Crisis in PCS in NC, & How to Address It

From The Arc of North Carolina

Crisis in Personal Care Services in NC, and How to Address It

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Issue:

For thousands of North Carolina citizens with intellectual and developmental disabilities (I/DD), as well as people with mental illness, the Medicaid State plan service "Personal Care" (or PCS) has provided supplemental funding for housing supports in small licensed group homes.

Earlier this year, the General Assembly raised the level of disability needed to receive PCS. Now, individuals must require assistance with three activities of daily living [ADL’s]. This rule applies to both in-home and facility based services, to achieve legally required comparability. Unfortunately, most individuals living in licensed group homes will no longer qualify.

This change could reduce a group home’s budget by up to 30%, creating significant budget shortfalls- yet another hardship for an already struggling community-based option.

Not only does this reduction affect the provider’s ability to provide basic support services, in many cases it could lead to an inability to meet the group home’s debt obligations. Many of these homes were financed using US Dept. of Housing & Urban Development (HUD) funding streams, and a significant number are tied together through HUD approved refinancing methods. If vacancy rates rise due to lack of support services, well over 250 properties could be at risk of failing.

Recommendations:

For most people living in these types of homes, PCS was not their most needed service. Individuals living in these settings most often need support services to allow them to live successfully in communities. For people with I/DD, they are most likely support services that are habilitative and for people with mental illness they would be recovery based support services.

For both populations there are Medicaid options that, if designed correctly, could support people in these settings and other community based options that should not increase the state funds needed to provide these supports. Unfortunately, it is impossible to get these new service definitions designed and approved by the Center for Medicaid Services by December 31- the end date of the current PCS definition.

With this in mind, we would recommend the following course of action.

1. Extend the state funds available to people living in Adult Care Homes to licensed group homes. Thirty-nine million dollars is already set aside for adult care homes during this period of transition. This reserve should be extended to licensed group homes as well. People living in licensed group homes often have more significant disabilities than the individuals in adult care homes and deserve the same protection provided by the funds appropriated for adult care home residents.
2. For people with IDD- Immediately begin the work of creating a specific 1915i option for services[s] that would support individuals living in community settings- both licensed and non-licensed. The 1915i option is a near perfect fit for this type of service. Not only can it provide funding to offset the loss of PCS, it could be designed to offset the state services dollars that are used in group homes and provide another meaningful Medicaid service for people living in other community settings. The match money for these services could come from already appropriated community base state funds. Preliminary estimates by The Arc indicate that a carefully crafted 1915i option could support individuals in these homes and make a significant dent in the waiting list without any additional appropriations from the State.
3. For people with Mental Illness– It is possible that the same type of 1915i option services may make sense for people with Mental Illness. It may be more difficult to craft services definitions that assure cost neutrality, but this option should be explored immediately.

At the same time, the state should review the possibility of creating a recovery-based support service under Medicaid that could be used in non-licensed community settings as well as licensed settings. Since Mental Health services are recovery based, such a service could be created without the use of a 1915i. In both cases, 1915i or state plan service funds already used for community services for people with mental illness could be used for match.

These recommendations are straightforward solutions to what will become a significant crisis if we do not act. While there may be other options, we suggest the above actions because they have to potential to solve the problem short term and create a low cost solution for the long term that is consistent with best practice. If we are able to follow this path we not only stabilize the licensed community based options but create good options for individuals who choose to live in less restrictive settings.