The COVID-19 pandemic has shed light on the need for home- and community-based services (HCBS), with that attention likely to lead to new funding and regulatory flexibilities moving forward.
At the same time, however, the public health emergency (PHE) has disrupted the HCBS space more than anything in history.
In fact, the amount of Medicaid HCBS providers has actually declined during the pandemic, with two-thirds of states reporting the permanent closure of at least one provider over the last year and a half, according to a new study published by the Kaiser Family Foundation (KFF).
“Most of these states reported permanent closures among more than one HCBS provider type,” KFF’s issue brief read. “States most frequently cited workforce shortages as the pandemic’s primary impact on in-home and group home services, while closures due to social distancing measures was the most frequently reported primary impact on adult day health and supported employment programs.”
The findings were drawn from HCBS data from across the country, with 41 total states responding as of mid-July.
While workforce challenges were already a pain point for providers prior to 2020, the KFF study indicated they worsened — sometimes significantly — for providers during the COVID-19 crisis. The prevalence of closures varied from state to state, as did workforce challenges.
“Oregon noted that HCBS providers experienced challenges with remaining financially viable due to the pandemic, which will impact their ability to reopen,” the brief read. “Specific challenges cited by Oregon related to providers’ ability to maintain leased space, retain trained staff and provide supported employment services such as job search, placement, and coaching.”
Due to social distancing requirements, adult day providers were hit the hardest in terms of closures. Some were unable to open for all of 2020 — in some cases, even into 2021 — and had to increase costs to adhere to state requirements, whether that meant altering their spaces, installing plexiglass or paying more for personal protective equipment (PPE).
Overall, 25 states reported a permanent HCBS provider closure. Among those closures were 19 adult day providers. 
Of the 25 states with closures, 16 reported closures of more than one kind of HCBS provider.
About three quarters of the state respondents used retainer payments — approved by the Centers for Medicare & Medicaid Services (CMS) — to financially support the providers struggling to make it through.
Broadly, retainer payments allow providers the ability to continue billing for personal care services even when there are factors preventing them from delivering that care.
“For example, some HCBS providers such as adult day health centers had to temporarily close to comply with social distancing orders during the COVID-19 PHE, and some HCBS enrollees may have had to temporarily stop receiving in-home services due to self-quarantine.”
But regardless of the funding provided by the federal government or states, dozens of HCBS providers were still forced to close.
Those closures inevitably led to gaps in care for patients across the country, especially for ones that were likely to be vulnerable during the pandemic.
Efforts have been made on a state and federal level to increase funding for HCBS providers in order to curtail the issue, including a 10% FMAP increase in the stimulus package passed earlier this year and other funding proposals included in President Joe Biden’s infrastructure plan.
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