Assisted living providers could gain access to a $12.7 billion infusion for Medicaid home- and community-based services through the American Rescue Plan.
Late Thursday, the Centers for Medicare & Medicaid Services published guidance for state Medicaid agencies to implement the enhanced federal medical assistance percentage, or FMAP, provision for HCBS in the COVID-19 stimulus package.
The additional federal funding — estimated to be $12.7 billion by the Congressional Budget Office, according to LeadingAge — allows states to tailor HCBS enhancements based on resident needs and priorities. CMS said the funding also will protect and strengthen the HCBS workforce, safeguard the financial stability of HCBS providers, and accelerate long-term services and supports reform and innovation.
As specified in the American Rescue Plan, covered serves include personal care, private-duty nursing and state plan home health. Most assisted living and adult day services covered by Medicaid are eligible, although the National Center for Assisted Living indicated that applicability will depend on whether a state defines HCBS to include assisted living — through waivers, for instance — and how individual states implement the CMS guidance.
Also, among the activities that states can implement “to enhance, expand, or strengthen Medicaid HCBS,” according to the letter from CMS to state Medicaid directors, is “[p]roviding nursing facilities or other institutional settings with funding to convert to assisted living facilities or to provide adult day services, respite care, or other HCBS.”
LeadingAge called the enhanced FMAP a “critical investment in Medicaid HCBS.”
“We welcome this guidance and appreciate the flexibility CMS grants to states, as well as the important guardrails on eligibility, services and rates that protect beneficiaries and the providers that serve them,” a LeadingAge spokesperson told McKnight’s Senior Living. “We encourage states to act swiftly to bolster home- and community-based services with these dollars, and we encourage providers to engage with their state agencies as the agencies make decisions. We are also pleased that CMS is allowing additional retainer payment periods for 2021.”
According to LeadingAge, states have until March 31, 2024, to spend down the federal dollars and have broad flexibility in how to spend those dollars, but they must be limited to HCBS. Provider rate increases and supplemental payments are specifically allowed uses of these dollars. States cannot restrict eligibility, eliminate or narrow services, or cut provider rates across HCBS programs until the dollars are spent.
CMS said that it is important to note that the legislation creating the enhanced FMAP includes language stating that states must use the funds to “supplement, not supplant” existing state dollars for Medicaid HCBS. The intent is to “enhance, expand or strengthen HCBS,” the agency said in the letter.
Dollars can be used for short-term projects to address the COVID-19 pandemic, as well as longer-term investments to rebalance state LTSS systems. Specifically, dollars can be used to increase provider rates, workforce recruitment and training, expand provider capacity, and expand the use of technology and telehealth.