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Families fight new caregiver regulations that restrict ability to care for children, spouses

Henry Brannan / WMRA News

Families say the regulations make it 'impossible' for them to be reimbursed for the care they provide.

UPDATE:The Department of Medical Assistance Services has paused the rollout of most of the new regulations. The announcement came late the day before the restrictions were set to take effect. It is unclear from the announcement whether LRIs will have access to respite care but other restrictions have been paused. The memo does not give a date when the extended flexibilities will end..

Virginia’s Medicaid agency has imposed strict new regulations on reimbursement for people who act as a caregiver for their spouse or minor child with a disability.

The restrictions, which hit March 1, will mean many people who have been paid to provide care for a Medicaid-enrolled family member will no longer qualify and will stop receiving payments.

The move by the Department of Medical Assistance Services will leave many of Virginia’s most economically vulnerable families without a lifeline first allowed during the Federal Public Health Emergency and then made permanent by the General Assembly in 2022.

DMAS data shows the program’s numbers have decreased by more than 20% in the past year as families struggled to prove they met the new regulations. They include a requirement to prove no one else can care for their loved one(s) and a blanket ban on spouses fulfilling an administrative role in the caregiving.

The regulations come during a national caregiver shortage that’s particularly severe in Virginia.

Rural families are impacted especially hard because there are fewer caregivers and worse overall economic conditions in the region’s rural areas.

The General Assembly is currently considering legislation to address the issue, but even the most immediate fix wouldn’t come before the regulations take effect.

But DMAS said in a statement the agency is working with the federal Medicaid agency and the General Assembly to “extend flexibilities to allow for time to implement any policy changes directed by the General Assembly.”

The new regulations and how we got here

Melissa Wallace remembers the moment she found out about the new restrictions.

“I want to cry just thinking about it,” she said. “That moment was hard, when I thought it was all going to be taken away instantly.”

Wallace, 42, and her husband Calvin, 45, raise their two sons in Buckingham County in rural Southside Virginia.

Both sons have disabilities and are enrolled in Medicaid. Her 8-year-old son, Oliver, absorbs information about topics like the solar system and chess like a sponge. He also has autism, attention-deficit/hyperactivity disorder and two chromosomal abnormalities. The last one put him at increased risk of several medical issues, and combined with ASD and ADHD, Oliver can’t perform tasks like eating, using the restroom and going to sleep without complete supervision and care.

“Pretty much anything he needs to do … he has to be prompted; he will not do [it] on his own. He will get distracted, he will forget how to do it,” she said. “His brain is just not clicking when it comes to these daily living skills. So somebody has to be there to help him.”

Oliver’s 5-year-old brother, Cayde, also has autism and receives specialized therapy to help with communication. His diagnosis came when he was about 2 years old and not talking. Afterward, he began therapies that have helped.

Between driving her sons to and from Richmond for appointments and helping them with virtually everything, caretaking is a full-time job for Melissa.

But until DMAS allowed parents like her the option to be reimbursed for the “extraordinary care” they provide their Medicaid-enrolled minor children, she had another job: running a successful spa.

Up until 2020, Wallace had been balancing caregiving for her kids while trying to wrangle outside care for them so she could run The Spa. Then, in 2020 when the COVID-19 pandemic forced her to close shop, everything lined up.

“I realized I had two children — both with diagnoses, both special needs — and I don't know what the heck I was thinking,” she said. “I was in survival mode essentially and didn't realize how tough it was until I was able to break away from one of those things, which was my business, and focus on my children and then realize there's no way I could go back.”

The new regulations have threatened that. While her husband works full time for a nearby mineral mine, it isn’t enough to support their family.

“It would make it nearly impossible to live; we would have to make huge adjustments,” she said of the possibility of losing that income. “Because at the moment, there's no way I could hold any sort of job and do all the caregiving that my children need at this point. And I would have to continue caring for them just without that extra bonus from Medicaid.”

Living in a rural area further complicates their situation.

“Finding somebody who's able to take care of my children at the timeframes that they would need to be taken care of [for me] to have an actual job, and [the caregiver is] willing to do the things for them that they need? I don't know of anyone who could do that around here,” she said.

Between appointments, Melissa has been writing letters in support of the bills to her state representatives. She said she writes to “plead with them to make the correct choice, to make them understand that this is so vitally important.”

But she’s also preparing for the worst. In addition to the letters, she has spent the last months filling out all the new paperwork DMAS requires to try and hang on to the ability to be reimbursed for the care she provides. The family has slashed their budget in the hopes of saving up enough money to at least temporarily put off financial ruin if they aren’t approved for continued reimbursement.

“I'm expecting for it to be hard for a while. I'm just hoping that all the kinks get worked out, I do get approved and this can continue in whatever version they allow,” she said. “This is such a difficult situation as it is, and they are just making it so much harder.”

And Wallace isn’t alone, there are currently about 1,700 other people in Virginia who receive reimbursement for the care they provide to a Medicaid-enrolled child or spouse with a disability, according to DMAS.

They’re what the agency calls LRIs, or Legally Responsible Individuals. LRIs are people who are responsible for the individuals they care for, which is always either a child under 18 or their spouse.

The child or spouse must be enrolled in Medicaid. Through the program, they get a Medicaid waiver which allows them to receive approved care either through a caregiving agency or an LRI. About 100,000 Virginians receive waivers, DMAS data show.

When an LRI gets paid for the care they provide, that’s called Medicaid Reimbursement. It’s also the focus of the new regulations on LRIs from DMAS.

There are four of those:

  • Caregiver of last resort 

LRIs can only provide care for their spouse or minor child with a disability if no one else can. And they must prove this with documentation.

  • Only “extraordinary care”

LRIs will only receive reimbursement for “extraordinary care.” This means if they’re taking care of their minor child, they will not be paid for “typical care needs” of a child their age. For example: changing an infant’s diaper would be typical but changing a diaper for a 12-year-old who needs to wear them would be extraordinary.

  • 40-hour limit 

LRIs will not be reimbursed for more than 40 hours of “extraordinary care” they provide each week. This applies even if the Medicaid-enrolled spouse or minor child is approved by DMAS for more than 40 hours of care.

  • No “respite” care

LRIs will not be able to have care provided by other caregivers reimbursed. This means if they need another attendant to take over while they’re temporarily unavailable, that care will not be reimbursed.Additionally, DMAS put three significant new restrictions on the people who fill an administrative role in the Medicaid-enrolled spouse or minor child’s care. They’re called an Employer of Record, or EOR, and work as an unpaid employer of the LRI.

  • No parents or step-parents 

EORs can no longer be LRIs. This means parents and step-parents can no longer fulfill the role.

  • 50-mile radius 

EORs must live within 50 miles of the Medicaid-enrolled spouse or minor child.The new regulations are the latest in a series of changes that started with the COVID-19 pandemic.

From the time psychiatric hospitals fell out of favor in the 1950s up until the pandemic, care for people with disabilities was provided through a web of institutions. They ranged from crisis centers and assisted living facilities to home care provided by a personal attendant paid through a Medicaid waiver.

But when the virus arrived in the U.S., it made it unsafe for caregivers to enter people’s homes. As a result, the federal agency that oversees Medicaid, Centers for Medicare and Medicaid Services, permitted states to apply to allow LRIs to be reimbursed for extraordinary care they provide.

Advocates in Virginia saw the difference the change made in families’ lives and lobbied to make it permanent. They succeeded in 2022 through a budget amendment that allowed LRIs to be reimbursed for care they provide their spouse or minor child “when circumstances prevent an individual from being cared for by a non-parent caregiver.”

The approval required DMAS to create guidelines for how the new policy would be applied. The agency created the guidelines and set them to start when the federal caregiver flexibilities were set to end in November 2023, six months after the sunset of the Federal Public Health Emergency.

Families and advocates fought the rollout, saying it was an impossible timeline and included a number of overly restrictive regulations like the requirement that LRIs prove they’re in the “best interest of the member.” DMAS pushed the rollout back, slightly altered the regulations and arrived at the new policy.

The impact on families

Like Melissa Wallace, Susannah Clarke is an LRI who takes care of a child. For Clarke, it’s her 12-year-old daughter, Isabelle.

Clarke, 44, is a single mom of three. She also runs a special education advocacy consulting business and a blog about raising a child with CHARGE syndrome, The Girl in Charge.

She talked to VPM News/WMRA while meeting Isabelle’s school bus, explaining her care while helping her to the house. “Sometimes we have to sit here for a minute. She needs a lot of sensory input,” she said, squeezing her daughter’s arms.

At the front stoop, Clarke started to unbuckle Isabelle from her wheelchair but paused when Isabelle’s breath got heavy. “She also has seizures. When she starts breathing heavy like that, I have to be careful,” Clarke said. “Probably a seizure coming on. So I try to wait just a minute until it passes.”

Clarke directed her attention back to Isabelle, and the pair took a moment to breathe before the single step, “You okay? Put your arms through. Thank you!”

Inside, she took Isabelle to her first-floor bedroom and explained, “This is why we bought this house — because this is her bedroom — and this is why we're working so hard to keep [it].”

Isabelle has also been diagnosed with Lennox-Gastaut syndrome. “She has seizures, significant visual impairment, significant hearing impairment, she's nonverbal. She has an overall developmental delay,” Clarke explained. “And she requires total care from either me as her primary caregiver or another caregiver — if I'm lucky enough to have one.”

The combination made the family’s old home in Northern Virginia increasingly unsafe as Isabelle grew bigger and her seizures got worse, making the stairs to her bedroom a dangerous obstacle. Unable to afford an accessible house in the area, the family moved to the Shenandoah Valley, near Winchester, to find a home that was safe for Isabelle.

Henry Brannan / VPM News Susannah Clarke comforts her 12-year-old daughter, Isabelle, at the front door after a day at school.
Henry Brannan / WMRA News

Henry Brannan / VPM News Susannah Clarke comforts her 12-year-old daughter, Isabelle, at the front door after a day at school.

“We ended up finding it here in Frederick County,” Clarke said. “If it had been in another county, we would have moved for the house.”

The move solved the family’s problems but when DMAS announced their new regulations, a new problem was created: Clarke’s EOR is her brother, and he still lives in Northern Virginia — about 20 miles farther than the 50 miles DMAS picked as a boundary for EORs. This means Clarke will have to find someone new by March 1 to fulfill the role in an area she has only lived in since 2019.

And Clarke isn’t alone. Around the commonwealth, Facebook groups have sprung up to connect perfect strangers to play an essential and deeply intimate role in the care each family provides for their loved one. VPM News/WMRA found four groups people are using to find someone to fulfill the unpaid EOR position -– some with thousands of members.

To Tonya Milling, executive director of The Arc of Virginia, a disability advocacy group, the policy DMAS is implementing to prevent fraud actually leaves people more vulnerable than ever.

Because the role is unpaid, she said it relies either on goodwill on the part of the EOR, or a desire to scam. The groups open people up to fraud because all it takes is someone responding to a post, “And what do they get right away? All of your private information, your social security number,” she said.

Milling said she sees the culture at DMAS as “suspicious of families, as opposed to supporting of families.” She said that fraud does occasionally happen and the agency must deal with it "head-on." But she cautioned that DMAS needed to reduce the harm the preemptive efforts to deal with the very small problem cause for everyone.

This adversarial disposition from the agency has left families confused. Clarke said the measures that are currently in place already address potential fraud concerns: the app she must use to log her hours caps the number of submittable hours at the number her daughter is approved for and outside watchdogs come in every one to three months to check on LRIs.

According to Milling, maybe the biggest issue families have with the new restrictions is that they are classified as a caregiver of last resort. Milling said at a listening session held by The Arc, she heard time and again the move was simply insulting.

“Nowhere else do you have to prove that the parent is in the best interest — that's actually the presumption in every other part of life,” she said. “Even in [child protective services], when a parent is being investigated for abuse or neglect, or any of those things, family reunification is always the goal and the model.”

Milling said families are also frustrated by DMAS banning respite care and stopping reimbursement for care at 40-paid hours even if the LRI takes care of more than one child. This leaves families like the Wallaces in a position where their kids may be approved for 80 or more hours of weekly care together but the LRI is only reimbursed for 40 hours of it.

At a broader level, behind disagreements on individual aspects of the new regulations, families, advocates and some members of Virginia’s General Assembly disagree with DMAS about something deeper: the need for regulations this restrictive.

Families VPM News/WMRA spoke to said the regulations are so strict they defeat the purpose of the 2022 legislation that approved LRIs for Medicaid reimbursement.

“[DMAS] made it almost near impossible for parents to qualify to be paid caregivers. So in theory, the governor said that parents could be paid caregivers,” Clarke said. “But in practice, because so many roadblocks were put up by these regulations, a lot of parents suddenly couldn't qualify to care for their own kids anymore.”

DMAS declined VPM News/WMRA’s interview request but provided a statement expressing its commitment to helping families adjust to the new reimbursement policy.

“There are additional safeguards required for a permanent policy that were not required during the temporary flexibilities of the public health emergency,” wrote Mary Olivia Rentner, DMAS public relations coordinator. “DMAS worked with its federal partners at the Centers for Medicare and Medicaid Services to ensure the policy complied with the safeguards required for CMS approval and the General Assembly guidelines.”

The statement did not directly respond to questions about families’ concerns.

Milling and other LRIs told VPM News/WMRA they understood DMAS had to have guidelines, but that these were going too far.

To Milling, the argument that DMAS has instituted these restrictions just to meet CMS’ guidelines rings hollow when states like Minnesota have been approved by the agency for their own LRI Medicaid waiver reimbursement plans without some of those restrictions.

She said the Arc of Virginia was “able to look and see what CMS approved in other states. And that really gave us the tools or the ammunition … to say, 'Well, no, you don't have to be this restrictive. Because we have these other examples of states that have been approved.'”

DMAS did not respond to a question about why their regulations are more restrictive than states like Minnesota.

Three bills in the General Assembly stand to address the new regulations: SB 488, HB 909 and HB 1318.

A DMAS spokesperson said the agency “recently met with CMS to discuss the potential General Assembly action on LRI policy and the approaching March 1 deadline.”

As a result of the meeting, CMS officials indicated that they would “now consider a request to extend flexibilities to allow for time to implement any policy changes directed by the General Assembly.”

Federal and state authority is needed to extend the deadline. A spokesperson for DMAS said the agency is working with both CMS and the General Assembly to get that extension.

New regulations could compound longstanding issues

The regulations come at a time where there are workforce shortages across health care.

In Virginia, there’s one caregiver for every 90 people. That puts the commonwealth in the bottom third of states compared with New York, where the ratio is 1 to 35.

Both Wallace and Clarke told VPM News/WMRA there simply is not the caregiver workforce in their respective areas to fill the void the new regulations could create for them.

Between those labor shortages and the new restrictions, families are caught between a rock and a hard place.

“I think people will give up, I think that they will be pushed out of the program,” Milling said. “And many times, because they couldn't find a caregiver that's stable and reliable, they'll just go without the support. They'll struggle, and they'll lose jobs and marriages will be impacted, as we have seen many times.”

Milling also said she has already seen program numbers start to drop since the restrictions were announced. Lately she has seen more and more posts: “People are saying, 'I'm just giving up — it's too hard.’”

DMAS data backs this up. While there are approximately 1,700 LRIs currently being reimbursed to provide services, a year ago that number was roughly 2,200.

VPM News/WMRA spoke to three LRIs, an advocate and a legislator across eight conversations. Each stressed that families take on this work because they feel it’s what’s best for their spouse or minor child.

“Nobody is getting rich doing this,” Shin said. “They're doing this because they love their kids or they love their family members.”

In the brief pauses between her care work, Melissa Wallace has moments like any other parent. Recently, Oliver asked her to teach him to play chess.

“I don't know how to play chess, but I've been learning,” she said with an audible smile. “It brings me so much joy to figure out how to play chess. It's a very complex game, and he takes in all that information and locks it in there.”

Wallace said her goal in all the care she provides and the therapies and appointments she drives her sons to is to help them be able to be as independent as possible in their lives.

“I am with them all of the time, and I don't have another choice. That may sound really sad or depressing to somebody, but I love my children. I love being a mother,” she said. “But it's exhausting and it's expensive, and having that little bit of help from the government to help offset the cost of me doing this is so huge. I think they're paying $12 and some change an hour. It's not a lot, but it's enough to make a difference in my life, in my world and in other’s.

Henry Brannan covers rural health care in the Shenandoah Valley and Charlottesville area for WMRA and VPM News. The position is in partnership with Report for America.