October 13, 1994

Sally K. Richardson

Director of Medicaid Bureau

Health Care Financing Administration

200 East Highrise Bldg.

6325 Security Blvd.

Baltimore, MD 21207

Dear Ms. Richardson,

On October 4, the Commissioner of the Administration on Developmental Disabilities, Bob Williams, at our request, convened a meeting with Robert Wardwell, the Director of the Division of Coverage Policy in the Medicaid Bureau and Mary Jean Duckett, the Chief of the Home and Community Based Waiver and staff of National Home of Your Own Alliance to discuss ways in which a Medicaid Home and Community-based Services waiver could apply to our efforts to expand the mortgage market for home ownership by people with developmental disabilities. We are requesting a written response to clarify the policies and procedures to use a provision in a Medicaid waiver final rule to apply waiver funds for expenses for a live-in personal caregiver toward a portion of a recipient's lease or mortgage payment and food costs.

The National Home of Your Own Alliance is funded by a cooperative agreement with the Administration on Developmental Disabilities. We are currently working in eight states to develop local demonstrations of home ownership and control for people with developmental and other disabilities. The Alliance will negotiate agreements in 23 states over the next five years, building coalitions of housing and disability organizations to recruit and include persons with disabilities. In addition to state technical assistance, the Alliance is building a national information clearinghouse and conducting policy research and evaluation in collaboration with the Center for Accessible Housing in North Carolina, United Cerebral Palsy in Washington, D.C., Coop Initiatives in Connecticut, Institute on Disability at Temple University in Pennsylvania, and the Human Services Research Institute in Massachusetts. Our goal is to leave in place an infrastructure of exemplary practices and public and private sector partnerships, linking the home mortgage and social service industries.

At the October 4 meeting referenced above, we discussed §441.310 (2) (ii) under Limits on Federal financial participation (FFP), referencing the cost of room and board of your final rule, published in the Federal Register for comment on July 25, 1994. After a thorough discussion of the issues, Mr. Wardwell and Ms. Duckett stated that this provision would allow states to use Medicaid waiver funds to pay for expenses of an unrelated live-in personal caregiver providing services to a waiver recipient in the recipient's home and apply those funds toward the

waiver recipient's lease or mortgage payment.

The provision in §441.310 (2) (ii) reads "For waivers that allow personal caregivers as providers of approved waiver services, a portion of the rent and food of the personal caregiver may be reasonably attributed to the unrelated caregiver who resides in the same household with the waiver recipient." Our understanding from the above-referenced meeting of this provision is that if a personal caregiver who provides an approved waiver service resides in the home of the waiver recipient, a portion of up to 50% of the room and food costs of the personal caregiver can be applied to the mortgage payment or rent and food costs of the waiver recipient.

Since this is a new regulation, we believe that many states would be interested in using this provision to assist waiver recipients to lease and own their own homes. It would help our work with states and the mortgage industry if we could have the following two questions answered:

1) What guidelines will the Health Care Financing Administration provide to states seeking authorization under an approved Home and Community-based Services waiver authorized under Section 1915(c) of the Social Security Act to use Medicaid waiver funds to pay for expenses of an unrelated live-in caregiver providing services to a waiver recipient in the recipient's home as authorized under the provisions established in §441.310(a)(2)(ii) and apply those funds towards the waiver recipient's lease and mortgage payments?

2) What procedures will states need to follow to amend an approved Medicaid Home and Community-based Services waiver authorized under Section 1915(c) of the Social Security Act to implement the provisions under §441.310(a)(2)(ii) in order to obtain Federal financial participation (FFP) to apply a portion of the rent and food of the unrelated personal caregiver providing approved waiver services and residing in the waiver recipient's home to the mortgage or rent and food costs of the waiver recipient?

This provision makes it possible for states and their provider agencies to reallocate their resources, making available funds necessary to assist Medicaid recipients to secure homes of their own. In facilitating this reallocation, states avail themselves of a cost-neutral way to assist people whose options would otherwise be limited to institutional settings.

Please send your response to Jay Klein, Institute on Disability, University of New Hampshire, National Home of Your Own Alliance, Durham, NH 03824-4724. Thank you for your attention. We look forward to hearing from you.

Sincerely,

Jay Klein

Alliance Director