Summary

In response to the HCBS Final Rule and its conflict of interest requirements, states have implemented mitigation strategies to reduce risk of conflicted arrangements in service delivery and improve the opportunities for individual autonomy in their own care. Mitigation strategies are structural and procedural approaches implemented by states that prevent or reduce the risks of conflicted care. State approaches to mitigate conflict of interest vary as some rely on added procedural safeguards (such as self-direction models or financial management services) to mitigate their risk while structural approaches while firewall systems structurally bifurcate direct service provider organizations and designated case management organizations.

This research analyzes the use of key components of service planning in Medicaid Waivers and their implications on the mitigation of conflict of interest. As case examples, 1915(c) Medicaid Waivers were used to analyze broad structural and procedural mitigation approaches.

Context

Nature of Conflict

For many people, a primary care provider is able to provide and coordinate needed services, with the emergency department and urgent care addressing unforeseen and acute needs. On the other hand, a person with more complex needs may be served by a variety of providers and systems, each of which specializes in addressing a subset of those needs. An unintentional but common effect of these specialty services, from the perspective of the person, is a fragmentation in the services received. The role of coordination has arisen to address this complexity and the resulting fragmentation, relying on a comprehensive service plan as a blueprint to assemble and pay for authorized services in support of the person.

In systems that have sought to address complexity through coordination of services in this manner, several issues have become apparent:

  1. Coordinator Conflict of Interest: Providers who perform coordination functions are often best positioned to assist with development of a person’s service plan based on their knowledge of the system of available services and supports. However, these same provider organizations stand to gain financially from the authorized services defined in the service plan, both from those services which provide ongoing coordination and other services operated by the same organization. This perverse incentive risks providing services which are not desired by the person and which may be unnecessary.
  2. Provider-Centered Coordination Processes: Having arisen to address system fragmentation, coordination is often oriented toward compiling the treatment recommendations of specialist providers and assuring compliance with those recommendations, yet not with aligning those various services with the person’s priorities and preferences, adapting them in response to the person’s input.
  3. Inequity in Decision-Making: Throughout history and up to the present day, people with complex needs have been categorically labeled as ‘disabled’: a term used to justify their exclusion from decisions about their service plans and authorized services. While court rulings and policy regulations have solidified protections against this type of discrimination,1 operational procedures have not consistently evolved to support people to frame and implement meaningful decisions regarding their services.
  4. Scope of Coordination Incomplete: Despite ongoing efforts to coordinate services across providers and systems, many people with complex needs still have multiple uncoordinated service plans across various systems, such as physical health, behavioral health, substance use, social services, education systems, etc.

While the policy requirements of Conflict-Free Access and Planning (CFA&P) focus primarily on the first of the issues noted above, states appear to have implicitly recognized how tightly-knit these issues are to one another.

The strategies currently being pursued across the nation show states engaged with considerations of how they might: (1) mitigate against conflict of interest, (2) redesign service planning and coordination processes around the person, and (3) increase equity and personal engagement in decisions about services, without (4) decreasing the scope and quality of the coordination systems which have already been implemented.

Summary of Rules

Often referred to as Conflict-Free Case Management, CFA&P and umbrella conflict of interest requirements were grown within Home and Community Based Service initiatives and are rooted in statutory guidance, legal rulings (such as Olmstead v. L.C., 1999), and the development of regulatory guidance by the Centers for Medicare & Medicaid Services (CMS). Regarding the latter, CMS’s administrative rules for CFA&P are the product of many years of consumer experiences and issues in a number of states. At the heart of the CFA&P requirement found in the Home and Community Based Services (HCBS) Final Rule2 is the need to ensure that people have choice in the care they receive and are protected from potential conflicts of interest inherent in the service system. Prior to the HCBS Final Rule, a person’s HCBS services could be planned and delivered by the same provider organization. The rule ensures service providers have no leverage in the planning process to include their own services in the plan without the express choice of the person receiving services.

CFA&P applies most notably to 1915(c) and 1915(i) Medicaid Waivers. The latter is under a state’s Medicaid plan and amendments are referred to as State Plan Amendments (SPAs). CFA&P is based on the belief that services free from conflict-of-interest are in the best interest of those served and protect them from exploitation. CFA&P requires a system of firewalls and safeguards implemented and overseen by the associated waiver authority. These firewalls and safeguards are reviewed by CMS via state waiver applications. CMS has authority to approve, pend, or disapprove of waiver applications that are not compliant with CFA&P rules.

The CFA&P component of the HCBS Final rule requires service plan development and service plan implementation/monitoring to be separate functions from service delivery and be provided by separate individuals or entities. For the purposes of understanding this rule, combined service plan development and service plan implementation/monitoring were often referred to as “case management”. However, the conflict of interest rules refer to both case management (under 1915(c) Medicaid waivers) and specific functions (under 1915(i) Medicaid Waivers) including eligibility assessment and service planning. The use of the “case management” is not comprehensive and is often defined differently between states and waivers. Conflict of interest policy is more specifically targeting the risks of conflict in access and during service planning.

Under CFA&P rules, a provider organization is not allowed to conduct eligibility assessments or service planning AND provide the direct service without protections in place. Decisions regarding eligibility assessments and service plan development must be clearly separated from the direct delivery of services.

CMS asserts that provider organizations have a financial motive to increase business through client referral. Therefore, provider organizations who offer direct services should not assist in eligibility assessments or service planning.

Policy Considerations

As states implement CFA&P, they must consider the scope and type of implementation they want to pursue. Beyond compliance with the HCBS final rule and CFA&P requirements, states must consider if they want to implement CFA&P protections similarly across waivers and if they want to include additional waivers beyond the 1915(c) and 1915(i) Medicaid waivers. Doing so requires considerable policy development and system reconstruction for states, but could create consistency in care for populations served under more than one waiver. For populations with Medicaid coverage stratified across Medicaid waivers, the risks of not aligning CFA&P implementation across waivers include segmented access points, isolated or “siloed” service delivery, and disconnected care coordination.

The type of CFA&P strategy varies across the country and within individual states. State approaches to CFA&P implementation and mitigation strategies fall into two categories under review in this analysis:

  • Firewalls: Structural protections in place to prevent conflicted arrangements between provider organizations. In structural protections, individuals or provider organizations are unable to conduct both service planning and provide direct waiver services. Firewalls are typically built into contractual program requirements between the payer and providers.

  • Safeguards: Procedural practices made available to people served that mitigate against conflicted arrangements. Safeguards are often combined with each other and can work in conjunction with firewalls. Both firewalls and safeguards provide protections to people served from the financial motives of service organizations and can be implemented in a variety of combinations to best meet the needs of- and provide protections to those served. Safeguards in this analysis include self-directed options, supports broker, options counseling, and independent facilitation.

Exceptions

CMS is aware that some regions of a state may have only one provider available to serve as both the service planning and direct service provider organization. In these instances, CMS requires the state to indicate how they will mitigate risk of conflict, potentially including additional state oversight of organizational practices. Often referred to as “rural exceptions”, these avenues for regions to claim exception are not limited to rural areas. There are a number of reasons why a provider may be the only willing and qualified provider in a given region. These reasons include: geographical accessibility/remoteness, limited service population, or cultural needs of a community or sub-population. States seeking an exception are required to identify which regions meet exception status for each of their HCBS waivers and to provide a description of safeguards they will implement to avoid conflict. In exception regions, states must require single provider organizations to implement intra-organizational firewalls to bifurcate the organization’s eligibility assessment and service planning functions from those of direct service provision. In the most well-developed rural exception requests, states utilized data to inform what constituted a “rural” region and centered the voices of people receiving services. This report does not include an analysis of waiver approaches to exceptions.

Methods of Analysis

This report provides analysis of specific item-level responses across approved Medicaid waiver applications, with an in-depth analysis of approved 1915(c) Medicaid waivers. This policy analysis is one tool to assist states in making decisions and guiding discussions about the next steps for CFA&P implementation. The analysis provides insight on the current practices of CFA&P nationally. The use of policy analysis to inform CFA&P implementation should be used in conjunction with other resources, including the voices of individuals served and surveys of current regional practices within a state.

Inclusion in CFA&P Waiver Analysis

All Medicaid waiver information used for this analysis was obtained from the Medicaid.gov website. In all, 1383 waiver and State Plan Amendment (SPA) submissions were considered for inclusion in the analysis. Readable Medicaid waiver applications3 were included in the analysis if they were approved by CMS4 and were:

  • a 1915(c) waiver, or
  • another type of waiver or SPA with key terms5 in description

This resulted in the selection of 382 approved waivers and SPAs for review and analysis (from the original 1383 considered). Below is a graph displaying the waivers included in this analysis by state and waiver type. The x-axis below represents each of the 50 states in the U.S. and Puerto Rico. The y-axis represents the number of included waivers from each state or territory. Each Medicaid waiver type included in this analysis is displayed below by color:

  • Yellow bars represent 1115 waivers
  • Pink bars represent various 1915(b) waivers
  • Dark blue bars represent 1915(c) waivers
  • Grey bars represent SPAs

Most waivers included in this analysis are 1915(c) Medicaid waivers. Except for Arizona, Puerto Rico, and Rhode Island, all states and territories represented have at least one 1915(c) Medicaid waiver.

Mitigation Approaches

Out of the 382 waivers within the scope of this review, 262 (68.6%) included one or more of the key CFA&P-related safeguards. The presence of safeguards within waiver applications reflects state attempts at providing protections to people served. When considering implementation scope, states can use the analysis in this section to inform which waivers have a foundation to build upon for protection from conflict-of-interest.

This analysis reviews the prevalence of several key CFA&P mitigation strategies across all waivers and SPAs within the scope identified above:

  • Supports Broker: Waiver responses which reference the use of supports brokers.
  • Options Counseling: Waiver responses which reference the use of formal options counseling or the presentation, exploration and/or discussion of service options.
  • Self-Direction: Waiver responses which reference self-direction (or participant- or consumer-direction).
  • Independent Facilitation: Waiver responses which reference independent facilitation of the service planning process or the use of independent facilitators within their system of supports.

Independent advocacy and financial management services were excluded from this analysis because these were not consistently referred to in the context of protecting individuals served from conflicted arrangements. The four safeguards used in this analysis refer to discrete strategies with fairly common definitions across systems.

The table below shows how often these mitigation strategies were referenced across all Medicaid waivers. Each is listed along with the number of distinct phrases in which it was referenced, the number of times it occurred in waivers, and number of waivers in which it was mentioned.

Concept Distinct phrases Occurrences Waivers
Self Directed 911 8272 251
Supports Broker 208 1794 54
Options Counseling 16 84 47
Independent Facilitation 6 32 4

Indications of Safeguards across Various Waivers

Waivers that reference the strategies above indicated they provide protections to those served by increasing autonomy and allowing those served to manage their own supports and services. The chart below displays the use of independent facilitation, options counseling, self direction, and supports brokers across states and waiver types. The state is displayed on the x-axis, percentage of waivers in a state that mentioned each safeguard is on the y-axis, and type of waiver is indicated by the color of bar.

Of all analyzed Medicaid Waivers, Self-Directed arrangements were referenced in the most states. Fourteen states included references to Self-Directed arrangements in all of their waivers. Every state with a 1915(c) waiver had at least one waiver that referenced Self-Directed arrangements.

Both Options Counseling and Supports Brokers were referenced in 19 states and primarily in 1915(c) Medicaid Waivers. Options Counseling was referenced in SPAs and 1915(b) Medicaid Waivers, but primarily indicated in the 1915(c) Medicaid Waivers.

Independent facilitation was indicated in the least number of states, with only California and Michigan referencing this safeguard. Both states only indicated the use of this safeguard in 1915(c) Medicaid Waivers. Less than a quarter of California’s analyzed waivers referenced this safeguard whereas half of Michigan’s waivers referenced this safeguard.

Beyond their potential to mitigate against risk by providing people served autonomy and authority over their care, safeguards can positively impact health outcomes and satisfaction with services.6 7

Focused Analysis of State Waiver Responses

Information relevant to the implementation of CFA&P may be found throughout waiver applications or state plan amendments, yet several sections of the 1915(c) Medicaid waiver focus specifically on these issues in a manner which allows for consistent review and comparison. The following sections provide a focused set of analyses related to key considerations of:8

  • Person-Centered Plan Development (Service Plan Development)
  • Service Plan Implementation and Monitoring
  • Participant Direction of Services

Note that the maps in the subsequent sections of the analysis pertain only to a subset of 282 1915(c) waivers, out of the broader scope identified above. States with no 1915(c) waivers are not displayed in maps or charts in this section.

Use of Firewalls

During service plan development, a person formulates what services they would like to engage and how, when, and where those services should be delivered. This process, depending on the state, can include supports and assistance from professionals and loved ones. The service plan development process takes place using the person-centered planning method and concludes with a completed plan. During this process and prior to the HCBS final rule, provider organizations could be incentivized to include themselves in the plan for the delivery of direct services.

This section of the analysis reviews the portions of the 1915(c) Medicaid waiver application that ask about protections in place for persons served in the Person-Centered Planning Process and service delivery. States were asked to identify what firewalls exist between Person-Centered Planning process (also referred to as Service Plan Development or Plan Development) and direct service delivery. Firewalls in this section constitute structural barriers between organizations conducting service plan development and organizations providing direct waiver services. Additionally, analyses of this section of the application identified words or phrases used by states to describe current service plan development processes.

Service Plan Development Firewalls

In this section of the waiver application, states were asked to indicate whether:

  • Plan Development Firewalls Exist: Provider organizations and/or individuals that have responsibility for service plan development may not provide other direct waiver services to the participant. Or
  • Other Safeguards are Developed: Provider organizations and/or individuals that have responsibility for service plan development may provide other direct waiver services to the participant.

The state map of the US below shows the proportion of waivers in which plan development firewalls were identified in 1915(c) Medicaid waiver applications. States displayed in dark blue have more 1915(c) Medicaid waivers with plan development firewalls. States displayed in light blue have fewer or no 1915(c) Medicaid waivers with plan development firewalls.

States such as Washington, Idaho, Oregon, and Iowa have a greater proportion of 1915(c) Medicaid waivers with plan development firewalls. States such as Alaska, Minnesota, and Michigan have fewer 1915(c) Medicaid waivers with plan development firewalls.

In the waivers reviewed, 64.2% (n = 181/ 282) indicated the existence of firewalls to protect against conflict of interest in the development of service plans. Most waivers did not allow provider organizations to conduct service plan development and provide direct waiver services.

Service Plan Implementation and Monitoring Firewalls

During service plan implementation and monitoring, the person served can discuss any issues, concerns, or challenges they have had with their services or providers. Providers of service plan implementation and monitoring have the responsibility to update and make changes to the plan according to the person’s needs and preferences. This portion of the process includes additional risks as this is where conflicts or dissatisfaction would be discussed and addressed. Prior to the HCBS final rule, provider organizations would be incentivized to overlook concerns of quality and dissatisfaction the person expressed about the direct service provided by their organization.

This section of the analysis reviews the portions of the 1915(c) Medicaid waiver application that ask about protections in place for persons served in the service plan implementation and monitoring and service delivery. State waiver authorities were asked to identify what firewalls exist between service plan implementation and monitoring and direct service delivery. Firewalls in this section (referred to as monitoring firewalls) constitute structural barriers between organizations monitoring the service plan and providing direct waiver services.

States were asked to indicate whether:

  • Monitoring Firewalls Exist: Provider organizations and/or individuals that have responsibility to monitor service plans and participant health and welfare may not provide other direct waiver services to the participant, or
  • Other Safeguards are Developed: Provider organizations and/or individuals that have responsibility to monitor service plans and participant health and welfare may provide other direct waiver services to the participant.

The state map of the US below shows the proportion of waivers in which monitoring firewalls were identified in 1915(c) Medicaid waiver applications. States displayed in darker blue have more 1915(c) Medicaid waivers with monitoring firewalls. States indicated in lighter blue have fewer or no 1915(c) Medicaid waivers with monitoring firewalls.

States such as Washington, Idaho, Oregon, and New York have more 1915(c) Medicaid waivers with monitoring firewalls. States such as New Jersey, Delaware, and Virginia have fewer 1915(c) Medicaid waivers with monitoring firewalls.

In the waivers reviewed, 67% (n = 189/ 282) indicated the existence of firewalls to mitigate against conflict of interest with service plan monitoring and direct service delivery. Most waivers reviewed indicated a monitoring firewall, meaning that waivers most often did not allow the same provider or organization to both monitor the service plan and to provide direct services under the plan.

Safeguard Use

Resource Use during Service Plan Development Process

This portion of the waiver application also requires states to describe the process used for service plan development. In this section, states identify a number of details about the service plan development process including:

  • who develops the plan, who participates in the planning process, and the timing of the plan
  • how the individual is informed of the available services
  • how the plan development process ensures that the plan addresses individual goals, needs, and choices
  • how the plan development process provides for the assignment of responsibilities

The chart below shows the prevalence with which certain resources and roles were referenced in responses to the specific section of the waiver application related to service plan development. These roles and resources include:

  • Supports Broker: Waiver responses which reference the use of supports brokers.
  • Options Counseling: Waiver responses which reference the use of formal options counseling or the presentation, exploration and discussion of service options.
  • Choice of Services: Waiver responses which reference participant choice of services, agencies, or providers.
  • Self-Direction: Waiver responses which reference self-direction (or participant- or consumer-direction).
  • Independent Facilitation: Waiver responses which reference independent facilitation of the service planning process or the use of independent facilitators within their system of supports.
  • Natural Supports: Waiver responses which reference natural supports or community resources.
  • Case Management: Waiver responses which reference the use of case-management, care-management or supports coordination.
  • Nurse: Waiver responses which reference a nurse

In waivers reviewed, 68.8% (194/282 waivers) identified case management as having a role in service plan development. Other resources frequently mentioned in the plan development process included natural support (such as family and friends), choice of services, and nurse. However, case management was the most prevalent service and resource identified (of the select options) in the service development process.

Participant Direction of Services

Since “conflict-of-interest” is a conflict between the monetary interests of the organization providing services and the person receiving services, one of the key safeguards against such conflict is to give the person greater control over directing their services. The 1915(c) Medicaid waiver application states, “CMS urges states to afford all waiver participants the opportunity to direct their services. Participant direction of services includes the participant exercising decision-making authority over workers who provide services, a participant-managed budget or both.”

The sections below correspond to Appendix E of the 1915(c) Medicaid waiver applications, which address participant direction of services. At the beginning of Appendix E, states select one of the following options with regard to their waiver:

  • Provides Self-Directed Options: This category includes waivers which provide participant direction opportunities. States who select this option go on to characterize the features of the self-directed options designed in their waivers. Or
  • No Self-Directed Options: These waivers do not provide participant direction opportunities. States selecting this option do no complete the remainder of Appendix E and thus their features are not reviewed in the sections below.

The map of the US below shows the proportion of waivers in which self-directed options (of some form) were identified in 1915(c) Medicaid waiver applications. States displayed in darker blue have more 1915(c) Medicaid waivers with some form of self-directed option, while those displayed in lighter blue have fewer or no 1915(c) Medicaid waivers with self-direction option.

States such as Michigan, Wisconsin, and Utah have more 1915(c) Medicaid waivers with self-directed options. States such as Alaska and Arkansas have fewer 1915(c) Medicaid waivers with self-directed options.

In the waivers reviewed, 72.3% (n = 204/ 282) indicated that the waiver provides some form of self-directed option. The specific characteristics of self-directed strategies vary, and some of these (e.g. dedicated self-direction, financial management services, independent advocacy) are detailed in the following sections.

Dedicated Options for Participant Direction

In the subsection related to participants’ ability to choose to direct their own services, states are asked to indicate which of the following options they have implemented:

  • Dedicated Self-Directed Options: This category includes waivers which are designed (a) to support only individuals who want to direct their services, or (b) to afford every participant (or the participant’s representative) the opportunity to elect to direct waiver services. Alternate service delivery methods are available for participants who decide not to direct their services.
  • Limited Self-Directed Options: This category includes waivers which are designed to offer participants (or their representatives) the opportunity to direct some or all of their services, subject criteria specified by the State. Alternate service delivery methods are available for participants who decide not to direct their services or do not meet the criteria.

The map of the US below shows the proportion of waivers in which dedicated self-directed options were identified in 1915(c) Medicaid waiver applications. The states displayed in darker blue have more 1915(c) Medicaid waivers with dedicated options for self-direction. States displayed in lighter blue have fewer or no 1915(c) Medicaid waivers with dedicated options for self-direction.

Kentucky has more 1915(c) Medicaid waivers with dedicated self-direction options. States such as Colorado, Washington, and Florida have fewer 1915(c) Medicaid waivers with dedicated self-direction options. States that indicated “No. This waiver does not provide participant direction opportunities” in the previous section were exempt from completing this section and are not included in the map below nor in subsequent maps regarding Financial Management Services or Independent Advocacy Arrangements by state.

In the waivers reviewed, 9.8% (n = 20/ 204) of the applicants who identified self-directed options indicated that those options were universally available within the waiver to allow for participants to direct their own services. That is, than 1 in 10 waivers had universally available self-direction options.

Provision of Financial Management Services

In the subsection related to the provision of financial management services for individuals who choose to direct their own services, states are asked to indicate whether financial management services (FMS) are a/n:

  • Waiver Service: Waiver applicant indicated that ‘FMS are covered as the waiver service specified in Appendix C-1/C-3.’ Or
  • Administrative Activity: Waiver applicant indicated that ‘FMS are provided as an administrative activity’

The state map of the US below shows the proportion of waivers in which specified financial management services are identified in 1915(c) Medicaid waiver applications. States displayed in darker blue have more 1915(c) Medicaid waivers with specified financial management services. States displayed in lighter blue have fewer or no 1915(c) Medicaid waivers with specified financial management services.

States such as Michigan, Wisconsin, and Texas have more 1915(c) Medicaid waivers with specified financial management services. States such as Tennessee, Connecticut, and North Dakota have fewer 1915(c) Medicaid waivers with financial management services.

In the waivers reviewed, 34.3% (n = 70/ 204) of the applicants who identified self-directed options indicated that those options included financial management services offered as a waiver service. That is, only 1 in 3 waivers indicated the use of specified financial management services.

Independent Advocacy

In the subsection related to the availability of independent advocacy for individuals who choose to direct their own services, states are asked to indicate whether:

  • Independent Advocacy Available: Waiver applicant indicated that ‘Yes. Independent advocacy is available to participants who direct their services.’ Or
  • Independent Advocacy Not Arranged Waiver applicant indicated that ‘No. Arrangements have not been made for independent advocacy.’

The map of the US below shows the proportion of waivers in which dedicated independent advocacy arrangements were identified in 1915(c) Medicaid waiver applications. States displayed in darker blue have more 1915(c) Medicaid waivers with independent advocacy arrangements. States displayed in lighter blue have fewer or no 1915(c) Medicaid waivers with independent advocacy arrangements.

States such as Michigan, Tennessee, and Kansas have more 1915(c) Medicaid waivers with independent advocacy arrangements. States such as Washington, Hawaii, and Pennsylvania have fewer 1915(c) Medicaid waivers with independent advocacy arrangements.

In the waivers reviewed, 28.9% (n = 59/ 204) of the waiver applicants with self-directed options indicated the existence of dedicated independent advocacy arrangements for participants to direct their own services. That is, fewer than 1 in 3 waivers identified the use of dedicated independent advocacy arrangements for use by participants who direct their own services.

Waiver Approaches

Broad Approaches: Structure and Process

The primary factor differentiating waiver risk mitigation approaches is the use of structural (firewall) vs. procedural (other safeguard) methods. Although states or waiver authorities may have designated specific risk mitigation approaches, these approaches are indicated at the waiver level. A single state may take different risk mitigation approaches in each of its waivers.

For the sake of this analysis, waivers were classified into one of five approach groups based on their indicated use of firewalls and safeguards. These waiver classifications (below) are based on the analyzed use of firewall and safeguards and are not endorsed by CMS as “approved approaches.” All waivers included in this analysis were approved by CMS.

Firewall Reliant waivers are those that indicated the use of two firewalls and one or less safeguard. These waivers rely primarily on the structural risk mitigation offered by bifurcation of conflicted service delivery arrangements. These waivers may not have as many opportunities for people served to have autonomy in their service planning and delivery. Most waivers, 98 of 282 (or 34.8% of analyzed waivers), were Firewall Reliant.

Firewall + Safeguard waivers take a similar approach to the Firewall Reliant waivers with the added benefit of two or more safeguards in addition to two firewalls. This approach to risk mitigation includes the structural mitigation offered by firewalls and the procedural mitigation offered by several safeguards. People served by these waivers have less risk of conflicted service planning and have several opportunities to direct their service planning and delivery. Over a quarter of analyzed waivers (26.2%), 74 out of 282 analyzed waivers, were Firewall + Safeguard Reliant. Of all analyzed waivers, Firewall and Firewall + Safeguard waivers made up the largest portion. Combined, waivers that used a structural approach (Firewall and Fire + Safeguard) comprised 61% of all analyzed waivers.

Safeguard Reliant waivers are those that rely on two or more safeguards to mitigate against risk. These waivers have no structural mitigation strategies. Safeguards in these waivers may or may not be implemented across every step of the planning process. People served in these waivers likely have several options to direct their service planning and delivery but may encounter conflicted service planning. Safeguard Reliant waivers made up 15% of all analyzed waivers.

Varied Use waivers were ones that did not have a strong slant towards a structural or procedural approach. These waivers used one firewall and one or more safeguard. Within these waivers, risk is mitigated at one point in the planning process (either service plan development OR monitoring). The safeguards used in these waivers may or may not mitigate against risk in the parts of the planning process without a firewall. People served by these waivers have risk mitigated at one point in service planning and have access to at least one safeguard. This approach is the least popular; only 7% of all analyzed waivers used this approach.

Limited Use waivers had the least mitigation against risk. They indicated either one firewall or one safeguard or neither. Waivers using this approach have no opportunity to overlap risk mitigation strategies to ensure thorough protection against conflict of interest. Waivers using this approach comprised 17% of all waivers.

In the chart below, each analyzed waiver is plotted based on its indication of firewalls and safeguards. Each dot in the plot below represents a waiver. The five waiver classifications are displayed in a different color.

  • Firewall Reliant: Light Pink
  • Firewall + Safeguard: Dark Pink
  • Varied Use: Yellow
  • Limited Use: Grey
  • Safeguard Use: Blue

Waiver Approaches by State

All analyzed waivers were classified into five approaches based on their use of firewalls and safeguards. This portion of the analysis looks at waiver approaches by state. For a variety of reasons including population need, provider adequacy, purpose of the waiver, and nature of service provision, a state may have a different or the same approach for each of its waivers.

All but six states have at least one waiver that utilizes the Firewall or Firewall + Safeguard approach. These approaches were the most widely used across all waivers and are found in nearly every state analyzed.

Of the states with applicable waivers, two thirds (32 out of 48 states and territories) included at least one waiver with a Firewall + Safeguard approach. Three states, Idaho, Iowa, and Utah had most or all of their waivers classified as this approach.

Waivers that were classified as Safeguard reliant were found in 20 states. However, only four states – Michigan, Minnesota, New Jersey, and Wisconsin – used this approach in half or more of their waivers.

Varied Use was found in 15 states and no state had more than half of their waivers classified as such.

Limited Use waivers were found in 24 states. Three states – Alaska, Delaware, and Virginia – take a Limited Use approach on all of their waivers.

Considerations for Implementation

As waiver authorities consider the renewal or application for new waivers, the must consider how, if at all, they should adjust their waiver to further mitigate against conflicts of interest. Key factors to consider when deciding on a conflict of interest mitigation approach include:

  • desires and wants of people served
  • gaps in risk mitigation (by population, location, provider type, service type, etc.)
  • capability and capacity of electronic health information exchanges
  • effectiveness of care coordination
  • availability of service providers

Structural Approaches

The choice of whether to use overt structural approaches (via a Firewall or Firewall + Safeguard approaches) to partition the provision of services to the person served is perhaps the key decision in developing a conflict-free strategy, due to their impact on the service system. The migration of a substantial portion of caseloads across provider organizations may have broader, unforeseen impacts such as:

  • forcing an unwanted participant choice between case-managers and other service providers, if operated by the same organization.
  • creating unintended barriers to a fully interoperable shared service plan, in instances where multiple EMRs would need to be used and an interoperable service plan had not yet been adopted and implemented across the state.
  • rebalancing among providers by using participant preference leading to instances where insufficient resources are available for providers of either case-management or other services which had been de-coupled from case-management.

Despite these and similar challenges, structural firewalls remain the clearest protection against conflict-of-interest. Of the 282 1915(c) Medicaid waivers reviewed, 198 (70.2%) included one or more structural firewalls, either as the primary method for reducing conflict-of-interest or in combination with other safeguards.

Of the 198 waivers which used structural approaches:

Waivers that used a firewall most often used a firewall between both service plan development and service plan implementation and monitoring (86.9% of waivers used a firewall for both functions). Most waivers had structural barriers between both components of case management and direct service delivery.

It is worth considering that such firewalls can be used in combination with other safeguards, an implicit acknowledgment that creating boundaries between providers is not sufficient to fully empower beneficiaries in decision-making.

Procedural Approaches

To ensure adequate access and quality assurance of procedural approaches, for both the sake of mitigating against risk and offering service delivery alternatives to people served, a thorough oversight process should be in place. In states, waivers, and/or regions that rely primarily on procedural approaches to mitigate against risk (such as Safeguard Reliant waivers), comprehensive risk mitigation requires:

  • defined safeguard approaches with clear models to assess fidelity
  • widespread availability of safeguards regardless of location
  • comprehensive safeguard coverage from beginning to end of service engagement
  • availability of workforce to provide safeguard services
  • measurement and monitoring of safeguard use by entities conducting oversight activities
  • quality oversight and process improvement efforts

With any single approach to risk management, there are additional opportunities for conflict if that single approach fails. The use of diversified mitigation approaches disperses the weight of risk. When safeguards are utilized primarily as the fulcrum of risk mitigation, their uses as alternative delivery models could be overshadowed. In systems with varied and diversified risk mitigation, safeguards can flourish as alternative and person-driven service delivery models.

Acknowledgements

TBD Solutions LLC conducted the analysis, writing, and publication of this study with the support of the Michigan Department of Health and Human Services (MDHHS), Behavioral Health and Developmental Disabilities Administration (BHDDA).

For inquiries about this report, please contact TBD Solutions at or 1-877-823-7348.

Appendix A: Methodology

This analysis seeks to ground its claims in submitted Medicaid waiver applications, and to do so in a way which is repeatable and verifiable through the use of reproducible research methods. This means that the analysis can be updated at future points in time, provided that the application documents do not change their fundamental structure, and that the results can be compared from one time to another. It also means that analyses of other questions related to Medicaid waivers are possible using the same underlying collection of structured texts.

Obtaining Waiver Metadata and Documents

This analysis relies on a database of Medicaid waivers and derived features. The waiver texts are scraped from the Medicaid.gov website using the R statistical programming language. We scrape waiver IDs and metadata from the webpage in order to search for those which are relevant to the key questions of this analysis. The scripts then pull all supporting files and documents for the relevant waivers of interest.

Features of 1915(c) Waiver Documents

In order to allow for subsetting and focus on specific sections and subsections, 1915(c) waiver documents were transformed to extract these features from the documents, using regular expressions for PDF documents and a mixture of regular expressions and CSS tags for HTML documents. Within specific sections, regular expressions were used to distinguish the text of the question from that of the answer in order to focus text analysis on the response given.

This resulted in a dataframe of all active C-waivers with explicit TRUE/FALSE identifiers for each of the characteristics identified in the documents. For the ‘firewall’ questions (i.e. Plan Development and Plan Monitoring firewalls) and the explicitly-endorsed questions about safeguards (i.e. Participant Direction, Financial Management Services, and Independent Advocacy), these indicators are derived from whether the waiver applicant filled in a particular response and provided clarification in the subsequent text field. For the other safeguards identified, these indicators are derived from a search for waiver documents which contain phrases with relevant sequences of words (e.g. “supports broker”, “independent facilitation”, etc.). In these instances, the TRUE/FALSE field indicates the presence of one or more references to the cluster of search terms related to a concept across the entirety of each waiver application.

Appendix B: Glossary

Case Management: A group of services that help an individual obtain needed medical, social, educational, and other services.9 The group of services includes assessments, development of a care plan, referral to services, and monitoring and follow-up activities. Direct services, such as those the individual utilizes case management services to access, are NOT included in case management services. In this analysis, case management refers to the activities of service plan development and plan implementation/monitoring.

Financial Management or Financial Management Services (FMS): A service available to individuals with self-direction arrangements that assists them in managing budgets. FMS includes billing/documentation support, payroll activities, budgeting assistance, and organization of purchases.10

Firewalls: Structural protections in place to prevent conflicted engagements between provider organizations. In structural protections, individuals or provider organizations are unable to conduct both service planning and provide direct waiver services. Firewalls are typically built into contractual program requirements between the payor and providers.

Independent Advocacy: A type of support available to individuals in self-directed arrangements that allows them to resolve complaints, appeal decisions, and file grievances.11 Independent advocacy services are available to other beneficiaries of other services, however independent advocacy in this analysis refers to that available to individuals in self-directed arrangements.

Independent Facilitation: A person who facilitates the Person-Centered Planning process who is not a service provider and is chosen by the individual served.

Options Counseling: A service provided to individuals to assist them in decision making about long-term supports and services.

Safeguards: Procedural practices within an organization that protect an individual from conflicted engagements. Safeguards are often combined with each other and can work in conjunction with firewalls. Both firewalls and safeguards provide protections to individuals served from the financial motives of service organizations and can be implemented in a variety of combinations to best meet the needs of- and provide protections to those served. Safeguards in this analysis include self-directed options, independent advocacy, financial management, supports broker, options counseling, and independent facilitation. Each of these safeguards is defined in below sections.

Self-Direction: A model of Medicaid delivery where an individual has decision-making authority to select and direct certain services with assistance.12 Examples of self-directed services include supports broker, financial management services, and independent advocacy.

Supports Broker: A professional who supports an individual in a self-direction arrangement and assists them to identify services they need, personnel requirements, and resources to meet requirements. A supports broker acts as a liaison between the individual and the program.13

  1. The Disability Rights movement, much like other Civil Rights movements of the 20th century, led to a series of court rulings and legal decisions protecting people with disabilities and mental illness, including the 1973 Rehabilitation Act, 1990 Americans with Disabilities Act, and the 1999 Supreme Court ruling of Olmstead v. L.C. that deemed unnecessary institutionalization of disabled people and those with mental illness was discriminatory.↩︎

  2. §441.301(c)(1) States, “Providers of HCBS for the individual, or those who have an interest in or are employed by a provider of HCBS for the individual must not provide case management or develop the person-centered service plan, except when the State demonstrates that the only willing and qualified organization to provide case management and/or develop person-centered service plans in a geographic area also provides HCBS.”↩︎

  3. This criteria requires that source documentation of the waiver application was available on the CMS site for review in an uncorrupted file.↩︎

  4. SPAs are included only if they were approved after the due date for transition plans ensuring compliance with the HCBS final rule.↩︎

  5. These key terms included references to behavioral health, mental illness, HCBS, LTSS, case-management, or integration.↩︎

  6. Cook, J. A., et al. (2019). Mental Health Self-Directed Care Financing: Efficacy in Improving Outcomes and Controlling Costs for Adults With Serious Mental Illness. Psychiatric Services (Washington, D.C.), 70(3), 191–201. https://doi.org/10.1176/appi.ps.201800337↩︎

  7. Grealish, A., et al. (2017). Does empowerment mediate the effects of psychological factors on mental health, well-being, and recovery in young people? Psychology and Psychotherapy, 90(3), 314–335. https://doi.org/10.1111/papt.12111↩︎

  8. As detailed in applicant responses to questions within Appendix D: Participant-Centered Planning and Service Delivery and Appendix E: Participant Direction of Services.↩︎

  9. Per the CMS Interim Final Rule that revises Medicaid regulations to incorporate changes made by section 6052 of the Deficit Reduction Act of 2005 found at, https://www.cms.gov/newsroom/fact-sheets/medicaid-definition-covered-case-management-services-clarified↩︎

  10. More information found at, https://www.medicaid.gov/medicaid/long-term-services-supports/self-directed-services/index.html↩︎

  11. More information found at, https://ncd.gov/policy/chapter-7-future-directions-self-directed-services↩︎

  12. More information found at, https://www.medicaid.gov/medicaid/long-term-services-supports/self-directed-services/index.html↩︎

  13. More information found at, https://www.medicaid.gov/medicaid/long-term-services-supports/self-directed-services/index.html↩︎