Fact Sheet
For States Interested in Creating a Home- and Community-Based Waiver for
Children with Serious Mental Disorders
Rules on Home- and Community-Based Waivers for Children
with Mental and Emotional Disorders
Issue
Despite the value of the home- and community-based services waiver
under Section 1915(c) for children with mental and emotional disorders
whose families might otherwise be forced into giving up custody to the
state because they can no longer manage their child at home without supports,
only three states have such waivers in their Medicaid programs. In contrast,
49 have waivers for individuals with developmental disabilities.
Home- and Community-Based Care Waiver
A home- and community-based waiver permits children with mental disabilities
(as defined in SSI) to be offered home-based services in lieu of placement
in an institution. The waiver allows the state to expand the number of
children eligible for Medicaid because children may be included regardless
of family income if they would otherwise require care in an institution.
The waiver also allows the state to offer these children and their families
an expanded package of home- and community-based services that may include
the all-important service of respite care for the family, along with other
family-support services that enable the child to remain at home. This
is a far better option for the child and family and less expensive for
the state. With support services, the child’s own family is able
to care for the child. Without such services, costly therapeutic foster
care or institutional services are the only option.
One potential problem in the federal rules for home- and community-based
waivers is the definition of the institutions from which the covered child
would be discharged or diverted. Federal law defines these institutions
as only “hospitals, nursing homes and Intermediate Care Facilities
for Mental Retardation.” The federal Centers for Medicare and Medicaid
Services (CMS) has made it clear that a residential treatment center for
a child with a mental or emotional disorder does not fall within this
definition. This makes it more difficult for states to use the waiver.
However, states can still estimate the number of children with serious
mental disorders whose condition requires the level of care provided in
a hospital and use cost estimates of hospital care to document their potential
savings through a waiver.
State Concerns
A recent survey of selected states without the home- and community-based
services waiver found that more than half of states had considered developing
a waiver for children with mental or emotional disorders, but faced barriers
in doing so. 1 These states identified the following
as the most significant barriers (percentage of states where officials
cited these barriers in parentheses):
- lack of state funds to furnish the state’s share of Medicaid
costs (65%);
- the federal rule which does not permit children in or at risk of placement
in a residential treatment center to be eligible (59%);
- the requirement that community services be no more expensive than
the alternative institutional placement (47%).
Modest Costs
Experience in the three states that have these waivers shows that
the cost-related concerns of other states can be addressed. In fact:
- The costs of a home- and community-based services waiver for children
with mental or emotional disorders are quite low per child, e. g. $12,900
per child for the home- and community- based services in Kansas (2001),
$23, 344 in Vermont (2001) and $40, 000 in New York (2001). In comparison,
per child institutional costs in these states were: $25, 600 in Kansas,
$52, 988 in Vermont and $77, 429 in New York.
- Since the state can limit the number of slots, a home- and community-based
waiver can be initiated with a relatively small state investment. For
example, first-year costs for the Kansas waiver were only $1 million.
Initially, New York began by serving 25 children.
The three states with these waivers did not find the state match difficult
to raise. All started small and expanded the waiver after the state had
some experience. In New York, the legislature was supportive of increasing
access to community care. In Vermont, total costs are low and several
agencies contribute funds for the match. In Kansas, tobacco settlement
resources were initially used for the match and experience with waivers
for individuals with developmental disabilities encouraged state officials
to apply for a waiver for children with mental disorders.
These three states have had little trouble meeting the cost-neutrality
requirements. The high costs of institutional care easily offset the average
waiver costs. Each state found it had an adequate level of funding and
none have average costs that approach the institutional costs. States
also did not find it difficult to gather the data to demonstrate cost
neutrality to the federal government. They used existing data systems,
and one supplemented this through a survey of providers.
Other Barriers
The states with the waiver found it a helpful source of funding for
home- and community-based services and a catalyst to build the necessary
infrastructure. However, states needed to address the issue of workforce
development and training. One state provided incentives for participating
agencies by providing start-up funds for new services.
Federal rules on the institutions to which children are at risk of placement
are a more serious barrier. Only hospitals, nursing homes and Intermediate
Care Facilities for Mental Retardation are included in the federal definition.
In some states very few children on Medicaid are placed in a psychiatric
or other hospital settings, but are instead in residential treatment centers
(RTCs). In these states, a home- and community-based waiver can still
be developed but the state will have to prepare documentation showing
that a significant number of children have conditions that require a hospital
level of care (even if the child is not placed in a hospital) and the
costs of such care. A home- and community-based waiver can be developed
in this manner.
Legislation to include RTCs within the definition of institution under
Section 1915(c) is pending in Congress and CMS has announced plans to
develop a demonstration program along these lines. However, pending federal
action some states may not be able to use the home- and community-based
waiver to help parents of children with mental or emotional disorders.
States can also control the size of the population covered (and thus the
costs) and the home- and community-based services families need to keep
their child at home are significantly less expensive than the costs of
alternative institutional care.
Action Needed
All 47 states2 without the waiver should examine
the pattern of institutional placements for children with mental and emotional
disorders to determine whether a home- and community-based services waiver
can help families struggling to find services for their child.
Notes
1 Survey conducted in 2001 by the Bazelon Center for
Mental Health Law, Washington, D. C.
2 And the District of Columbia
|
