Conflicts of Interest
Conflicts of interest (COI) happen when an organization’s official duties and their private interests don’t line up. In Home and Community-Based Services (HCBS), COIs happen when there is a financial relationship between case management agencies and service providers, which isn’t allowed under the HCBS Settings Final Rule (Final Rule).
This page will help explain how the current system in Kansas creates conflicts of interest and why they’re a problem.
How does the Kansas system create COIs?
In Kansas, an individual who needs Intellectual/Developmental Disability (I/DD) waiver services works with the following entities in order:
A Community Developmental Disability Organization (CDDO) completes an eligibility assessment to determine the individual’s eligibility for I/DD waiver services. If they are eligible, the CDDO refers them to local service providers.
The individual will then work with a case manager at a Targeted Case Management (TCM) agency to develop a person-centered support plan. This plan covers the services and supports they need.
Next, a care coordinator at a Managed Care Organization (MCO) uses the person-centered support plan to create a person-centered service plan. The MCO authorizes services based on this service plan.
A Community Service Provider (CSP) then provides the individual with the services listed in their service plan.
You can see all these steps laid out in the diagram below.
COIs happen when these steps overlap.
If these steps are not separated properly, then one organization could be handling too many steps in the process. This creates a conflict of interest. The exact consequences of that conflict of interest depend on where in the process it happens.
Community Developmental Disability Organizations (CDDOs)
Some organizations that provide TCM and HCBS waiver services are also CDDOs. Or, a service provider may also be the parent company overseeing a TCM agency and CDDO at the same time. When that happens, one organization gets to determine if people are eligible for services, recommend a service provider to them, and then provide those services. There are obvious conflicts of interest there! In these cases, case managers might not give unbiased opinions or ignore complaints against their service providers.
To eliminate these COIs, Kansas will need to separate further the duties a CDDO performs from the functions of Community Service Providers. Out of the state’s 27 CDDOs, 21 of them (78% of the total) do not follow federal rules on conflicts of interest. That means a lot will have to change.
Targeted Case Management (TCM)
Conflicts of interest can also happen when the same organization provides both case management and direct services (or when a CSP is the parent company for a TCM agency). In other words, there’s a conflict when one organization creates the person-centered support plan, which lists what services an individual can receive, and then provides those services.
This sort of dual role creates conflicts between the organization’s financial interests and the needs of individuals receiving services. The financial conflict can impact the decisions a TCM makes when creating service plans, which could limit an individual’s freedom of choice. The influence may be subtle enough that a case manager isn’t even aware of it.
Severing TCM from service provision is critical for upholding person-centered principles in the HCBS system.
The Centers for Medicare & Medicaid Services define conflicts of interest as when the same organization helps individuals gain access to services, monitors those services, and provides those services to that individual.
Examples of COIs
If you read the last section, you should know how the current system in Kansas creates conflicts of interest. But it might not be obvious exactly what counts as a conflict of interest.
A conflict of interest happens any time one organization provides case management and direct services to one individual. But, COIs also happen when the organization providing case management has a financial interest in a service provider, or if the case manager is employed by a service provider.
Below, you can see some situations that would all count as conflicts of interest under federal rules. All the situations listed below are not allowed under the HCBS Settings Final Rule.
A community service provider (CSP) is approved to provide direct services and case management but has one agency name and the same executive leadership.
Sunshine and Happiness is the parent (holding) company for Tornado Targeted Case Management and Jayhawk Home Care. Tornado and Jayhawk both report to the same executive leadership and board of directors. Sunshine and Happiness has a financial interest in both.
Tornado Targeted Case Management and Jayhawk Home Care are separate companies. But, to lower costs, they decide to share management. Now, the same people oversee case management and direct services.
A community developmental disability organization (CDDO) provides case management, direct services, and the duties of a CDDO.
Why Conflicts of Interest Are a Serious Problem
Conflicts of interest can cause problems for both individuals receiving services and for Kansas’s Medicaid system as a whole. All the problems below can happen when one organization decides what services an individual will get and then provides those services.
How COIs Can Impact People Receiving Services:
An individual’s person-centered support plan may over- or under-authorize services.
Case managers may drop individuals who “cost too much” or “do not bring enough revenue.”
Case managers may feel pressure to steer individuals to their own (parent) organization for services instead of to the best choice.
Case managers may try to keep an individual as a client instead of following their requested/needed service changes.
Case managers may not feel able to advocate as much for individuals due to pressure from the provider.
How COIs Can Impact Kansas’s Medicaid System:
Kansas could lose approximately 60% of its funding if it doesn’t address COIs.
CMS can withhold the approval of future waivers—such as the new Community Support Waiver (CSW).
Providers may be ineligible for continued enrollment as providers.
Separating service provision from case management is the best way to follow person-centered principals and protect the integrity and funding of HCBS in Kansas.
How will the Conflict-Free Kansas Grant address Conflicts of Interest?
The Conflict-Free Kansas Grant will provide funding to CDDOs, TCM agencies, and HCBS I/DD CSPs to help them eliminate—or significantly reduce—COIs. The goal is to maximize individuals’ confidence and trust in their service plans and ensure providers comply with federal regulations. Only by eliminating COIs can Kansas ensure that the HCBS system is truly person-centered.
Eligible applicants can use grant funds to separate eligibility assessment, TCM, and direct service provision. This reimbursement-based grant will cover costs related to restructuring, system updates, and training to ensure compliance. Grantees can even use funds to create New TCM agencies to serve individuals currently served by conflicted agencies.