American flag and money

The Department of Health and Human Services is giving states an additional year — through March 31, 2025 —  to use American Rescue Plan (ARP) funding to enhance, expand and strengthen home- and community-based services for people with Medicaid who need long-term services and supports, the agency said Friday.

“The Biden-Harris Administration is committed to expanding access to home- and community-based care for people with disabilities and older adults. Thanks to the American Rescue Plan, these additional funds will help people with Medicaid to live and thrive in the setting of their choice,” Centers for Medicare & Medicaid Services Administrator Chiquita Brooks-LaSure said. “With this extension, we are addressing states’ concerns, giving states the time and resources to strengthen connections to care at home and in communities.”

Section 9817 of the ARP provided states a temporary 10 percentage point increase to the federal medical assistance percentage (FMAP) for certain Medicaid expenditures for HCBS — an estimated $12.7 billion. States originally had a three-year period — from April 1, 2021 through March 31, 2024 — to use the available state funds.

“The extended time frame, of an additional year, will help to facilitate high-quality, cost-effective, person-centered services for people with Medicaid,” HHS said. “This will allow Medicaid beneficiaries to remain in the setting of their choice — whether it is their home or another setting — and remain a valued part of their communities.”

States can use the ARP funding for various purposes. Among them: to identify and implement changes aimed at addressing existing HCBS workforce issues. They also can use the dollars to provide critical services and meet the needs of family caregivers and people on HCBS wait lists. And they can use funding to provide additional support to address the continued impact of the COVID-19 pandemic on individuals at home who need long-term services and supports. Some states are also using the funds to increase pay and benefits for direct service workers, HHS said.