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Related Experiment Video

Updated: Jul 17, 2026

Signal Acquisition, Score Interpretation, and Economics of a Non-Invasive Point-of-Care Test for Coronary Artery Disease
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How does Cash and Counseling affect costs?

Stacy B Dale1, Randall S Brown

  • 1Mathematica Policy Research Inc., PO Box 2393, Princeton, NJ 08543, USA.

Health Services Research
|January 25, 2007
PubMed
Summary

Consumer-directed care models like Cash and Counseling increased Medicaid spending on personal care services. However, these models ensured recipients received authorized services, unlike traditional systems where care was often underutilized.

Area of Science:

  • Health Services Research
  • Public Health Policy
  • Medicaid Program Evaluation

Background:

  • Consumer-directed models offer Medicaid beneficiaries more control over personal care services (PCS) and home- and community-based waiver services (HCBS).
  • Understanding the cost implications of these models is crucial for healthcare policy and resource allocation.

Purpose of the Study:

  • To evaluate the impact of the consumer-directed Cash and Counseling model on overall Medicaid service costs.
  • To compare the utilization and expenditure of PCS/HCBS under a consumer-directed versus a traditional agency-directed model.

Main Methods:

  • Analysis of Medicaid claims data from a demonstration of the Cash and Counseling program across Arkansas, New Jersey, and Florida.
  • Randomized controlled trial design comparing treatment (Cash and Counseling) and control (usual agency services) groups.

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  • Ordinary least squares regression models controlling for pre-enrollment characteristics and spending.

    • Main Results:

    • Expenditures for personal care/waiver services were higher in the Cash and Counseling group, indicating increased service utilization.
    • Higher PCS/HCBS costs were partially offset by savings in other Medicaid services, particularly long-term care.
    • Overall Medicaid costs were generally higher for the treatment group, with variations by state and age group.

    Conclusions:

    • The Cash and Counseling model led to higher Medicaid costs primarily because it improved access to authorized services, which were underutilized in the traditional system.
    • Control group members were less likely to receive authorized services, and received a lower proportion of them.
    • Careful program design and monitoring are essential for consumer-directed models to manage total Medicaid costs effectively.