state report information sometime in 2003, a development
that could facilitate ongoing monitoring of the timeliness and
completeness of these reports.
Extent of Oversight Weaknesses Evident in 15 Largest Waivers Serving
the Elderly:
Our analysis of CMS's oversight activities for the 15 largest HCBS
waivers serving the elderly demonstrates the extent of oversight
weaknesses. Overall, 8 of the 10 CMS regional offices provided
inadequate oversight for 13 of these 15 largest state waivers for the
elderly, which, in 1999, served about 215,000 beneficiaries--over half
(57 percent) of the total elderly waiver beneficiary population at that
time (see table 6). We found that:
* Four of the 15 HCBS waivers were not reviewed in a timely manner by
the CMS regional office--none of the 4 had reviews for 8 or more years
and yet were renewed.[Footnote 34]
* Four of the 15 waivers had no waiver review final report completed by
the regional office. Two of the reviews occurred in 1999, and for the
remaining 2 waivers the regional office could not tell us the date of
the reviews or whether a final report was available.
* Four of the 15 waivers lacked a timely annual state report to the
regional office. As of April 2002, the most recent annual report for
these 4 waivers was either for the waiver period ending August 1999 (1
waiver) or September 2000 (3 waivers).
* Seven of the 15 waivers had annual state reports that were incomplete
because they either lacked information on their quality assurance
mechanisms or on whether deficiencies had been identified.
Table 6: Status of CMS and State Monitoring for the 15 Largest HCBS
Waivers Serving the Elderly:
New York regional office:
State: New York; Number of waiver beneficiaries[A]: 19,732; CMS waiver
review not timely or report not finalized: Yes; Annual state report not
timely or documentation insufficient[B]: Yes.
Philadelphia regional office:
State: Virginia; Number of waiver beneficiaries[A]: 10,514; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: Yes.
Atlanta regional office:
State: South Carolina; Number of waiver beneficiaries[A]: 14,361; CMS
waiver review not timely or report not finalized: Yes[C]; Annual state
report not timely or documentation insufficient[B]: Yes.
State: Georgia; Number of waiver beneficiaries[A]: 14,018; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: Yes.
State: Florida; Number of waiver beneficiaries[A]: 13,762; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: Yes.
State: Kentucky; Number of waiver beneficiaries[A]: 13,339; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: Yes.
State: North Carolina; Number of waiver beneficiaries[A]: 11,159; CMS
waiver review not timely or report not finalized: Yes[C]; Annual state
report not timely or documentation insufficient[B]: Yes.
Chicago regional office:
State: Ohio; Number of waiver beneficiaries[A]: 26,135; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: No.
State: Illinois; Number of waiver beneficiaries[A]: 17,396[D]; CMS
waiver review not timely or report not finalized: Yes; Annual state
report not timely or documentation insufficient[B]: Yes.
State: Wisconsin; Number of waiver beneficiaries[A]: 13,900; CMS waiver
review not timely or report not finalized: Yes; Annual state report not
timely or documentation insufficient[B]: No.
Dallas regional office:
State: Texas; Number of waiver beneficiaries[A]: 27,978; CMS waiver
review not timely or report not finalized: Yes; Annual state report not
timely or documentation insufficient[B]: Yes.
Kansas City regional office:
State: Missouri; Number of waiver beneficiaries[A]: 20,821; CMS waiver
review not timely or report not finalized: Yes; Annual state report not
timely or documentation insufficient[B]: No.
Denver regional office:
State: Colorado; Number of waiver beneficiaries[A]: 11,481; CMS waiver
review not timely or report not finalized: Yes; Annual state report not
timely or documentation insufficient[B]: No.
Seattle regional office:
State: Oregon; Number of waiver beneficiaries[A]: 26,410; CMS waiver
review not timely or report not finalized: No; Annual state report
not timely or documentation insufficient[B]: Yes.
State: Washington; Number of waiver beneficiaries[A]: 25,718; CMS
waiver review not timely or report not finalized: No; Annual state
report not timely or documentation insufficient[B]: No.
Source: CMS.
Note: GAO analysis of data provided by CMS, June 2002 and the most
recent annual state waiver reports. The 15 largest HCBS waivers serving
the elderly are based on the number of beneficiaries.
[A] The number of HCBS waiver beneficiaries is based on 1999 HCFA Form
372 data. See Harrington, Aug. 2001.
[B] The annual report is required by statute and CMS directs states to
(1) submit such reports within 6 months after the period covered, and
(2) include information on how the state implements, monitors, and
enforces its health and welfare standards and the waiver's impact on
the health and welfare of beneficiaries.
[C] The CMS regional office could not provide the date that the last
waiver review was conducted or specify whether a report had been
finalized.
[D] Author's estimate. See Harrington, Aug, 2001.
[End of table]
Scope and Duration of Regional Office Waiver Reviews Are Limited:
The limited scope and duration of periodic regional office waiver
reviews raise a question about the confidence that can be placed in
findings about the health and welfare of waiver beneficiaries. CMS
regional offices conduct reviews using guidance provided by
headquarters. The guidance instructs regional office staff to review
beneficiary records; interview waiver beneficiaries, primary direct-
care staff of waiver providers, and case managers; and observe waiver
beneficiaries and the interaction between the beneficiary and direct-
care staff. This guidance was updated in January 2001 when use of the
new HCBS waiver quality review protocol became mandatory. However, the
new protocol does not address important operational issues such as:
* an adequate sample size or sampling methodology for the beneficiary
record reviews and interviews to provide a basis for generalizing the
review findings;
* whether the sample should be stratified according to the different
groups served under the waiver (i.e., for a waiver serving both the
elderly and the disabled, selecting a stratified sample based on the
proportion of persons aged 65 and over and those aged 18 to 64 with
disabilities); and:
* the appropriate duration of an on-site review, taking into
consideration the number of sites and beneficiaries covered in the
waiver.
Our analysis of regional office review reports for 21 HCBS waivers
serving the elderly found that the reviews varied considerably in the
number of beneficiary records evaluated and their method of determining
the sample, potentially limiting their ability to generalize findings
from the sample to the universe of waiver beneficiaries.[Footnote 35]
Specifically, we found a wide range of sample sizes in 15 of the 21
regional office reviews that included such information. The sample
sizes for record reviews ranged from 14 beneficiaries (of 73 served) in
the Boston regional office review of the Vermont waiver to 100
beneficiaries (of 24,000 served) in the Seattle regional office review
of the Washington waiver. (See app. VII for a summary of the sample
sizes in the regional office reviews.) Eleven of the 15 CMS waiver
review reports included information on the specific number of
beneficiaries interviewed or observed during the review; however, we
could not determine whether beneficiary interviews or observations had
been conducted in other waiver reviews. The method by which the
beneficiary record review samples were selected varied, with some
regional offices using randomized sampling methods, some basing their
sample on geographic location, and others reporting no method of sample
selection.
For most of these same 15 waivers serving the elderly, we found that
the regional staff typically spent 5 days conducting the waiver review-
-regardless of the number of waiver beneficiary records sampled or the
overall size of the waiver. However, the Seattle regional office staff
conducted only three reviews in the past 4 years, targeting its largest
HCBS waivers. For example, the regional office has spent 3 to 4 weeks
per waiver for the on-site portion of the review and another week for
state agency interviews and review of documents. Generally, the number
of beneficiary records reviewed and beneficiaries interviewed is
dependent on (1) the number of days allocated to the waiver review by a
regional office and (2) the number of regional office staff members
available.
Limited Regional Office Resources Available for Oversight of HCBS
Waivers:
The limited number of assigned staff and available clinical
specialists, coupled with insufficient travel funds allocated to
regional office oversight of HCBS waivers, have contributed to the
timeliness and scope problems we identified. According to regional
offices, the level of attention given to HCBS waiver oversight,
including periodic reviews when waivers come up for renewal, is at the
discretion of regional office management and competes with other
workload priorities.[Footnote 36] In August 2000, some regional office
officials formally communicated to HCFA headquarters their concern that
the agency was not devoting sufficient resources to properly monitor
the quality of HCBS waiver programs. Regional office officials
responsible for waiver oversight told us that the number of staff
available for waiver oversight has not kept pace with the growth in the
number of waivers and beneficiaries served and that resource issues
remain a key challenge for waiver oversight.
We found that CMS regional offices differed substantially in the number
of staff assigned to waiver oversight and the extent to which staff
with clinical or program expertise were assigned to waiver oversight.
According to Dallas, Denver, and Philadelphia regional office staff,
the level of resources allocated by the regional offices for such
reviews dictated the number of waiver beneficiary records reviewed or
beneficiary interviews conducted. Six of the 10 regional offices had
two or fewer full-time-equivalent (FTE) staff assigned to monitoring
HCBS waivers (see table 7).[Footnote 37] Moreover, we found that the
number of regional office staff assigned to monitoring HCBS waivers
bore little relationship to the waiver workload. For example, the
Chicago regional office had six FTE staff to monitor 34 HCBS waivers
with 131,902 waiver beneficiaries, while the Dallas regional office had
one-and-a-half FTE staff for 28 HCBS waivers with 63,614 waiver
beneficiaries. Until a few years ago, one person in the Philadelphia
regional office was assigned to oversee HCBS waivers--despite growth in
the number and size of the region's HCBS waivers over the past
decade.[Footnote 38]
Table 7: Number and Specialty of CMS Regional Office Staff Assigned to
Oversee HCBS Waivers:
CMS regional office: Boston; Number of HCBS waivers (number of waivers
for the elderly ): 26 (9); Number of HCBS waiver beneficiaries[A]
(number of elderly waiver beneficiaries): 45,390 (20,190); Number of
FTE staff assigned to oversee waivers: 1; Specialist staff assigned to
oversee waivers: No.
CMS regional office: New York; Number of HCBS waivers (number of
waivers for the elderly ): 15 (3); Number of HCBS waiver
beneficiaries[A] (number of elderly waiver beneficiaries): 69,390
(24,319); Number of FTE staff assigned to oversee waivers:
