A CRS Review of 10 States: Home and Community-Based Services – States Seek to Change the Face of Long-Term Care: Texas

A CRS Review of 10 States: Home and Community-Based Services – States Seek to Change the Face of Long-Term Care: Texas

Order Code RL31968
CRS Report for Congress
Received through the CRS Web
A CRS Review of 10 States: Home and
Community-Based Services – States Seek to
Change the Face of Long-Term Care:
Texas
May 1, 2003
Jane Tilly
Dr. P.H., Consultant
The Urban Institute
Carol O’Shaughnessy
Specialist in Social Legislation
Domestic Social Policy Division
Rob Weissert
Research Assistant
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Home and Community-Based Services – States Seek
to Change the Face of Long-Term Care: Texas
Summary
Demographic challenges posed by the growing elderly population and demands
for greater public commitment to home and community-based care by persons with
disabilities of all ages have drawn the attention of federal and state policymakers for
some time. Spending on long-term care by both the public and private sectors is
significant. In 2001, spending for long-term care services for persons of all ages
represented 12.2% of all personal health care spending (almost $152 billion of $1.24
trillion). Federal and state governments accounted for almost two-thirds of all
spending. By far, the primary payor for long-term care is the federal-state Medicaid
program, which paid for almost half of all long-term care spending in 2001.
Many states have devoted significant efforts to respond to the desire for home
and community-based care for persons with disabilities and their families.
Nevertheless, financing of nursing home care, chiefly by Medicaid, still dominates
most states’ spending for long-term care today. To assist Congress understand issues
that states face in providing long-term care services, the Congressional Research
Service (CRS) undertook a study of 10 states in 2002. This report, one in a series of
ten state reports, presents background and analysis about long-term care in Texas.
Ten percent of the Texas population is 65 and older. The state has a large,
rapidly growing elderly population, estimated to reach 4.4 million, or 16.1% of the
state’s total population in 2025. Medicaid spending for long-term care in FY2001
was $3.3 billion – 28.5% of all Medicaid spending. Medicaid spending for
institutions was more than 70% of Medicaid long-term care spending and more than
20% of all Medicaid spending in FY2001. Spending for home and community-based
services has increased rapidly in recent years and represented 29.2% of Texas long-
term care spending in FY2001, primarily due to increased use of the Medicaid
Section 1915(c) home and community based waiver program. From FY1990 to
FY2001 spending for this program increased from less than 1% to over 21% of all
Medicaid long-term care spending in Texas.
Texas provides a wide range of services in the home and community to about
100,000 adults with disabilities. Despite this, the state has significant overcapacity
in its nursing home industry. As a result, the nursing home occupancy rate is quite
low – 68.5% in 2000. The state continues to serve many persons with developmental
disabilities in large state institutions and has no plans to close any facilities in the
foreseeable future.
Interviews with state officials and a review of state reports highlighted a number
of issues including: an imbalance in Medicaid financing favoring institutional care,
rather than home and community-based care; a shortage of frontline long-term care
workers; and waiting lists for home and community-based services.
The 10-state study was funded in part by grants from the Jewish Healthcare
Foundation and the U.S. Department of Health and Human Services, Health
Resources and Services Administration, Office of Rural Health Policy.

Contents
Introduction: Federal Legislative Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
A CRS Review of Ten States: Report on Texas . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Summary Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Demographic Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Administration of Long-Term Care Program . . . . . . . . . . . . . . . . . . . . . . . . 6
Trends in Institutional Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Trends in Home and Community-Based Care . . . . . . . . . . . . . . . . . . . . . . . . 6
Long-Term Care Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Issues in Financing and Delivery of Long-Term Care . . . . . . . . . . . . . . . . . . 7
Demographic Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Need for Long-Term Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Administration of Long-Term Care Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
State and Local Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Integration and Coordination Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Texas Long-Term Care Services for the
Elderly and Persons with Disabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trends in Institutional Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Trends in Home and Community-Based Care . . . . . . . . . . . . . . . . . . . . . . . 15
Personal Care and Adult Day Care . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Medicaid 1915(c) Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
State Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Texas Long-Term Care Services for Persons with Mental
Retardation and Developmental Disabilities . . . . . . . . . . . . . . . . . . . . . . . . 18
Trends in Institutional Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Trends in Home and Community-Based Care
. . . . . . . . . . . . . . . . . . . . . . 21
Financing Long-Term Care in Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Medicaid Spending in Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Medicaid Long-Term Care Spending in Texas . . . . . . . . . . . . . . . . . . . . . . 24
Issues in Long-Term Care in Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Institutional Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Nursing Home Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Integration of Health and Long-Term Care Services . . . . . . . . . . . . . . 31
Consumer Direction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Waiting Lists for Home and Community-based Care . . . . . . . . . . . . . 32
Long-Term Care Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

Appendix 1. Major Home and Community-Based Long-Term Care
Programs for the Elderly and Persons with Disabilities in Texas . . . . . . . . 34
Appendix 2. Population in Large State Facilities . . . . . . . . . . . . . . . . . . . . . . . . 44
Appendix 3. About the Census Population Projections . . . . . . . . . . . . . . . . . . . . 46
Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
List of Figures
Figure 1. Percentage Increase Over 2000 Population
in Texas, 2005-2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Figure 2. Institutional and Home and Community-Based Services as
a Percent of Medicaid Long-Term Care Spending
in Texas, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Figure 3. Medicaid Long-Term Care Spending by
Category in Texas, FY1990-FY2001(in constant 2001 dollars) . . . . . . . . . 26
Figure 4a. Medicaid Long-Term Care Spending in Texas
by Category, FY1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Figure 4b. Medicaid Long-Term Care Spending in Texas
by Category, FY2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Figure 5. Total Medicaid Home and Community-Base Services Waiver
Spending by Target Population in Texas FY2001 . . . . . . . . . . . . . . . . . . . . 28

List of Tables
Table 1. Texas Population Age 65 and Older, 1990 and 2000 . . . . . . . . . . . . . . . 8
Table 2. Elderly Population as a Percent of Total Population, Texas
and the United States, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 3. Estimated Number of Persons with Two or More Limitations
in Activities of Daily Living (ADLs),
By Poverty Status, in Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 4. Nursing Home Characteristics in Texas
and the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Table 5. Persons with Mental Retardation and Developmental
Disabilities Served in Residential Settings, by Size, by Size
of Residential Setting, 1990, 1995, and 2000 . . . . . . . . . . . . . . . . . . . . . . . 20
Table 6. Share of Federal and State Spending by Category, Texas and
the United States, 1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 7. State Spending for Medicaid from State Funds as a Percent of State
Spending, Texas and the United States, 1990-2001 . . . . . . . . . . . . . . . . . . 23
Table 8. Medicaid Long-Term Care Spending in Texas,
FY1990-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Table 9. Medicaid Spending in Texas, Total Spending and
Long-Term Care Spending, by Category, and Percent
Change, FY1990-FY2001 in Constant 2001 Dollars . . . . . . . . . . . . . . . . . . 25
Table 10. Federal and State Spending for Institutional and Community
Services for Persons with Mental Retardation/Developmental Disabilities
in Texas, 1990 and 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Table A-2. Population in Large State Facilities for Persons with
Mental Retardation/Developmental Disabilities, Closure Date,
and Per Diem Expenditures
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Acknowledgments
CRS wishes to acknowledge the significant time and contributions of the many
state officials and stakeholders who provided information on long-term care services
in Texas. Without their invaluable experience and insight, this report would not be
possible. We would particularly like to acknowledge officials from the Health and
Human Services Commission, the Department of Human Services, the Department
of Mental Health and Mental Retardation, and the Department on Aging. We would
also like to thank the advocates and providers who offered valuable perspectives on
the long-term care system in Texas.
The authors also gratefully acknowledge the excellent assistance of Charlotte
B. Foote in the production of this report.

Preface
Demographic challenges posed by the growing elderly population and demands
for greater public commitment to home and community-based care by persons with
disabilities of all ages have drawn the attention of federal and state policymakers for
some time. Spending on long-term care by both the public and private sectors is
significant. In 2001, spending for long-term care services for persons of all ages
represented 12.2% of all personal health care spending (almost $152 billion of $1.24
trillion). Federal and state governments accounted for almost two-thirds of all
spending. By far, the primary payor for long-term care is the federal-state Medicaid
program, which paid for almost half of all U.S. long-term care spending in 2001.
Federal and state Medicaid spending for long-term care was about $75 billion,
representing over one-third of all Medicaid spending, in FY2001. Over 70% of
Medicaid long-term care spending was for institutions – nursing homes and
intermediate care facilities for the mentally retarded (ICFs/MR). Many believe that
the current federal financing system paid through Medicaid is biased toward
institutional care. State governments face significant challenges in refocusing care
systems, given the structure of current federal financing. Many states have devoted
significant efforts to change their long-term care systems to expand home and
community-based services for persons with disabilities and their families.
Nevertheless, financing of nursing home care – primarily through the Medicaid
program – still dominates most states’ spending in long-term care today.
While advocates believe that the federal government should play a larger role
in providing support for home and community-based care, Congress has not yet
reached consensus on whether or how to change current federal policy. Congress
may continue an incremental approach to long-term care, without major federal
involvement, leaving to state governments the responsibility for developing strategies
that support home and community-based care within existing federal funding
constraints and program rules.
To help Congress review various policy alternatives and to assist policymakers
understand issues that states face in development of long-term care services, the
Congressional Research Service (CRS) undertook a study of ten states in 2002. The
research was undertaken to look at state policies on long-term care as well as trends
in both institutional and home and community-based care for persons with
disabilities (the elderly, persons with mental retardation, and other adults with
disabilities). The research included a review of state documents and data on long-
term care, as well as national data sources on spending. Interviews were held with
state officials responsible for long-term care, a wide range of stakeholders and, in
some cases, members or staff of state legislatures.
The 10 states included in the study are: Arizona, Florida, Illinois, Indiana,
Louisiana, Maine, Oklahoma, Oregon, Pennsylvania, and Texas. States were chosen
according to a number of variables, including geographic distribution, demographic
trends, and approaches to financing, administration and delivery of long-term care
services.
This report presents background and analysis about long-term care in Texas.
Reports on the other nine states and an overview report will be available during 2003.

Home and Community-Based Services –
States Seek to Change the Face of
Long-Term Care: Texas
Introduction: Federal Legislative Perspective
States choosing to
The Social Security Amendments of 1965, which
modify their programs for
created the Medicaid program, required states to
l o n g - t e r m c a r e f a c e
provide skilled nursing facility services under their
state Medicaid plans, and gave nursing home care the
s i gn i fi can t challenges.
same level of priority as hospital and physician
Financing of nursing home
services.
care has dominated long-term
care spending for decades.
“Section 1902 (a) A State plan for medical assistance
The federal financing
must provide for inclusion of some institutional and
some noninstitutional care and services, and, effective
structure that created
July 1, 1967, provide (A) for inclusion of at least . . .
i n cen t i ves to support
(1) inpatient hospital services . . .; (2) outpatient
institutional care reaches
hospital services; (3) other laboratory and X-ray
back to 1965. A number of
services; (4) skilled nursing home services (other than
services in an institution for tuberculosis or mental
converging factors have
diseases) for individuals 21 years of age or older; (5)
supported reliance on nursing
physicians’ services . . . .;” P.L. 89-97, July 30, 1965.
home spending. Prior to
enactment of Medicaid,
homes for the aged and other
public institutions were
financed by a combination of direct payments made by individuals with their Social
Security Old Age Assistance (OAA) benefits, and vendor payments made by states
with federal matching payments on behalf of individuals. The Kerr-Mills Medical
Assistance to the Aged (MAA) program, enacted in 1960, a predecessor to Medicaid,
allowed states to provide medical services, including skilled nursing home services,
to persons who were not eligible for OAA cash payments, thereby expanding the
eligible population.1
In 1965, when Kerr-Mills was transformed into the federal-state Medicaid
program, Congress created an entitlement to skilled nursing facility care under the
expanded program. The Social Security Amendments of 1965 required that states
provide skilled nursing facility services and gave nursing home care the same level
of priority as hospital and physician services. Amendments in 1967 allowed states
to provide care in “intermediate care facilities” (ICFs) for persons who did not need
skilled nursing home care, but needed more than room and board. In 1987, Congress
eliminated the distinction between skilled nursing facilities and intermediate care
1CRS Report 83-181, Nursing Home Legislation: Issues and Policies, by Maureen Baltay.

CRS-2
facilities (effective in 1990). As a result of these various amendments, people
eligible under the state’s Medicaid plan are entitled to nursing home facility care; that
is, if a person meets the state’s income and asset requirements, as well as the state’s
functional eligibility requirements for entry into a nursing home, he or she is entitled
to the benefit.
These early legislative developments were the basis for the beginnings of the
modern day nursing home industry. Significant growth in the number of nursing
homes occurred during the 1960s – from 1960 to 1970, the number of homes more
than doubled, from 9,582 to almost 23,000, and the number of beds more than
tripled, from 331,000 to more
than one million.2 (Today
Since its inception, Medicaid has been the predominant
there are about 17,000 nursing
payor for nursing home care. In 1970, over $1 billion was
homes with 1.8 million
spent on nursing home care through Medicaid and
beds.3)
Medicare. Federal and state Medicaid payments
accounted for almost all of this spending – 87%. Medicaid
spending for nursing home care grew by 50% in the three-
During the latter part of
year period beginning in 1967.
the 1960s and the 1970s,
nursing home care attracted a
In FY2001, Medicaid spent $53.1 billion on institutional
great deal of congressional
care (for nursing homes and care in intermediate care
facilities for the mentally retarded).
oversight as a result of

concern about increasing
federal expenditures, and a
pattern of instances of fraud
and abuse that was becoming
evident. Between 1969 and 1976, Senator Frank Moss, then-Chairman of the
Subcommittee on Long-Term Care of the Senate Special Committee on Aging, held
30 hearings on problems in the nursing home industry.4
Home care services received some congressional attention in the authorizing
statute – home health care services were one of the optional services that states could
provide under the 1965 law. Three years later in 1968, Congress amended the law
to require states to provide home health care services to persons entitled to skilled
nursing facility care as part of their state Medicaid plans (effective in 1970). During
the 1970s, the Department of Health, Education and Welfare (now Health and
Human Services, DHHS) devoted attention to “alternatives to nursing home care”
through a variety of federal research and demonstration efforts. These efforts were
undertaken not only to find ways to offset the high costs of nursing facility care, but
2U.S. Congress, Senate Special Committee on Aging, Developments in Aging, 1970,
Report 92-46, Feb. 16, 1970, Washington, cited from the American Nursing Home
Association Fact Book, 1969-1970.
3American Health Care Association, Facts and Trends 2001, The Nursing Facility
Sourcebook, 2001, Washington. The number of nursing homes is for 1999-2000 and number
of beds is for 1998. (Hereafter referred to as American Health Care Association. The
Nursing Facility Sourcebook.)
4U.S. Congress, Senate Special Committee on Aging, Nursing Home Care in the United
States: Failure of Public Policy, Washington, 1974, and supporting papers published in
succeeding years.

CRS-3
also to respond to the desires of persons with disabilities to remain in their homes and
in community settings, rather than in institutions. However, it was not until 1981 that
Congress took significant legislative action to expand home and community-based
services through Medicaid when it authorized the Medicaid Section 1915(c) home
and community-based waiver program.
Under that authority (known then as the Section 2176 waiver program), the
Secretary of DHHS may waive certain Medicaid state plan requirements to allow
states to cover a wide range of home and community-based services to persons who
otherwise meet the state’s eligibility requirements for institutional care. The waiver
provision was designed to alter the bias in the Medicaid program that favored
institutional care over care in home and community-based settings. Services include:
case management, personal care, homemaker, home health aide, adult day care,
habilitation, environmental modifications, among many others.5 These services are
covered as an option of states, and under the law, persons are not entitled to these
services as they are to nursing facility care. Moreover, states are allowed to set cost
caps and limits on the numbers and types of persons to be served under their wavier
programs.
Notwithstanding wide use of the Section 1915(c) waiver authority by states over
the last two decades, total spending for Medicaid home and community-based
services waivers is significantly less than institutional care – about $14.4 billion in
2001, compared to $53.1 billion for nursing facility care services and care for persons
with mental retardation in intermediate care facilities (ICFs/MR). Despite this
disparity in spending, in many states the Section 1915(c) waiver program is the
primary source of financial support for a wide range of home and community-based
services, and funding has been increasing steadily. Federal and state Medicaid
support for the waiver programs increased by over 807% from FY1990 to FY2001
(in constant 2001 dollars).
The home and community-based waiver program has been a significant source
of support to care for persons with mental retardation and developmental disabilities
as states have closed large state institutions for these persons over the last two
decades. Nationally, in FY2001, almost 75% of Section 1915(c) waiver funding was
devoted to providing services to these persons.
States administer their long-term care programs against this backdrop of federal
legislative initiatives – first, the entitlement to nursing home care, and requirement
to provide home health services to persons entitled to nursing home care, and,
second, the option to provide a wide range of home and community-based services
5States may waive the following Medicaid requirements: (1) statewideness – states may
cover services in only a portion of the state, rather than in all geographic jurisdictions; (2)
comparability of services – states may cover state-selected groups of persons, rather than all
persons otherwise eligible; and (3) financial eligibility requirements – states may use more
liberal income requirements for persons needing home and community-based waiver
services than would otherwise apply to persons living in the community. For further
information, see CRS Report RL31163, Long-Term Care: A Profile of Medicaid 1915(c)
Home and Community-based Services Waivers, by Carol O’Shaughnessy and Rachel Kelly.

CRS-4
through waiver of federal law, within state-defined eligibility requirements, service
availability, and limits on numbers of persons served.

CRS-5
A CRS Review of Ten States: Report on Texas
Summary Overview6
Overview
! Long-term care issues for the elderly and persons with disabilities have been
a challenge for Texas policymakers for some time. Institutional spending
dominates public long-term care financing and the Texas population is rapidly
aging. Among the state’s responses to these challenges are efforts to expand
home and community services over time, integrate delivery of these services,
and develop a comprehensive response to the Supreme Court’s decision in
Olmstead v. L.C.7
! In September 1999, then-Governor George W. Bush issued an executive order
requiring the Texas Health and Human Services Commission (HHSC) to
review all services and supports available to persons with disabilities in Texas
and make recommendations for improvement to them.8 The Commissioner
appointed a 12-member advisory board to help the state formulate its plan
which resulted in a blueprint that the state has been following to improve its
long-term care system for persons with disabilities.
Demographic Trends
! Texas is a large state with a relatively young population; persons aged 65 and
over represent about 10% of the population. However, the state has a large,
rapidly growing elderly population, estimated to reach 4.4 million in 2025.
! Persons aged 85 and over with two or more limitations in activities of daily
living (ADLs) are estimated to increase 31% by 2010 to a total of 31,270. The
number of persons aged 18 to 64 with the same level of disability will increase
by 10.7%, reaching 60,290 in that year.
6Information based on Texas data and documents, national data, and interviews with state
officials. This report does not discuss programs for persons with mental illness. It also
generally excludes discussion of programs for infants and children with disabilities, other
than those serving persons with mental retardation and developmental disabilities.
7The Supreme Court ruled in Olmstead v. L.C. that Title II of the Americans with
Disabilities Act (ADA) requires states to transfer individuals with mental disabilities into
community settings, rather than remaining in institutions, when a state treatment
professional has determined the appropriateness of such an environment, the community
placement is not opposed by the individual with a disability, and the placement can be
reasonably accommodated.
8Texas Health and Human Services Commission, Texas Promoting Independence Plan, In
Response to Executive Order GWB99-2 and the Olmstead Decision, Jan. 9, 2001, Austin
Texas.

CRS-6
Administration of Long-Term Care Program
! Texas has four major state-level departments that administer home and
community services to persons with disabilities and operate under the
umbrella of the HHSC. Over time, Texas has struggled with coordinating the
activities of these departments and has created several innovative programs
to attempt to integrate their activities at the state and local levels.
Trends in Institutional Care
! Texas has a large number of nursing home beds; the occupancy rate is quite
low – 68.5% in 2000. This implies that the state has significant excess
capacity in its nursing home industry. The supply of licensed assisted living
facility beds has grown from 21,628 in 1997 to 40,259 in 2001. Like nursing
homes, the occupancy rate in assisted living facilities is also quite low – only
59% in 2001.
! Unlike many other states, Texas has not eliminated many of its large state
facilities for persons with developmental disabilities. The state closed two of
its 15 facilities in 1996; the remainder, some of which began operation in the
1960s, remain open. The state has no plans to close any facilities in the
foreseeable future. Persons living in large institutions with 16 or more
residents declined from 74.6% of all persons living in group residences in
1990 to 57.7% in 2000. Nevertheless, Texas retains a relatively large
proportion of persons with developmental disabilities in institutions compared
to many states, ranking 48th in the Nation in its use of smaller community
facilities.
Trends in Home and Community-Based Care
! Texas supports a wide range of services for older and younger adults with
physical disabilities through its: Medicaid personal care and day activity and
health services programs; a Medicaid Section 1915(c) home and community-
based services waiver for adults with disabilities (excluding persons with
developmental disabilities); and eight small programs funded by state funds
and federal Social Service Block Grant (Title XX of the Social Security Act)
funds.
! Texas has three Medicaid Section 1915(c) home and community-based
services waivers for persons with developmental disabilities. The largest
waiver– the Home and Community-Based Waiver – served 6,731 people of
any age with a diagnosis of mental retardation at a cost of $263 million in
SFY2002. The waiver offers a wide range of services including home
modifications, group residential options, case management habilitation,
nursing, therapies, and supported employment. No state-funded programs are
specifically designed to serve persons with developmental disabilities, other
than mental retardation.

CRS-7
Long-Term Care Spending
! Spending for nursing home care decreased as a percentage of Medicaid long-
term care spending from 55.2% in FY1990 to 48.8% in FY2001. During the
same period, the portion spent on (intermediate care facilities for the mentally
retarded (ICFs/MR)) decreased from 34.4% to 22%. While the proportion of
Medicaid long-term care funds spent on institutional care decreased during the
1990s, there was a slow but steady increase in the spending for home and
community-based services, primarily due to increased spending on the
Medicaid Section 1915(c) home and community-based waiver program.
However, less than one of every three Medicaid dollars spent on long-term
care in Texas is for home and community-based services.
! Almost half of waiver spending in Texas is devoted to the aged and disabled
populations; waiver spending for persons with developmental disabilities
accounted for almost 40% of spending in FY2001, with the remainder for
other populations with disabilities. (In many other states, funding for waiver
programs for persons with developmental disabilities account for the largest
portion of waiver spending.)
Issues in Financing and Delivery of Long-Term Care
! Among the challenges Texas faces are an institutional bias in financing long-
term care services; a crisis in nursing home liability insurance; large waiting
lists for community services; need for increased access to housing with
services the community; and a long-term care labor shortage.
! There has been pressure from consumers for expanded opportunities to direct
the course of their own care. As a result, Texas sought and received approval
from the Centers for Medicare and Medicaid Services (CMS) to provide
consumer-directed services in all home and community-based programs; in
2003, more than 100,000 Medicaid beneficiaries may be eligible to direct their
personal attendant and respite care services.

CRS-8
Demographic Trends
Texas was the second most populous state in the country in 2000 with a
population of 20.9 million. It also is one of the younger states. Its population aged
65 and older – 2.1 million persons in 2000 – represents only 9.9% of its total
population ranking it 47th in the Nation. (Table 1).
Despite being a young state, Texas has a large population of older persons that
is growing rapidly. From 1990 to 2000, the state’s elderly population grew by
20.7%, and those most in need of long-term care – the population age 85 and older
– grew by 42.8%. (Table 1).
Table 1. Texas Population Age 65 and Older, 1990 and 2000
1990
2000
2000
Percent
population
Percent of
Percent of
change,
rank in
total
total
1990-
U.S. (based
Age
Number
population
Number
population
2000
on percent)
65+
1,716,576
10.1
2,072,532
9.9
20.7
47
65-74
998,239
5.9
1,142,608
5.5
14.5
47
75-84
551,732
3.2
691,984
3.3
25.4
47
85+
166,605
1
237,940
1.1
42.8
46
Under 65
15,269,934
89.9
18,779,288
90.1
23
5
Total
16,986,510
100
20,851,820
100
22.8
2
Source: U.S. Census Bureau. Profile of General Demographics for Texas: 1990. 2000:
[http://www.census.gov/census2000/states/tx.html]. Percentages may not sum to 100% due to
rounding.
Texas, along with the rest of the country, will experience large increases in its
older population over the next 25 years. By 2025, its elderly population will increase
by 107.8% (See Figure 1). In 2025, 16.1% of the Texas population will be aged 65
years or older, compared to 18.5% for the Nation (Table 2). While older persons
will represent a smaller proportion of the Texas total population compared to the
United States as a whole in 2025, Texas will have to address the long-term care needs
of 4.4 million elderly then, nearly 500,000 of whom will be aged 85 or older.

CRS-9
Figure 1. Percentage Increase Over 2000 Population
in Texas, 2005-2025
140%
120%
100%
80%
60%
40%
20%
0%
2005
2010
2015
2020
2025
65-74
75-84
85+
65+
Total
Under 65
Source: CRS calculations based on data from the U.S. Census Bureau. Projections:
[http://www.census.gov/population/www/projections/st_yrby5.html]; analyzed data from State
Populations Projections: Every Fifth Year.
Table 2. Elderly Population as a Percent of Total Population,
Texas and the United States, 2025
Proportion of total
Proportion of total
population
population
Age
in Texas
in United States
65+
16.1%
18.5%
65-74
9.3%
10.5%
75-84
5.0%
5.8%
85+
1.7%
2.2%
Under 65 population
83.9%
81.5%
Source: CRS calculations based on data from the U.S. Census Bureau. Projections:
[http://www.census.gov/population/www/projections/st_yrby5.html]; analyzed data from State
Populations Projections: Every Fifth Year. See Appendix 3 for information on projection
assumptions.

CRS-10
Need for Long-Term Care
Table 3 presents estimates of the number of persons aged 18 and over in Texas
who have limitations in two or more activities of daily living (ADLs) and thus may
need long-term care services. These estimates were derived from data generated by
The Lewin Group, Inc., and combine national level data on persons with disabilities
with state-level data from the U.S. Census Bureau on age, income, and broad
measures of disability.
Persons aged 85 and over with two or more limitations in ADLs are estimated
to increase 31% by 2010 to a total of 31,270; the number of persons aged 18 to 64
with the same level of disability will increase by almost 11% reaching 60,290.
Growth in the number of adults of all ages with disabilities will place pressure on
public and private long-term care resources.
Table 3. Estimated Number of Persons with Two or More
Limitations in Activities of Daily Living (ADLs),
By Poverty Status, in Texas
2002
2005
2010
Percent
of
Poverty
Persons with 2+ ADLs by age and income
18-64
65+
85+
18-64
65+
85+
18-64
65+
85+
Up to
15983
20316
6089
16672
21643
6618
17689
24618
7982
100%
Up to
24175
39610
10938
25215
42175
11887
26758
47827
14339
150%
Up to
30743
52271
14222
32064
55651
15456
34030
63071
18644
200%
All
54470
93257
23853
56812
99260
25923
60290
112211
31270
income
Source: CRS analysis based on projections generated by The Lewin Group, Inc., through the HCBS State-
by-State Population Tool available on-line from: [http://www.lewin.com/cltc]. The Lewin Group Center on
Long-Term Care HCBS Population Tool, by Lisa M.B. Alecxih, and Ryan Foreman.

CRS-11
Administration of Long-Term Care Programs
State and Local Administration
Texas has four major departments that administer institutional and home and
community services to persons with disabilities, which now operate under the
umbrella of the Texas Health and Human Services Commission (HHSC). Over time,
Texas has struggled with coordinating the activities of these departments and has
created several innovative programs to attempt to integrate their activities at the state
and local levels.
The Texas Health and Human Services Commission (HHSC) oversees the
activities of the Texas Department of Human Services, Texas Department of Mental
Health and Mental Retardation, Texas Department on Aging, Texas Rehabilitation
Commission, and other human service agencies. The Health and Human Services
Commission is also the single state agency for Medicaid and operates the program
through memoranda of understanding with its subordinate departments.
Each of the state agencies under the HHSC umbrella has a citizens’ oversight
board appointed by the Governor and an agency head (commissioner or executive
director) who reports to the HHSC commissioner. The citizen boards provide input
into a department’s operations through approval of agency rules.
The Texas Department of Human Services (DHS) has an Assistant Deputy
Commissioner for Long-Term Care who oversees client eligibility for services,
program policies, community care (i.e., most home and community services), and
education. The program policy unit regulates nursing facilities, intermediate care
facilities for the mentally retarded (ICFs/MR), and hospices.
Ten regional offices carry out most of DHS’ work through administration of a
number of programs, collectively called Community Care. These programs provide
home and community services to a wide range of people with disabilities. The 10
regional offices determine functional and financial eligibility as well as provide case
management for the majority of Community Care programs. The Department
contracts out functional assessment and case management for two Medicaid Section
1915(c) home and community-based services waivers that serve persons with
developmental disabilities.
The Texas Department of Mental Health and Mental Retardation (TDMHMR)
confines its services for persons with developmental disabilities to those with mental
retardation; services for those with other types of developmental disabilities remain
with DHS. TDMHMR has local authorities in each county in the state that provide
services to persons with mental retardation directly, or through a network of local
providers. These traditional local authorities do functional assessment and case
management.
In eight regions of Texas, TDMHMR has implemented a new design for the
local authorities. Under this model, local authorities are the single entry point for
services; they assess the need for services and perform case management that

CRS-12
incorporates person-directed planning to support the participant in decision-making
regarding their services. These local authorities provide quality assurance, they do
not provide services.
The Texas Department on Aging (TDOA) administers the Older Americans Act
program which supports nutrition services, family caregiver support services,
information and referral, in-home and respite services, and the nursing home
ombudsman program, among others. Twenty-eight area agencies on aging administer
the Older Americans Act services. In 1999, the legislature proposed merging TDOA
with the other long-term care units in DHS; this step toward integration was delayed
until 2006 due to concerns expressed by some advocacy groups.
The Texas Rehabilitation Commission (TRC) administers vocational
rehabilitation programs and funds ten Independent Living Centers, which served 21
counties and 3,260 people in 1999.9 The Commission also operates a Comprehensive
Rehabilitation Services program for people with traumatic brain or spinal cord
injuries; the program served 489 people in FY1999.10
Integration and Coordination Efforts
Texas has undertaken four major efforts to integrate and coordinate health and
long-term care services at the state and local levels. In 1991, the Health and Human
Services Commission (HHSC) was created to oversee the state’s health and human
services departments. Until recently, the Commission had to rely primarily on
coordination efforts to persuade the departments to work together at the state and
local levels, the Commission acquired the power to transfer funds among the
departments and thus now has more tools to ensure coordination of departmental
activities.
In 1987, legislation established the Community Resource Coordination Groups
(CRCGs) of Texas. This county-based interagency forum coordinates health, long-
term care, and social services for persons needing services from more than one state
agency. In 2001, legislation expanded the CRCG program to adults (prior to that
time only children were covered). Seventeen state-level agencies under the purview
of the HHSC have signed a memorandum of understanding to support the
development of CRCGs around the state. The state has a CRCG team for adults, and
another for children, which oversee the development of the county units. According
to state officials, all 254 Texas counties have units devoted to children, and 95
counties have units for adults.
In yet another coordination effort, the 76th Texas Legislature permitted
communities to submit local access plans for long-term care services and required the
state to support these efforts. The plans describe barriers to access to services and
request assistance from HHSC in surmounting those barriers. Only about 23
9Texas Council on Developmental Disabilities and Texas Office for Prevention of
Developmental Disabilities, Texas Services Supplement to 2000 Biennial Report. Hereafter
referred to as Texas Services Supplement to 2000 Biennial Report.
10Texas Services Supplement to 2000 Biennial Report.

CRS-13
communities had submitted plans by August 2000, and one-third of these
communities were aggressively pursuing local access systems. The legislature did
not appropriate any funding to support these planning efforts, but the HHSC and
TDOA received a $1.4 million Real Choice Systems Change Grant from the U.S.
Department of Health and Human Services to assist with these efforts in SFY2003.11
The Texas grant, entitled Texas Real Choice Grant: Creating a More Accessible
System for Real Choices in Long-Term Care Services is designed to test the concept
of a “systems navigator program,” which is intended to help people of all ages with
disabilities avoid institutionalization. Two communities have been selected to
evaluate the program’s effectiveness in diverting people from institutions or
transitioning them from institutions into the community. Future plans are dependent
upon the results of the evaluation.
One of Texas’ most ambitious integration efforts is development of a small
“consolidated Medicaid waiver” project in Bexar County. The project is intended to
merge Medicaid Section 1915(c) home and community-based services waivers for
adults and children with disabilities that are ordinarily separately administered.
Taking this step allows for one set of providers, one comprehensive service array,
one consistent set of rates, and one administrative agency. This project serves 100
individuals who qualify for nursing facility care (50 adults and 50 children) and 100
individuals who qualify for ICFs/MR care (50 adults and 50 children), regardless of
age or type of disability.
Another innovative project is the development of a single assessment instrument
that could be used in all long-term care programs, with an emphasis on predicting
resource (service or dollar) use. The Texas Instrument of Functional Assessment
(TIFA) may be used for broad budget prediction/planning purposes, or at the program
level to determine eligibility for a program or to set limits on individual resource use.
The TIFA is currently being administered to over 6,000 persons receiving publicly-
funded long-term care services to determine if there is a correlation between the
TIFA and service utilization. Final results are expected by January 2004.
11 Texas Health and Human Services Commission, Enhancing Community Access for Long-
Term Care, Progress Update on SB374, Aug. 11, 2000.
[www.hcbs.org/compendium/web/texas_rc.htm] (accessed on Apr. 3, 2003)

CRS-14
Texas Long-Term Care Services for the
Elderly and Persons with Disabilities
Trends in Institutional Care
Since 1997, the number of nursing home beds and facilities in Texas has been
steadily declining.12 By 2000, Texas had 1,251 nursing facilities with 127,525 beds,
with an occupancy rate of 68.5% in 2000 (Table 4). At 61.5 beds per 1,000 older
Texans aged 65 and older, the state’s rate is higher than the national rate of 52.7. The
ratio of 536 beds per 1,000 persons aged 85 and over is much higher than the national
average of 434.8 per 1,000. The low occupancy rate combined with the high ratio of
nursing home beds to older persons implies that the state has significant excess
capacity in its nursing home industry.
While the nursing home supply has dropped over the last several years, the
supply of licensed assisted living facilities has grown from 794 in 1997 to 1,298 in
2001. During the same time period the number of licensed beds almost doubled from
21,628 to 40,259.13 Significant excess capacity exists among assisted living facilities
as well; the occupancy rate in these facilities was only 59% in 2001.14 The state does
not control the supply of assisted living facility beds.
Table 4. Nursing Home Characteristics in Texas
and the United States
(data are for 1999-2000)
Characteristic
Texas
United States
Number of facilities
1,251
170,023
Number of residents
87,299
1,490,155
Number of beds
127,525
1,843,522
Number of Medicaid beds
34,768
841,458
Number of beds per 1,000 pop aged 65 and older
61.5
52.7
Number of beds per 1,000 pop aged 75 and older
137.1
111.1
Number of beds per 1,000 pop aged 85 and older
536.0
434.8
Occupancy rate
68.5%
80.8%
Source: American Health Care Association, Facts and Trends: The Nursing Facility Source book.
For the U.S., Ibid., American Health Care Association.
As in most states, a large portion of Medicaid long-term care spending in Texas
is devoted to nursing home care. In FY2001, of total long-term care spending under
Medicaid ($3.3 billion), 48.8% was spent on care in nursing homes. Texas state
12 Texas Department of Human Services, FY2001 Long Term Care Regulatory Annual Report, Oct.
2001. Hereafter referred to as FY2001 Long Term Care Regulatory Annual Report, Oct. 2001.
13FY2001 Long Term Care Regulatory Annual Report, Oct. 2001.
14FY2001 Long Term Care Regulatory Annual Report, Oct. 2001.

CRS-15
officials generally believe that Medicaid’s financial incentives help promote an
institutional bias in the program.
Trends in Home and Community-Based Care
Texas supports a relatively wide range of home and community-based services
for adults with physical disabilities. These include two Medicaid state plan services
provided at the option of the state – personal care and adult day care; one Medicaid
Section 1915(c) home and community-based waiver program; and eight small
programs funded by state and Social Service Block Grant (SSBG) funds authorized
under Title XX of the Social Security Act.
Texas employs two features that make its financial eligibility standards for home
care services provided under its state Medicaid plan different from those used by
other states. The first is its use of a Special Income Rule to determine eligibility for
home care services. In the early 1980s, the state received approval from the U.S.
Department of Health and Human Services (DHHS) to conduct a Section 1115
demonstration project15 designed to eliminate custodial care in nursing homes and to
serve people needing that level of care in the community. Under the demonstration,
Texas was allowed to use a Special Income Rule, known as the “300% rule” when
determining eligibility for a Medicaid state plan service known as Primary Home
Care. Under the rule, persons may have income up to 300% of the federal SSI level
and qualify for Medicaid. Ordinarily, states are allowed to use this more liberal
income standard to determine financial eligibility only for institutional care, or for
Section 1915(c) home and community-based waiver services. States are not allowed
to use the 300% rule for Medicaid state plan services. Since Texas does not have a
medically needy program (which allows persons with high medical expenses to
deplete their income and then establish Medicaid eligibility), the use of the 300% rule
for home care in Texas was intended to establish a more liberal standard for home
care only. When the Texas demonstration project ended, Congress amended the
Medicaid statute16 to allow Texas to continue to use the more liberal 300% rule to
determine eligibility for home care services offered under the state Medicaid plan,
thus creating eligibility for home care for persons who have higher income than
would otherwise be eligible.
In addition to its use of the 300% Special Income rule, Texas allows persons
who qualify for nursing home care and whose income exceeds 300% of the SSI level
to place income into special trusts, called “Miller trusts,” and still qualify for
Medicaid coverage. Medicaid law requires states that use only the 300% rule (and
15Section 1115 of the Social Security Act allows the Secretary of the Department of Health
and Human Services (DHHS) to conduct research and demonstration programs authorized
under the Social Security Act, including Medicaid. Under this authority, states may
experiment with different approaches to the delivery of health and long-term care services
than are otherwise permitted under Medicaid.
16Section 1929(b)(2) of the Medicaid statute. There is no expiration date for this provision.

CRS-16
do not have a medically needy program) to allow applicants to place income in
excess of that level in trusts to receive Medicaid coverage.17
Personal Care and Adult Day Care. The largest home and community-
based program in Texas is the personal care service, called Primary Home Care,
which is offered as an optional Medicaid state plan service. About 76,000 persons
were served in SFY2002 at a cost of $511.4 million.18 The program finances
personal care, homemaker, and medical escort services. As discussed above, persons
may have income up to 300% of the Supplemental Security Income (SSI) eligibility
level ($1,656/month in 2003 for an individual) under the Special Income Rule. In
addition, they must meet SSI’s assets limit of $2,000 (for an individual).19 The
program is available to people of any age with limitations in at least one personal
care task. Care is capped at 50 hours per week.
Texas’ adult day care program – Medicaid Day Activity and Health Services –
is covered under rehabilitation services which are offered as an optional Medicaid
state plan service. This program covers nursing and personal care, physical
rehabilitation, meals, transportation, and social activities during the day, Monday
through Friday in adult day care centers. The service is available to people of any age
who have a medical diagnosis and who need assistance with at least one personal
care task. Participants must have countable incomes at or below 100% of the SSI
benefit level ($552 per month for an individual in 2003) and have assets no greater
than $2,000 for an individual. The program served 14,960 participants in SFY2002;
the service cost $79 million.20 Individuals can receive care up to five days a week.
Medicaid 1915(c) Waiver. The only major Medicaid Section 1915(c) waiver
designed to serve the adult population with physical (non-developmental) disabilities
is the Community-Based Alternatives (CBA) waiver. This waiver provides a wide
range of services including personal assistance, adult foster care, assisted living,
nursing, therapies, and respite care.21 Participants must need a nursing facility level
of care, and their care costs cannot exceed 100% of their Texas Index for Level of
Effort (TILE)22 rate (i.e., 100% of what their costs would have been in a nursing
17Medicaid statute requires that, after the person’s death, the state must become the
beneficiary of the trust. The statute also requires that the estates of persons who benefit
from certain Medicaid services, including home and community-based long-term care
services, are subject to recovery by the state after their death. However, Texas has not
complied with these federal requirements. As of May 2003, the Texas legislature was
considering a bill that would include estate recovery provisions, however.
18Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003. Primary Home Care serves children as well as adults. As
of Dec. 31, 2002, the program served 87,768 consumers age 18 & over.
19Certain items are excluded, such as an individual’s home; up to $2,000 of household goods
and personal effects; life insurance policies with a face value of $1,500 or less; an
automobile with value up to $4,500; and burial funds up to $1,500, among other things.
20Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003.
21 For a full list of services under each of the waivers, see Appendix Table 1.
22TILE – Texas Index for Level of Effort. TILE is Texas’ version of a nursing home
(continued...)

CRS-17
facility). A participant’s countable income cannot exceed 221% of the federal
poverty level and financial resources cannot exceed $2,000. This waiver served
41,128 participants in SFY2002 at a cost of $397 million.23 For more detailed
information on this and other programs, see Appendix 1.
State Programs. There are a number of pathways that establish Medicaid
eligibility for home and community-based long-term care services. These include
coverage of persons whose income does not exceed 300% of the federal SSI payment
level ($1,656 a month for an individual in 2003) and whose financial resources do
not exceed $2,000 for an individual, as allowed under the Section 1915(c) waiver
program. Many people may need community care but cannot meet Medicaid’s
income limits or resource tests. One of the issues many states have confronted is
how to serve these people. Texas has addressed this issue in part through its seven
programs which receive state general revenues and SSBG funds. The eighth program
– In-Home and Family Support – is strictly general revenue-funded. Regional DHS
offices manage these programs as part of the Community Care program.
Family Care, the largest state-funded program provides personal care,
homemaker services and medical escort services to people with monthly incomes at
or below $1,656 for an individual (300% of the SSI benefit level) and financial assets
that do not exceed $5,000. The program served 8,460 participants a month in
SFY2002 at an annual cost of $46.5 million. The program is available statewide and
is limited to 50 hours of care a week. Its benefit structure is similar to that of the
Primary Home Care Program.
In-Home and Family Support, is the second largest state program; it serves
persons aged 4 or older who have a physical disability limiting their functional
independence. The program provides direct grants to participants or their families
that can be used for attendant, home health, or chore services or equipment and home
modifications. The program served 4,730 participants a month at an annual cost of
almost $9 million in SFY2002.24 This program is available statewide and has no
means test although co-payments start at 105% of the state median income adjusted
for household size.
The six other state-funded programs25 each serve fewer than 1,000 persons a
month. Funding for all amounted to about $20 million in SFY2002.26 Each program
provides a narrow range of services; two of the programs focus on group residential
(...continued)
payment system designed to relate payment to the disability level of the resident.
23Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003.
24Ibid.
25Residential Care, Adult Foster Care, Consumer-Managed Personal Assistance Services,
Respite Care, and Special Services to Persons with Disabilities and 24-Hour Attendant Care,
Day Activity and Health Services.
26Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003.

CRS-18
care; two on consumer-directed services; one on respite care; and one on day activity
and health services.
Texas Long-Term Care Services for Persons with
Mental Retardation and Developmental Disabilities
Services to persons with mental retardation and other developmental disabilities
in the United States changed dramatically over the last half of the 20th century as a
result of a number of converging factors. These include the advocacy efforts of
families and organized constituency groups, various changes to the Social Security
law that provided payments to individuals through SSI and SSDI and to service
providers through the Medicaid program, and significant litigation brought on behalf
of persons with mental retardation.27
Trends in Institutional Care
The early history of services to persons with mental retardation is characterized
by the development of large state institutions or training schools begun during the
latter part of the 19th century and continuing through the first part of the 20th century.
Between 1920 and 1967, institutions quadrupled in size and peaked at almost
200,000 individuals nationwide in 165 free-standing, state-operated mental
retardation institutional facilities.28 Today, some states are still faced with the legacy
of large state-operated institutions.
Texas, unlike some other states, has not eliminated many of its large state
facilities for persons with developmental disabilities. The state closed two of its 15
facilities in 1996; the remainder, some of which began operation in the 1960s still
operate. The Austin State School opened in 1917 and still had an average daily
census of 437 in 2001; another, the Mexia State School opened in 1946 and had a
census of 551 in 2001. (See Appendix 3 for a list of the institutions that have been
closed and those in operation and their 2000 census.)
Part of the reason for the existence of these facilities is the severity of residents’
disabilities. Seventy-seven percent of residents of the state’s large state facilities for
persons with mental retardation and development disabilities have severe or profound
mental retardation and 48% of residents also have a mental health diagnosis.29 These
27For a detailed history of the development of services for persons with developmental
disabilities, see The State of the States in Developmental Disabilities by David Braddock,
Richard Hemp, Susan Parish, and James Westrich. University of Illinois at Chicago.
American Association on Mental Retardation, Washington, 1998. (Hereafter cited as
Braddock, The State of the States in Developmental Disabilities.)
28Braddock, The State of the States in Developmental Disabilities.
29Texas Department of Mental Health and Mental Retardation, The Strategic Plan for Fiscal
Years 2003-2007, draft dated 4/25/02. Austin Texas. (Hereafter referred to as Texas
Department of Mental Health and Mental Retardation, The Strategic Plan ).

CRS-19
percentages are about the same as in the U.S. as a whole.30 The state has no plans to
close any facilities in the foreseeable future.31 Stakeholders and state officials
asserted in interviews that parents of persons residing in state schools have been
effective in keeping institutions open for their children.
Of the 1500 buildings that TDMHMR operates on 22 campuses, 95% have
surpassed their depreciable lives and the costs of upkeep have risen over time.32 For
SFY2002, the legislature authorized $3.3 million for maintenance of these facilities;
for SFY2003, the authorization is $2 million, with an additional $35 million available
from bond sales.
Despite its reliance on institutional care, in SFY2000, TDMHMR only spent
about 32% of its service budget on institutions33 compared to 65% in SFY1989.34
This has resulted, in part, from an initiative called Promoting Independence, the
state’s response to the Supreme Court’s decision in Olmstead v. L.C.
Persons living in large institutions with 16 or more residents declined from
74.6% of all persons living in group residences in 1990 to 57.7% in 2000 (Table 5).
The proportion of persons residing in smaller facilities increased over the decade.
Nevertheless, in 2000, Texas ranked 48th in the Nation in its use of smaller facilities
(based on the percent of individuals in residences of six or fewer persons).35
30Ibid., The State of the States in Developmental Disabilities.
31Ibid., Texas Department of Mental Health and Mental Retardation, The Strategic Plan.
32Ibid., Texas Department of Mental Health and Mental Retardation, The Strategic Plan.
33Institution in this case is limited to state schools and state hospitals.
34Texas Health and Human Services Commission, Texas Promoting Independence Plan, Jan.
9, 2001 and information provided by staff of Texas Department of Mental Health and
Mental Retardation, Jan. 14, 2003.
35Disability at the Dawn of the 21st Century and The State of the States, David Braddock
Editor. American Association Mental Retardation, Washington, 2002, p. 86 (Hereafter
referred to as Disability at the Dawn of the 21st Century, 2002).

CRS-20
Table 5. Persons with Mental Retardation and Developmental
Disabilities Served in Residential Settings, by Size of
Residential Setting, 1990, 1995, and 2000
Persons served by residential settinga
Setting by size
1990
1995
2000
17,624
17,478
18,584
TOTAL
(100%)
(100%)
(100%)
13,148
11,205
10,721
16+ PERSONS
(74.6%)
(64.1%)
(57.7%)
Nursing facilities
3281
2987
2919
State institutions
7290
5879
5338
Private ICFs/MR
2577
2339
2464
Other residential
0
0
0
4,476
1,112
550
7 - 15 PERSONS
(25.4%)
(6.4%)
(3.0%)
Public ICFs/MR
24
35
177
Private ICFs/MR
2095
558
373
Other residential
2357
519
0
5,161
7,313
= or>6 PERSONS
0
29.5%
39.4%
Public ICFs/MR
0
180
878
Private ICFs/MR
0
3536
3794
Other residential
0
1445
2641
Source: Disability at the Dawn of the 21st Century and the State of the States, David Braddock, editor.
With Richard Hemp, Mary C. Rizzolo, Susan Parish, and Amy Pomeranz. American Association on
Mental Retardation, Washington, 2002.
a Texas classification categories were <8 persons; 9-13 persons, and 14+ persons. Percentages may
not sum to 100% due to rounding.

CRS-21
Trends in Home and Community-Based Care
Texas’ reliance on institutional care for persons with mental retardation and
developmental disabilities is reflected in the fact that the state has only three
relatively small Medicaid Section 1915(c) home and community-based waivers for
this population. Participants must meet a requirement that they need an institutional
level of care; their incomes cannot exceed 300% of the SSI benefit level; and their
countable financial resources cannot exceed $2,000. No state-funded programs are
specifically designed to serve persons with developmental disabilities.
The Home and Community-Based Services Waiver is the largest of Texas’
waivers and served 6,731 people of all ages with a diagnosis of mental retardation at
a cost of $263 million in SFY2002.36 The waiver offers a wide range of services
including: home modifications, group residential options, case management,
habilitation, nursing, therapies, and supported employment. The cost for an
individual’s services is capped at 125% of the annual payment to an intermediate care
facility for the mentally retarded (ICFs/MR). TDMHMR operates this waiver.
Texas Community Living Assistance and Support Services Waiver (CLASS)
serves people with developmental disabilities with an onset before age 22. This
waiver, which is available in 104 counties, served 1,451 clients a month at a cost of
$45.7 million in SFY2002.37 The waiver provides a narrower range of services than
the waiver for persons with mental retardation described above. The CLASS waiver
provides case management, habilitation, therapies, adaptive aides and minor home
modifications. The cost for an individual’s services is capped at 125% of the annual
payment to an ICF for people with mental retardation and related conditions. DHS
administers this waiver.
The Deaf-Blind Multiple Disabilities Waiver serves only persons who are deaf,
blind, and have a third disability. This statewide waiver served 112 clients a month
at a cost of $4.8 million in SFY2002.38 Services include assisted living, case
management, nursing, respite, and various therapies. An individual’s costs are
capped at 115% of the average cost of an ICF/MR. DHS administers this waiver.
36 SFY2002 Quarterly Measures Report, Texas Department of Mental Health and Mental
Retardation (Jan. 9, 2003); and SFY2002 Monthly Financial Report as of Nov. 2002, Texas
Department of Mental Health and Mental Retardation.
36Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003.
38Personal communication with staff from the Budget Division of Texas Department of
Human Services, Jan. 10, 2003.

CRS-22
Financing Long-Term Care in Texas
In most states, the federal-state Medicaid program is the chief source of
financing for long-term care. In Texas, the Medicaid program accounted for $3.3
billion in long-term care spending in FY2001. Spending for institutions represented
70.8% of Medicaid long-term care spending. While spending on home and
community-based services represented less than a third of all Medicaid long-term
care spending, spending for home and community-based services increased
dramatically from FY1990 to FY2001.
Medicaid Spending in Texas
Medicaid is a significant part of state budgets. After elementary, secondary and
higher education spending, Medicaid spending was the largest share of state budgets
in 2001. According to data compiled by the National Association of State Budget
Officers (NASBO), federal and state Medicaid spending represented almost 20% of
state budgets for the United States as a whole in 2001.
In Texas, Medicaid is the second largest category of federal and state spending
combined, behind elementary and secondary education. Of the state’s $52.4 billion
budget in 2001, federal and state Medicaid spending represented slightly more than
one of every five dollars. Spending for Medicaid almost doubled as a proportion of
the state’s spending from 1990 to 2001 (Table 6).
State spending for Medicaid services in Texas contributed from state funds only
(excluding federal funds)39 also increased during the 1990s. As a percent of
spending for all categories of state spending, state Medicaid spending increased from
6.6% in 1990 to 11% in 2001. (Table 7).
39Federal and state governments share the costs of Medicaid spending according to a
statutory formula based on a state’s relative per capita income (Federal Medical Assistance
Percentage, or FMAP). In FY2001, the federal share for Medicaid in Texas was 60.57%.

CRS-23
Table 6. Share of Federal and State Spending by Category,
Texas and
the United States, 1990-2001
(may not add to 100% because of rounding)
Expenditure category
Texas
All states
1990
1995
2000
2001
2001
Total Expenditure
(in millions)
$23,531
$37,005
$49,390
$52,356
$1,024,439
Medicaid
13.0%
20.8%
21.8%
20.1%
19.6%
Elementary & Secondary
Education
27.1%
28.4%
29.5%
30.5%
22.2%
Higher Education
16.6%
13.2%
14.1%
13.2%
11.3%
Public Assistance
1.8%
1.4%
1.7%
1.6%
2.2%
Corrections
3.4%
7.4%
6.4%
6.3%
3.7%
Transportation
11.3%
8.0%
9.4%
9.1%
8.9%
All other expenses
26.9%
20.7%
17.2%
19.1%
32.1%
Source: CRS calculations based on National Association of State Budget Officers (NASBO) State
Expenditure Reports 1990-2001.
Table 7. State Spending for Medicaid from State Funds as a
Percent of State
Spending, Texas and the United States, 1990-2001
State spending
Texas
All states
1990
1995
2000
2001
2001
Total state spending
$17,876
$26,599
$34,991
$37,082
$760,419
(in millions)a
State Medicaid spending
$1,183
$3,168
$4,614
$4,132
$85,141
(millions)b –state only funds
State Medicaid spending as a
6.6%
11.9%
13.2%
11.1%
11.2%
percent of total state
spending– state only funds
Source: CRS calculations based on data from the National Association of State Budget Officers
(NASBO), State Expenditure Reports for 1991, 1997 and 2001. Data reported are for state fiscal
years. Percentages may not sum to 100% due to rounding.
a Total state spending for all spending categories, excluding federal funds.
b State spending for Medicaid, exclusive of federal funds.

CRS-24
Medicaid Long-Term Care Spending in Texas40
Long-term care spending
Medicaid long-term care financing in Texas at a
represented 28.5% of all
glance:
Medicaid spending in Texas in
FY2001, a decrease from 39.7%
Spending for institutions represented more than
70% of Medicaid long-term care spending in
in 1990 (Figure 2 and Table 8).
FY2001. Spending for nursing homes alone
Although institutions still
represented almost half of total Medicaid long-term
dominate Medicaid long-term
care spending in FY2001.
care spending, from FY1990-
FY2001, spending on nursing
Spending for nursing home care grew at less than
half the rate of total Medicaid spending from
homes and ICFs/MR decreased
FY1990 to FY2001 (86.3% compared to 193.7%)
from 89.7% to 70.8% of total
long-term care spending. In
Spending for nursing home care decreased as a
FY2001, $2.3 billion or 20% of
percentage of long-term care spending from 55.2%
all Medicaid spending was for
in FY1990 to 48.8% in FY2001. During the same
period, the portion spent on ICFs/MR decreased
care in institutions, but nursing
from 34.4% to 22.0%.
home spending accounted for
more than two-thirds of the total
Less than one of every three Medicaid dollars spent
institutional spending (Table 9
on long-term care is for home and community-based
services. However, there has been a significant
and Figure 2).
increase in the spending on home and community-
based service waivers from FY1990-FY2001.
Table 8. Medicaid Long-Term Care Spending in Texas,
FY1990-2001
FY1990 FY1995 FY2000 FY2001
Long-term care spending as a % of Medicaid
spending
39.7%
23.8%
28.5%
28.5%
Institutional care spending as a % of long-
term care spending
89.7%
84.7%
71.8%
70.8%
Nursing home spending as a % of
long-term care spending
55.2%
57.7%
47.7%
48.8%
ICFs/MR* spending as a % of long-term
care spending
34.4%
27.0%
24.1%
22.0%
Total home and community-based services
spending as a % of long-term care spending
10.3%
15.3%
28.2%
29.2%
HCBS waivers spending as a % of long-term
care spending
0.6%
4.4%
20.5%
21.1%
Source: CRS calculations based on CMS/HCFA 64 data provide by The Medstat Group, Inc. For
2000 and 2001, Burwell Brian et al., Medicaid Long-Term Care Expenditures in FY2001, May 10,
2002. For 1995, Burwell, Brian Medicaid Long-Term Care Expenditures in FY2000, May 7, 2001.
For 1990, Burwell, Brian Medicaid Expenditures for FY1991. Sytemetrics/McGraw-Hill Healthcare
Management Group, January 10, 1992. (Hereafter cited as Burwell, Medicaid Expenditures FY1991-
FY2001.) 1990 total Medicaid spending based on HCFA 64 data provided by The Urban Institute,
Washington.
*Intermediate care facilities for the mentally retarded.
40This section discusses Medicaid spending, both federal and state.

CRS-25
Figure 2. Institutional and Home and Community-Based Services as
a Percent of Medicaid Long-Term Care Spending
in Texas, 1990-2001
100%
90%
$1,099.5
80%
million
$1,755.6
70%
million
$2,328.7
60%
million
50%
$959.7
40%
$316.7
million
30%
$126.6
million
20%
million
10%
0%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
Institutional Care (Nursing Home and ICF-MR)
Home and Community-Based Services (Home Health, Personal Care and HCBS Waivers)
Source: CRS calculation based on Burwell, Medicaid Expenditures FY1991-FY2001. 1990 total Medicaid
spending, based on HCFA 64 data provided by Urban Institute.
Table 9. Medicaid Spending in Texas, Total Spending and
Long-Term Care Spending, by Category, and Percent
Change, FY1990-FY2001 in Constant 2001 Dollars
(dollars in millions)
Percent change
FY1990-FY2001
(in constant
Spending category
1990
1995
2000
2001
2001 dollars)
Total medicaid
$3,085.0
$8,698.4
$10,622.8
$11,520.5
193.7%
Total long term care
$1,226.1
$2,072.3
$3,024.3
$3,288.4
110.9%
Total institutional care
$1,099.5
$1,755.6
$2,171.5
$2,328.7
66.6%
Nursing home
$677.2
$1,196.6
$1,442.5
$1,604.1
86.3%
ICFs/MR*
$422.3
$559.0
$729.0
$724.6
34.9%
Total home and community-
based services
$126.6
$316.7
$852.8
$959.7
496.2%
Home health
$2.0
$36.0
$0.0
$0.0
-100.0%
Personal care
$117.8
$188.8
$232.4
$267.4
78.5%
HCBS waivers
$6.8
$91.9
$620.4
$692.3
7905.4%
Source: CRS calculation based on Burwell, Medicaid Expenditures FY1991-FY2001. 1990 total
Medicaid spending, based on HCFA 64 data provided by Urban Institute, Washington, D.C.
*Intermediate care facilities for the mentally retarded.

CRS-26
Figure 3. Medicaid Long-Term Care Spending by
Category in Texas, FY1990-FY2001
(in constant 2001 dollars)
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
Billions
$0.5
$0.0
90
91
92
93
94
95
6
7
8
9
0
1
19
19
19
19
19
19
199
199
199
199
200
200
Nursing Home
ICFs/MR
Home Health
Personal Care
HCBS Waivers
Source: CRS calculations based on Burwell, Medicaid Expenditures FY1991-FY2001. 1990 total
Medicaid spending, based on HCFA 64 data provided by Urban Institute, Washington.
Figures 4a and b depict changes in long-term care spending patterns from
FY1990 to FY2001. In FY1990, 34.4% of Medicaid long-term care spending was
devoted to care for persons with developmental disabilities in ICFs/MR; this
spending decreased to 22% of long-term care spending by FY2001. The proportion
of spending on nursing home services also declined during that time period from
55.2% to 48.8%.
Medicaid spending devoted to home and community-based services
represented less than one of every three Medicaid dollars spent on long-term care.
However, Texas has made substantial use of the Section 1915(c) home and
community-based services programs. Spending on home and community services
increased from 10.3% to 29.2% of long-term care expenditures, primarily due to the
expansion of Section 1915(c) waivers, which increased from .6% of home and
community-based spending to 21.1% in FY2001.

CRS-27
Figure 4a. Medicaid Long-Term Care Spending in Texas
by Category, FY1990
Total Medicaid LTC Spending: $1,226.1 million
ICFs/MR
34.4%
Home Health
0.2%
HCBS
Personal Care
10.3%
9.6%
HCBS Waivers
0.6%
Nursing Home
55.2%
Source: CRS calculations based on Burwell, Medicaid Expenditure FY1991-FY2001.
Figure 4b. Medicaid Long-Term Care Spending in Texas
by Category, FY2001
Total Medicaid LTC Spending: $3,288.4 million
ICFs/MR
22.0%
Personal Care
8.1%
HCBS
29.2%
HCBS Waivers
21.1%
Nursing Home
48.8%
Source: CRS calculations based on Burwell, Medicaid Expenditure FY1991-FY2001.
Increased funding for waiver services does not affect all populations equally.
In FY2001, 58% of waiver spending in Texas was devoted to the aged and persons
with disabilities. Waivers for persons with mental retardation and developmental
disabilities MR/DD accounted for 39.4% of waiver spending.

CRS-28
Figure 5. Total Medicaid Home and Community-Base Services
Waiver Spending by Target Population in Texas
FY2001
Total Medicaid HCBS Waiver Spending: $692.3 million
Others Waivers
2.4%
Aged and
Disabled/
MR/DD Waivers
Physically
39.4%
Disabled
Waivers
58.3%
Source: CRS calculations based on Medicaid HCBS Waivers Expenditures, FY1995 through FY2001
by Steve Eiken and Brian Burwell, The Medstat Group, Inc., May 13, 2002.

CRS-29
Federal and state spending for persons with mental retardation and
developmental disabilities was almost $1.5 billion in 2000 (Table 10). This
represented an increase of 68.4% (in constant 2000 dollars) since 1990. Of total
2000 spending, 51.4% came from state resources. Federal waiver funding increased
from only $4.8 million in 1990 to $145.5 million in 2000, an increase of over
2,000%.
Table 10. Federal and State Spending for Institutional and
Community Services for Persons with Mental
Retardation/Developmental Disabilities in Texas,
1990 and 2000
Percent
Percent
1990
2000
of
change in
(current
(current
FY2000
constant

dollars)
dollars)
total
2000 dollars
Services, total
$703.9
$1,471.1
100.0%
68.4%
Congregate/institutional services
$453.0
$492.0
33.4%
-12.5%
Federal Funds
$240.1
$303.0
20.6%
1.7%
State Funds
$212.9
$189.0
12.8%
-28.5%
Home and community-base
services
$250.9 $979.1 66.6%
214.4%
Federal funds
$44.9
$412.2
28.0%
639.6%
ICFs/MR funds*
$32.3
$166.6
(11.3%)
315.7%
HCBS waiver**
$4.8
$145.5
(10.0%)
2355.7%
Title XX/SSBG funds***
$0.0
$10.2
(0.69%)
---
Other
$7.8
$89.9
(6.1%)
823.3%
State Funds
$206.0
$566.9
38.5%
121.8%
Source: CRS calculations based on data presented in The State of the States in Developmental Disabilities,
by David Braddock et al., 1998. American Association on Mental Retardation, Washington, D.C., p. 404 (for
1990 data). Unpublished data furnished by Richard Hemp, University of Colorado (for 2000 data).
*Intermediate care facilities for the mentally retarded. These funds are used for community services.
**Home and community-based waiver (Section 1915(c)) of the Medicaid statute.
***Social Services Block Grant (Title XX of the Social Security Act).

CRS-30
Issues in Long-Term Care in Texas
The following discussion highlights issues raised in state reports and
interviews with state officials and key stakeholders conducted during the Texas site
visit during the summer of 2002.
Institutional Bias. Texas has dealt with the institutional bias built into the
Medicaid program over the years by increasing funding devoted to home and
community services, particularly for its aged and disabled Medicaid beneficiaries.
The state was also one of the first to have a comprehensive plan for dealing with the
implications of the Supreme Court’s Olmstead decision. That plan has fostered a
number of changes designed to provide the least restrictive care in home and
community-based settings, rather than institutional care.
Texas implemented a three-phase response to Olmstead for nursing home
residents. The first phase began in December 2000 and consisted of informing
nursing home residents about community-based alternatives. The 2-year second
phase began in September 2001 with a pilot program in three sites to relocate nursing
facility residents into the community. Pilots involve hiring and training relocation
specialists, developing an assessment instrument, and conducting community
awareness activities. The third phase will be to divert persons from nursing homes
to home and community-based services through pre-admission screening.
In December 2000, Texas implemented its Community ICFs/MR Living
Options process, which is designed to inform all residents of ICFs/MR about
alternative living arrangements and to determine whether people with developmental
disabilities can live successfully in the community. People who wish to leave an
ICF/MR and whose interdisciplinary team determines that they are able to live in the
community are placed on the Home and Community-based Services Waiver waiting
list.
The third major step the state took involved using legislative “riders,” which
the legislature often uses to impose policy direction on the executive branch. Rider
7, from the 77th Legislature (2002-2003), states that DHS cannot disallow community
services for current waiver participants who would otherwise be in a nursing home
if additional services are required to keep them in the community. Another recent
rider (37) states that as residents leave nursing homes, their funds should follow them
into the community and that their use of home and community services will not be
counted against the waiver slots; in effect they jump the waiting list for home and
community services. In response to Rider 37, the state moves anyone who has lived
in a nursing home within the last 6 months to the top of the Community Based
Alternatives Waiver waiting list.
Nursing Home Liability Insurance. Due to historical quality assurance
problems in nursing homes, Texas requires nursing homes to have liability
insurance. Many companies have stopped selling policies to the state’s facilities
because of perceived high damage awards. The state sponsored an insurance
company – the Joint Underwriting Association (JUA) – that will provide insurance
but will not cover losses due to punitive damages. According to state officials, the

CRS-31
company’s policies cost 50 to 70% less than similar policies available in the private
marketplace. However, providers say that premiums remain unaffordable and that
many facilities are going without liability insurance as a result. The state has also
capped damage awards against nursing homes at $750,000.
Integration of Health and Long-Term Care Services. Texas has tried
to integrate health and long-term care services for persons with disabilities because
the state believes that integration could improve service delivery and possibly lead
to cost savings. Three efforts are noteworthy but small. The state’s Consolidated
Waiver Program encompasses persons with developmental disabilities and children
as well as aged and disabled adults. This program is designed to test consolidation
of 5 Medicaid waivers in Bexar county. The waiver will last for three years and will
serve 100 persons (50 adults and 50 children) eligible for nursing facility care and
100 persons (50 adults and 50 children) eligible for ICFs/MR. There will be one
comprehensive service array, one set of providers, one set of reimbursement rates,
and a single functional assessment process.
Bienvivir Senior Health Services operates the state’s only Program of All-
Inclusive Care for the Elderly (PACE) in El Paso, Texas. PACE serves persons aged
55 or older who are eligible for both Medicare and Medicaid and who need a nursing
facility level of care. The program provides these dually eligible beneficiaries with
all needed medical and supportive services in community-based settings designed to
prevent or delay institutionalization. PACE programs receive capitated payments
from Medicare and Medicaid. Bienvivir Senior Health Services receives capitated
payments of 95% of comparable nursing home costs. The program cost $13.4
million and served 468 clients a month in FY2001.41
The Texas STAR+PLUS waiver in Harris County was originally intended to
rely on Medicare and Medicaid waivers to provide integrated health and long-term
care services to dual eligibles. The state did not obtain the Medicare waiver
necessary for integration and now only covers up to 120 days in a nursing facility
under its Medicaid waiver. However, Evercare, one of its Medicaid HMOs, received
approval from CMS in 2002 to operate as a Medicare+Choice plan.42 To encourage
STAR+PLUS dual eligible members to voluntarily enroll in this Medicare+ Choice
plan, the state has lifted the three prescription per month limit for those who choose
this option. This provides a real opportunity for the Medicaid waiver to offer more
integrated care. STAR+PLUS already integrates acute and long-term care for
Medicaid-only members who comprise approximately half of the program’s
membership.
41Texas Department of Human Services, Individual Service Profiles Community Care
Programs, Apr. 2002, as updated on May 31, 2002.
42The Medicare+Choice program was created by Congress in the Balanced Budget Act
(BBA) of 1997 to give Medicare beneficiaries more access to private health plans, including
several types of managed care plans. Typically these plans provide more health care
coverage than fee-for-service Medicare in return for beneficiary premiums and Medicare
capitated payments. For further information, see CRS Report RL30702, Medicare+Choice,
by Hinda Ripps Chaikind and Paulette Morgan.

CRS-32
Consumer Direction. Many consumer advocacy groups view consumer-
direction, which entails beneficiaries hiring, firing, training, and managing their own
personal attendants, as a key priority. Advocates say that this improves quality of life
and community integration for persons with disabilities. Consumer direction
opportunities do exist in CLASS, the deaf-blind multiple disabilities (DBD) waiver,
STAR+PLUS, Primary Home Care and the Community Based Alternatives (CBA)
waiver, but at the time of the site visit Texas officials asserted that they were having
difficulty getting some of their amendments related to consumer-direction approved
by the Center for Medicare and Medicaid Services. Subsequently, the U.S.
Department of Health and Human Services announced approval of the Texas plan to
allow aged and disabled Medicaid beneficiaries the opportunity to “develop and
manage their own services.”43
Housing. Many stakeholders see access to affordable housing as a key
prerequisite for moving people from institutions into the community. The state has
taken a few steps in this area, such as requiring the Texas Department of Housing and
Community Affairs to make 35 housing vouchers available to people leaving nursing
homes. However, Medicaid’s use of group residential housing is rather limited.
Waiting Lists for Home and Community-based Care. Waiting lists
have been a significant concern for some time in Texas, but the projected $1.8
billion budget deficit projected for SFY2003, and $8.1 billion for the 2004-05
biennium will likely forestall any attempt to tackle this issue. In March 2002, the
Community Based Alternatives Waiver for the aged and disabled had an “interest
list” of 37,667 persons, 54% of whom were estimated to be eligible for services; the
median length of time on the interest list is 10.38 months.44 About 21,000 of those
on the list were already receiving services, primarily from the Primary Home Care
and adult day care programs.
The Texas Department of Mental Health and Mental Retardation reports that
in February 2002, 16,845 people were waiting for mental retardation services in the
home or community; 46% of these people received no services. Data about persons
on the various waiting lists show that about 15% eventually drop off the list and 75%
live at home with parents. Sixty-one percent of persons on the list want services
immediately and 36% want residential services. The CLASS waiver had an interest
list of 7,360 in March 2002, half of whom the state estimates were eligible for
services; the median length of stay on the list was 3.9 years. About 1,508 persons
were already receiving some Medicaid community care. People move off all interest
lists on a first-come-first-served basis. The state projected that the Home and
43U.S. Department of Health and Human Services Press Release, Oct. 31, 2001. HHS
Approves Texas Plan to Allow Elderly, Disabled to Direct their own Services.
44Jim Hine, Commissioner of Texas Department of Human Services, Presentation before the
Texas Senate Finance Committee on Health and Human Services Demand, Thursday, May
9, 2002. Hereafter referred to as Jim Hine, Commissioner of Texas Department of Human
Services Presentation, May 9, 2002.

CRS-33
Community-Based Services Waiver for persons with mental retardation will have a
waiting list of 10,720, 32% of whom are likely to request out-of-home placement.45
Long-Term Care Staffing. Stakeholders for persons with mental
retardation and developmental disabilities stated that there is an inadequate number
of state staff to perform case management and monitoring of beneficiaries’ care. The
number of state staff has not kept pace with the growth in the number of beneficiaries
receiving services. In addition, TDMHMR has a problem recruiting and retaining
employees, particularly in its state operated facilities. It had a turnover rate of 33.5%
in FY2001, compared to a state government wide average of 17.5%. In addition, the
provider base for serving persons with MR/DD has been weakened by the labor
shortage. There aren’t enough licensed nurses and attendant turnover is high. Some
of these problems are attributed to low state reimbursement for providers.46
Stakeholders also have concerns about the effects of the labor shortage in nursing
homes and among home and community care providers serving the aged and disabled
populations.
Stakeholders worry about whether the long-term care workforce has sufficient
training to handle the increasing medical needs of persons with disabilities in the
community. The state has dealt with the problem in nursing homes by providing
facilities, beginning in May 2002, with higher payment rates if they raise the number
of staff in their facilities.
45Jim Hine, Commissioner of Texas Department of Human Services, Presentation May 9,
2002.
46Texas Department of Mental Health and Mental Retardation, The Strategic Workforce
Analysis and Plan for Fiscal Years 2003-2007.

CRS-34
Appendix 1. Major Home and Community-Based Long-Term Care Programs for the Elderly and
Persons with Disabilities in Texas
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Consolidated
Aged and
Nursing
Health and
221% of
Health and
Assisted living,
100 clients
Cost cannot
Health and
Health and
Waiver
disabled
facility (NF)
Human
federal
Human
attendant care,
served in
exceed 150%
Human
Human
Program-
adults and
level of care
Services
poverty
Services
consumable medical
FY2002
of NF rate
Services
Services
Nursing
medically
Commission
level/
Commission
supplies, counseling,
correspond-
Commission
Commission
Facility
dependent
$2,000
dental services,
ing to their
Waiver
children
dietary supplements,
level of care
1915(c)
environmental
modifications, escort
services, foster care,
habilitation,
independent living
skills training,
medication
management, night
supervision,
nutrition/meal
services,
occupational
therapy, personal
emergency response
system, pharmacy,
physical therapy,
per-vocational
services,
psychological
testing, respite,
special medical
equipment,
language, and
supported
employment among
others.
No opportunity for
consumer direction.

CRS-35
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Community
Aged and
Nursing
Department
221% of
Department
Personal assistance
41,128 clients
Individual
Department
Department
Based
disabled
facility level
of Human
federal
of Human
services, adaptive
FY2002
cost ceiling
of Human
of Human
Alternatives
adult, age
of care
Services’
poverty
Services
aids and medical
of 100% of
Services
Services
Waiver
21 and
regional
level/$2,000
regional
supplies, adult foster
individual’s
$397,000,000
1915(c)
above
office
office
care, assisted living
TILE (Texas
services, emergency
FY2002
Index for
response services,
Level of
Began in 1994
minor home
Effort)
and is
modification,
payment rate
available
nursing services,
statewide
occupational,
physical and speech
therapy services,
respite, home
delivered meals. No
consumer direction
option.
Medicaid
All ages
Functional
Physician
(300% of
Department
Personal care, home
76,000 clients
Up to 50
Department
Department
Primary
limitation
must order
SSI)/$2,000
of Human
management (ie.,
in FY2002
hours of care
of Human
of Human
Home Care
with at least
the service
Services
homemaker), escort
a week
Services
Services
one personal
and a
regional
for medical purposes
care task
regional
office
only
$511,375,000
(Offered as an
based on a
DHS nurse
in FY2002
optional
medical
must approve
Medicaid
condition
it.
state plan
service under
personal care)

CRS-36
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Medicaid Day
All ages
Medical
Physician
SSI
Department
Daytime services
Medicaid-
Up to 50
Department
Department
Activity and
who are
diagnosis
must order
eligibility
of Human
Monday –Friday
14,960 clients
hours of care
of Human
of Human
Health
eligible for
and a
services and
Services
including: nursing
FY2002
a week
Services
Services
Services
SSI.
functional
a licensed
Regional
and personal care,
disability
nurse must
office.
physical
related to the
supervise
rehabilitation, noon
Title XX–
(Offered as an
Title XX –
diagnosis
them. A
meal and snacks,
688 clients
optional
people age
where the
DHS
Department
transportation, and
FY2001.
Medicaid
18+
individual
regional
of Human
social educational
state plan
needs
nurse must
Services
and recreational
service under
Medicaid -
assistance
approve the
Regional
activities.
rehabilitation
$79,000,000
with one or
service.
office
services)
FY2002
more
Title XX
personal care
$3,387,509
tasks.
FY2001
Title XX and
Adults age
Functional
Department
Medicaid
Department
Personal care, home
8,460 clients a
Up to 50
Department
Department
State-funded
18 and
assessment
of Human
recipient or
of Human
management
month in
hours of care
of Human
of Human
Family Care
older with
score of 24+
Services
300% of SSI/
Services
(homemaker), escort
FY2002
per week
Services
Services
disabilities
with an
regional
$5,000 for an
regional
for medical
unmet need
office
individual
office
appointments only.
Available
for personal
$46,496,322
statewide
care or home
in FY2002
management.
Beneficiaries
must need
help in
performing
ADLs. The
degree of
impairment
is measured
on a 60 point
functional
needs
assessment
scale where
the higher
the score, the
more severe
the
impairment.

CRS-37
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
State- funded
Age 4 and
Physical
Department
Copayments
Department
Direct grants to
4,730 clients a
$3,600
Department
Department
In-home and
over
disability
of Human
begin at
of Human
beneficiaries or their
month in
lifetime for
of Human
of Human
Family
that
Services
105% of
Services
families. They may
FY2002
equipment or
Services
Services
Support
substantially
Regional
state median
regional
use grants for
home
limits the
Office
income for
office
equipment, home
modificat-
person’s
household
modifications, health
$8,996,250 in
ions.
Available
ability to
size.
services, counseling
FY2002
statewide,
function
& training,
with a lengthy
independent-
attendant, home
$3,600
wait list in all
ly
health, homemaker,
annually for
areas
and chore services.
services and
supplies
State-funded
Age 18 +
Functional
Department
Medicaid
Department
Assisted living
799 clients a
Not
Department
Department
Residential
assessment
of Human
recipient or
of Human
facility services
month in
available
of Human
of Human
Care
score of
Services
300% of
Services
provide 24 hour
FY2001
Services
Services
18+.Bene-
regional
SSI/$5000
regional
living arrangement.
office
for an
office
Residents contribute
Available in
ficiaries must
individual
to the cost of their
$6,187,564 in
every region
need help in
care but retain a
FY2001
but not every
performing
personal needs
county in the
ADLs. The
allowance.
state
degree of
impairment
is measured
on a 60 point
functional
needs
assessment
scale where
the higher
the score, the
more severe
the
impairment.

CRS-38
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
State-funded
Age 18 +
Functional
Department
Medicaid
Department
24 hour living
221 clients a
Not available
Department
Department
Adult Foster
assessment
of Human
recipient or
of Human
arrangement for no
month in
of Human
of Human
Care
score of 18+.
Services
an income
Services
more than 3
FY2001
Services
Services
Beneficiaries
regional
that doesn’t
regional
unrelated adult
must need
office
exceed
office
clients. Services
Available in
help in
$1635 a
available are
$1,112,512 in
every region
performing
month for an
personal care and
FY2001
but not every
ADLs. The
individual
transportation.
county in the
degree of
and assets
Client pays room
state
impairment
cannot
and board.
is measured
exceed
on a 60 point
$5000 for an
functional
individual
needs
assessment
scale where
the higher
the score, the
more severe
the
impairment.
State & Title
Age 18 +
Capable of
Licensed
None but
Department
Personal assistance
599 clients a
Nursing
Department
Department
XX-funded
consumer-
personal
person pays
of Human
services selected and
month in
facility
of Human
of Human
Consumer
direction
assistance
income-
Services
supervised by client.
FY2001
weighted
Services
Services
Managed
with a
service
related fee
regional
cost.
Personal
disability
agencies
when income
office
Assistant
expected to
exceeds
$7,143,965 in
Services
last at least 6
$1,200 a
FY2001
months and
month.
needing help
Available in 8
with at least
regions
one personal
care task

CRS-39
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
State-funded
Age 18 +
Need care or
Department
Medicaid
Department
Respite may be
420 clients a
336 hours
Department
Department
Respite Care
supervision
of Human
recipient or
of Human
provided in an
month in
(ie., 14 days)
of Human
of Human
or both and
Services
an income
Services
institution, adult
FY2001
Services
Services
have an
regional
that doesn’t
regional
foster home, adult
Available
unpaid
office
exceed
office
day health care
statewide
caregiver
$1,635 a
facility or a person’s
$1,130,286 in
who needs
month for an
home.
FY2001
relief due to
individual;
stress or is
no asset test.
temporarily
unable to
provide care
Title XX &
Age 18+
Functional
Department
300% of
Department
Counseling,
161 a month
24-hour
Department
Department
State-funded
assessment
of Human
SSI/ $5,000
of Human
personal care, and
in FY2001
attendant
of Human
of Human
Special
score of 9+.
Services
Services
skills training for
care costs
Services
Services
Services to
Beneficiaries
regional
regional
community living
cannot
Persons with
must need
office
office
and 24-hour
$1,210,141 in
exceed
Disabilities &
help in
attendant care in
FY2001
nursing
24-hour
performing
Houston
facility
Attendant
ADLs. The
weighted
Care
degree of
average cost.
impairment
is measured
Available in
on a 60 point
3 regions.
functional
24-hour
needs
Attendant
assessment
Care
scale where
available only
the higher
in Houston.
the score, the
more severe
the
impairment.

CRS-40
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Home and
Persons
Must meet
Department
300% of SSI/
Department
Assistive
6,731 clients
Annual
Department
Department
Community-
with a
ICFs/MR
of Mental
$2,000
of Human
technology/adaptive
in FY2002
individual
of Mental
of Mental
Based
diagnosis of
level of care
Health and
Services
aids, case
cost cannot
Health and
Health and
Services
mental
Mental
regional
management, dental
exceed 125%
Mental
Mental
Waiver (for
retardation
Retardation
offices
services,
$263 million
of the annual
Retardation.
Retardation
persons with
of any age
environmental
in FY2002
ICFs/MR
Providers
mental
modifications/minor
payment to a
perform
retardation)
home modifications,
facility
intake for
foster
potential
care/companion
clients.
1915(c)
care, habilitation/day
habilitation,
occupational
therapy, physical
therapy, respite,
skilled nursing,
social work services,
speech/hearing/
language,supported
employment,
psychology,
dietician services,
residential
assistance. No
consumer direction
opportunities.

CRS-41
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Consolidated
Persons
ICFs/MR
Health and
221% of
Health and
Behavior
100 clients
Health and
waiver
with mental
level of care
Human
federal
Human
communication
served
Human
program –
retardation
criteria
Services
poverty
Services
specialist, personal
FY2002
Services
ICFs/MR
or develop-
Commission
level/ $2,000
Commission
assistance services,
Commission
waiver
mental
social work,
Health and
1915(c)
disabilities
habilitation,
Projected
Human
and must
transportation,
expenditures
Services
Began Nov.
live in
adaptive aids and
$1,466,904 in
Commission
2001
Bexar
medical supplies,
FY2002125%
County –
minor home
of average
the pilot site
modifications,
aggregate
nursing services,
ICFs/MR/ RC
dental, audiology,
costs, 150% of
psychological, child
nursing
support services,
facility
assisted
payment rate
living/residential
care, adult foster
care, emergency
response service,
respite, home
delivered meals, 24-
hour residential
habilitation,
intervener services,
dietary services,
orientation and
mobility services,
physical,
occupational and
speech therapies,
independent
advocacy, family
surrogate services,
prescribed drugs.

CRS-42
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Community
People with
Approved
Private
$1,635/
Department
Case management,
1,451 clients a
Individual
Department
Department
Living
Develop-
related
agency does
$2,000
of Human
habilitation, respite,
month
cost cap of
of Human
of Human
Assistance
mental
conditions
functional
Parental
Services
nursing,
FY2002
125% of the
Services
Services
and Support
Disabilities
diagnosis,
assessment
income is not
Region
psychological
cost of
Services
of all ages
condition
and
deemed
Office
services, physical,
institutional
(CLASS)
with onset
such as
Department
$41,721,474
Private
available to
occupational &
care
Waiver
before age
cerebral
of Human
in FY2002
agencies
children.
speech therapy,
Program
22
palsy and
Services does
adaptive aids/
provide case
head injuries,
final
supplies, minor
management.
adaptive
eligibility
home modifications,
1915(c)
behavior of
determin-
specialized
level II or
ation.
therapies, consumer
Available in
higher, 3+
directed services
104 counties
functional
limitations.
People must
meet
ICFs/MR
/RC level of
care criteria.
People
cannot
participate if
they have
mental
retardation.
Must need
habilitation
and case
management.

CRS-43
Functional
Financial
eligibility
eligibility
No. of
Annual
Income/
persons
cost cap
Target
Determined
resource
Determined
enrolled/slots
(aggregate/
Admin.
Financial
Program
group
Criteria
by
limits
by
Services
approved
individual)
oversight
oversight
Deaf-Blind
People who
ICFs/MR/RC
Private
300% of SSI/
Department
Assisted living, case
112 clients a
Individual
Department
Department
Multiple
are deaf-
level of care
agency does
$2000
of Human
management,
month FY
cost cap is
of Human
of Human
Disabilities
blind with a
criteria
functional
Services
intervener,
2002
115% of the
Services and
Services
Waiver
third
assessment
regional
habilitation, respite,
average cost
private
disability
and
offices.
nursing, orientation
of an
agency does
and age 18+
Department
and mobility,
$4,791, 000
ICFs/MR/RC
case
1915 (c)
of Human
behavior
FY2002
management.
Services does
communication,
Available
final
physical,
statewide
eligibility
occupational &
determin-
speech therapy,
ation
chore provider,
adaptive
aids/supplies and
environmental
accessibility.
Consumer direction
available for
habilitation, respite,
and intervener
services.
Sources: Texas response to American Public Human Services Association Home and Community-Based Services Waiver Survey, May 2002; Texas Department of Human Services, Individual Service
Profiles Community Care Programs, Apr. 2002, as updated on May 31, 2002 and Personal communication with staff from the Budget Division of Texas Department of Human Services, Jan. 10, 2003.
NF - Nursing Facility
ICFs/MR/RC - Intermediate Care Facility for the Mentally Retarded and Related Conditions.
SSI - Supplemental Security Income

CRS-44
Appendix 2. Population in Large State Facilities
Table A-2. Population in Large State Facilities for Persons with
Mental Retardation/Developmental Disabilities, Closure Date,
and Per Diem Expenditures
Residents
Average per
Large state MR/DD
Year
with
diem
facilities or
facility
Year
MR/DD
expenditures
units
opened
closed
on 6/30/01
FY01 ($)
Abilene State School
(Abilene)
1957
--
572
212.92
Austin State School
(Austin)
1917
--
437
249.45
Brenham State School
(Brenham)
1974
--
457
199.71
Corpus Christi State School
(Corpus Christi)
1970
--
386
158.45
Denton State School
(Denton)
1960
--
669
157.83
El Paso State Center
(El Paso)
1973
--
150
211.7
Lufkin State School
(Lufkin)
1962
--
450
209
Mexia State School
(Mexia)
1946
--
551
192.17
Ft. Worth State School
(Ft. Worth)
1976
1996
--
--
Lubbock State School
(Lubbock)
1969
--
392
211.17
Richmond State School
(Richmond)
1968
--
566
230
Rio Grande State Center
(Harlingen)
1973
--
93
171

CRS-45
Residents
Average per
Large state MR/DD
Year
with
diem
facilities or
facility
Year
MR/DD
expenditures
units
opened
closed
on 6/30/01
FY01 ($)
San Angelo State School
(Carlsbad)
1969
--
301
182
San Antonio State School
(San Antonio)
1978
--
298
210
Travis State School
(Austin)
1961
1996
--
--
Source: Residential Services for Persons with Developmental Disabilities: Status and Trends
Through 2001. Research and Training Center on Community Living, Institute on Community
Integration/UCEED. University of Minnesota (June 2002).

CRS-46
Appendix 3. About the Census Population
Projections
“The projections use the cohort-component method. The cohort-component
method requires separate assumptions for each component of population change:
births, deaths, internal migration (Internal migration refers to State-to-State
migration, domestic migration, or interstate migration), and international migration
... The projection’s starting date is July 1, 1994. The national population total is
consistent with the middle series of the Census Bureau’s national population
projections for the years 1996 to 2025.” Source: Paul R.,Campbell, 1996, Population
Projections for States by Age, Sex, Race, and Hispanic Origin: 1995 to 2025, U.S.
Bureau of the Census, Population Division, PPL-47. For detailed explanation of the
methodology, see same available at:
[http://www.census.gov/population/www/projections/ppl47.html].

CRS-47
Additional Reading
Texas Council on Developmental Disabilities and Texas Office for Prevention of
Developmental Disabilities, Texas Year 2000 Biennial Report: Imagine the
Possibilities, Imagine the Hope 2000 Biennial Report, Austin, Texas, 2001.
Available from [http://www.txddc.state.tx.us/menus/fset_pub_biennial.asp]
Texas Council on Developmental Disabilities and Texas Office for Prevention of
Developmental Disabilities, Texas Services Supplement to 2000 Biennial
Report, Austin Texas, 2001. Available from
[www.txddc.state.tx.us/publications/biennial_report].
Texas Department on Aging, Strategic Plan; FY2003-2007, Austin Texas, Jun. 2002.
Available from [www.tdoa.state.tx.us/DocsandPubsList.htm].
Texas Department of Human Services, Individual Service Profiles Community Care
Programs, Apr. 2002, as updated on May 31, 2002. Austin, Texas.
Texas Department of Human Services, FY2001 Long Term Care Regulatory Annual
R eport, October 2001, Austin, Tex as. Availab l e from
[www.dhs.state.tx.us/publications].
Texas Department of Human Services, Long-Term Care Needs Assessment Survey
Results, Jul. 2001, Austin Texas.
Texas Department of Mental Health and Mental Retardation, The Strategic Plan for
Fiscal Years 2003-2007, Apr. 2002. Austin Texas. Available from
[http://www.mhmr.state.tx.us/CentralOffice/InformationServices/LongRange
StrategicPlanDefault.html].
Texas Department of Mental Health and Mental Retardation, The Strategic
Workforce Analysis and Plan for Fiscal Years 2003-2007. 2002. Austin Texas.
Texas Health and Human Services Commission, Texas Promoting Independence
Plan, In Response to Executive Order GWB99-2 and the Olmstead Decision,
Jan. 9, 2001, Austin Texas. Available from
[http://www.hhsc.state.tx.us/pubs/tpip/tpip_index.html].
Texas Health and Human Services Commission, Enhancing Community Access for
Long-Term Care, Progress, Updated on SB374, Aug. 11, 2000, Austin Texas.
Available from
[http://www.hhsc.state.tx.us/pubs/SB374_000811.htm].

CRS-48
Texas Health and Human Services Commission, The Long Term Care Plan for
People with Mental Retardation and Related Conditions; Fiscal Years 2002-
2003, Apr. 2000, Austin, Texas. Available from
[http://www.hhsc.state.tx.us/Medicaid/reports/LTC2000plan.pdf].
Texas Health and Human Services Commission, A Status Report on an Assessment
of the Design and Delivery of Long-Term Services and Supports, Dec. 21, 1998,
Austin, Texas. Available from
[www.hhsc.state.tx.us/budget/cons_bud/ltssrpt.htm].