In the Family Care program, the MCO does not have to provide a service the participant wants if there are less expensive alternatives that achieve the same results. In this case, the MCO terminated the petitioner’s AFH funding because he had been largely living with family members and using natural supports successfully. At the time of the hearing, he had transitioned to independent living but wanted to maintain his spot in the AFH as a “security blanket.” ALJ John Tedesco concluded AFH funding was not necessary or cost-effective.
This decision was published with support from the Elder Law & Special Needs Section of the State Bar of Wisconsin, the Wisconsin chapter of the National Academy of Elder Law Attorneys, and Krause Financial.
Preliminary Recitals
Pursuant to a petition filed on December 22, 2025, under Wis. Admin. Code § DHS 10.55, to review a decision by the Lakeland Care Inc regarding Medical Assistance (MA), a hearing was held on February 4, 2026, by telephone.
The issue for determination is whether the Family Care Agency erred in its termination of the Adult Family Home support after petitioner has transitioned to independent living.
There appeared at that time the following persons:
PARTIES IN INTEREST:
Petitioner:
—
Respondent:
Department of Health Services
201 E. Washington Ave.
Madison, WI 53703
By:
Lakeland Care Inc
3415 Custer St. – Suite C
Manitowoc, WI 54220-4356
ADMINISTRATIVE LAW JUDGE:
John Tedesco
Division of Hearings and Appeals
Findings of Fact
- Petitioner is a resident of Brown County.
- On 8/11/25 the agency issued a notice to petitioner informing him that it would be terminating the support of an adult family home funded placement. The notice explained:
your care team has assessed your health and safety needs can be met within the community with supports put in place. Currently — you have been staying with friends/family and your needs have been met. — your needs can be met with supportive home care (meal prepping, household chores and mobility needs), personal emergency response system, and medical and food shopping transportation if you have a place to reside. In the event you do not have a place to reside your care team has provided you with resources to the ADRC and homeless shelters, and how to meet your needs within the community. — all your options have been provided for you to explore. Your care team will continue to support you in finding housing and assess your needs.
- Petitioner requested an internal grievance.
- The decision was sustained through the grievance process and notice was issued on 10/1/25.
- Petitioner filed an appeal with DHA.
- Petitioner is now residing in an independent living setting and remains in the Family Care Program.
Discussion
The Family Care program, which is supervised by the Department of Health Services, is designed to provide appropriate long-term care services for elderly or disabled adults. It is authorized in the Wisconsin Statutes § 46.286, and is described comprehensively in the Wisconsin Administrative Code, Chapter DHS 10.
The CMO must develop an Individual Service Plan (ISP) in partnership with the client. Wis. Adm. Code § DHS 10.44(2)(f). The ISP must reasonably and effectively address all of the client’s long-term needs and outcomes to assist the client to be as self-reliant and autonomous as possible, but nevertheless must be cost effective. While the client has input, the CMO does not have to provide all services the client desires if there are less expensive alternatives to achieve the same results. Wis. Admin. Code § DHS 10.44(2)(f)3; DHS booklet, Being a Full Partner in Family Care, page 9. ISPs must be reviewed periodically. Adm. Code, §DHS 10.44(j)(5).
Wis. Stat., §46.287(2)(a)1 provides that a person may request a fair hearing to contest the reduction of services under the FCP program, among other things, directly to the Division of Hearings and Appeals. In addition, the participant can file a grievance with the CMO over any decision, omission, or action of the CMO. The grievance committee shall review and attempt to resolve the dispute. If the dispute is not resolved to the participant’s satisfaction, she may then request a hearing with the Division of Hearings and Appeals.
The issue in this case is whether the CMO erred in its termination of funding for placement in an adult family home. As has been noted many times in the past, there are no standards written in the law or policy on how to make such a determination. It comes down to the general criteria for determining authorization for services—medical appropriateness and necessity, cost effectiveness, statutory and rule limitations, and effectiveness of the service. See Wis. Adm. Code Ch. DHS § 107.02(3)(e).
While it is correct to say that the standard under Wis. Admin. Code § DHS 10.44(2)(f)3 specifically includes that the ISP should assists the enrollee to be as self-reliant and autonomous “as possible and desired” by the enrollee, it is also the long-standing position of the Department, as affirmed in many fair hearing decisions, that the Family Care participant does not have “unfettered choice” in deciding what supports Family Care provides that will serve him or her, what living arrangements will be provided by Family Care, and exactly how the care plan is to be configured.
Petitioner has had the support of the FCP funding an adult family home for quite some time. In recent years, petitioner elected to largely live with natural supports and not in the AFH. Petitioner has now transitioned to independent living and is receiving FCP supports in the community.
Petitioner, at hearing, merely argued that he wishes to maintain his spot at the AFH as a “security blanket.”
The FCP is a taxpayer funded public benefit program with limited resources. Cost-effectiveness is a basic and primary tenet of the program. Maintaining a spot at an AFH that is not used or needed is not cost-effective. It also, based on the thorough record made by the respondent, does not appear to be necessary.
Petitioner remains in the FCP program and will continue to receive appropriate supports. But, payment for an AFH that was not being utilized is not justified. This was not a close case.
Conclusions of Law
The agency did not err in terminating the AFH support.
THEREFORE, it is
Ordered
That this appeal is dismissed.
[Request for a rehearing and appeal to court instructions omitted.]
If you found this decision useful, sign up for my email newsletter. You’ll get summaries of newly published decisions and a PDF of useful information on estate recovery.