February 2004

Minnesota Medicaid Home and Community-Based Waiver Services for Persons With Mental Retardation or Related Conditions

Minnesota's Medicaid Home and Community-Based Waiver programs provide alternatives to institutional care for certain Medicaid-eligible persons and cost about $1 billion in fiscal year 2003. The programs have expanded significantly over the years, with annual rates of growth averaging 23 percent since 1991. The Department of Human Services oversees Minnesota's five Medicaid Waiver programs, and counties administer them. Because of concern over spending increases and questions about variation in county expenditures and practices, the Legislative Audit Commission directed the Office of the Legislative Auditor to evaluate Minnesota's Medicaid Waiver programs. We started the evaluation in June 2003. We identified problems with the Department of Human Services method of allocating funds for the Mental Retardation or Related Conditions (MR/RC) Waiver program, which is the largest of Minnesota's Medicaid Waiver programs. The department should improve how funding is distributed among counties. We found that the department lacks sufficient controls over the component of the MR/RC Waiver program known as Consumer Directed Community Supports, which allow waiver recipients greater control over their services. To ensure appropriate spending, the department should implement additional safeguards.