CMS Provides Medicaid Funding for Home, Community Care

WASHINGTON–CMS will give states $1.75 billion over five years
to allow elderly and disabled Medicaid recipients to live in the
community rather than in institutions, HHS Secretary Mike Leavitt
announced last week.

The agency said the monies, to be delivered through competitive
grants, will help shift Medicaid from its historical emphasis on
institutional long-term care services to a system that offers more
choices for seniors and people with disabilities, including home
and community-based services. What CMS terms a “rebalancing”
initiative, called “Money Follows the Person,” was included in the
Deficit Reduction Act and is a part of President Bush’s “New
Freedom” initiative.

“With this program, people who need long-term care and prefer to
live in their own homes and communities can do so,” Leavitt said.
“States will also get more for their money by giving the elderly
and people with disabilities more control over how and where they
get the Medicaid-funded long-term care services they need.”

According to CMS Administrator Mark McClellan, “We’ve worked
with advocates and states for years to end the institutional bias
in Medicaid, and now we’ve got the best opportunity ever to do it.
We need to move as quickly as possible to make that shift across
Medicaid. With new federal funding, there is no longer any excuse
for the status quo.”

Under the program, states will receive a higher rate of federal
Medicaid matching funds–between 75 to 90 percent–for
beneficiaries who are moved out of nursing homes and into community
settings. The funds are available not only for home health care but
also for home modification costs, respite services to augment
informal or unpaid caregivers, personal care and assistive
devices.

Because institutional care was the norm when the Medicaid law
was enacted 40 years ago, CMS said, to provide home and
community-based services, states must get a waiver of normal
program rules. According to HHS, waivers and demonstration programs
“offer the promise of significantly lower costs per beneficiary and
reductions in overall Medicaid spending” because individuals are
given control over how they will get their services. But
rebalancing Medicaid coverage may have some short-term costs, which
the new federal program should help states to overcome.

For more information on the Money Follows the Person initiative,
visit www.grants.gov. For more details about the New
Freedom Initiative, visit www.cms.hhs.gov/newfreedom.