Martin Kitchener, Ph.D
Terence Ng
Micky Willmott
Charlene Harrington, Ph.D

July 2006

Center for Personal Assistance Services
Department of Social & Behavioral Sciences
3333 California Street, Suite 455
University of California, San Francisco
Telephone: 415-476-3964

This project was funded by National Institutes on Disability and Rehabilitation Research (NIDDR) Grant No. H133B031102. Government sponsorship of this research does not constitute endorsement of the results or the conclusions presented here.


The State of Arkansas is participating in a broader CMS-funded 7-state collaborative study of its effort to rebalance long-term care and support programs, which is being conducted through a master contract with the CAN Corporation (Contract Number - RTPP CMS-04-0411). Rosalie A. Kane from the Division of Health Services Research, School of Public Health, University of Minnesota is the Principal Investigator; Charlene Harrington and Martin Kitchener from the University of California, San Francisco, are participating on the multi-organization study team. The Year 1 reports from this 3-year study are expected to be available from the investigators and CMS in the fall of 2005 and will provide fuller information and context for the material presented here. The authors acknowledge colleagues from the CMS project team who are working on the Arkansas report: Rosalie Kane, Dann Milne, Robert Kane, Reinhard Priester, and Donna Spencer.

Table of Contents

List of Tables


Although the majority of long-term care (LTC) in the United States is provided informally (unpaid, usually by family and friends), policy-makers face mounting pressure to expand access to formal (paid) home and community-based services (HCBS). The main aim is to allow consumers to live as independently as possible rather than in institutions such as nursing homes. The pressure on states to broaden access to HCBS increased in 1999 when the Supreme Court ruled in the Olmstead case that unjustified institutionalization of persons on public programs constitutes discrimination in violation of the 1990 Americans with Disabilities Act (ADA). Subsequent consumer litigation against certain states has provided further impetus for change (Kitchener et al., 2005). HCBS programs have become increasingly popular over institutional care as a model for providing LTC. Despite these mounting pressures for HCBS, studies report that the development of HCBS funded by Medicaid (the largest single payer of LTC) remains uneven across the states and limited by factors including policies that commit 64.5 percent of the program's LTC expenditures to institutions (Burwell et al., 2005).

Previous studies of HCBS development have given limited attention to personal care services which involve non-medical assistance with activities of daily living (ADLs), such as bathing and eating, and instrumental ADLs (IADLs), such as shopping and preparing meals (LeBlanc et al., 2001). In the US, formal personal care is paid by a combination of private sources (out of pocket expenses and the limited indemnity insurance markets) and governmental programs. While Medicaid is the main program for providing personal care, it is also funded through a variety of other federal and state programs including: Older Americans Act (OAA) Title III, the U.S. Department of Veterans Affairs' Housebound and Aid and Attendance Allowance Program, the Medicare home health benefit, and Title XX Social Security Block Grants.

Many elderly and disabled persons rely on formal personal care services (PCS) to remain independent, especially Medicaid programs delivering community-based personal care (Stone, 2001). Although states have had the option of providing PCS as a Medicaid state plan benefit since 1975, 22 states reported no commitment of funds to the benefit in 1995 (Winterbottom et al., 1995). Since then, the PCS benefit has become the major funding mechanism for personal care used by the elderly and by younger, physically disabled persons living in the community (LeBlanc et al., 2001). While the Medicaid program allows states considerable discretion in defining PCS, care must be approved by an authority recognized by the state (e.g., a physician) and cannot solely involve ancillary tasks (e.g., housekeeping or chores). The PCS benefit must be made available to all categorically eligible groups statewide although it may (at the discretion of states) include the medically needy (those who spend down to the state standard because of medical expenses).

By 2002, 30 states operated Medicaid PCS programs with 683,099 participants and total expenditures of $5.6 billion (Kitchener et al., 2005b). Nationally, the PCS program represented 63% of public personal care expenditures. Studies of PCS programs indicate wide variation in policies including: hours provided per day, services provided outside the participant's residence, and hiring independent providers not employed by licensed agencies (Mollica, 2001; Kitchener, et al., 2005b). An increasing number of state PCS programs aim to expand consumer-directed services that give clients greater control over funds (e.g., cash allowances) and the management of care attendants. The most common approaches involve either traditional home care or personal attendant agencies or by the use of independent providers (Summer and Ihara, 2004). A study of California's PCS program indicated that allowing participants to hire relatives, friends, and neighbors may increase client satisfaction and help address the limited supply of attendants (Benjamin, 2001).

To address the information gap about state PCS programs, this study selected states that had promising practices in their Medicaid PCS optional state plan program for more in-depth study. Arkansas (AR) was selected as one of these states because it was a well-established program with a reputation for an innovative provider training and supervision program, and was one of three original Robert Wood Johnson Foundation/Health and Human Services Personal Care Cash and Counseling states.

This report contains three main sections. The first presents an overview of the AR state socio-demographic characteristics, economic and political factors, and budget. The second part reviews the AR Medicaid program and the administration and management of its HCBS programs. Specifically, it reviews the state personal care programs including the personal care in waivers, the Older Americans Act, and other programs. The third section describes the main features of the Arkansas Medicaid PCS optional state plan program concentrating on the organization and management of the benefit.


The purpose of this in-depth study was to describe selected Medicaid State Plan PCS programs and to understand the factors that facilitated or created barriers to the development of better PCS practices. From a systematic review of the research literature, a list of better practices concerning the following three aspects of PCS programs was compiled: planning, structure/content, and review/monitoring. Better practices within each category involve issues concerning consumer perspectives.

Evidence of better practices among PCS programs was collected from two sources: (1) the PAS Center advisory panel; and (2) the researchers' annual survey of all PCS programs. The final selection of case sites involved three further criteria: (1) each program must have been operational for at least one year, (2) there must have been some quantitative or qualitative program data even if this information was not collected as part of an organized evaluative design, and (3) the set of programs was designed to include variation along dimensions including: state size, region, per capita income, population density, and various other attributes.

The information on this and the other cases was obtained from multiple sources including: secondary data, face-to-face and telephone interviews with state officials and various consumer and professional organization representatives conducted in the state in the summer of 2005. In addition, statistical data on the PCS programs were collected for l999-2005.

Arkansas State Characteristics

As background to the AR Medicaid State Plan PCS Program case study, this section presents information on four sets of state characteristics shown to be important within the research literature: (1) socio-demographics, (2) economics, (3) politics, and (4) the state Medicaid program.

1. Socio-Demographic, Economic, and Political Characteristics

In 2004, the state of Arkansas (AR) had a population of approximately 2.8 million people, one of 22 states which have a population fewer than 3 million (US Census Bureau, Population Division 2004). The majority of Arkansans report their race as white (81 percent, 2,102,167 people) and African Americans comprised the largest minority population (16 percent, 409,625 people) (US Census Bureau, American Community Survey 2004). In 2003, an estimated 525,000 (21.3 percent) Arkansans over the age of 5 had a disability. Of these people, an estimated 101,000 had difficulty performing self-care activities such as bathing, dressing, or eating. Twenty five percent of people with self-care difficulties lived alone which was slightly more than the national average of 24 percent (PAS Center website).

Table 1: Socio-Demographic (Need) Characteristics, AR and US, 2002
 Total Population (2004)1 2,752,629 293,655,404
 Percent of Persons Age 65+ (2003)2 13.55% 12.1%
 Percent of Persons Age 85+ (2003)2 1.60% 1.25%
 Percent of Population Minority (2003)2 19.39% 23.84%
 Percent of Persons with Disabilities (2003)3 21.3% 14.8%
 Percent of Persons with Difficulty in Self-Care (2003)3 4.1 2.7%
 Percent of Persons with Difficulty in Self-Care Living Alone (2002)3 24.5% 23.5%
 Number of informal caregivers (percentage of total population, 2004)4 300,000 (11.1%) 27,200,000 (9.26%)
 Number of informal caregiving hours (2004)4 279,000 (10.51%) 29,182,000,000
 Annual market value of informal caregiving (2004)4 $2,457,800,000 $257,096,000,000

Sources: (1) U.S. Census Bureau Population Division (2004), (2) U.S. Census Bureau, American Community Survey (2004c,d), (3) National Center for Personal Assistance Services, State Disability Statistics, (4) Friss Feinberg et al (2004)

Economic and Political Characteristics

In 2003, Arkansas was one of the poorest states in the nation, ranking 48th in terms of per capita income ($34,246, Smith 2004) and 10th for the number of people living below the poverty level (16 percent) (US Census Bureau, American Community Survey, 2004). The state unemployment rate was close to the national average in November 2004 (US Dept of Labor, Bureau of Labor Statistics, 2004). The percentage of Arkansans residing in an urban area was far less than the national average (52.52 percent vs. 79.01 percent) and a greater percentage of Arkansans are not covered by health insurance than the national average (16.6 percent vs. 15.1 percent) (DeNavas et al 2004).

Table 2: Economic and Political Characteristics, AR and US
Economic Characteristics AR US
State Munificence (State revenue-expenditure, 2003)* ($279,806)
Percent of Population in Urban Area (2000)2 52.52% 79.01%
Percent of Population in Poverty (2003)3 16% 12.7%
Personal Income Per Capita (2003)4 $34,246 $30,906
Percent of Population Unemployed (2004)5 5.2% 5.4%
Percent Persons Not Covered by Health Insurance (2003)6 16.6% 15.1%
Percent households with internet access7 36.9% 50.1%
Percent homeownership rate (2004)8 69.1% 69%
Percent of population age 25+ with High School Graduates or higher (2003)8 79.7% 83.6%
Percent of Bachelor level education or higher (age 25+) (2003)8 19% 26.5%
Political Climate
ADA US Senator liberalism rating (mean average)9 90% (2004)

Sources: (1) U.S. Census Bureau (2005), (2) US Census Bureau (2004) (3) U.S. Census Bureau American Community Survey, (2004a), (4) US Bureau of Economic Analysis (2005), (5) US Dept of Labor (2005), (6) DeNavas et al (2004), (7) Friss Feinberg et al (2004), (8) U.S. Census Bureau (2004, 2004b) (9) Americans for Democratic Action (2005).

The Governor of Arkansas in 2005 was Republican Mike Huckabee who was elected as lieutenant governor but assumed the role of governor in 1996 after the resignation of Governor Jim Guy Tucker. He was elected to a four-year term in 1998 and again in 2002. In 2005, the Arkansas House of Representatives comprised of 72 Democrats and 28 Republicans and the State Senate comprised of 27 Democrats and 8 Republicans. In 2005, both Senators from Arkansas were Democrats (Mark Pryor and Blanche Lincoln, Arkansas's second ever woman Senator). Lincoln was first elected in 1998 and is serving her 2nd full term, while Pryor, elected in 2002, is serving his first. Both Senators scored high on the Americans for Democratic Action (ADA) liberalism rating in 2004: Lincoln with 95 percent and Pryor with 85 percent. Arkansas has 4 U.S. Representatives, 3 Democrats and 1 Republican. The Democrats had ADA scores ranging from 60 to 95 percent, while the Republican's ADA score was 10 percent.

State Medicaid Program

In 2002, the Arkansas Medicaid program provided services to over 579,000 participants with expenditures exceeding $2.6 billion, ranking 22nd in the nation for expenditures in 2004 (Burwell, 2005). Per capita expenditure was less than the national average and there was a higher than national average number of participants per 1,000 population (213.95 vs. 172.79). The federal government matched the Arkansas state Medicaid expenditures for both mandated and optional services at the rate of 77.62 percent in 2004.

Table 3: Medicaid, AR and US
Participants (2003)1 702,064 51,971,173
Participant per 1,000 population 257.53 178.72
Expenditures (2004)2 $2,606,881,320 $282,262,742,600
Expenditures per capita (2004)2 $947.05 $961.20
Federal match (2004)1 77.62%
Managed care?1 Yes
Financial Eligibility (% SSI)1 300%
209b Rules3 No(SSA)
State Supplemental Payment (SSP)3 No (SSA)

Sources: (1) Centers for Medicare and Medicaid Services (2005a), (2) Burwell, Sredl, and Eiken, 2005, (3) Kaiser Family Foundation, State Health Facts (2005a), (4)Kaiser Family Foundation, State Health Facts (2005b) (5) Social Security Administration (2005b)

As of 2003, Arkansas operated two Medicaid managed care programs operating under 1915(b) authority: (1) Non-Emergency Transportation, and (2) Primary Care Physicians. Individuals eligible for Supplemental Security Income (SSI) and who are aged, blind and disabled are automatically qualified for Medicaid services as categorically eligible individuals. The federal SSI standard for an individual was $579 per month in 2005. States can opt to supplement this income with 'state supplemental payments' (SSP), but as of 2003, Arkansas was not one of the 31 states who participated in this program. However, under the ARSeniors program, individuals aged 65+ may qualify for Medicaid personal care if their income is $653.34.

Arkansas is one of 36 states which have 'medically needy' criteria for the aged, blind, and disabled. However, the financial criteria are set at 15% FPL for individuals ($108), one of the least generous in the country (Crowley 2003). Therefore, whilst Arkansas allowed for the maximum level (300 percent) of SSI for its special income standards for institutional and HCBS waivers for the categorically needy (NASMD 2003), the restrictive nature of the medically needy criteria for the aged, blind, or disabled makes the Medicaid rules less generous than some other states.

Long Term Care in Arkansas

As background to this study of the Arkansas Medicaid State Plan PCS Program, this section presents information on five aspects of the publicly funded LTC system in Arkansas: (1) organizational structure, (2) Medicaid LTC participants and expenditures by provision type, (3) personal care delivered through Medicaid waivers, (4) other programs delivering personal care, and (5) strategic planning.

Organizational Structure

The Arkansas Department of Health and Human Services (ADHHS) is the single State agency authorized to contract for Medicaid services. Within ADHHS, the Division of Medical Services administers the Medicaid program. Within the Division, the Office of Long-Term care is responsible for nursing home policy and procedures (ADHHS 2005)

Medicaid LTC Participants and Expenditures

As shown in Table 4, Arkansas' Medicaid LTC participants were more likely to use nursing facilities and ICF/MRs when compared with the national average in 2002. Medicaid beneficiaries in Arkansas were more likely to use a combination of home health services, personal care or waiver programs than participants nationally. Of the total number of Medicaid LTC participants in Arkansas, 38.86 percent were served in institutions (nursing facilities and ICF/MRs) and 61.14 percent were HCBS recipients. However, total state spending on Medicaid institutional care made up more than three quarter of the state's Medicaid spending in 2002.

Nursing facility residents received 72.23 percent of all state Medicaid expenditures, even though they constituted only 35.65 percent of Medicaid participants. Whilst Arkansas Medicaid LTC expenditures per capita were lower than the national average, total Medicaid expenditures per capita were higher than the national average (see table 3). The percentage of Arkansas Medicaid LTC dollars spent on HCBS (23.56 percent) was well below that spent nationally (30.6 percent). Arkansas's total Medicaid HCBS expenditures per participant were 43 percent of the national average and the state's HCBS waiver expenditures per participant were only 47 percent of the national average.

Table 4: Arkansas Medicaid LTC Participants and Expenditures
Participants (per 1,000 population)
Nursing facility (2002)1 20,068 (7.41) 1,346,686 (4. 68)
ICF/MR (2002)1 1,808 (0.67) 117,497 (0.41)
Total Institutional (2002) 21,876 (8.08) 1,464,183 (5.09)
Home Health (2002)2 7,189 (2.66) 722,257 (2.51)
PCS (2002)3 15,870 (5.86) 683,099 (2.37)
Waivers (2002)4 11,361 (4.20) 920,833 (3.20)
Total HCBS (2002) 34,420 (12.71) 2,326,189 (8.08)
Total Medicaid LTC participants (2002) 56,296 (20.79) 3,790,372 (13.16)
Expenditures $ (per capita)
Nursing facility (2004)5 $540,193,697($196.25) $45,835,646,786 ($156.09)
ICF/MR (2004)5 $71,321,403 ($25.91) $11,761,206,072 ($40.05)
Total Institutional (2004) $611,515,100 ($222.16) $57,596,852,858 ($196.14)
Home Health (2004)5 $37,063,038 ($13.46) $3,445,549,127 ($11.73)
PCS (2004)5 $60,287,053 ($21.90) $7,028,041,064 ($23.93)
Waivers (2004)5 $69,942,372 ($25.41) $21,244,610,417 ($72.35)
Total HCBS (2004) $167,292,463 ($60.78) $31,718,200,608 ($108.01)
Total Medicaid LTC (2004) $778,807,563 ($282.93) $89,315,053,466 ($304.15)

Source: (1) CMS (2005b) (2) UCSF Annual Survey Home Health (2004), (3) UCSF Annual Survey PCS (2004), (4) UCSF Annual Survey 372 reports (2004), (5) Burwell et al (2005)

Medicaid HCBS Waivers

In 2005, Arkansas operated six Medicaid 1915(c) waivers that provided a range of population groups with HCBS. The largest waiver is the Elder Choices program which served over 7,400 elderly persons in 2003 (see Table 5). The MR/DD waiver program served a little over 2,500 persons in 2003. The Adult with Physical Disabilities (APD) waiver is the only Arkansas waiver that offers personal care to its more than 1,000 elderly and disabled persons in 2003. The three newest (2003) and smallest waivers are the (1) Respite for Physically Disabled Children waiver, (2) Respite for MR/DD Children waiver and (3) Assisted Living waiver. The two respite waivers only provide respite care while the Assisted Living waiver provides supervision and limited nursing services.

Table 5: Arkansas Medicaid 1915(c) waivers
Waiver name (identifier) Population served Participants (2003) Expenditure (2003) Services provided include: Personal care
MR/DD (0188) MR/DD 2,520
2,644 (2004)
Adaptive equipment, environmental modifications, integrated support services, specialized medical support and case management No
DAAS Elder Choices (0195) Elderly (65+) 7,420 $32,925,129 Adult day care, adult foster care, chore and homemaker services, home delivered meals, emergency response and respite care No
Adults with Physical Disabilities (APD) (0312) Adults (21 to 64 years) with a disability 1,180 $13,868,300 Attendant care, environmental modifications Yes
Respite for Physically Disabled Children (0364) Children with physical disabilities 2 $253 Respite No
Respite for MR/DD Children (0365) Children with MR/DD 57 $32,781 Respite No
Assisted Living (0400) Elderly (65+), adults (21+) with a disability 56 $408,084 24-hour supervision and limited nursing services No

Source: National Center for Personal Assistance Services (2005) and UCSF survey of 372 reports (2002).

By the end of 2002, the MR/DD waiver reported a total of 1,997 persons on its waiting list waiting an average of two years to get waiver services. In 2003, the number of persons on the MR/DD waiver wait list increased to 2,678 and the two respite waivers for children reported a total of 75 persons on their wait lists. However, by 2004, none of the waivers reported wait lists.

Medicaid Personal Care in Waivers

After the State Plan PCS program, the second largest Medicaid program delivering personal care is 1915(c) HCBS waivers. In Arkansas, the number of participants receiving personal care through HCBS waivers increased by 28 percent between 2002 and 2003 and by 310 percent between 1999 and 2002. Between 1999 and 2003, there was a 235 percent increase in inflation-adjusted expenditures with a 18 percent annual increase in 2002 alone. Despite such increases, expenditures per participant remained stable and declined between 2002 and 2003.

Table 6: Arkansas Medicaid Personal Care in Waivers Summary Data, 1999-2003
1999 2000 2001 2002 2003
 Raw 296 480 714 923 1,182
 Per 1,000 population 0.11 0.18 0.27 0.34 0.43
Expenditures ($)
 Raw 3,601,106 5,997,403 8,418,729 11,042,357 13,313,959
 Per capita 1.36 2.24 3.13 4.08 4.88
 Per participant 12,166 12,495 11,791 11,964 11,264
 CPI-adjusted (2003) 3,976,347 6,406,982 8,744,830 11,291,562 13,313,959

Source: Kitchener, Ng and Harrington, (2005).

Arkansas Personal Care Through the Older Americans Act Title III

The federal Older Americans Act (OAA) is authorized until FY 2005. Title III enables states to provide services to support older people (60+) to stay independent in the community, including through providing personal care services. The number of people receiving personal care through Title III OAA funds in Arkansas increased by 156 percent between 1999 and 2000. With no federal data are reported for Arkansas in 2001, participants in 2002 declined by 43 percent compared with 2000. The trend in inflation-adjusted expenditures trend was similar, with a 6 percent decline in 2002 when compared to 2000. However, expenditure per participant increased every year with a 128 percent increase between 1999 and 2002.

Table 7: AR Personal Care in Older Americans Act Title III Summary Data 1999-2002
1999 2000 2001 2002
 Raw 822 2,108 0 1,196
 Per 1,000 population 0.31 0.79 0 0.44
Expenditures ($)
 Raw 274,950 921,050 0 908,382
 Per capita 0.10 0.34 0 0.34
 Per participant 334 437 0 760
 CPI-adjusted (2002) 296,900 962,235 0 908,382

Source: Kitchener, Willmott, & Harrington (2004b)

Other sources of Personal Care Funding in Arkansas

In 2002, there were two state-only funded LTC programs in Arkansas which provide personal care (amongst other services). Both serve individuals over 60 years old who do not meet the financial and functional eligibility requirements of Medicaid as well as individuals waiting placement on the Medicaid HCBS program. The income limit for these programs was $1,090 per month (200% FPL, in 2002), neither program has asset limits or cost caps but service limits are applied.

Table 8: Alternative Sources of AR Personal Care Funding
State-only funded programs Total Systems Change Grant($thousands) R&D waiver programs
Title of Program Expenditure (year) 2001* 2002 2003 2004 2005 Independent Choices program
State Aging Services $4,686,551 FY02 Appropriation 1,975 958 75 2,193 2,857
Cigarette Tax $3,000,000 FY02 Appropriation

Source: Kitchener, Willmott & Harrington (2004a,c,e).
*A Nursing Facility Transition Grant, Independent Living Partnership grant of $308,000 was awarded to a Community Living Center in Arkansas in 2001.

Arkansas was one of the original 3 states which conducted 'Cash and Counseling' research and demonstration programs to provide consumer-directed HCBS. 'Independent Choices' began in 1998 and operates under a 1115 waiver, providing up to 3,500 aged and physically disabled adults with PAS. The monthly allowances are approximately equal to the cost of the Medicaid personal care services the people would have otherwise received - approximately $398.00/month. Philips and Schneider (2002) report four major revisions: (1) cashing out the ElderChoices waiver (as well as the Medicaid state plan services); (2) less emphasis on outreach; (3) greater attention to training consumers to be employers, and (4) revising the payment structure for counseling/fiscal agencies to provide a one-time payment for developing the cash management plan, followed by a fixed monthly payment per cash recipient.

In addition, Arkansas received one of the largest total amounts of funding through the federal CMS 'Real Choice Systems Change' grant scheme (over $8 million between 2001 and 2005). These grants include awards of $900,000 for Community-Integrated PAS (2001), $598,000 for Nursing Facility Transition (2002) and $500,000 for Quality in HCBS (2004) (Kitchener et al 2004e) and a 'Systems Transformation' grant of over $2 million in 2005. Arkansas also received and Aging and Disability Resource Center grant in 2004 to develop a 'Community Choice Resource Center' to create a single entry point for long-term care and information for older adults (aged 60 and over), extending to physically disabled adults over time (ADRC 2005).

Strategic Planning Activity

The federal Supreme Court Olmstead ruling suggested that states demonstrate compliance with the ADA integration mandate by producing formal plans for increasing community integration. Governor Mike Huckabee authorized the AR Department of Human Services to appoint a task force in June 2001 after a year of work by an Olmstead Working Group. The 23-member task force, consisting of consumers, advocates, providers, and agency officials, held more than a dozen full meetings and numerous subcommittee meetings between July 2001 and May 2002, releasing a comprehensive draft plan for long-term care reforms in October 2002. In their study of Olmstead activity, the NCD noted that: "the Arkansas group has consistently emphasized public awareness of Olmstead, and the recommendations … reflect that" (Gran et al., 2003).

Following revisions, the final report is 86 pages long and includes 115 recommendations and contains a series of Action Steps from 2003 through October 2005 (Arkansas 2003). The recommendations generally cover four needs; (1) additional resources, (2) community capacity, (3) new approaches to service provision, and (4) better information for consumers. Some of the recommendations called for significant new resources. For example, $11.6 million for FY 2003-2005 to strengthen the mental health system and $6.4 million in the same period to reduce the waiting list for Medicaid waiver services for people with developmental disabilities, amounts requested in the governor's budget plan for FY 2004 and approved by the legislature.

State officials say that the legislature was able to generate about $100 million in new funds for the Department of Human Services because of increased tobacco taxes, but most of the funds will be needed to support the growth in caseload that the department has been experiencing. The fiscal "slide has slowed progress," one official said. However, even without substantial new funding, the report notes that Arkansas has received a number of grants in recent years "... to support systems-change efforts, including improving consumer information, establishing consumer-directed programs and assisting individuals moving institutions to the community."

Litigation Related to Olmstead

As of May 2004, an estimated 627 Olmstead-related complaints have been filed nationally against state agencies claiming people have not received services in the most integrated setting (Kaiser Family Foundation 2004). There have been 62 lawsuits filed relating to HCBS and/or community integration since 2000 and in at least 20 such cases, states have made settlement agreements involving the development of detailed plans to extend HCBS. In Arkansas there have been 3 cases relating to Medicaid which have been brought and/or decided since 1999 (the date of the Supreme Court Olmstead ruling). One of these cases, which is now settled (Tessa G v. AR Dept of Human Services), concerned the management of the HCBS waiver waiting list.


Program History and Structure

Arkansas' state plan PCS was implemented in 1985 and is administered in the State Division of Medical Services. The purpose of the program is to "supplement, not supplant, other resources available to the client" by providing "medically necessary services authorized by an attending physician and individually designed to assist clients with their physical dependency needs" (ADHHS 2005: II-10).

Arkansas PCS Program, Participants and Expenditures

After the Arkansas PCS program served 18,358 participants in 1999, there has been a steady decline in participants and inflation-adjusted expenditures with a 16 percent decline in participation and a 29 percent decline in CPI-adjusted spending between 1999 and 2003. However, expenditures per participant rose 5 percent annually in 2001 before declining almost two percent by 2003.

Table 9: Arkansas Medicaid State Plan PCO Program, 1999-2003
1999 2000 2001 2002 2003
 Raw 18,358 17,716 16,823 15,870 15,475
 Per 1,000 population 6.92 6.61 6.25 5.86 5.68
 Expenditures ($)
 Raw 60,787,103 57,862,615 57,417,047 53,367,081 51,819,753
 Per capita 22.92 21.60 21.33 19.71 19.01
 Per participant 3,311 3,266 3,413 3,363 3,349
 CPI-adjusted (2003) 72,479,638 64,578,258 60,584,049 54,571,474 51,819,753

Source: Kitchener, Ng and Harrington (2005).

Types of Clients

The Arkansas state plan personal care program provides services to all categorically eligible Medicaid beneficiaries including children, the elderly, persons with mental health or MR/DD and the physically disabled. All PCS for Medicaid-eligible individuals under the age of 21 require prior authorization from the Arkansas Foundation for Medical Care (AFMC) Inc (ADHHS 2005: II-42). AFMC reviews the PCS provider's submitted documentation (Form DMS-618) and authorizes a set amount of service time per month. As shown in Table 10, the populations did not change between 2002 and 2004.

Table 10: Arkansas Medicaid State Plan PCS Clients Groups Served, 2002-2004
2002 2003 2004
Children Y Y Y
Elderly Y Y Y
Mental Health Y Y Y
Physically disabled Y Y Y
Other Categorically needy persons of all ages Categorically needy persons of all ages Categorically needy persons of all ages

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Types of Providers

While numerous agencies, organizations and other entities may qualify for enrollment in the Arkansas Medicaid program each must be registered with the state (administered through the state Medicaid Enrolled Provider Unit). Between 2002 and 2004, in addition to Medicare licensed home health and personal care agencies, the Arkansas PCS program enrolled entities including, residential care facilities, Area Agencies on Aging (AAA), public schools & developmental day services treatment clinics. Each provider must be licensed, certified or both, as required by law. PCS cannot be provided by a member of the client's family defined by the state as: a spouse, a minor's parent or guardian, or an adult's guardian (ADHHS 2005: II-38).

Participation requirements vary among the different types of providers. For example, while the Arkansas Division of Health Facility Services must license a 'Class A' home health agency before it may apply to enroll as a PCS provider, private care agencies must hold current licensure from the Arkansas Department of Labor (ADHHS 2005: II-4).

Table 11: AR Medicaid State Plan PCS Enrolled Provider Entities, 2002-2004
2002 2003 2004
Medicare certified home health agencies Y Y Y
Licensed home health & personal care agencies Y Y Y
Centers for independent living N N N
Independent providers (no agency affiliation) with fiscal intermediary N N N
Independent providers (no agency affiliation) without fiscal intermediary N N N
Persons legally responsible for client (using state only money) N N N
Other family members & friends, not legally responsible for client Y Y Y
Facilities such as foster care/residential/assisted living etc Y Y Y

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Functional Assessment Procedures

In Arkansas, registered nurses (RNs) and physicians are authorized to determine the level of care required and assess the amount of services a client needs. Authorizations for such assessments are provided by physicians after medical assistance is determined to be required for 1 or more of the client's physical dependency needs. The physician and client must have a face-to-face visit before the authorization of services (unless the physician has seen the client within the past 60 days). A physician's order for a provider RN to assess a client for personal care is a recommendation to evaluate the client's dependency needs (ADHHS 2005: II-19)

An individualized personal care service plan signed (original only) and dated by the participant's physician constitutes the physician's personal care authorization. The plan must specify: the start date for services to begin, the duration of services, and the expected results. In addition, the pan must clearly specify which of the client's dependency needs are met by each task provided. The service plan terminates six months when the physician is responsible for reviewing the service plan to ensure the client's needs are addressed by the services provided. There is no state system to track unmet personal care need.

Table 12: Arkansas Medicaid PCS Need Assessment & Authorization, 2002-2004
2002 2003 2004
Non-physicians assess client's needs for State Plan PC e.g., nurses Y (RNs) Y (RNs) Y (RNs)
Need assessment based on a scoring system such as ADLs Y (1 or more physical dependencies needed) Y (1 or more physical dependencies needed) Y (1 or more physical dependencies needed)
After assessment, non-physicians authorize State Plan PC N N N
Specific criteria used for the authorization decision Y (Med assistance with 1 or more physical dependency needs) Y (Med assistance with 1 or more physical dependency needs) Y (Med assistance with 1 or more physical dependency needs)
State tracks unmet needs, that is, services (e.g., respite) or extra hours of care that are needed by clients but not currently available N N N

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Financial Eligibility

All categorically eligible Medicaid beneficiaries in Arkansas are eligible for the state plan personal care program. While the state operates a Medically Needy category for some Medicaid programs, this does not include long-term care services such as ICF/MR and state plan PCS (ADHHS 2005: II-11).

Under its contract with the Division of Medical Services, EDS has deployed Provider Electronic Solutions (PES) applications technology (ADHHS 2005). With PES, Medicaid providers are able to verify a participant's Medicaid eligibility for a specific date or range of dates, including retroactive eligibility for the past year. Providers may obtain other useful information including the status of benefits used during the current fiscal year, and other insurance or Medicaid coverage.

Table 13: Arkansas Medicaid State Plan PCS Financial Eligibility, 2002-2004
2002 2003 2004
Medically needy N N N
100 percent of SSI N N N
150 percent of SSI N N N
300 percent of SSI N N N
Other, please specify All categorically eligible beneficiaries All categorically eligible beneficiaries All categorically eligible beneficiaries

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Services Available

The PCS program involves primarily "hands-on" assistance by a personal care aide with a client's physical dependency needs (as opposed to purely housekeeping services). The tasks the aide performs are similar to those that a nurse aide would normally perform if the participant were in a hospital or nursing facility. Arkansas PCS restricts coverage to services directly helping a client with only certain "routines" (e.g., eating and doing laundry) regardless of the client's ability to execute other non-covered routines (ADHHS 2005: II-24). In Arkansas, "tasks" are components of routines such that the routine of meal preparation involves tasks such as removing food from refrigerator and washing-up etc. Thus, while the Arkansas state plan PCS program reported provided cuing services in 1999, between 2002 and 2004 officials reported providing only personal care services to assist directly with ADLs and IADLs.

Table 14: Arkansas Medicaid State Plan PCS Services, 2002-2004
2002 2003 2004
PC services to assist directly with ADLs e.g., bathing, feeding, toileting YYY
PC services to assist directly with IADLs e.g., housekeeping, shopping, cooking YYY
Medical transportation NNN
Non-medical transportation NNN
'Cuing' or monitoring NNN
Emergency support/respite NNN
Animal Assistance e.g., Guide Dogs NNN
Assistive Technology (AT) NNN
Case management NNN
Task delegated by nurse e.g., injections NNN

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Arkansas Medicaid PCS Delivery Sites

Services to participants on the Arkansas state plan PCS program may be furnished in the client's home, and at the State's option, in another location (ADHHS 2005: II-10). Thus, services can be provided in the community and at a participant's workplace.

Table 15: Arkansas Medicaid State Plan PCS Delivery Sites, 2002-2004
2002 2003 2004
Client's residence YYY
Client's work site YYY
In the community, outside residence & work site YYY

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Cost Controls and Hours of Care

While there are no limits to the maximum cost of care per recipient for the Arkansas PCS program, there is a 64-hour benefit limit per month, per adult client. However, providers may request extensions of this benefit (using Form DMS-618) on the basis of medical necessity (ADHHS 2005: II-32). Consumers under the age of 21 require prior authorization for all PCS.

Table 16: Arkansas Medicaid State Plan PCO Cost Controls, 2002-2004
2002 2003 2004
Maximum cost per recipient N N N
Maximum hours of care per recipient Y (64 hrs per month ) Y (64 hrs per month ) Y (64 hrs per month )
Other 21 & below require prior authorization 21 & below require prior authorization 21 & below require prior authorization

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Provider Training

In Arkansas, all PCS providers are required to have achieved at least 40 hours of training (ADHHS 2005: II-40). Twenty four of the training hours must be conducted in the classroom and cover issues including: client respect and privacy, understanding instructions, communication with client, logging services, reporting events, state law, basic body functioning, personal care skills (e.g., help with housekeeping and personal hygiene). Following a minimum of 16 hours of classroom time, 16 hours of training must involve practical work supervised directly by a registered nurse (RN) or Qualified Mental Retardation Professional (QMRP) with two years experience. Trainees must complete 24 hours of classroom time before any supervised training is conducted at an actual client site (with the consent of the client). All trainees must pass an examination based on this curriculum. An aide trainee successfully completing the training must receive a dated certificate and then participate in at least 12 hours of in-service training every twelve months (each component must be at least one hour long). The Arkansas state plan personal care program does not allow clients to hire and fire their care providers and also does not require background checks.

In Arkansas, all PCS providers must be supervised by a RN or a QMRP. The supervisor is responsible for specified tasks including instructing aide on routines and tasks to perform (ADHHS 2005: II-34). At least once a month the supervisor must review the aide's records, document the review, and issue further instructions if necessary. At least three times every six months, the supervisor must visit the client at the service delivery location to conduct an on-site evaluation. One of these visits must include the aide and one must not. During the visit with the aide present, the supervisor must observe and document the condition of the client, the type and quality of service provision, and the interaction between the aide and client. If necessary, the service plan is to be modified and further instruction provided to the aide. When the aide is not present during the visit, the supervisor must: observe and document the condition of the client, document from available evidence the quality of services provided, and query the client on the quality of services and adequacy of relationship with provider. The supervisor must also review the service plan and the aide's records no less than once every 62 days.

Table 17: Arkansas Medicaid PCS Providers, 2002-2004
2002 2003 2004
State requires formal training for care providers Y (40hrs) Y (40hrs) Y (40hrs)
State requires certification of care providers Y Y Y
State requires supervision of care providers Y (RNs) Y (RNs) Y (RNs)
State allows client to hire & fire care providers N N N
State requires criminal background check for care providers N N N
Every client have a care plan Y Y Y
Every client have a case manager Y Y Y

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Provider Rates, Wages and Benefits

The reported maximum agency rates for Arkansas state plan personal care program remained the same at $12.35 per hour between 2002 and 2004. No information was available for care provider wages.

Table 18: Arkansas Medicaid State Plan PCS Care Provider Rates, 2002-2004
2002 2003 2004
What $ rate is paid to agencies? $12.35/hr $12.35/hr $12.35/hr
What $ rate is paid to care providers? n/a n/a n/a

Source: UCSF Annual Survey of Medicaid State Plan PCS Programs, 2004.

Although state officials recognize that there is a shortage of providers, Arkansas does not know if agencies provide care providers with either health care benefits or sick leave benefits.

Table 19: Arkansas PCS Provider Benefits, 2002-2004
2002 2003 2004
Care providers receive health care benefits N/A N/A N/A
Care providers receive sick leave? N/A N/A N/A
Shortage of care providers Y Y Y

Provider Supply

In 2003, Arkansas paid significantly less than the national average hourly wage to both personal and home care aides and home health aides ($6.50 vs $7.91 and $7.57 vs $8.77 respectively). Perhaps unsurprisingly in the same year, Arkansas had 50 percent fewer personal and home care aides per 1,000 65+ population than the national average (7 vs. 14 per 1,000 population) and also had much fewer home health aides per 1,000 population age 65+ than the national average (10 vs 16 nationally). Similarly, reimbursement rates for Medicaid and Medicare providers were significantly lower than the national average. However, Arkansas ranks third highest in the nation for the number of Medicare-certified home health agencies per 1,000 population age 65+, with 0.46 per 1,000 population compared to 0.20 nationally (Gibson et al 2004).

Table 20: Reimbursement Rates and Supply
Medicare HCBS
Percent of Medicare beneficiaries receiving Home Health Services (2002) 6.1% 6.3%
Medicare-certified Home Health Agencies (per 1,000 population, age 65+) 2003 0.46% 0.20%
Payment rates
Medicare Reimbursement per day for nursing facility care (average) 2002 $216 $265
Medicaid Reimbursement per day for nursing facility care (average) 2002 $94 $118
Private pay rate per day in nursing facility (urban average) 2003 $106 $158
Medicare reimbursement per Home Health visit (average) 2002 $98 $124
Private pay hourly rate for Home Health Aide (urban average) 2003 $15.65 $18.12
HCBS Resources
Personal & Home Care Aides (per 1,000 population age 65+) 2003 7 14
Personal & Home Care Aides median hourly wage (2003) $6.50 $7.91
Home Health Aides (per 1,000 population age 65+) 2003 10 16
Home Health Aides median hourly wage (2003) $7.57 $8.77

Source: Gibson et al (2004)


This case study of the Arkansas Medicaid State Plan Personal Care Services (PCS) program highlights four interesting features. First, the program is one of the oldest Medicaid state plan PCS programs in the nation. Over time, it has developed the capacity to serve more than 15,000 clients per year and the flexibility to adopt new practices including mandated provider training.

Second, the Arkansas PCS program operates two policies that are generous when compared with PCS programs in other states: (1) the functional eligibility criterion (one ADL); and (2) the capacity to provide services outside the client's home in the community. The maximum number of 64 service hours per month without prior authorization is, however, not generous when compared with similar programs in other states.

Third, the policy of agency-employed RNs conducting client assessments may reduce state costs to some extent and also may provide agencies with greater autonomy and control over client need assessment.

Fourth, unlike many other PCS programs, Arkansas mandates all providers to be employed by agencies that are required to provide: (1) a 40 hour (initial) training program and (on-going) program, (2) 12 hours of in-service education per year, and (3) structured work supervision by RNs.


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