As part of the recently passed $1.9 trillion American Rescue Plan, state Medicaid programs have seemingly received a major bump in funding for vital home- and community-based services (HCBS).
In theory, the bump is designed to help HCBS operators expand their services, attract new workers and take on more clients. Still, some in-home care providers and other experts have raised questions about the applicability of the new law.
Specifically, the home- and community-based services provision in the American Rescue Plan — the COVID-19 relief package that President Joe Biden signed into law on March 11 — began at the start of April. The provision raises the federal matching rate for Medicaid HCBS spending by 10% from April 1 of 2021 through March 31 of next year.
“It’s one thing to pass the American Rescue Plan,” Biden said during a March 12 speech. “It’s going to be another thing to implement it. It’s going to require fastidious oversight to make sure there’s no waste or fraud, and the law does what it’s designed to do. And I mean it: We have to get this right.”
Biden has promised to support HCBS as president since his early days on the campaign trail.
But the American Rescue Plan was also undoubtedly driven by an effort to shift care into home and community-based settings in light of the considerable toll the COVID-19 emergency has taken on nursing homes and other long-term care facilities.
“There’s been a lot of interest among Democrats on the hill — and even some Republicans — to expand [home- and community-based services],” Howard Gleckman, a senior fellow at the Urban Institute and all-around aging expert, told Home Health Care News. “I think that this is just accelerating what was already a pre-COVID trend and making it more aggressive.”
The Urban Institute is Washington, D.C.-based economic and social policy research organization.
While numbers have begun to decline since the start of vaccine rollouts, more than 174,000 nursing home residents have died as a result of the COVID-19 virus, according to AARP statistics. This includes nursing homes and other facility-based long-term care settings.
In total, the 10% FMAP bump from the American Rescue Plan would translate to an added $11.4 billion for home- and community-based services over the next year, according to the Kaiser Family Foundation.
For providers, this new boost could mean a number of new possibilities, Kate Rolf, CEO of Nascentia Health, told HHCN.
“I’m hopeful we will see an increase in provider funding for access to care in rural areas and that it will improve access for providers to get services like telehealth,” Rolf said. “[Home care] lags behind in reimbursement when compared to other health care entities. I think this will help us gain some ground.”
Nascentia Health is a home-focused health system based in Syracuse, New York. The organization’s home care agency operates in five counties in upstate New York.
Nascentia Health has already begun strategizing around ways to improve its care services and delivery, according to Rolf.
“We are already beginning to look at how we can rebuild home- and community-based services to improve the quality of care, especially in some of the more rural areas,” she said. “And perhaps change our model of care so that we can provide care more efficiently and improve access.”
The additional funds could also assist providers in their recruiting and retention efforts, at a time when the demand for care continues to rise. In general, the demand for caregivers exceeds the amount of available workers — and it is projected to do so for the foreseeable future.
“Workforce issues continue to be our No. 1 challenge,” David Totaro, chairman of the Partnership for Medicaid Home-Based Care (PMHC), told HHCN.
Washington, D.C.-based PMHC is an industry advocacy group that represents home- and community-based care providers operating in the Medicaid space.
The waiting game
Despite all of the possibilities, the American Rescue Plan doesn’t explicitly state how the funds should be used.
Instead, it says that states must use the money to “implement, or supplement the implementation of, one or more activities to enhance, expand, or strengthen” Medicaid home- and community-based services.
This lack of clarity has become a major issue surrounding the new law.
“There are still many questions unanswered — mostly regarding the process for submission and approvals and what was meant by the phrase ‘to supplement, not supplant’ in the announcement,” Totaro said. “CMS did hold a listening session last month in which hundreds of providers and other interested parties attended. However, CMS listened and did not provide responses. We are still waiting for responses to the issues raised and hope to have more information soon.”
Another issue stems from the law not being permanent, according to Gleckman.
“It’s a significant new incentive for states to expand their home and community-based services programs, but because it’s only temporary that creates some challenges for states,” he said. “They don’t want to stand up new programs if they’re not going to last, so I suspect that a lot of this will be used for more short-term kinds of benefits.”
Some experts have questioned how providers can make meaningful investments in a system if the law only allows for new spending — and it only lasts a year.
With this in mind, Gleckman pointed to the Biden administration’s recent American Jobs Plan proposal, which calls for Congress to redirect $400 billion toward home-based care, as a possible permanent expansion for Medicaid HCBS.
Along with the new funding, the proposal pushes for the expansion of the Money Follows the Person (MFP) program, which allows certain Medicaid users to more seamlessly transition from a nursing home back into the home.
Biden’s recent proposal points to a “strong commitment” from the administration to expand Medicaid HCBS, according to Gleckman.
But looking ahead, there need to be broader changes to Medicaid when it comes to supporting care in the home setting.
“The Medicaid program is not really enough to allow people to get the level of care they need at home,” Gleckman said. “They still need a broader infrastructure of benefits that Medicaid doesn’t necessarily pay for — things like transportation, home-delivered meals programs and adult day services. A lot of that is essential to make it possible for people to live at home.”