Consumer-Directed Personal Care Programs:

Department of Veterans Affairs and Medicaid Experience

HEHS-98-50R: Published: Jan 16, 1998. Publicly Released: Jan 16, 1998.

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Pursuant to a congressional request, GAO reviewed the Department of Veterans Affairs' (VA) Aid and Attendance (A&A) program as well as selected state Medicaid programs that permit consumers to hire their own personal care attendants, focusing on whether: (1) the government might be paying twice for persons in nursing homes who also received A&A benefits; (2) there are any existing public programs that could serve as a model for Medicaid; and (3) there is sufficient knowledge about consumer-directed personal care to recommend one of these programs as a model.

GAO noted that: (1) while such programs exist, the information currently available is not sufficient to determine whether any of the existing consumer-directed personal assistance programs that allow consumers to pay or participate in paying attendants could serve as a model for Medicaid; (2) in terms of the programs in place, they tend to differ both in their mechanisms for paying attendants and in whether they monitor the use of the payments; (3) VA does not monitor the use of A&A allowance, taking the position that has no authority to tell veterans how to use the benefit; (4) state programs want to ensure that the employer taxes are paid for personal care attendants, and this can present difficulties for the consumer/employer, who must satisfy all Internal Revenue Service reporting requirements, and for the state, which generally prefers not to be the employer of record; (5) in most cases, the state or a fiscal intermediary makes payments and handles the taxes; and (6) although there has been no rigorous evaluation of any of these programs to date, the four-state Cash and Counseling Demonstration, sponsored by the Robert Wood Johnson Foundation and the Department of Health and Human Services, will produce important information on its cost-effectiveness--but not until 2001.

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