CMS Administrator Seema Verma

The federal government is providing $165 million in supplemental funding to states for a longstanding Medicaid program designed to transition residents of nursing homes and other institutions and into home- and community-based services. 

The Centers for Medicare & Medicaid on Wednesday announced the new federal funding for states that operate the Money Follows the Person, or MFP, demonstration program. The hope is that the funding will help state Medicaid programs “jump-start efforts” to transition older adults and people with disabilities from institutions and nursing facilities to settings of their choosing.

The program started in 2007 and more than 101,000 people have transitioned from facilities and to the community by 2019, according to the agency. Only about 4,100 Medicaid beneficiaries were transitioned under the program last year, which was a 48% decrease from 2018, however.

In the announcement, CMS Administrator Seema Verma alluded that America’s “over-reliance on institutional long-term care facilities” and the devastation experienced by nursing home residents during the coronavirus pandemic impacted the investment. 

“Residential care will always be an essential part of the care continuum, but our goal must always be to give residents options that help keep our loved ones in their own homes and communities for as long as possible,” Verma said in a statement. 

“Home- and community-based care is not only frequently more cost effective, but is preferred by seniors and adults with disabilities seeking to maintain the dignity of independent living. This new federal investment will help states get our loved ones back home,” she added.

Thirty-three states currently operate MFP-funded transition programs and are eligible for the funding. They can receive up to $5 million for planning and capacity building activities to accelerate long-term care system transformation design and implementation, and to expand HCBS capacity. They also can use the funding to support HCBS planning and capacity built activities in direct response to the COVID-19 public health emergency. 

LeadingAge said in a statement to McKnight’s on Wednesday that the effect of these funds will depend on what each state chooses to do, as states are the recipients of MFP dollars. 

“The amount each state will receive from this disbursement is relatively small compared to overall Medicaid LTSS costs and previous funding allocations for MFP, so any impact would likely be limited,” the organization explained. 

Read additional coverage from McKnight’s here.