HHS Extends States’ Deadline to Utilize American Rescue Plan’s HCBS Funding

On Friday, the U.S. Department of Health and Human Services (HHS) – through the U.S Centers for Medicare & Medicaid Services (CMS) – announced that states would have an additional year to use funding from the American Rescue Plan to both enhance and expand home- and community-based services (HCBS).

The news is major for home-based care providers, as the federal government is committing to further and prolonged support for HCBS in general.

“The Biden-Harris Administration is committed to expanding access to home- and community-based care for people with disabilities and older adults,” CMS Administrator Chiquita Brooks-Lasure said in a statement. “Thanks to the American Rescue Plan, these additional funds will help people with Medicaid to live and thrive in the setting of their choice. With this extension, we are addressing states’ concerns, giving states the time and resources to strengthen connections to care at home and in communities.”


The Biden administration has been attempting to weave HCBS support into policy since it took over the White House. Ultimately, its best success has been from the American Rescue Plan, which offered a 10 percentage point increase to HCBS funding through the Federal Medicaid Assistance Percentage (FMAP) match.

Friday’s announcement means that states can access that funding for a longer period of time. Initially, there was a three-year period carved out – from April 1, 2021, to March 31, 2024. Now, that funding will be available for states to expend until March 31 of 2025. 

“This is very good news,” William A. Dombi, the President of the National Association for Home Care & Hospice (NAHC), told Home Health Care News. in an email. “The ARPA funds are desperately need in Medicaid HCBS, but using those founds properly has been a complex undertaking for the states. The added time to use the funds is very welcome.”


Broadly, these funds can be used to strengthen states’ HCBS programs, particularly when it comes to bolstering the workforce and reducing the reliance on institutional care.

The American Rescue Plan, passed in March of last year, was a $1.9 trillion economic recovery package. Its initial HCBS bump was estimated to be worth about $12.7 billion.

“The extended timeframe of an additional year will help to facilitate high-quality, cost-effective, person-centered services for people with Medicaid,” the announcement read. “This will allow Medicaid beneficiaries to remain in the setting of their choice – whether it is their home or another setting – and remain a valued part of their communities.”

Prior to the extension, providers had been concerned about a fiscal cliff, where programs funded via the HCBS investments would suddenly disappear. That cliff still remains off on the horizon, though Friday’s news creates a longer runway for a more permanent solution.

How states have used funding

The most popular ways that states have taken advantage of the funding thus far has been through expanding services to more beneficiaries, strengthening the workforce through wage bumps and other means, increasing technology usage, improving quality of care and addressing social determinants of health needs among seniors.

For instance, Minnesota proposed its Community First Services and Supports (CFSS) program, which expands the existing personal care benefit. It would allow spouses and parents to become a support worker for loved ones and allow goods to be purchased to aid aging in place, among other benefits.

The Medicaid waiting lists for HCBS are notoriously long. They are often not accurate either, as the resources to find out how many people could benefit from HCBS in each state are just not there.

Increased funding means a dent could finally be made in these waitlists.

“There’s just a lot of unmet need, and there are a lot of people that aren’t getting any services, either because they’re not deemed eligible, or they’re on a very long waitlist for services,” Kathy Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation, previously told Home Health Care News. “Then there are other people who end up having to receive services in an institutional-type setting when they’d much rather stay at home.”

Overall, states are proposing $4.59 billion in total planned spending for rate increases and adjustments, $3.1 billion in retention payments and one-time bonuses and $1.04 billion to offer wage increases and benefit packages, according to CMS.

“According to states’ spending plans submitted to CMS, each state plans to spend between $31.6 million and $4.63 billion in state and federal funds on activities that enhance, expand, or strengthen HCBS under Medicaid,” an agency fact sheet describes.

CMS has signed off on HCBS investment plans for all 50 states.

The map above shows ARPA HCBS investments per state. States in a darker shade of blue have invested more in HCBS. Source: CMS

New Hampshire, in specific, is mandating rate increases to qualified providers. That money, in turn, is supposed to be directed to the direct care workforce in the form of recruitment, retention, training and tuition reimbursement for relevant health care education or career ladder development.

California and Kentucky have also implemented new training programs to enable better care for children with disabilities and seniors with dementia, respectively.

The technology front is also noteworthy for home-based care providers. When hospitals were gifted billions of dollars earlier this century to update their electronic health record (EHR) systems, providers elsewhere were largely left out, which has left home-based care behind in that respect.

Source: CMS

Now, there is a dedicated $1.6 billion in total planned spending from 18 states to expand – or begin – telehealth utilization and provide necessary equipment to beneficiaries. That could affect nearly 3 million HCBS beneficiaries in total.

Georgia is planning to help its providers with that much-need update by developing infrastructure from the funding to incorporate EHRs into the state’s existing systems and also to incentivize more providers to adopt this technology.

“Everyone deserves the dignity to live in their own homes and communities, and the Biden-Harris Administration is committed to protecting that right,” HHS Secretary Xavier Becerra said in a statement. “Thanks to extended funding from President Biden’s American Rescue Plan, we are expanding home- and community-based services for millions of aging Americans and people with disabilities across the country. We are working hand-in-hand with states to ensure they have the time and support they need to strengthen their home care systems and workforce.”

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