More than half of states polled plan to continue providing higher reimbursement rates to home-and-community-based service (HCBS) providers even after temporary federal funding expires, according to a new survey by Kaiser Family Foundation. The report released Tuesday included information from 48 responding states.
The Biden administration’s American Rescue Plan Act (ARPA) included a 10% increase in the Federal Medical Assistance Percentage (FMAP), allowing state Medicaid programs to increase reimbursement rates to HCBS providers, including home care agencies. That funding will expire at the end of the COVID-19 public health emergency scheduled for April.
Twenty-eight states passed along permanent rate increases, 14 offered time-limited rate increases and six offered a mix of both. Some states used ARPA funds to offer bonus payments to workers and expanded worker training programs.
Despite the higher wages and enhancements, the Kaiser survey found worker shortages continue to plague Medicaid HCBS programs. Forty-four states reported at least one Medicaid HCBS provider closed this year, up from 30 states in 2021. The trend suggests that Medicaid providers continue to struggle, despite the broader economy returning to normal following an easing in the pandemic.
Still, the survey found states are getting more creative in dealing with the worker shortage by increasing self-directed and family caregiving opportunities throughout the pandemic. All states offer at least one HCBS program with an option for enrollees to self-direct their services. Forty-eight states now allow legally responsible relatives to be paid caregivers compared to 36 states in 2020. Arizona is now offering training to family caregivers through a law passed last year. Other states are considering similar measures.
Telehealth helped expand access to HCBS programs during the pandemic. Nearly all states allowed virtual evaluations for eligibility screenings and other services. The survey found most states plan to continue offering telehealth services, but there are likely to be limits on virtual services when the PHE expires, which could happen in April.