The federal government continues to provide financial incentives to states to expand Medicaid home-and-community-based services. Jennifer Bowdoin, Ph.D., director of the Division of Community Services Transformation for the Centers for Medicare & Medicaid Services, emphasized that on Tuesday during a session of the National Association for the Support of Long Term Care’s legislative and regulatory conference.
Most recently, Section 9817 of the American Rescue Plan provided $12.7 billion for states to invest in community-based programs through a temporary 10 percentage point increase to the Federal Medical Assistance Percentage (FMAP). States actually have spent an estimated $25 billion in total American Rescue Plan 9817 expenditures, Bowdoin said. When states are implementing activities to boost home-and community-based programs, the total cost of the activities may be higher than the original slated funding, she explained. On average, states plan to spend $2,604 per HCBS beneficiary on activities that enhance, or strengthen, HCBS, Bowdoin said.
MFP
Another effective way for states to grow HCBS is through the Money Follows the Person rebalancing demonstration project, Bowdoin explained. A total of 34 states currently participate, and as many as 38 states are expected to participate later this year thanks to expansion through the Consolidated Appropriations Act. The program offers a powerful tool to widen HCBS because states are reimbursed at a higher rate through the MFP and have more flexibility to offer more services. CMS renewed the demonstration project in December 2020 with expanded participant eligibility, Bowdoin said.
Growth in Medicaid HCBS
There is no question Medicaid HCBS is growing. The Kaiser Family Foundation late last week released a report that found that spending on Medicaid HCBS totaled $115.8 billion in fiscal year 2020. And states continue to rebalance long-term services and supports toward HCBS. In fiscal year 2019, HCB LTSS made up 59% of total spending while institutional LTSS comprised 41% of total spending.
“We expect this trend to continue in the future,” Bowdoin said.
The pandemic has accelerated states’ interest in promoting HCBS, Bowdoin said. HCBS is consistent with where people want to receive care and it’s fiscally responsible, Bowdoin noted.
“We know adequate support can be supported for people who need an institutional level of care in a community-based setting,” she said.
