When President Joe Biden signed the American Rescue Plan in March, he locked in an important payment bump for Medicaid home- and community-based services (HCBS).
Among its many provisions, the $1.9 trillion legislative package raises the Federal Medical Assistance Percentages (FMAP) for certain Medicaid HCBS by 10% from April 1 of 2021 through March 31 of next year. While the increase is a net positive for in-home care providers, many have raised questions as to how, when and where the additional Medicaid funds can be used.
The U.S. Department of Health and Human Services (HHS) offered clarity on Thursday as part of new guidance.
“Millions of individuals across the county — including people with disabilities and older Americans — rely on home-based care and the workforce that provides that critical care,” HHS Secretary Xavier Becerra said in a related announcement. “The Biden-Harris administration continues to support states and workers by making critically needed investments in home- and community-based services.”
In a nearly 30-page letter sent to state Medicaid directors, HHS and its Centers for Medicare & Medicaid Services (CMS) provided additional information on reporting requirements for the 10% FMAP boost as well as timing. The department also specified which services are eligible under the increase.
“State Medicaid programs and the home-based care industry have been eagerly awaiting [federal] guidance on this important provision,” Matt Wolfe, a partner at law firm Parker Poe, told Home Health Care News in an email. “We are still reviewing and talking with our partners in the myriad state Medicaid programs on feasibility and timing issues. At first blush, the letter appears to provide helpful flexibility to states to implement improvements to HCBS.”
According to the guidance, states must use federal funds attributable to the increased FMAP to “supplement, not supplant, existing state funds” dedicated to Medicaid HCBS.
“In other words, states cannot use the state funds equivalent to the amount of federal funds made available by the increased FMAP to pay for HCBS that [are] available under the Medicaid program as of April 1, 2021,” the letter reads. “These state funds must be used to enhance, expand or strengthen HCBS beyond what is available under the Medicaid program as of April 1, 2021.”
The supplement-versus-supplant technicality was one of the main areas that HCBS stakeholders initially wanted more information on. Effectively, HHS is telling states that the 10% bump should be used to make HCBS programs better or more widely available — not pay for them in full.
As far as timing, the HHS guidance notes that states will be permitted to use the state funds equivalent to the amount of federal funds attributable to the increased FMAP through March 31, 2024.
“This time period to expend funds attributable to the increased FMAP will provide states with sufficient time to design and implement short-term activities to strengthen the HCBS system in response to the COVID-19 [public health emergency], as well as longer-term strategies to enhance and expand the HCBS system and to sustain promising and effective programs and services,” the guidance reads.
Moving forward, states will need to submit both an initial and quarterly HCBS spending plan to HHS on how they are strengthening home-based care programs. That initial plan must be delivered within 30 days of the May 13 guidance.
To demonstrate compliance with the requirement not to supplant existing state funds expended for Medicaid HCBS, states must not impose stricter eligibility standards, methodologies or procedures for home-focused programs and services that were in place on April 1. Additionally, states must preserve covered HCBS, including the services themselves and the amount, duration and scope of those services.
Especially noteworthy for providers, the HHS guidance notes that states must maintain HCBS provider payments “at a rate no less than” those in place as of April 1.
To some extent, the hard April 1 stop may pose issues down the road, according to Wolfe.
“One concern I could imagine being an issue in certain states is the date of retroactivity being April 1, 2021,” he said. “Because Congress enacted [the American Rescue Plan] in early March, it is possible that some states moved forward with this opportunity in anticipation of this guidance. Hopefully, CMS will recognize the intent of those states to expand HCBS to Medicaid beneficiaries in a swift manner.”
Eligible services for the 10% boost include home health and personal care, as well as services delivered under self-directed models. Case management, rehab and private-duty nursing (PDN) services are likewise eligible, as are Program of All-Inclusive Care for the Elderly (PACE) services.
The inclusion of PDN was a pleasant surprise, David Totaro, chairman of the Partnership for Medicaid Home-Based Care (PMHC), told HHCN.
“PMHC thanks CMS for the additional guidance on the use of the FMAP funds,” Totaro said in an email. “While we need a bit more time to review the entire guidance, we are pleased that PDN services are now specifically included in the guidance and that the use of these funds has been extended through 2024.”
The increase can similarly be used to support COVID-19-specific initiatives. Examples include initiatives aimed at personal protective equipment (PPE) and workforce training.
“I also appreciate that CMS has offered states a non-exhaustive list of permissible activities,” Wolfe said. “As CMS acknowledged, states are best positioned to determine the types of activities that would most effectively expand home-based care.”
In contrast, states cannot use federal funding to pay for activities that are more administrative in nature.
“For example, Medicaid administrative claiming for HCBS activities performed by state No Wrong Door systems and state long-term care ombudsman programs are not eligible for the increased FMAP,” the guidance reads.
Companies featured in this article:
CMS, HHS, Parker Poe
