AAA Operations Policy #8: Private Pay Programs

This content is part of a public comment period. For more information, refer to Minnesota Board on Aging – State Plan on Aging.

Authority Reference	OAA Section 306(g) 45 CFR Part 1321.3 (definitions) and 1321.9(c)(2)(xiii)
Operating Category	AAA Operations

Policy

1. Private pay programs are a type of contract or commercial relationship and are programs, separate and apart from programs funded under the Act, for which the individual consumer agrees to pay to receive services under the programs. Because private pay programs are a form of contracts and commercial relationships, they are also subject to AAA Operations Policy #7: Contracts and Commercial Relationships.

2. Private pay programs must promote equity, fairness, and inclusion.

3. AAAs are permitted to use Title III administrative funds or program development and coordination funds to develop private pay programs consistent with MBA policies.

4. Regardless of whether Title III funding is initially used to develop the private pay program, an AAA contract to provide services through a private pay program must have MBA’s prior approval as described in AAA Operations Policy #7: Contracts and Commercial Relationships.

5. AAAs offering private pay programs must abide by conflict of interest requirements as established in Title III Administrative and Financial Requirements Policy #2: Conflicts of Interest.

6. AAAs offering private pay programs must meet financial accountability requirements, including the following:

A. If Title III funds are initially used by a AAA to pay part of all of the cost incurred to develop and carry out a private pay program, the Title III funds must be reimbursed through revenue earned in the private pay program.

B. If the services being offered in the private pay program are of the same type provided under the Older Americans Act, the following conditions apply:

· i. Consumers may only purchase those services at their fair market rate

· ii. All costs incurred in providing such services (and not otherwise reimbursed under paragraph 6(a) of this policy) are reimbursed.

· iii. The AAA or service provider reports the rates for providing services and the rates are consistent with the prevailing market rate for providing those services in the relevant geographic area as determined by MBA or the AAA (as applicable)

· iv. The AAA or service provider is encouraged to use a sliding scale fee for the private pay program to promote affordability.

C. Revenue earned through the private pay program in excess of what is needed to provide the service must be used to expand Title III services provided to individuals receiving Title III-funded services.

7. AAAs may not use Title III direct service funding to support provision of service through private pay programs, except as a part of routine information and assistance or case management referrals.

8. Individuals who receive information about private pay programs and who are eligible for services provided with Title III funds in the planning and service area must be made aware of Title III-funded and any similar voluntary contributions-based service options, even if there is a waiting list for those services on an initial and periodic basis to allow individuals to determine whether they will select voluntary contributions-based services or private pay programs.

Procedures

1. AAAs must follow procedures for developing and obtaining prior approval for private pay programs as outlined in AAA Operations Policy # 7: Contracts and Commercial Relationships.