Why A Fee-For-Service Payment Structure Could Be Holding HCBS Back

Home- and community-based services’ (HCBS) fee-for-service (FFS) payment structure could be having adverse effects on beneficiaries.

That’s according to a new report published in Health Affairs, which suggests that too much in-home care could be a detriment to a beneficiaries’ independence and long-term outlooks.

Unlike value-based payment models, FFS can prioritize quantity over quality. The added volume that comes with HCBS visits can lead to that dependence for beneficiaries, according to CareBridge Chief Strategy Officer Patti Killingsworth, who was the report’s author.


On the flip side, value-based payment models tied to quality can better promote independence.

“While Medicaid has successfully helped millions of Americans who need LTSS avoid institutions and remain at home, it has become clear over the past several years that this is not enough,” Killingsworth wrote in the report. “Policymakers must advance HCBS that go beyond simply keeping people at home and out of institutions.”

The Nashville, Tennessee-based CareBridge is a value-based solutions platform for HCBS.


Killingsworth also serves on the Medicaid and CHIP Payment and Access Commission (MACPAC). MACPAC makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services (HHS) and states on issues affecting Medicaid.

The HCBS payment structure is set up in a way that disincentivizes independence, Killingsworth argued. The more hours spent in a client’s home, the less independence that client is able to experience.

Payment for HCBS is almost exclusively FFS and volume-driven currently.

That structure rewards providers who deliver more hours of personal care services.

“While other parts of health care are realigning payment toward value-based care that rewards outcomes, Medicaid HCBS is stuck in a fee-for-service world that rewards more hours instead of the outcomes that matter most to beneficiaries,” Killingsworth wrote.

Needed adjustments

Looking ahead, Killingsworth and her colleagues believe that changing the way an HCBS provider assesses an individual’s strengths and needs should be changed.

In order to do that, providers and caregivers should start to get more comfortable in objectively identifying the level of independence people have while performing activities of daily living.

Instead of providing care that helps maintain a level of independence, care models should be centered around increasing a client’s ability to perform tasks themselves. That path should also include “using paid, in-person support only when needed to fill in care gaps.”

“This does not mean that in-person support would no longer be needed,” Killingsworth wrote. “But instead, they would be provided only when there is no way to empower a person to independently meet their own needs.”