Bureaucrats Attack Cash and Counseling Program in Colorado – Interview

Health Care News:  How did you become acquainted with this cash and counseling program?

Gorman: John Anderson, founder of the Independence Institute, and Julie Reiskin, currently Executive Director of the Colorado Cross Disabilities Coalition, introduced me to CDASS. In the mid-1990s, Colorado was fortunate to have had an exceptional group of officials interested in market-oriented health reform. They began working on a new attendant care model for Medicaid in 1995. Medicaid approved a pilot program limited to 150 people in 2001.

Medicaid case managers determine how much, and what types, of home care a disabled individual needs. Before CDASS, the state would simply pay an agency to send people to provide it. Sometimes they showed up, sometimes they didn’t. Sometimes they stole. The people getting the care could not fire them.

The CDASS pilot gave people a choice after they had spent a year in regular Medicaid. CDASS clients take courses in managing their own care and in accounting for their funding. Each year, the state case managers determine a care plan for everyone enrolled in the program. The amount regular Medicaid would pay for the plan is deposited in an account overseen by a financial manager. After the manager collects its fee, participants use the remaining money to pay for their care.

In the pilot program, CDASS clients could use half of their savings to purchase things that Medicaid did not cover, such as voice-activated telephones for quadriplegics. The other half reverted to the state.

The pilot program’s monthly spending was about 20 percent under budget. Patient satisfaction was high. When the incentives are right, people can get more health care for less. Patients in the program are much more selective in how they spend their money and who they hire. Rather than pay the high wages commanded by trained nurses, some CDASS participants prefer to hire less expensive unskilled people and train them to do the tasks that the state would send nurses to perform.

Health Care News:  What seems to be driving the resistance by the government health care apparatus?

Gorman: Interest group politics and government’s unquenchable desire to control everything. Government agencies sympathetic to the claims of existing businesses and those who would unionize home care workers have steadily added unnecessary regulations to the CDASS program.

The first CDASS participants were essentially running small businesses. The wage flexibility and shared savings made it worth their while to work hard to keep their spending under budget. They also had lower overhead than the agencies that had previously provided them with home care workers.

When Colorado Medicaid applied to make CDASS a permanent part of its plan, federal Medicaid officials made limiting a family member to a 40-hour workweek a condition of approval. This requirement made no sense. CDASS clients received an annual amount to pay for their care. If husbands, wives, parents, or children were willing to work more than 40 hours a week, and many were, it was no business of the government.

When clients compensated for the 40-hour limit by adjusting the hourly rates paid, state government responded by setting a maximum wage. Flexibility was further reduced when the state also began setting minimum wages even though some attendants accepted lower pay because working for a CDASS participant had other benefits like flexible hours, more training, or permission to bring their children to work. Home care agencies and those seeking to unionize home care workers pushed for wage limits in order to make CDASS less competitive.

Losing flexibility created other problems. A CDASS participant might offer someone $100 a month to be on call every evening for a month. If the timesheets approved for the program did not have a category for that kind of arrangement, the reimbursement might be recorded as $100 for one hour of work. When state officials saw those payments, they complained that wages were too high. The Colorado state auditor even concluded that CDASS clients were being given too much money for their care just because CDASS clients paid skilled attendants an average of $16.68 an hour when the standard state rate was $28.36.

Health Care News:  It appears the sentiment on home health care is changing. Are you encouraged?

Gorman:  Cash and Counseling type programs of varying quality are now common in state Medicaid plans. This is an undoubted improvement. The problem is that government never knows when to quit. And, as the COVID policy debacle has shown, those who make health policy are often unable or unwilling to properly assess risks and benefits for the various parties involved.

For example, the home care benefit the Biden Administration wants to add to would give the 20 percent of Medicare patients being discharged from the hospital to a skilled nursing facility the right to duplicate skilled nursing care services at home.

Unlike CDASS payments, Medicare payments go to home care providers. Counseling is nonexistent. Fraud, theft from patients, and other elder abuse are rampant in Medicare home care. Unlike Medicaid, Medicare does not cover long-term care or personal services. Its patients often have little experience directing their care. An estimated 50 percent of Medicare patients currently prescribed home care at hospital discharge actually receive it.

Perhaps new care structures will develop if Medicare ever gets serious about giving patients real power. Until then, at hospital discharge a short-term admission to a nursing home or rehab facility may cost less, and be better for patients, than poorly organized home care.