1,600 children impacted by key Medicaid cut

State officials revealed new information Thursday about a Medicaid program growing faster than Indiana can afford. (Getty Images)
By Whitney Downard
Indiana Capital Chronicle

INDIANAPOLIS — Just over 1,600 disabled children receiving services through the Family and Social Services Administration (FSSA) made up a significant portion of the unexpected expenses that caused a $1 billion Medicaid shortfall — the first time the agency has publicly identified the number of children benefiting from an attendant care program that paid their parents.

In the last year, though, expenses for the program skyrocketed as families — many for the first time — had livable wages to cover the expense of caring for their medically complex children with few guardrails.

 Cora Steinmetz, the Director of Medicaid for the Family and Social Services Administration, at a Jan. 24, 2024 Public Health Committee meeting. (Whitney Downard/Indiana Capital Chronicle)

For Indiana Medicaid Director Cora Steinmetz, the program’s growth was unsustainable — particularly important as the program eats up an ever-growing slice of the state’s budget — and prompted agency action.

“Enrollment on this waiver has grown but not at a pace that really explains the rapid increase in expenditures. It’s been so much more in the space of utilization than enrollment,” Steinmetz said.

The state didn’t have a maximum limit for the number of hours an LRI could claim, meaning that some families claimed as many as 100 hours per week. It’s unclear whether FSSA monitored the number of hours or left such oversight to the providers who trained and paid families.

FSSA also noted that while families reported receiving as much as $15 per hour, the agency was paying providers $34.36 per hour — meaning that less than half went to the caretakers and most of the state’s funds went to the providers.

“We … don’t have the transparency or don’t receive the data around how much the caregiver receives in reimbursement … What we have heard from caregivers is that $15 an hour is a typical level of compensation under attendant care,” Steinmetz added.

Structured Family Caregiving

Steinmetz shared that 1,622 children were beneficiaries of the attendant care program in a Medicaid Advisory Committee, the first since the announced Medicaid shortfall in December.

While the attendant care program has received a disproportionate amount of attention, FSSA has implemented several other changes — such as halting a 2% Medicaid indexing that would have increased reimbursement rates for six different providers, including dentists and home health services.

Instead of attendant care, FSSA is attempting to shift families into the Structured Family Caregiving program, which pays a per diem rather than an hourly rate.

As of December, children made up 8% of the 20,847 Hoosiers receiving attendant care in the state while Hoosiers 60 years of age and older made up the bulk — nearly two-thirds — of the program.

FSSA reported that in March 2022, when the LRI program started, 10% of children got more than 60 hours of attendant care per week. By December 2023, nearly half of children — 47% — were getting that much.

However, both parents can participate as LRIs under attendant care. It’s unclear how many of the 1,622 children had both parents paid as caregivers.

Just two years ago, only 456 children utilized attendant care at a cost of $9.3 million. But with over 1,600 children, the costs soared to $172 million — a number that includes a Medicaid increase implemented over the summer.

In contrast, Structured Family Caregiving comes in three different tiers, based on need. A family can receive $77.54, $99.71 or $133.44 per day and providers are expected to retain between 30-35% of that cost for administrative care — which includes 15 days of respite care for the caregiver.

“Under both services, the Medicaid program pays a provider service agency who then compensates the caregiver,” Steinmetz said. “So this is not a service whereby the caregiver is directly contracting with the Medicaid program.”

A family where one parent provides full-time care at $15 per week would earn around $31,200 a year — roughly equivalent to a level three structured family care recipient getting $133.44 each day, or $34,093 annually, according to FSSA.

Notable, both attendant care under LRI and structured family care are excluded from income for federal taxation purposes.

Unanswered questions for families

Families have repeatedly rallied at the Statehouse, seeking clarification on the change. In a chat accompanying the hybrid meeting, families wondered why the state couldn’t maintain the attendant care program with guardrails — such as limiting hours like other states.

“Are there enough home health care nurses and medical workers to provide care for the 1,600 critically ill children whose parents will no longer be able to afford to provide care themselves,” asked Olivia Ruzic.

Ruzic previously shared the story of her family’s reliance on attendant care to provide for three-year-old Archer, born with Kabuki Syndrome, with the Indiana Capital Chronicle. For a time, the Ruzic family lived in a two-bedroom home where Archer slept in a closet but attendant care transformed the family’s way of life, allowing Archer’s father, Jesse Ruzic, to go back to school and study nursing.

In another comment, Ruzic noted the near-poverty line wages under Structured Family Caregiving. For 2024, $31,200 is considered the Federal Poverty Line for a family of four like the Ruzics.

Parent Sarah Saylor, who has also rallied at the Statehouse, noted that earlier reporting could have flagged the growing deficit. Unlike other states, Indiana doesn’t report expenditures on a monthly or quarterly basis and House Republicans have repeatedly resisted efforts to compel the agency to make such reports.

“We truly want to understand and work together … (and) collaborate,” Saylor said. “We want to find a program that is financially sustainable that also meets the needs of all Indiana members, including waiver recipients…”

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The Indiana Capital Chronicle is an independent, nonprofit news organization dedicated to giving Hoosiers a comprehensive look inside state government, policy and elections. The site combines daily coverage with in-depth scrutiny, political awareness and insightful commentary.

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