CMS Issues Guidance to States on Enhanced Funding for Medicaid Programs

WASHINGTON, D.C. (June 4, 2021)—The Centers for Medicare & Medicaid Services (CMS) issued guidance on how states can receive enhanced funding, provided through the American Rescue Plan Act of 2021 (ARP), to increase access to home- and community-based services (HCBS) for Medicaid beneficiaries. These benefits provide critical services to millions of older adults and individuals with disabilities, allowing them to receive health services in their homes and communities, rather than in nursing homes and other institutions. The guidance is a key tool to assist states in leveraging federal resources to increase health equity in Medicaid beneficiaries’ access to HCBS, positive health outcomes and community integration.

As the pandemic continues to impact health care, it is important that Medicaid beneficiaries with long-term services and supports needs receive the assistance required to live in the setting of their choice, including their own home. The additional federal funding made available under the American Rescue Plan allows states to tailor HCBS enhancements based on the needs and priorities of its residents, while protecting and strengthening the HCBS workforce, safeguarding financial stability for HCBS providers, and accelerating long-term services and supports reform and innovation.

“Millions of individuals across the county—including people with disabilities and older Americans—rely on home-based care and the workforce that provides that critical care. The Biden-Harris Administration continues to support states and workers by making critically needed investments in home- and community-based services,” said HHS Secretary Xavier Becerra. “The American Rescue Plan helps to ensure that states can benefit from an increased federal investment in HCBS systems across the country, so that Medicaid beneficiaries receive high quality, cost-effective, person-centered services in their homes and remain a valued part of their communities.” 

Section 9817 of the ARP provides states with a temporary 10 percentage point increase to the federal medical assistance percentage (FMAP) for certain Medicaid HCBS from April 1, 2021 through March 31, 2022 to improve HCBS under the Medicaid program. The guidance that was issued to states via a State Medicaid Director Letter outlines the eligible services and parameters for which states can claim the increased FMAP, and provides examples of activities that states can implement to enhance, expand or strengthen HCBS.

To review the State Medicaid Director Letter, click here.