Scarce data and unstandardized definitions of services make it hard for states to determine rates for home- and community-based services, but with the looming expiration of certain federal flexibilities, many are running out of time.
“When we say ‘HCBS payment rates,’ we focused on three core services that are covered by all states that account for the vast majority of HCBS spending: Home-based services, day service, and round-the-clock care,” Rober Nelb, a principal analyst at the Medicaid and CHIP Payment and Access Commission, said in a meeting earlier this month, according to a transcript. “One of the main challenges in comparing payment rates across states is that every state defines these services a bit differently … we actually found 253 unique state-defined services that fell into these three categories.”
States, therefore, are left without a clear picture of what services are affected by HCBS rate-setting. Or on the other hand, wildly different healthcare providers could be grouped together as HCBS, but they each may require different levels of support.
“Most states use data from the Bureau of Labor Statistics as a starting point for developing HCBS wage assumptions,” Nelb said. But there are issues that come with using BLS data to make these determinations. The bureau lacks specific categories for direct support professionals and some other HCBS workers, he noted, so it can be hard for states to find a good benchmark that reflects the skills and requirements for these workers.
Instead, many states contract independent studies on HCBS providers’ costs and services to develop their own wage assumptions. But the problem with these, Nelb said, is that the results of these studies are often restricted from public access. When they are publicly available, the data generally is not presented in a standardized way that can be compared across different states. But even armed with the results of these studies, states often cannot afford to pay HCBS workers the amount that the data suggests, he said.
“State budget constraints limit states’ ability to fund rates at a level that may be recommended by a rate study,” Nelb said. “The variabilities in the state legislative process can create uncertainty for providers about available HCBS funding and whether there will be certain payment rate increases.”
The federal government addressed this challenge with the American Rescue Plan Act, but the funding is set to expire in March 2025. The majority of states do not currently have a plan in place to sustain current rates for HCBS afforded by ARPA dollars, Nelb noted.
“At least 22 states do have some plan in place to sustain rate increases,” he said. “But of course, that means more than half of states do not.”
Providers may not have to worry too much, however. In October, Sen. Bob Casey (D-PA) introduced the HCBS Relief Act, which would provide two years of dedicated Medicaid funds for states to “stabilize their HCBS service delivery networks, recruit and retain HCBS direct care workers, and meet the long-term service and support needs of people eligible for Medicaid home and community-based services,” according to a summary of the bill.
