Effectiveness of Consumer Directed Services
First Annual Update
as Required by House Bill 2292

Report to the 78th Texas Legislature

FEBRUARY 1, 2004

(printable Adobe Acrobat PDF version)

Executive Summary

The Consumer Directed Services (CDS) model was developed in response to Senate Bill 1586, 76th Legislature, Regular Session. The CDS model provides the opportunity for a consumer or his or her guardian or designated representative to be the legal employer of record for the providers of services. Thus, under CDS, consumers have greater control and responsibility for their care.

In July of 2002, Texas was one of the first states to receive approval from the Centers for Medicare and Medicaid Services (CMS) for the implementation of the CDS delivery model in multiple Medicaid home and community-based waiver programs and in the Medicaid State Plan. The development and implementation of the CDS model is a significant accomplishment in terms of giving persons with disabilities greater involvement and responsibility in their day-to-day lives.

House Bill 2292, 78th Legislature, Regular Session, directs the Texas Health and Human Services Commission (HHSC) to provide an annual report regarding the effectiveness, including the cost-effectiveness, of consumer directed services in Texas no later than February 1 of each year. This is the first report on the effectiveness of CDS submitted to the Legislature as a result of this requirement. Senate Bill 153, 78th Legislature, Regular Session, also mandated the formation of a Consumer Directed Services Workgroup to assist in the continued implementation of the CDS option.

In Texas, consumer directed services are currently available in six programs:

• Community Based Alternatives (CBA),
• Community Living Assistance and Support Services (CLASS),
• Deaf-Blind-Multiple Disability Waiver (DBMD),
• Primary Home Care (PHC),
• Consumer Managed Personal Assistance Services (CMPAS), and
• In-Home and Family Support Programs (IHFS) at TDMHMR.

While the CDS option has been available in four of these programs since 2001 (CDS was implemented in January 2002 and 2003 for PHC and CBA, respectively), the utilization rate of CDS varies across programs, with a high of 28% in CLASS to a low of .07% in CBA and PHC. In the CLASS program, concerted efforts were made to educate consumers about the CDS option. Ensuring that enrollees in programs with the CDS option are aware of and sufficiently educated about CDS remains a key challenge to the State in the continued implementation and oversight of the consumer directed option.

Preliminary analysis indicates that consumers are satisfied with services under the CDS option, but a comprehensive survey has yet to be conducted due to the relatively low numbers of individuals utilizing CDS across all programs.

Recommendations by HHSC to conduct a more comprehensive evaluation of the CDS option in calendar year (CY) 2004 include:

1. Evaluating the effectiveness of the CDS option, including cost-effectiveness, client experience and utilization trends; and
     
2. Examining the factors that lead to varied utilization of CDS in different programs. HHSC will work with the State's External Quality Review Organization to survey clients who have been given the option to enroll in CDS, but have not selected it. This survey will help determine if increased consumer education or other strategies may be necessary to ensure that clients are correctly informed and supported regarding the CDS option.

HHSC will consult with the Consumer Directed Services Workgroup in its examination of these issues.

Introduction

Consumer direction of services is a philosophy of care that is growing in acceptance at both the state and federal levels. A central element of consumer direction is the ability to hire, fire, train and supervise personal assistance attendants, as well as the opportunity to directly purchase services. Texas was one of the first states to receive approval from the Centers for Medicare and Medicaid Services (CMS) for the implementation of the Consumer Directed Services (CDS) delivery model in multiple Medicaid home and community-based waiver programs and in the Medicaid State Plan.

CMS has shown great interest in the CDS model and has streamlined the process for states to incorporate consumer direction into their Medicaid programs. In 2002, the Bush administration announced a new Medicaid waiver initiative known as Independence Plus. This initiative is designed to provide states opportunities within their Medicaid programs to allow people with disabilities and the elderly to have greater involvement, control and choice in identifying, accessing and managing certain long-term services and supports.

Texas' intent to offer consumers the CDS option pre-dated CMS' finalization of the Independence Plus waiver option. Before approving Texas' requests for CDS services in 2002, CMS made minor changes to Texas' waiver amendments to make them consistent with the Independence Plus waiver template. Thus, while Texas did not use the Independence Plus waiver template to secure CMS approval for the CDS option, the CDS implementation in Texas has been consistent with federal intent and direction for this new model of service delivery.

Consumer Direction in Texas

There are six programs in Texas that offer consumer direction as an option. The degree to which consumers in these program have chosen the CDS option varies, from a high of 28% to a low of less than 1%. The following table provides information on the programs currently utilizing the CDS option.

Programs Offering CDS in Texas

In addition to the above-mentioned programs, Texas is awaiting approval for a new waiver known as the Texas Home Living (TxHmL) Program. Once this waiver is approved, officials at the Texas Department of Mental Health and Mental Retardation (TDMHMR) will begin the process of seeking approval from CMS to add the CDS option to this waiver and will use the knowledge gained from implementation in the TxHML Program to conduct a feasibility analysis for potential implementation in other MHMR programs.

Effectiveness of Consumer Directed Services

Consumer directed services, as they are implemented in Texas, are budget-neutral to the state and to the Medicaid program in terms of rates paid to CDS agencies and attendants. While this provides a degree of information regarding the overall costs of the CDS option, studies in other states have found interesting trends in the cost effectiveness of the CDS option.

For example, a review of the Arkansas Cash and Counseling program, which uses the CDS model, found that although the CDS option led to higher expenditures for personal care services, these higher expenditures were offset by lower spending for nursing home and other Medicaid services by the second year of the program. The fact that CDS in Texas is presently utilized by a somewhat different population and in a different type of program than in Arkansas is likely to reduce or eliminate the possibility of broad cost offsets for Texas CDS programs. In Arkansas, CDS is provided to disabled adults and frail elderly clients receiving only personal care services. The higher utilization of these personal care services resulted in the Arkansas clients needing less intensive nursing facility and acute care. In Texas, the majority of clients utilizing CDS are in the CLASS waiver, which serves children and adults with developmental disabilities. Unlike the Arkansas personal care program, CLASS clients already receive several other services, which help to prevent nursing home or other types of costly care, reducing the likelihood of finding significant cost offsets in CLASS as a result of the CDS option.

However, there is a need for better understanding of the fiscal implications of CDS in Texas. To the degree that CDS may impact the type and utilization of services, it will be helpful for the State to learn more specifically the impact CDS has on the overall costs of services and any potential for cost offsets or increases. HHSC intends to conduct a comprehensive evaluation of CDS cost effectiveness in CY 2004, when it is expected that there will be sufficient enrollment to make such a study productive.

Consumer directed services are widely supported by advocates and consumers as a means to provide consumers greater control and autonomy. To a large degree, stakeholders have assumed that greater control would lead to greater consumer satisfaction with services. Initial, and relatively preliminary, evaluations of the CDS option in Texas and in other states have demonstrated that consumers using the CDS option are highly satisfied with this type of delivery mechanism.

However, because the pool of consumers in Texas has been relatively small to date, Texas has not performed a broad evaluation of the satisfaction or overall effectiveness of the CDS model. By the middle of 2004, HHSC expects that there will be sufficient enrollment and months of data to initiate a more comprehensive evaluation of the effectiveness of the CDS option in Texas. This evaluation would include:

• Client experience
• Cost effectiveness
• Service utilization patterns

The results of this evaluation would be included in the 2005 annual report.

Calendar Year 2004 Recommendations for Program Improvement

The CDS option in Texas is still relatively young. In addition, the small numbers of consumers utilizing the CDS option limits the information that the State can collect on its impact. In Calendar Year 2004,

HHSC plans to enhance understanding of the effectiveness of the CDS option by:

1. Evaluating the effectiveness of the CDS option, including cost-effectiveness, client participation and utilization trends.
   An evaluation of the effectiveness of the CDS option will provide the State information necessary in making decisions about which populations and in which programs the CDS option may have the most impact and in terms of enrollee satisfaction and qualify of care. In addition, such an evaluation will provide the State with information on the costs and cost offsets that may accompany increased use of the CDS option.
     
2. Examining the factors that lead to the low utilization of CDS to identify areas where increased consumer education or other strategies are necessary to ensure that clients are correctly informed about and supported when selecting and using the CDS option.
   The current variance among utilization rates of CDS across programs where it is available is significant, ranging from .07% to 28%. Concerted efforts were made to educate consumers about the CDS option in CLASS, the program with the highest utilization rate. HHSC will work with the State's External Quality Review Organization to survey clients who have been given the option to enroll in CDS, but have not selected it. This survey will help determine if increased consumer education or other strategies may be necessary to ensure that clients are correctly informed and supported regarding the CDS option. The overall examination will identify the critical aspects that need to be in place to assure that consumers are adequately informed of the CDS option, including both the enhanced control and responsibility that accompany this model of service delivery.

HHSC will consult with the Consumer Directed Services Workgroup in its examination of these issues. The findings from this examination will provide important information for decisions regarding the applicability of CDS to other populations as well as current efforts to implement and oversee the CDS option.