Nursing Home Diversion and the Veterans Administration

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(Veteran’s Directed Home and Community Based Care Program)

On February 17, 2009, Western Michigan Area Agency on Aging entered into a relationship with Bottle Creek Veterans Administration to offer Nursing Home Diversion services for their County based on a new Veteran benefit (Veteran’s Directed Home and Community Based Care Program).  As each of us know, Nursing Home Diversion grants have been awarded across the U.S. to 20 states.  Second year funding has also been awarded to the following 10 states:
• Arkansas 
• Connecticut
• Florida
• Massachusetts
• Michigan
• New Jersey     
• New York
• Texas
• Virginia
• Washington

These states are currently working with the Veterans Administration (VA) on this new initiative entitled, “Veteran’s Directed Home and Community Based Care Program.”  This program has been added as another option to traditional Veteran Affairs Medical Centers extended care provider arrangements and homemaker/home health services.

The VA and our Administration on Aging (AoA) have coordinated an outreach to Area Agencies on Aging (AAA) and/or Adult Disability Resource Center (ADRC) throughout the U.S. to begin exploring and establishing a partnership of care.  This unique opportunity will be provided locally utilizing VA and AAA negotiated provider agreements to purchase a product of services.  The Lewin Group, hired by AoA, is helping to facilitate these agreements nationwide. The agreement will utilize a VA form 10-1170 as the application starting point for AAA’s to engage in service.

The VA is working toward a goal of 109,362 veterans to be enrolled in the Veteran’s Directed Home and Community Based Care Program by 2011-2013.  The VA is looking to increase the current number of slots from its home maker/home care program from the current level of 50,000.

The VA has projected that by 2050 nursing home placement among veterans could triple. However, no additional beds will be approved by the VA.

As this project roles out nationally, it is anticipated that ten additional states will be asked to work with the VA in the near future:

• Georgia
• Illinois
• Kentucky
• Louisiana
• Maryland
• Minnesota
• New Hampshire
• Ohio
• Vermont
• West Virginia

In Maryland, there are five counties enrolled in the Nursing Home Diversion program:

• Baltimore City
• Baltimore County
• MAC, Inc. (Dorchester, Somerset, Wicomico, & Worcester Counties)
• Prince Georges County
• Washington County

The VA is coordinating agreements with AAA’s. The list of services that may be provided under the purchase of product agreement is as follows:

• Personal Care (physical or verbal assistance with eating, bathing, dressing, grooming, transferring)
• Home Maker (cleaning, laundry, meal planning and preparation, shopping)
• Adult Day Care
• Assistive Technology (emergency response, pill dispensers)
• Home Delivered Meals
• Caregiver Support (counseling, training)
• Respite Care
• Environmental (yard care, snow removal, cleaning)
• Other (grab bars, lift chairs, ramps, small appliances)
• Assessment
• Options (counseling including care management)
• Fiscal Management Services

The VA is proposing to coordinate and conduct the veteran health status assessment process.  The following personnel will determine the needs and the services from the above list.

• Physicians (medical orders)
• Nurses, (ADL’s)
• Social worker (IADL’s)

(Please note the AAA’s will also be able to be involved in the assessment process and negotiate the needs of the clients/veterans)

The package of services will then be bid by the AAA’s based on monthly service fees, and/or basic subsets or categories for basic and intermediate care.  These will be classified in 3 ways:

• Basic
• Intermediate
• Extensive (Individually Priced Out)


Currently, the AAA’s listed below have submitted the following product agreement rates:

   * Michigan has proposed the following rates to the VA:

• Basic – $3500 per month
• Intermediate – $4500 per month

   * New Jersey has proposed the following rates to the VA:

• Basic – $2200 – $3200 per month (Low and High)
• Intermediate – $3200 – $6800 per month (Low and High)

* These bids from Michigan and New Jersey have not yet been accepted by the VA, but   
   negotiations are in process. Variances of the fee structure by localities can be very    
   different based on geography, regional cost of living, access to providers, etc.

AAA’s will be responsible for the following:

• Develop Support Mechanism
• Arrange Fiscal Management
• Structured Case Management
• Assess Service Needs
• Develop Budgets
• Develop Non-Traditional Services

Support mechanism and services may be rendered for the veteran by family members, friends, neighbors, etc.  The decision of the veteran or their surrogate decision maker will include who renders the service, where, when, how and at what rate.  An integral part of this program will require a fiscal agent to work on issues concerning tax withholdings, check issuance, budget and accountability reports.

The Cash and Counseling model ( can be a useful tool/model in helping to create Fiscal Employer Agents (Fiscal Intermediaries). Currently, only 2 national organizations (located in Massachusetts and Utah) offer fiscal intermediary services and one region in Connecticut has a relationship.  Fifteen states utilize cash and counseling. New Jersey, Arkansas and Florida were the first with replication in the other twelve states.  The cash and counseling model will be needed to allow flexibility in hiring staff by veterans including family members, neighbors and friends in order to stretch the service budget dollars.  This creates flexibility for a veteran center hiring approach. Management by the veteran or their designee becomes the corner stone of service delivery.  I have provided a pamphlet and a CD concerning cash and counseling to the five Maryland counties participating in the Nursing Home Diversion.
A flow chart is attached displaying the flow of decision-making regarding this program as part of this report.

Financial management tools that may be used, other than cash and counseling, include Government F/EA, Vendor F/EA, Agency with Choice (AwC) and Fiscal Conduit. 
(see other attachment for additional details)

Please note, it is important to understand that some of these other options consider the agency as the primary employer and some consider the participant or veteran as the managing employer.  Inconsistencies, training, remittance of W2’s or tax liability consequences, can create problems for case managers, participants or your organization. For example, spouse, children and parents are exempt from FICA withholdings (social security) and Federal Unemployment Tax Act (FUTA) and in some states, State Unemployment Tax Act (SUTA).

Non-payment issues of taxes by the agents can cause liability concerns.  It is suggested that Cash and Counseling, a model that has worked, be the choice for handling this issue.


Arnold J. Eppel
Baltimore County Department of Aging

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