Potential Impact of Additional Federal Funds for Medicaid HCBS for Seniors and People with Disabilities

CMS’s May 2021 guidance adopts a three-pronged maintenance of effort requirement for states to demonstrate that they are using the new federal funds to supplement and not supplant existing state spending as required by the American Rescue Plan. Specifically, states must (1) not impose eligibility standards, methodologies or procedures for HCBS programs and services stricter than those in effect on April 1, 2021; (2) maintain coverage of HCBS and the amount, duration, and scope of those services as of April 1, 2021; and (3) not decrease provider payments below the rate in effect on April 1, 2021.

The guidance provides that states must maintain any temporary changes to HCBS eligibility, services, or provider payment adopted under Medicaid emergency authorities in response to the COVID-19 PHE “for as long as allowable under those authorities.” However, CMS clarifies that, to meet the requirements to receive the enhanced HCBS FMAP, states do not have to retain such changes past the approved end date of any emergency authorities. CMS also notes that states will not be penalized for fluctuations in HCBS enrollment, utilization, or spending that are unrelated to changes in state policies and procedures, especially during the COVID-19 PHE.

The state’s initial HCBS spending plan projection and narrative should estimate the total amount of enhanced funds that the state anticipates claiming from April 1, 2021 through March 31, 2022 and the anticipated expenditures for activities the state intends to implement. CMS will approve state submissions that meet the terms of the guidance within 30 days. Until all of the enhanced funds are expended, states must submit quarterly HCBS spending plans and narratives that estimate the amount of enhanced funds that the state has claimed or anticipates claiming and anticipated and/or actual expenditures and provide progress reports on state activities. The guidance indicates that CMS will publicly post summary information from the state reports.

Appendix Table: Examples of American Rescue Plan State Activities to Enhance, Expand, or Strengthen Medicaid Home and Community-Based Services (HCBS)
 Activities to Support State COVID-Related HCBS Needs
Topic Activity Examples
Services Increase covered services Provide new HCBS or expand scope of existing HCBS to reduce risk of institutionalization during COVID-19 PHE

Specific services highlighted include:

  • Assistive technology (including necessary internet activation costs) and staffing to mitigate social isolation and ensure service plans continue to be fully implemented during PHE
  • One-time community transition costs and transition coordination services for those moving from institutions or provider-operated congregate community setting to private community residence
  • Mental health and substance use disorder treatment and recovery services (including via telehealth) to address HCBS enrollee needs during PHE
  • Rehabilitative services to regain skills lost during PHE
Facilitate COVID vaccine access Assist with scheduling appointments

Provide direct support services during appointments

Provide transportation to appointments

Develop in-home vaccine options

Conduct vaccine education and outreach

Provide COVID education/outreach Develop educational materials in accessible formats about COVID prevention, treatment, and recovery for HCBS enrollees, their families, and the general community

Pay for American Sign Language and other interpreters to assist in providing HCBS and provide information about COVID

Workforce Increase worker compensation Increase payment rates for HCBS providers (e.g., home health agencies, PACE organizations, agencies or beneficiaries that employ DSPs), with the expectation that direct care worker pay will increase

Provide paid sick, family, medical leave and/or hazard, overtime, shift differential pay for home health workers and DSPs

Increase behavioral health provider payment rates to expand access to mental health and substance use disorder services for HCBS enrollees during PHE

Engage in worker recruitment Conduct activities and offer incentive payments to recruit and retain home health workers and DSPs

Conduct activities to recruit more behavioral health providers

Provide family caregiver supports Cover equipment and supplies need by family caregivers, including items not typically covered such as PPE and payment as a service provider
Support provider COVID response Purchase PPE and routine COVID testing for direct services workers and people receiving HCBS

Provide home health worker/DSP training specific to COVID PHE

Fund adult day health centers to make physical, operational or other changes to safely deliver services during COVID PHE

Activities to Support State HCBS Capacity Building and LTSS Rebalancing Reform
Topic Activity Examples
Eligibility and Enrollment Streamline eligibility and enrollment processes Adopt new policies such as expedited HCBS eligibility (subject to CMS approval)

Streamline application and enrollment processes

Reduce or eliminate HCBS waiting lists Increase number of HCBS waiver slots to serve additional enrollees
Build no wrong door systems Establish toll free phone lines

Develop informational websites

Automate screening and assessment tools

Conduct marketing and outreach

Services Increase covered services Provide new services or increase scope of existing services

Specific examples highlighted include:

  • Community transition (add new populations and/or services)
  • Equipment and devices to address functional needs and promote independence and support community integration (e.g., eyeglasses, wheelchair transfer boards, adaptive cooking equipment)
  • Assistive technology (e.g., individual tele-communication start-up costs such as equipment or internet connectivity activation, smartphones or computers to address functional needs and promote independence and support community integration)
Improve service planning Adopt standardized functional assessments

Enhance person-centered planning/provide training

Workforce Engage in worker recruitment and retention Create financial incentives to expand the number, retention rate, and skills of direct care workforce

Expand opportunities for self-direction

Provide family caregiver supports Provide respite services
Offer worker training Provide training for caregivers, enrollees, and providers (general or to support community integration)
Increase provider capacity Fund nursing homes/institutional settings to convert to assisted living facilities or to provide adult day health, respite, or other HCBS
Oversight/Data/ Systems Strengthen institutional diversion and community transition programs Improve use of data (MDS, claims, encounter) to support community transition programs

Strengthen and improve PASRR processes to prevent unnecessary institutionalization

Embed options counselors in hospital discharge programs

Address social determinants of health Assess health disparities for seniors and people with disabilities

Test alternative payment models or delivery of new services to address social determinants of health, such as housing supports, employment supports, community integration

Build social determinant of health network partnerships

Invest in quality improvement Upgrade critical incident management reporting systems

Adopt new quality measures

Implement experience of care surveys such as HCBS CAHPS

Provide training and technical assistance to build provider performance measurement and predictive analytic capabilities

Improve cross-system data integration Establish data sharing agreements among state/county agencies, providers, community-based organizations

Integrate claims/encounter data with incident management system

Invest in infrastructure to incorporate HCBS into electronic health records

Integrate Medicare and Medicaid data

Improve care coordination Implement information technology care coordination enhancements such as notification systems and capabilities (e.g., hospital admission/discharge/transfer) to share information across settings

Improve Medicaid managed care plan access to Medicare data to improve care coordination for dual eligible enrollees receiving HCBS

Implement integrated care models to more effectively address complex population needs

Provide more intensive care coordination for enrollees with significant socioeconomic needs based on risk stratification modeling

Develop cross-system partnerships Incentives health plans and providers to partner with community-based organizations, social service agencies, counties, housing agencies, public health agencies

Require providers to participate in local/regional provider networks

Build Medicaid housing partnerships

NOTES: DSP = direct support professional. PPE = personal protective equipment. List of examples is not exhaustive.
SOURCE: KFF analysis of CMS SMD #21-003, Implementation of American Rescue Plan Act of 2021 Section 9817:  Additional Support for Medicaid Home and Community-Based Services during the COVID-19 Emergency, Appendixes C and D (May 13, 2021).
Potential Impact of Additional Federal Funds for Medicaid HCBS for Seniors and People with Disabilities – Data Note – 9667-02

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