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. 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. 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. 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. 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. 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. 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. 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. 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. Recommendations for Executive Action

To ensure that state quality assurance efforts are adequate to protect the  health and welfare of HCBS waiver beneficiaries, we recommend that the  Administrator of CMS    develop and provide states with more detailed criteria regarding the  necessary components of an HCBS waiver quality assurance system,  require states to submit more specific information about their quality  assurance approaches prior to waiver approval, and    ensure that states provide sufficient and timely information in their annual  waiver reports on their efforts to monitor quality. To strengthen federal oversight of the growing HCBS waiver programs and  to ensure the health and welfare of HCBS waiver beneficiaries, we  recommend that the Administrator    ensure allocation of sufficient resources and hold regional offices  accountable for conducting thorough and timely reviews of the status of  quality in HCBS waiver programs, and    develop guidance on the scope and methodology for federal reviews of  state waiver programs, including a sampling methodology that provides  confidence in the generalizability of the review results. As of June 2002, almost one-fifth of all HCBS waivers in place for  3 years or more had either never been reviewed or were renewed without  a review; 14 of these waivers had 10 or more years elapse without a  regional office review. The full extent of such  problems is unknown because many state waivers lacked a recent CMS  review. CMS did not comment directly on our conclusion that the agency  is not fully complying with statutory and regulatory requirements when it  renews waivers. Appendix VIII: Comments from the Centers for Medicare & Medicaid Services
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. 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.

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.