Is Hawaii violating Federal Requirements for Receiving ARRA Funding?

Hawaii is due to receive an estimated $360 million in additional federal funds for medicaid from the American Recovery and Reinvestment Act (ARRA). The state should have already received over $70 million of those funds. However, the ARRA requires that states must meet a set of requirements in order to receive this funding, intended to protect the civil right of children and adults with disabilities to remain in their homes with their families. Hawaii appears to have violated some of these requirements. On February 1, 2009, Hawaii wiped out four of its five 1915(c) HCBS waiver programs. The chart distributed by the state showed that only the developmental disability (DD) program remained, and only until 2011. On February 1, 2009, Hawaii dumped all its medicaid participants into two managed care organizations: Evercare run by United Healthcare from Minnesota, and Ohana, owned by Wellness of Florida. What that meant in legal terms is that all the previous HCBS waiver participants were switched without their knowledge from a program with the protections of Section 1915(c) of the Social Security Act, to a Section 1115 experimental project (with a 5 year lifespan) run by two for-profit managed care corporations. In so doing they lost federally defined and protected civil rights to medical choice and staying in their homes. On January 20, Hawaii's state medicaid director sent an email to various state legislators stating that:

The DD/MR long term care services are being preserved as a 1915(c) waiver and are not incorporated into the 1115 waiver of QUEST and QExA

On February 1, 2009, this same "robust menu of services which includes Skilled Nursing, Respite and Personal Care services" were cut by anywhere from 15% to 70% for virtually everyone in the DD waiver. This included children within the age bracket covered by EPSDT. (As an aside, what nobody knew was that the two MCOs had been told that any services in place on February 1 could not be changed for 90 days. So if you (a parent or caregiver) had made an informal appeal before February 1, your family member's services could not be cut for at least 90 days. Nobody told us that, though, until after February 1 had come and gone.) Now the state is admitting they are considering another 15% cut in DD service budgets. State DD officials are telling parents to go to their new medicaid MCO to access EPSDT funds for home support services. According, once again, to Hawaii's state medicaid director,

Any EPSDT service required to be medically necessary will continue to be provided.

But a parent was just told by their representative at one of the MCOs that since institutionalization of her medically fragile child would only cost $7,000 a month, the family had better not ask for skilled nursing services that exceeded that. The parent has letters from two of her child's doctors stating 24/7 skilled nursing is medically necessary, and even a prescription for 24/7 nursing from one of them. Meanwhile, the Center for Medicare and Medicaid Services (CMS) in Washington, D.C. issued a follow-up statement in April 2009 clarifying what's called the "Maintenance of Effort (MOE)" requirement states need to meet in order to receive their additional federal medicaid funding under the American Recovery Act (ARRA). According to that statement:

To be in compliance with the MOE, a state cannot have done the following after July 1, 2008: 􀂄 Made it harder for an individual to qualify for nursing home care or home- and community-based waiver services. 􀂄 Eliminated coverage for home- and community-based waiver care that costs more than institutional care, which could make it harder for some individuals to qualify for waiver coverage. 􀂄 Removed individuals currently receiving services through a home- and communitybased waiver program or reduced or eliminated home- and community-based waiver slots that were approved but not filled as of July 1, 2008.

Hawaii has violated all three of those provisions. According to a document published by the Kaiser Foundation in March 2009, Hawaii was expected to receive an estimated total of $360 million in additional Federal medicaid funds between October 1, 2008 and December 31, 2010. According to this same report, Hawaii should already have received at least $70.6 million in these funds from the feds. What's the money being spent on? Why is Hawaii apparently being allowed to flaunt federal regulations? Why are our children being threatened with institutionalization by the representatives of EPSDT? Who's going to put a stop to this? A Primer in the Different Types of Medicaid Waiver Programs A 1915(c) waiver program refers to Section 1915, item (c) of the federal Social Security Act. The definition is:

“medical assistance” ..... payment for part or all of the cost of home or community-based services (other than room and board) approved by the Secretary which are provided pursuant to a written plan of care to individuals with respect to whom there has been a determination that but for the provision of such services the individuals would require the level of care provided in a hospital or a nursing facility or intermediate care facility for the mentally retarded the cost of which could be reimbursed under the State plan. For purposes of this subsection, the term “room and board” shall not include an amount established under a method determined by the State to reflect the portion of costs of rent and food attributable to an unrelated personal caregiver who is residing in the same household with an individual who, but for the assistance of such caregiver, would require admission to a hospital, nursing facility, or intermediate care facility for the mentally retarded.(my emphasis)

Hawaii's state medicaid director stated in his email that

Section 1915 (c) (4)(B) of the Social Security Act does allow for the reduction of the number of hours and days for respite care provided under Section 1915(c) (2) D) if the total cost of care exceeds the cost of care in a Nursing Home. Thus, the DOH does have the authority to reduce respite services if the conditions of Section 1915(c)(2)(D) are affected.

What Section 1915(c) (4) (B) of the Social Security Act actually states is that:

(4) A waiver granted under this subsection may, consistent with paragraph (2)—

(A) limit the individuals provided benefits under such waiver to individuals with respect to whom the State has determined that there is a reasonable expectation that the amount of medical assistance provided with respect to the individual under such waiver will not exceed the amount of such medical assistance provided for such individual if the waiver did not apply, and

(B) provide medical assistance to individuals (to the extent consistent with written plans of care, which are subject to the approval of the State) for case management services, homemaker/home health aide services and personal care services, adult day health services, habilitation services, respite care, and such other services requested by the State as the Secretary may approve and for day treatment or other partial hospitalization services, psychosocial rehabilitation services, and clinic services (whether or not furnished in a facility) for individuals with chronic mental illness. (my emphasis; this paragraph doesn't state what Hawaii's medicaid director said it did)

Except as provided under paragraph (2)(D), the Secretary may not restrict the number of hours or days of respite care in any period which a State may provide under a waiver under this subsection. (my emphasis)

Are "respite care" and the long-term care services required to maintain an individual with special health care needs at home the same thing? They are not, so I don't understand how potential reductions in "respite care" (intended to give the caregiver a break) should have any impact on long-term care supports required by the caregiv-ee. Paragraph (2) (D) referred to above states:

(2) A waiver shall not be granted under this subsection unless the State provides assurances satisfactory to the Secretary that—..... (D) under such waiver the average per capita expenditure estimated by the State in any fiscal year for medical assistance provided with respect to such individuals does not exceed 100 percent of the average per capita expenditure that the State reasonably estimates would have been made in that fiscal year for expenditures under the State plan for such individuals if the waiver had not been granted.

However, in 1999 (after the 1991 writing of the above paragraphs in the Social Security Act), the Supreme Court released what has become known as the Olmstead Decision.

In Olmstead v. L.C. and E.W., 119 S.Ct. 2176 (1999) the Supreme Court stated loud and clear that the denial of community placements to individuals with disabilities is precisely the kind of segregation that Congress sought to eliminate in passing the Americans with Disabilities Act (ADA).

According to the Supreme Court, the rights to community support services extends to individuals already living in the community but at risk of institutionalization because of a lack of appropriate community supports:

Since the Makin [a district court case in Hawaii] decision numerous courts, including the 10^thFisher v Oklahoma, have confirmed that individuals “at risk of institutionalization” can successfully pursue an Olmstead lawsuit. In addition the U.S. Department of Health and Human Services, Office of Civil Rights (the federal agency responsible for ensuring that states comply with the Supreme Court decision in Olmstead) has confirmed that the mandate of Olmstead applies to people living in the community, but at risk of institutionalization because of a lack of appropriate community supports. (See HHS, Olmstead Circuit Court of appeals in Update #2, letter to state Medicaid Directors, July 26, 2001).

That review of the Olmstead Decision goes on to note that:

Olmstead is not a case based on the federal Medicaid law. The Supreme Court decision did not directly change Medicaid law. What the Court did do is make it clear that the state must operate its programs in a manner that complies with the ADA integration mandate. Of all state programs, the Medicaid program is the one most likely to be impacted by the Olmstead decision, because it is a major source of state financing for long-term care for people with disabilities. Furthermore, the Medicaid program is structured so that it is much easier to obtain long-term care in an institution than to receive similar supports in the community. This structure creates an inherent tension as far as operating the Medicaid program so that it complies with Olmstead.

"Inherent tension" is putting it mildly.

A second type of medicaid waivers are those authorized under Section 1115 of the Social Security Act.

These are managed care medicaid programs. There are several descriptions online of the differences between Section 1915(c) and Section 1115 waivers, but the following is very to the point:

these Waivers are research and demonstration Waivers......When states accept the 1115 Waivers, there must be an evaluation process to ensure that those whom the original Medicaid law intended to include receive benefits and services

The budgeting distinction between the two types of waivers has enormous impact on the provision of the long term care services provided to Medicaid participants:

Like 1915(c) programs, 1115 programs must be budget neutral. However, for 1115 programs this means that the program cannot cost Medicaid any more than the state would have spent in the absence of the waiver¹,²⁶ whereas 1915(c) programs should not cost more than providing state plan services, such as nursing home care, to the same population.

An enormous source of tension with Section 1115 "demonstration projects" is that they allow profit-making companies to administer EPSDT. The National Health Law Project has published a list of 30 questions that all should be answered "yes" in evaluating whether a managed care project is meeting EPSDT requirements.