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Medicaid waivers need oversight, says GAO
Disability activist calls report 'paternalism'

July 8, 2003 -- Over the past 10 years, Medicaid has increasingly moved to allow personal assistance services in one's home, rather than a nursing home.

These services, though, are still not a mandated service under the Medicaid program. Medicaid provides them under "waivers."

In the last decade, these waivers -- called "home and community-bases services" (HCBS) waivers -- grew from $1.6 billion to $14.4 billion. "The number of waivers, participants, and average state per capita spending also grew significantly," says the General Accounting Office. "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." Only slightly over half -- 55 percent -- of the beneficiaries of these waivers were elderly persons; the rest were non-elderly people who need assistance with tasks of daily living but who do not want to live in institutions.

The disability rights movement has been urging Congress for over a decade to change the Medicaid program so that each Medicaid recipient is free to choose whether to receive services paid for by Medicaid in an institution, or at home. Yet the Medicaid legislation has not yet changed; it still specifies placement in an institution. However, the program allows for "waivers," and it is via these waivers that in-home services are today being provided through Medicaid.

In its July 7, 2003 report, the GAO said that "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.

"CMS has not developed detailed state guidance on appropriate quality assurance approaches as part of initial waiver approval," said the report. "Although CMS oversight has identified some quality problems in waivers, CMS does not adequately monitor state waivers and the quality of beneficiary care." (An earlier report by the Government Accounting Office (GAO-02-431R) has noted that there is no correlation between nursing home funding and improved quality of care. )

The report -- and the July 8 New York Times editorial praising the report -- harms the move toward in-home services, says ADAPT's Bob Kafka. Groups like the American Health Care Association, the national nursing-home operators' lobby, "now have a government report to make their case to slow down HCBS growth," he says.

"Our reading of the GAO text finds no evidence of quality problems in actual care or of harm to consumers," say Drs. Rosalie Kane and Larry Polivka. "Rather the GAO found the following: in some states, people who were assessed as eligible for the in-home care failed to receive the services recommended; the case management oversight was sometimes skimpy; and the oversight of the federal government and its regional offices fell short of vigorous monitoring. These were mislabeled quality problems, but are really problems in access and accountability." Dr. Kane is with the School of Public Health and School of Social Work at University of Minnesota and Dr. Polivka directs the Florida Policy Center on Aging at the University of South Florida.   

"The GAO report showed no phantom clients or expenditures on people who receive no service," they say. "Rather, it showed that some states failed to serve all those they documented as eligible." States often amass documentation of unmet needs for their planning purposes, they say.

In a statement issued Monday, Sen. Chas. Grassley (R. IA) urged that all waivers nationwide "be put on hold until the department gets a handle on the quality of care," but Kane and Polivka say that such interruptions will simply "worsen the problem of unmet need," and add that "many states, including Washington, a state the GAO studied in depth, have vigorous state-run quality assurance and information systems."

"Ongoing supportive care at home and in the community works well to better the lives of people with disabilities of all ages," they explain. "Like all health and humans services it is imperfect, but we must refrain from sacrificing community care while pursuing its improvement."

The GAO report recommended that the Administrator of CMS "take steps to better ensure that state quality assurance efforts are adequate to protect the health and welfare of HCBS waiver beneficiaries, and strengthen federal oversight of the growing HCBS waiver programs."

To read the report highlights (PDF document), go to The report Long-Term Care: Federal Oversight of Growing Medicaid Home and Community-Based Waivers Should Be Strengthened (GAO-03-576) is available as a PDF document at To get either document in html form, go to Adobe and paste in its URL.


Bob Kafka
512-442-0252 (512-431-4085 cellphone.)

Rosalie A. Kane, Ph.D.
Division for Health Services Research & Policy
School of Public Health
University of Minnesota
Phone: 612-624-5171
Fax: 612-624-5434

Larry Polivka, Ph.D.
Director, Florida Policy Exchange Center on Aging
University of South Florida






Expert sources


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Consumer control of in-home services (overview)

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The Institutional Bias of Public Policy (overview)

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Administration unveils Medicaid waiver "templates" to reduce institutional placement 5/21/02

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