ARC Paper on Private Pay

Private Pay Supported Employment:

An Opportunity for People with Developmental
Disabilities and Their Families

Groups Which May Seek the Private Pay Option
What Medicaid Regulations Require and Allow
A Brief Scan of the Issues and Questions Regarding This Idea
Ways in Which People Might Benefit from Private Pay
Possible Issues That Could Arise from Accepting Private Pay Funding
Societal Issues
Supported Employment Providers—Issues to Address
Values Issues
Operational Issues
County Governments—Issues to Address
Values Issues
Operational Issues


A number of families of adults with developmental disabilities in Dane County have expressed interest in purchasing a variety of supported employment services on a private pay basis or on a shared private pay/public funding basis. In response to this, The Arc-Dane County convened a series of meetings to discuss this issue and develop this informational paper for families, consumers, advocates, providers and counties. These meetings included family members, Dane County staff, and providers.

The impetus for these discussions grew out of the following thoughts:

· Developmental disabilities services have faced a limited funding situation for several years, and there is no clear sign on the horizon that this will change in the near future.

· Waiting lists for supported employment services are not getting shorter. Consequently, many people who need and want supported employment won’t receive it anytime soon.

· Many employable people with developmental disabilities will not be able to obtain and hold the jobs they want without the assistance of a supported employment provider.

· Some families of people with developmental disabilities have the financial capacity to pay for supported employment services. If their son or daughter is not receiving needed services and they wish to purchase these services, it seems logical to explore that possibility.

· Some supported employment providers are already providing services to a small number of people on a private pay basis. It is not widely known how each provider is approaching this.

Groups Which May Seek the Private Pay Option

· People with developmental disabilities who do not meet their county’s functional eligibility criteria for vocational support and funding.

Exploring private pay options appears to be these consumers’ only chance of obtaining supported employment. This may create a new opportunity for people who only need a small amount of supported employment services (or who used to receive some supported employment services), but are not receiving any now.

· Families of people on the waiting list who want to purchase supported employment services while they are waiting to be served.

Waiting lists for supported employment services are long. Some families may be concerned about a loss of job skills and/or their son’s or daughter’s keeping a job that they obtained while in school, if they do not receive supported employment after graduation. Others may want to support their son’s or daughter’s desire to make a contribution to their community or enrich their lives with supported employment. These families may wish to purchase supported employment services to alleviate these problems while they wait for county services.

· Families who are dissatisfied with the quality or quantity of supported
employment that their son or daughter is receiving.

Private pay could create an opportunity to supplement public funding with private pay funding and improve the situation for these consumers. For example, the number of hours of post-graduation supported employment for which a person may qualify is determined by the number of supported employment hours that they received in their home school district. Therefore, it is possible for student A, who lives in one district to receive fewer support hours than student B, who lives in another district, even though their vocational support needs are similar.

What Medicaid Regulations Require and Allow

Individuals who enroll in a Medicaid waiver have the right to pay privately for additional or uncovered services with their own resources, or through family or other resources. Individuals cannot supplement the rate paid to a provider under the Medicaid program—that is they cannot add to the hourly or daily rate paid to a provider, but individuals can purchase additional hours or days of service.

It is important to note that if once on waiver the individual can demonstrate through a Fair Hearing process that the additional hours of service are needed to assure health and safety, these services must be covered by the Medicaid waiver. Thus private pay options cannot be used to cover services required to assure the consumer’s health and safety. Private pay options should be looked on as enrichment services rather than meeting basic health and safety needs.

Private Pay can be used to add to services provided to persons with disabilities on Medicaid waiver programs. The basic services must be determined by a study committee and provided through county resources. Additional services can be provided through the Private Pay option when they are in addition to basic services. For example, if 20 hours per week of supported employment is the basic service provided, private pay can purchase an additional 10 hours per week of service.

Note: Many people who would seek private pay do not receive SSI or Medicaid.

A Brief Scan of the Issues and Questions Regarding This Idea

Ways in Which People Might Benefit from Private Pay

· People who currently have no vocational support would have a chance to make a contribution to their community and enrich their own lives. Families who are willing and able would have the direct ability to help their family member enter the workforce.

· This would create an additional choice for people. For example, someone who currently receives 10 hours of support through county funding may be able to take on a second job if private pay funds are made available.

Possible Issues That Could Arise from Accepting Private Pay Funding

· The availability of private funds presents a dilemma for county government, i.e., should the county seek out opportunities to match private pay funding with county funding to reduce the county’s average expenditure per person? Will the county accept the entire funding responsibility when the private pay funding runs out?

· People using private pay funds may not be able to access Department of Vocational Rehabilitation (DVR) funds. The DVR requires that there be a financial assurance from county government of long-term support, unless the DVR feels that the person does not need it. This may work for people who are not eligible for Medicaid or SSI, and may not need long-term support; however, it would not be an option for those who do. Would DVR accept private pay as a long-term support option in lieu of a county letter?

· Much care should be exercised in using trusts so that Social Security and Medicaid benefits are not jeopardized.

Societal Issues

· Some people are concerned that society is shirking its responsibility to people with developmental disabilities. Will promoting this idea unintentionally reinforce that?

· If the private pay option picks up momentum, would county government ever be tempted to “coerce” or strongly encourage families to use the private pay option as an alternative to spending county funds?

· The issue of “fairness”

1. Do people with financial resources have an unfair advantage because they can purchase services? Many would respond that “freedom” in a democracy includes the right to spend your money on anything you want, including supported employment services for your adult son or daughter.

2. Does private pay allow people with money to move ahead of others on the waiting list? Although this question may be raised, we must remember that

* many people who will use private pay are not eligible for government-funded services, and are not on the waiting list. Their bringing private funds into the system does not affect the priority of people on the waiting list.

* for people on the waiting list, counties would need to determine if private pay impacts their priority. People using private pay would require appropriate financial counseling so that services will not be interrupted before government funding “kicks in.”

Supported Employment Providers—Issues to Address

· Values Issues

1. Will the supported employment agency provide services differently to private pay consumers than the way it provides them to government-funded consumers? If so, what is the justification for that? Would a private pay consumer get the services of a job developer ahead of a county consumer because the private pay consumer is paying more? (or requires less paperwork and bureaucratic compliance?)

2. Would the supported employment agency consider providing more hours per week of support to a private pay consumer than the agency would provide that same person if s/he were receiving government-funded services? If so, what is the justification?

3. Would the provider charge the same rates for private pay consumers as it charges government-funded consumers? If not, how would the difference be justified? If the provider is trying to achieve “rate parity” or rate consistency for all consumers, how is that defined?

4. Who should benefit from agency fundraising—everyone, or only consumers which the county serves, because the county may not be paying their full share of the costs? Should fundraising be used in part to offset costs to private pay consumers and their families?

5. Will the agency be comfortable terminating service if a client’s private funds are depleted? Does terminating a client for that reason violate the agency’s mission?

· Operational Issues

1. Will the provider have an “annual contract” or “annual agreement” with each family? If so, how will the contract be developed between provider and family? Will it focus on outcomes or units of service? How much flexibility will be in the document for the consumers, families, or the provider to make adjustments during the year?

2. Will the same vocational assessment process be used for publicly and privately-funded consumers? Will the Individual Service Plan format be the same as it is for a provider using public funds? How will job development services be billed?

3. Will the provider bill families a set rate for each hour of service, or a flat amount per month? What will be the provision for periods of unemployment or sick days?

4. How will providers define “past due” in relation to private pay invoices sent to families? What steps will the provider take before terminating service? Will this be clearly spelled out in the contract/agreement?

5. What adjustments must be made in the agency’s fiscal accounting procedures to handle private pay clients?

6. How will providers educate or remind families that purchasing vocational services with private funds does not guarantee that the consumer would be eligible for county funding or move them up on the waiting list?

7. Is the vocational provider setting aside a certain portion of its capacity for private pay consumers, or do they plan to do this on a more fluid basis?

8. What will agencies do to assure a smooth transition from school-supported vocational services to private pay vocational services?

9. Will agencies or staff be permitted to accept a yearly bonus for a job well done?

County Governments–Issues to Address

· Values Issues

1. Would the county find constraints on capacity if private pay consumers are using supported employment agencies with which the county has contracts? Counties would have to decide whether they would need to mandate that space be saved for a certain number of people, or whether to encourage the supported employment agencies to expand to meet the number of people needing their services.

2. If a person is on the county’s waiting list for supported employment services and s/he begins receiving private pay supported employment services, does that person’s status on the waiting list change?

3. Will the county treat private pay funds as an “offset” in a person’s Individual Service Plan (i.e., reduce the county spending accordingly), or treat it as an add-on to county services?

4. Will the county make a commitment for future funding to someone currently on private pay?

5. Is the county encouraging, discouraging or neutral on private pay for the following groups:

– People not eligible for government-funded services
– People on the waiting list
– People receiving services who want to add supplemental or enrichment services

· Operational Issues

1. How could this work for people who are working with case managers/brokers* to direct their own services?

2. How will the county insure that the transition from private pay to county funding goes smoothly?

3. How does the private pay supported employment option relate to a county’s current use of family choice options?

*A support broker works with the consumer and his or her team to develop a person-centered plan. It is reviewed at least annually. The broker is charged with informing the consumer and/or guardian which vocational and residential choices are available in the area. Support brokers negotiate rates with support providers, and may advocate with the county on the consumer’s behalf. They are
required to have regular contact with the consumer and his or her team.


Consumers who do not receive supported employment services are deprived of the opportunity to contribute to society through employment. For those not receiving SSI, the problem is even more acute because without supported employment, they may be unable to work and thus lack a source of income.

Some families of consumers who are facing a long wait for supported employment services, or who do not qualify for county funding, have suggested the idea of personally purchasing supported employment services. In the present system, the private pay option is not readily available to them. If public dollars are not available, the right to use private dollars should be a viable option. It is reasonable to remove barriers which prevent people from turning unproductive hours into employable hours.

Although the discussion of private pay originally focused on people without supported employment services, it became clear that some people would like to purchase additional support for their family members who are already receiving services. It would seem reasonable to explore the possibility of supplementing with private dollars to enhance the services being provided.

This paper was written with the collaboration of families, supported employment providers, and counties to explore and identify some of the values and issues that could arise with private pay funding. As such, this paper could be used to:

· Educate families, advocates, providers and government officials on the issues surrounding private pay supported employment.
· Identify issues and questions which providers and counties should address when contemplating the idea of accepting private pay consumers.
· Identify questions which families may want to ask providers and counties.


1. The county should develop and make publicly available its own policies regarding private pay supported employment. This should include the county’s positions on the values and operational issues listed above, so families and provider agencies know where they stand. In addition, each supported employment provider should clarify its values and operational approach to accepting private pay consumers. The results could vary among providers.

2. Providers have a responsibility to make their values and approach clear and readily available to consumers and families.

3. Parent organizations should act as a clearinghouse for information from county government and providers regarding:

· supported employment agencies that are willing to provide services on a private pay basis;
· public information that is available from providers regarding their values and operational approaches;
· County values and approach to private pay options.


The Arc-Dane County wishes to thank the many members, parents, professionals and providers who helped to develop this working paper. Our intent was to ask for ideas and thoughts that might assist parents, providers and county staff in researching the many values and pragmatic issues related to Private Pay. We appreciate the many hours and comments devoted to this topic. Among the many persons, we wish to give special thanks to:

Sally Gleason, Member of the Arc-Dane County
Whose energy, questions and insight led to the undertaking of the project,

Lynn Breedlove, Disability Rights Wisconsin
Whose ability to facilitate groups of interested persons and insight into the issues made this paper possible,

Dennis Harkins and Robin Cooper
Whose expertise allowed the initial working group to gain clarity on the various issues,

And to the parents, professionals and providers who outlined the initial issues:
Barb Caswell, Goodwill Industries, Janet Estervig, W.O.R.C, Inc., Jessica Mathews, REM Wisconsin, and many others,

Carol Ayres, The Arc-Dane County
Who put together the working draft you see here.

We hope the document is of assistance to you as you explore the possibility of Private Pay.

Board of Directors of The Arc-Dane County
Ron Johnson, President
Marc Krasnick, Vice President
Paul Yochum, Past President
John Leemkuil, Treasurer
Kathleen McNeil, Secretary

Susan Helgesen
Nancy Kaellner
Lori Powell
Dan Remick
Bob Ross
Laura Skilton Verhoff
Tracy Woehrle

The Arc-Dane County
6602 Grand Teton Plaza , Suite 111A
Madison, WI 53719
608-833-1199 phone
608-833-1307 fax                                      March 26, 2008

Powered by WordPress. Designed by Woo Themes