History of Waivers
In 1981, then-president Ronald Reagan highlighted the case of a young girl named Katie Beckett. Katie was on a ventilator and remained in the hospital because Medicaid would pay for her care while in the hospital but she became ineligible for Medicaid if she went home. As Reagan stated,
Now, it would cost $1,000 a month for her particular ailment to send her home. Her parents have no way that they can afford that, and the regulations are such that Medicaid now cannot pay for that if she goes home. The alternative is Medicaid continues to pay $6,000 a month to keep her in a hospital, when the doctors say she would receive better treatment and be better off at home. But her parents can't afford to have her taken off Medicaid.
Recognizing that changing regulations would save the government money, Congress passed a provision in the 1982 TEFRA legislation that gave states the option of qualifying additional children for Medicaid if they met standard SSI criteria for disability. Around the same time, Congress passed Section 2176 of the Omnibus Budget Reconciliation Act (OBRA) of 1981 (PL 97-35), which permitted Home and Community Based Services (HCBS) waivers, also called 1915(c) waivers for the first time. This legislation allowed certain Medicaid rules to be waived, permitting states to offer Medicaid coverage targeted to individuals in certain parts of the state, of specific economic levels, or in specific types of groups, such as children who are medically fragile.
View Katie Beckett's story in her mom's own words:
The primary goal of both of these pieces of legislation was to remove people with disabilities from institutional care by providing less costly home care services in a community setting.
Since this time, additional legislation has further supported the right of individuals with disabilities to remain in community settings. The Americans with Disabilities Act, passed in 1990, specifies that individuals must receive services, "in the most integrated setting appropriate." The Supreme Court decision in Olmstead vs. L.C. (1999) clarified that people with disabilities should be placed in community settings when appropriate, if this can be accomplished with available resources. It also mandates that states provide community services to any individuals on waiting lists in a reasonably expeditious manner. Finally, as of October 1, 2011, a provision of the Affordable Care Act put into effect the Community First Choice Option, which provides increased support and funding for moving individuals out of institutions and into the community. This legislation is designed to fund the mandate of community care created by the Americans with Disabilities Act and clarified by the Olmstead decision.
Originally, TEFRA waivers, which are often called Katie Beckett waivers, were intended for children with extreme medical complexity and catastrophic medical costs, while HCBS waivers focused on individuals with cognitive impairment or developmental disabilities. Over time, approximately half of the states continued to use TEFRA or TEFRA-like waivers for children with medical complexity, while the other half developed new HCBS waivers targeting this population. TEFRA waivers, when implemented by the states, are required to serve all children who meet medical eligibility criteria, and only extend regular Medicaid services to this population. HCBS waivers, on the other hand, are not entitlements and can restrict the number of children served, but they may also provide additional services not covered by Medicaid, such as home modification and respite. Currently, almost all states have some type of program for this population, with about 40% of states offering Medicaid through TEFRA, about 60% offering HCBS waivers, and a few offering TEFRA-like or other unique programs.
About Illinois' Waiver
In Illinois, the Division of Specialized Care for Children (DSCC) began its home care program in 1979, when the first Illinois child on a ventilator was discharged into the home setting. By 1983, eleven children on ventilators received care through a three year grant from the Division of Maternal and Child Health. This increased to 73 children by 1986, served through a Title XIX waiver administered by DSCC on behalf of the Department of Public Aid and the University of Illinois. In 1994, Illinois continued its program through a 1915(c) waiver serving children who are both medically fragile and technology dependent.
The Medically Fragile and Technology Dependent Waiver (MFTD Waiver) is a home and community based services waiver, also called a 1915(c) waiver. It is a Medicaid program that the federal government had granted to the state of Illinois to prevent costly institutionalization and permanent hospitalization of children with catastrophic medical conditions and expenses. It is called a "waiver" because it waives standard Medicaid rules by evaluating only the child's income when calculating eligibility. Under normal rules, children are eligible for Medicaid while living in an institution/hospital, but not once they return home unless their family qualifies financially for Medicaid.
Most children on this waiver are ventilator-dependent, have tracheostomies, or have central IV lines, and require extensive care and services. Without this waiver, 95% of these children would require permanent hospitalization to receive their care. The remaining 5% could be cared for in a skilled nursing facility. Children who have private insurance only receive supplemental Medicaid coverage to cover expenses their private insurance does not pay for, while uninsured children can receive full coverage.
Children throughout the state are eligible for the waiver as long as they are under 21, meet medical eligibility, require ongoing home nursing, can safely be cared for at home, and the cost of care is less than it would be in a hospital or skilled nursing facility. The average cost for hospitalization in a pediatric hospital is $55,000 per month, while the average cost for children on the waiver cared for at home is $15,684 per month. In other words, it is three times cheaper to care for these children at home than in hospitals and institutions.
Currently, the capacity of the waiver is 700 children, with 666 of these spots designated for children who require a hospital level of care. As of May 1, 2011, there were 498 active children on the waiver. The average cost per child in fiscal year 2010 was $188,210 per year.
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