GAO expresses concerns about waivers and their quality control

According to a General Accounting Office (GAO) report, the Centers for Medicare & Medicaid Services (CMS) should ensure that state quality assurance efforts adequately protect the health and welfare of Medicaid beneficiaries covered under home and community-based service (HCBS) waivers.

The GAO also recommended strengthening federal oversight of the growing HCBS waiver programs. CMS generally accepted the GAO’s recommendations, but voiced concerns about some technical aspects of the report.

But the senators who requested the report expressed great concern and called on Health and Human Services (HHS) Secretary Tommy Thompson to suspend HCBS waivers pending improvements in quality control. Many state officials and consultants contacted by State Health Watch expressed concern about the report and a possible overreaction by CMS that could hurt people receiving services under the waivers. Some of them shared success stories in terms of some state efforts to maintain a close watch on HCBS programs. The GAO reported that in the decade from 1991 to 2001, Medicaid long-term care spending more than doubled to more than $75 billion, while the proportion spent on institutional care declined. In that same time period, HCBS waivers grew from 5% to 19% of the expenditures. The number of waivers, participants, and average state per-capita spending also grew considerably. Every state except Arizona operates at least one HCBS waiver program.

But in the absence of specific federal requirements for HCBS quality assurance systems, the agency said, states provided limited information to CMS 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, the GAO said.

The issue matters, according to the GAO, because more than 70% of the waivers for the elderly the 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. GAO cautions that 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.

The GAO report complained that CMS guidance to states and oversight of the HCBS waivers are inadequate to ensure quality of care for beneficiaries. It faulted CMS for not developing detailed guidance for states on appropriate quality assurance mechanisms as part of the waiver approval process, and said that initiatives under way to generate information on state quality assurance approaches do not address the problem. In addition, it said, CMS has not fully complied with statutory and regulatory requirements that condition renewal of HCBS waivers on:

1. states submitting required annual reports that include information on state quality assurance approaches and deficiencies identified through state monitoring;

2. CMS’ conducting and documenting periodic waiver reviews to determine whether states satisfied requirements for protecting the health and welfare of waiver beneficiaries.

States determine the types of long-term care services they want to offer under a waiver. They may provide a variety of skilled services to only a few individuals with a particular condition, such as those with traumatic brain injury, or may offer only a few unskilled services to a large number of people, such as the aged or disabled. The wide variety of services that may be available under waivers includes home modification such as installing a wheelchair ramp; transportation; chore services; respite care; nursing services; personal care services; and caregiver training for family members.

The GAO pointed out that according to a CMS-sponsored review, oversight of waivers often is decentralized and fragmented among a variety of agencies and levels of government, and there is rarely a single entity with accountability for the overall quality of care provided by waiver beneficiaries.

The report said information that has come to CMS indicates states use a variety of mechanisms to protect the health and welfare of beneficiaries served by the waivers. They can include satisfaction surveys, on-site visits to beneficiaries, complaint systems, conformity with provider licensure, and other state standards, provider audits and visits, corrective action plans, sanctions, program manuals, case management reviews, and internal or external program evaluations. The report questioned the wisdom of not having specific guidance calling for uniform mechanisms and reports, and said that CMS regional offices and state audits have identified weaknesses in state oversight in 15 of the 23 waivers the GAO examined. In some cases, it said, waiver programs did not have essential oversight systems or processes in place.

CMS making some advances

GAO acknowledged that CMS has a number of initiatives under way to generate information and dialog on quality assurance approaches, but said these initiatives stop short of requiring states to submit detailed information on their quality assurance approaches when applying for a waiver or stipulating the necessary components for an acceptable quality assurance system. And CMS also is not holding its regional offices or the states accountable for oversight of the quality of care provided to individuals under HCBS waivers, according to the GAO. The agency said its audit of the 15 largest waivers demonstrated the extent of oversight weaknesses in these ways:

1. Four of the 15 waivers were not reviewed in a timely manner by the CMS regional offices but still were renewed.

2. Four of the 15 had no waiver review final report completed by the regional office.

3. Four of the 15 lacked a timely annual state report to the regional office; and seven of the 15 had annual state reports that were incomplete because they either lacked information on their quality assurance mechanisms or on whether deficiencies had been identified.

The GAO said that the current size and likely future growth in HCBS waiver programs that serve a vulnerable population, particularly elderly individuals eligible for nursing home placement, make it even more essential for states to have appropriate mechanisms in place to monitor the quality of care.

It recommended that CMS develop and provide states with more detailed criteria on 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; ensure that states provide sufficient and timely information in their annual waiver requests on their efforts to monitor quality; 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 generalization of review results.

Asked for comment on a draft of the GAO report, CMS affirmed its commitment to an ongoing responsibility, in partnership with states, to ensure and improve quality in HCBS waivers. CMS said the federal focus should be on assisting states in the design of HCBS programs, respecting the assurances made by states, improving the ability of states to remedy identified problems, providing assistance to states to improve the quality of services, and thereby assisting people to live in their own homes in communities of their choice.

"CMS generally concurred with our recommendations to improve state and federal accountability for quality assurance in HCBS waivers," the GAO said, "but raised questions about our definition of quality, how best to ensure quality in state waiver programs, the appropriate state and federal oversight roles, and the resources and guidance required to carry out federal quality oversight."

While the GAO did not suggest shutting down the waivers, Sen. Chuck Grassley (R-IA), who requested the report with Sen. John Breaux (D-LA), said, "These waivers should be put on hold until [HHS] gets a handle on the quality of care going to older and disabled Americans. Right now there’s no accountability, and that’s wrong."

Mr. Grassley and Mr. Breaux wrote to Mr. Thompson to say they applaud the intent of the waivers but were troubled by the GAO findings on quality oversight. They said they strongly agreed with the GAO recommendations and that it is "imperative that HHS review its current policies for guidance to the states and work toward guaranteeing that all Americans have access to quality long-term care in their homes and communities." They asked Mr. Thompson for a response that includes a detailed plan, including implementation dates, of how the oversight weaknesses identified in the report will be addressed.

[For the GAO report, go to: For the Grassley/Breaux letter, go to:]