Participant-directed program saves $18 million

The foundation that was laid for the operation of Arkansas' Cash and Counseling demonstration and the Independent Choices program was "unique from the very start," says Deborah Ellis, a program administrator with the Arkansas Department of Human Services' Division of Aging and Adult Services. "It truly was a spirit of teamwork on all levels to implement this new program."

There was "tremendous enthusiasm on a national level," she says, from the Centers for Medicare & Medicaid Services (CMS), the Robert Wood Johnson Foundation, and the Cash and Counseling National Program Office.

"What made it most unique was the focus on the people that would enroll in this program, and not on the providers who would provide the service to the people," she says.The big question, says Ms. Ellis, was whether people would act responsively if given an opportunity to be in control of meeting their health care needs, or if they would be worse off.

While much flexibility is given to participants, she says, much is expected in return. "It is the people that I have encountered that have taught me my best lessons in state government," she says. "People can teach us a lot about the right things to do. Our policies have a direct impact on a person's quality of life."

For instance, the program helps family caregivers who provide the majority of in-home care, Ms. Ellis says, which in turn decreases high institutional costs. The Independent Choices program offered some people the ability to leave the nursing home and return home, she adds, and allowed others to avoid institutional care altogether.

"Offering a participant-directed program goes much further than the policies that mold the program," she says. "To me, it puts the 'human' in human services."

Participant-directed programs require the same continuous quality improvement plans as any other program, Ms. Ellis notes. "We are continuously seeking ways to improve the program," she says. "Participant-directed programs do not function well without a lot of human interaction in the operation of the program."

In fiscal year 2005, 15,309 adults received agency personal care services, and 1,433 persons had their personal care services met through the Independent Choices program, while in 2011 personal care agencies met the needs of 14,122 adults and Independent Choices provided personal care services to 3,368 participants.

One of the earliest trends that was first identified by the Cash and Counseling demonstration evaluator, Mathematica Policy Research, was that savings in long-term care costs was helping to off-set higher personal care cost, Ms. Ellis reports. A longer-term follow-up study showed that savings in long-term care would continue through the third post-enrollment year, with nursing facility use reduced by 18% over the entire three-year study.

In 2010, an Independent Choices staff person, Mr. Daniel Clark, replicated the original demonstration cost neutrality criteria required by CMS, and added criteria to analyze institutional cost, she says. The analysis used data available through the Medicaid data warehouse, and covered state fiscal years 2005 through 2009.

The average institutional cost was $2,416 annually for each participant in Independent Choices, compared to $3,298 for those receiving agency services, according to this analysis.

The data also showed that while Arkansas spent 16% more on personal care services, the Independent Choices net expenditures were 14% lower on average, she adds.

"Those in Independent Choices program received twice the in-home personal care services, yet the net expenditure to Medicaid averaged 14% less," she says. "The overall state and federal savings were $18,551,518 during the time frame."