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The Aging Network

Information Memoranda

August 1, 1997



SUBJECT: Cash and Counseling Projects

The purpose of this memorandum is to: 1) describe cash and counseling, particularly those projects recently funded by the Robert Wood Johnson Foundation (RWJF) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE), Department of Health and Human Services; and 2) encourage aging network involvement in these and other consumer-directed projects. In subsequent IM's, the Administration on Aging will describe other developments in consumer-directed services, including the "Independent Choices" projects funded by RWJF.

All of us in the aging network have reason to be interested in consumer direction in general, and in the four-state RWJF/ASPE Cash and Counseling Demonstration and Evaluation Program in particular. Consumer direction is consistent with the goal of independent living expressed throughout the Older Americans Act, including the Title I objective which states that the network is responsible for assisting older persons to secure the "free exercise of individual initiative in planning and managing their own lives" and "full participation in the planning and operation of community-based services and programs provided for their benefit." Moreover, consumer-directed care is one of the most significant innovations in long-term care in the past decade, an innovation that promises to become an effective option for meeting the needs of disabled persons of different ages. We all have a stake in fostering demonstrations of consumer-directed approaches and in understanding the implications of their results.

Consumer-Directed Services: A General Overview

A distinction is often made in home and community-based services between those that are "agency-directed" and those that are "consumer-directed." Currently, elements of these two approaches are often blended. Traditionally, however, agency-directed services have featured care delivered by a provider agency, case management to coordinate services, and public regulation of providers to assure quality. Service decisions have tended to give heavy weight to the judgments of the case manager or provider agency staff.

Consumer-directed services, by contrast, are intended to allow informed consumers to assess their own needs, determine how and by whom these needs should be met, and monitor the quality of services received. Typically, these services are implemented as personal care services provided by a home care worker selected, trained and supervised by the consumer. Often, consumers also have the flexibility to choose other ways, e.g., home modifications and assistive devices, to meet their needs for personal assistance.

Consumer direction may take place in differing degrees depending on circumstances. It ranges from individuals independently making all decisions and managing services directly to individuals using a fiscal intermediary to assist in managing needed services. The unifying principle is that individuals have the primary authority to make choices that work best for them.

Younger adults with disabilities have been the most vocal in advocating for consumer-directed services, but older persons with disabilities as well as surrogate decision-makers--including the parents of disabled children and families of persons with cognitive impairments and developmental disabilities--have also expressed a growing interest in this approach. Recent research suggests that significant numbers of older persons would like to have more involvement in making key decisions regarding their personal care and are more satisfied with services when they do. For example, Glickman, Brandt and Caro (1994) found that at least 24 percent of elderly Massachusetts home care clients were willing to assume greater responsibility for their services; and Doty, Kaspar and Litvak (1996), in their study of elderly home care recipients in Michigan, Maryland and Texas, found "strong statistical associations between indicators of consumer choice and indicators of consumer satisfaction."

Cash and Counseling

Cash and counseling (C&C) is one of the ultimate forms of consumer direction in which consumers are given the option of receiving cash payments that they may use to purchase a variety of support services. Consumers may purchase personal care services from a home care agency, an adult day care center, a friend or a relative, or they may use the money to make home modifications or buy assistive devices that limit their future need for personal care. Along with the cash, consumers receive information, advice, and training on how to access and manage their own care. Area agencies on aging, centers for independent living, or other public or private organizations, or individuals with interest and expertise may be appropriate sources to provide a menu of counseling services, including assistance in hiring, training and supervising workers, a registry of workers available to provide back-up support, or assistance in handling tax and accounting responsibilities.

Cash and counseling, or similar approaches, are being used by several European countries, including Holland, Germany, and Austria, and interest in the option is rising in this country because national and state government officials are looking for innovative and cost-effective approaches to meet the needs of a growing aged and disabled society. A number of states, including Michigan, Wisconsin, and Colorado, are currently using state funds to make C&C one component of their long-term care systems.

Proponents argue that such approaches will increase consumer satisfaction and autonomy, improve quality of care, and lower costs, but as yet there has not been sufficient empirical research to substantiate these claims fully. On the other hand, there are concerns that some consumers or their family members may spend the cash benefit inappropriately; that the quality of care could suffer; that there will be a great increase in the number of people applying for benefits; or that frail consumers will have difficulty in resolving the myriad of legal, liability, and employee benefit issues that come with managing one's own care.

These concerns are beginning to be addressed successfully in current state programs through such means as counseling and fiscal intermediary services. However, many officials and researchers think that before the cash option is utilized on a large scale in this country, the C&C approach needs to be evaluated against more traditional models of service provision.

The Cash and Counseling Demonstration and Evaluation Program

Essentially, the Cash and Counseling Demonstration and Evaluation Program is a policy-driven evaluation of the C&C approach. Under this RWJF initiative, four states were funded in 1996--Arkansas, Florida, New Jersey and New York--to test the idea of giving elderly and younger Medicaid recipients with disabilities the choice of traditional services or cash, along with counseling assistance, to help consumers manage the benefits and make sure the funds are well spent. The University of Maryland Center on Aging was designated to be the national program office responsible for directing and coordinating the demonstration, providing technical assistance to the states (in collaboration with the National Council on the Aging), and supervising the work of the evaluation contractor, Mathematica Policy Research, Inc.

The state demonstrations will run for three years. Enrollment will be open for one year. In the research design, eligible volunteer participants will be randomly assigned to one of two groups: the control group will receive "traditional" benefits, i.e., agency-provided, home and community-based services; the C&C group will receive cash to pay for attendant care, home modifications, and other personal assistance along with the counseling supports that will help them live independently in the community. Volunteer participants assigned to the "cash" option can return to the "traditional system" at any time.

The Mathematica evaluation, funded by ASPE, will measure differences between the groups in terms of such outcomes as cost, quality, consumer satisfaction, caregiver satisfaction, and type and amount of personal care received. It also will look at other important aspects of the demonstrations such as service mix and the varying characteristics of the consumers, e.g., age, disability, and family support.

The state projects are currently developing their specifications for the counseling contracts. This summer, they will seek a 1115 Research and Demonstration Waiver through the Health Care Financing Administration to allow the C&C participants to receive Medicaid funds in the form of cash and to allow recipients to pay family caregivers. Authority is also being sought to assure that the cash-out of Medicaid home care benefits will not affect consumers' eligibility for, or benefits under, other federally-assisted programs such as SSI, Food Stamps, or various housing programs, etc. The target date for enrollment in the Cash and Counseling Demonstration Program is April 1998.

For more information on the RWJF/ASPE program please contact:

Nat'l Program Office: Kevin J. Mahoney, Ph.D.
Program Director
University of Maryland Center on Aging
1240 HHP Building
College Park, MD 20742
(301) 405-2549

Arkansas: Suzanne Crisp, Assistant Director
Division of Aging and Adult Services
Department of Human Services
P.O. Box 1437, Slot 1412
Little Rock, AR 72203-1437
(501) 682-2441

Florida: Kerry Schoolfield, Director
Strategic Long-Term Planning
Florida Consumer-Directed Care
Department of Elder Affairs
4040 Esplanade Way
Building B, Suite 152
Tallahassee, FL 32399-7000
(904) 414-2087

New Jersey: William A.B. Ditto
Acting Assistant Director
Office of Disabled Affairs
Division of Medical Assistance
and Health Services, CN-712
New Jersey Department of Human Services
Trenton, NJ 08625-0712
(609) 588-2622

New York: Ann Hallock, Project Manager
Cash and Counseling
Bureau of Program and Data Analysis
Office of Medicaid Management
New York State Department of Health
Room 2038, Corning Tower
Empire State Plaza
Albany, NY 12237
(518) 474-9265

The Aging Network and Cash and Counseling

Many state and area agencies on aging are already involved in the RWJF or state-funded C&C projects, and we encourage them to continue to take an active role in their implementation. Aging network agencies in states where projects have not been started are urged to consider appropriate ways they may help to promote consumer direction. Among the roles that state and area agencies on aging may play include:

· administering programs;
· serving on advisory committees;
· providing outreach and information and referral; and
· promoting counseling and fiscal intermediary services.

Cash and Counseling may not be the service approach of choice for all older persons, but it can be an important and valuable new option for many of the people we serve and represent. For these C&C demonstrations to receive an adequate evaluation, they need the active involvement of our network. The quality of the outreach, screening, counseling and monitoring undertaken by the projects will, in part, depend on the expertise and commitment we bring to bear. Again, we all have a stake in fostering demonstrations of this kind and in understanding their results, especially in terms of future long-term care policy.

William F. Benson
Acting Principal Deputy Assistant
Secretary for Aging