States are responsible for  establishing state policies and procedures in accordance with federal  requirements. Types of Medicaid HCBS Programs and Delivery Systems

Medicaid HCBS cover a wide range of services and supports to help  individuals remain in their homes or live in a community setting, such as  personal assistance with daily activities, assistive devices, and case  management services to coordinate services and supports that may be  provided from multiple sources. With approval from CMS, states can  provide Medicaid HCBS under one or more types of programs authorized  under different sections of the Social Security Act, including several state  plan and waiver authorities. Selected States Used Multiple Tools and Entities to Conduct Needs Assessments across Distinct HCBS Programs

		Selected States Varied in the Extent to Which Needs Assessment Tools Were Tailored to Distinct HCBS Programs and Assessment Purposes

Each of the six selected states we reviewed used varied needs  assessment tools across their distinct Medicaid HCBS programs, for  which both functional eligibility criteria and amount of services available to  beneficiaries can differ widely. One  version of the assessment was used for HCBS programs serving  individuals with intellectual and developmental disabilities, and a  different version was used for all other programs. CMS Has Taken Steps to Improve Effectiveness by Addressing the Potential for Conflicts of Interest, but These Steps Do Not Address All Types of Programs or Conflicts

CMS has sought to improve HCBS needs assessments by addressing  concerns about the potential for conflicts of interest that HCBS providers  and managed care plans may have in conducting assessments. As  previously noted, HCBS providers may have a financial interest in  providing services that could potentially lead to over-utilization of  services, while managed care plans may have a financial interest in  increasing enrollments and reducing enrollees’ service utilization. The specific requirements may differ by program and whether the  assessment is used to determine functional eligibility or develop service  plans:
For example, for State Plan HCBS—a relatively small program that  accounted for less than 1 percent of estimated Medicaid HCBS  expenditures in fiscal year 2015—states are required to establish  conflict-of-interest standards that address both (1) evaluation of  eligibility, and (2) needs assessments used to develop service plans. For example, several  types of HCBS programs have specific requirements for states to  establish standards to address potential conflicts of interest when HCBS  providers conduct needs assessments that are used for service planning,  but there are no equivalent requirements for State Plan Personal Care  Services programs. In addition, HCBS providers may  conduct certain needs assessments that inform HCBS functional eligibility  determinations, but specific conflict of interest requirements are generally  not in place for such assessments. While CMS has a goal of achieving an  effective long-term services and supports system that provides  appropriate services to beneficiaries, because the agency does not  require states to address the potential for HCBS providers’ conflicts of  interest in conducting needs assessments under all HCBS authorities,  there is a risk that some states may rely on HCBS providers to conduct  assessments without addressing HCBS providers’ financial incentives,  which can lead to over-utilization of HCBS. The guidance  stated that managed care plans may not be involved in any HCBS  functional eligibility determinations or needs assessment processes prior  to a beneficiary’s enrollment in the plan. One managed care  plan admitted to enrolling 1,740 individuals in managed care HCBS  whose needs did not qualify them for the program from January 2011  to September 2013, and it resolved allegations that it had submitted  false claims for Medicaid HCBS in a $35 million settlement with the  U.S. Department of Justice. The absence of requirements for states to address acknowledged risks is not consistent with federal internal control  standards that require federal agencies to identify, analyze, and respond  to risks related to achieving defined objectives. Recommendation for Executive Action

The Administrator of CMS should ensure that all types of Medicaid HCBS  programs have requirements for states to avoid or mitigate potential  conflicts of interest on the part of entities that conduct needs  assessments that are used to determine eligibility for HCBS and to  develop HCBS plans of service. These requirements should address both  service providers and managed care plans conducting such  assessments.
Why GAO Did This Study

With approval from CMS, the federal agency responsible for overseeing state Medicaid programs, states can provide long-term care services and supports for disabled and aged individuals under one or more types of HCBS programs. State and federal Medicaid HCBS spending was about $87 billion in 2015. Effective needs assessments help states ensure appropriate access to, and manage utilization of, services and therefore costs. States' processes vary, and challenges include the potential for assessors to have conflicts of interest leading to over- or under-estimating of beneficiaries' needs for HCBS.
GAO was asked to examine states' needs assessment processes for provision of long-term services and supports. This report addresses (1) how selected states assess needs for HCBS, and (2) steps CMS has taken to improve coordination and effectiveness of needs assessments, among other objectives. GAO studied six states that varied in terms of assessment tools in use, participation in federal initiatives, HCBS delivery systems, and geographic location; reviewed federal requirements and documents; and interviewed CMS officials and stakeholders.

What GAO Found

The six selected states that GAO reviewed used multiple approaches to assess individuals' needs for Medicaid home- and community-based services (HCBS). Each state may have multiple HCBS programs authorized under different sections of the Social Security Act. These programs serve beneficiaries who generally need assistance with daily activities, such as bathing or dressing. States establish needs assessment processes to collect data on functional needs, health status, and other areas that they use to determine individuals' eligibility for HCBS and to plan services, such as the amount of services needed. The selected states varied in the extent to which they used different assessments across HCBS programs and used multiple types of entities—such as state or government agencies, contractors, or providers—to conduct them.
The Centers for Medicare & Medicaid Services (CMS) has taken steps to improve needs assessments but concerns about conflict of interest remain in regard to HCBS providers and managed care plans. HCBS providers may have a financial interest in the outcome of needs assessments, which could lead to overstating needs and overprovision of services. CMS has addressed risks associated with HCBS provider conflicts, such as by requiring states to establish standards for conducting certain needs assessments, but these requirements do not cover all types of HCBS programs. For example, specific conflict of interest requirements are generally not in place for needs assessments that are used to inform HCBS eligibility determinations. In addition, requirements for states to establish standards to address HCBS providers' potential for conflict of interest in conducting needs assessments that are used for service planning do not apply across all programs.
Similarly, managed care plans may have a financial interest in the outcome of HCBS assessments used for both determining eligibility and service amounts. Managed care plans could have an incentive to enroll beneficiaries with few needs, as plans typically receive a fixed payment per enrollee. For example, a plan in one state admitted in a settlement with the federal government to enrolling 1,740 individuals, from 2011 through 2013, whose needs did not qualify them. In 2013, CMS issued guidance that managed care plans may not be involved in assessments used to determine eligibility for HCBS, but CMS has not consistently required states to prevent this involvement. Among three states GAO reviewed with managed care HCBS programs, CMS required one to stop allowing plans to conduct such assessments but allowed plan involvement in two states. The absence of conflict-of-interest requirements across all types of HCBS programs and states is not consistent with federal internal control standards, which require agencies to respond to risks to program objectives.

What GAO Recommends

GAO recommends that CMS ensure that all Medicaid HCBS programs have requirements for states to address both service providers' and managed care plans' potential for conflicts of interest in conducting assessments. HHS concurred with GAO's recommendation.