2025 Fee for Service System Overview | ADMINISTRATION-5600-MANUAL

Area Agencies on Aging will implement a Fee for Service System following guidance from the Division of Aging Services.

DAS Procedural Issuance 103, transmitted November 22, 1994, established the fee-for-service system to be used specifically to leverage state Community Based Services (CBS) funding to generate additional resources through client fees.

The 2006 reauthorization of the Older Americans Act retained the cost sharing options for specified Title III services first enacted with the 2000 amendments. The Division has adopted a fee scale setting the baseline at 100 percent of the poverty line.

Section 2026, Cost Share, Section 2027, Voluntary Contributions, and Section 2028, Private Pay, address the basic components of a Fee for Service System.

Sections 2025, 2026, 2027 and 2028 of this manual supersedes in full and incorporates in part Procedural Issuance 103 and provides amendments to the original system as well as Section 116 of MAN 5300.

DAS needs information on applicants' income for the following reasons:

NAPIS reporting now requires that the Aging Network record for the individually registered services whether an applicant/recipient has income at/below the federal poverty level. This is an indicator of appropriate targeting of services (refer to Section 3016 of this manual). Cost share calculations entail obtaining more detailed information on individual income.

Intake and Screening staff should first elect to ask applicants whether individual income falls at or below the levels set in the poverty guidelines. The staff should inform the applicants that, depending upon the availability of services, some may be asked for more detailed income information to determine the amount of a cost share, if any, applied.

The HCBS Income Worksheet and Fee Scale are then used to capture more detailed information on income, make adjustments to income for out of pocket expenses, and to determine the amount of cost share based on the net income calculated. The HCBS Income Worksheet is in the DAS Data Base System (DDS) under the Assessment Tab. A hardcopy version, to be used in the event the DDS is unavailable, is found in Appendix D of this manual.

The following definitions are used in Sections 2025, 2026, 2027 and 2028 of this manual.

Area agencies/providers shall assure that adequate policies and procedures are implemented to protect both direct services staff and clients in the handling of cash and checks used to make payments for services or voluntary contributions.
Agencies will develop procedures to safeguard and account for cost share payments. Refer to Section 3025, Internal Controls, in this manual.

Agencies are to protect the privacy and confidentiality of each individual with respect to the declaration or non-declaration of individual income and to any share of costs paid or not paid by an individual, and to participation in the voluntary contributions program.

Consumers must be assigned one fund source for the duration of a fiscal year. Refer to Section 3016, Targeting Service Delivery, for guidance on which consumers should be assigned to OAA funding streams.

Termination for non-payment policy will vary based upon fund source. Consumers utilizing OAA fund sources may not be terminated from service for non-payment of cost share.

AAAs may change a consumer’s fund source under the following circumstances:

AAAs/providers will develop billing and collections schedules and processes that provide consumers with statements of the fees for which they are responsible, along with instructions on how payments may be made. The written statement will contain, at a minimum, the following:

For monthly cost share amounts of $10.00 or less, the AAA/provider may, with the consumer’s consent, bill for these amounts quarterly or semi-annually.

When a service is used on an infrequent or short-term basis, such as some transportation services, a home modification or chore service, the consumer may pay at the time of service delivery or completion. The provider will issue the consumer a receipt for the payment.

Fees should be charged for services rendered and presented in a clearly itemized statement. Fees should not be based on a percentage of an individual’s income or assets.

Fees for service are to be stated in written form and discussed with the consumer and/or person accepting responsibility for payment prior to the initiation of services. If time or circumstances does not allow for this, then all information should be verbally presented and documented, the followed up in writing.

Consumers may be assessed for certain services that are cost- shared or privately paid (refer to Definitions above). AAAs are to ensure that policies and procedures are instituted to manage terminations for non-payment effectively and fairly.

AAAs and providers must have a termination process. The AAA may determine through its written policy whether payment is due in part or in full by specific dates to avoid termination.

It is not the intent of this policy to redress non –payment of fees in a punitive manner. It is, however, the intent of this policy to fully inform consumers of the actual cost of services, seek their agreement for an appropriate share of that cost, and to work with the consumer so that he/she can pay fees that are reasonable for him/her.

The following outline is suggested as a process to manage potential terminations.

Step 1: ADRC staff informs consumers at various points of contact of the cost share and private pay options for services.

Step 2: Case management or service provider staff informs consumers during the assessment about cost share and private pay options, and the consumer signs an agreement to cost share or private pay. The agreement must describe the service cost and amount of fee to be paid, as well as the process for collection of fees and the process for termination.

Step 3: Staff contacts the consumer (either by telephone or by letter) when payment is more than 30 days past due. If changes in the consumer’s situation have occurred, the Income Worksheet must be re-calculated to derive a new cost share amount. Such contact should identify future actions if fees are not paid.

The contact must be documented in the client record and any written correspondence must also be filed in the client record.

Step 4: Staff contacts the consumer by letter when payment is 60 days past due. Such contact should identify future actions if fees are not paid, including the termination date of services if fees are not paid.

Step 5: If fees are not paid, and, after reasonable alternatives, including those described above, have been explored to avoid termination, the consumer may be terminated from services, with the exception described in the note above.

The consumer must be notified in writing 30 days before the date of termination. The notice must include:

The AAA should ensure that consumers terminated from services have been informed of other service options, including being referred for the wait list for OAA services.

OAA §315(a)(5), 42 U.S.C. § 3030c-2(a)(5) Section 3020, Administrative Appeal