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Balancing Incentive Program

The Balancing Incentive Program authorizes grants to States to increase access to non-institutional long-term services and supports (LTSS) as of October 1, 2011.

The Balancing Incentive Program will help States transform their long-term care systems by:

  • Lowering costs through improved systems performance & efficiency
  • Creating tools to help consumers with care planning & assessment
  • Improving quality measurement & oversight 

The Balancing Incentive Program also provides new ways to serve more people in home and community-based settings, in keeping with the integration mandate of the Americans with Disabilities Act (ADA), as required by the Olmstead decision. The Balancing Incentive Program was created by the Affordable Care Act of 2010 (Section 10202).

How The Balancing Incentive Program Is Financed

The Balancing Incentive Program increases the Federal Matching Assistance Percentage (FMAP) to States that make structural reforms to increase nursing home diversions and access to non-institutional LTSS. The enhanced matching payments are tied to the percentage of a State’s LTSS spending, with lower FMAP increases going to States that need to make fewer reforms.

Total funding over 4 years (October 2011 – September 2015) can’t exceed $3 billion in Federal enhanced matching payments.

Federal Funding for State Programs

To participate in the Balancing Incentive Program, a State must have spent less than 50% of total Medicaid medical assistance expenditures on non-institutionally based LTSS for fiscal year 2009. States must also submit an application that meets programmatic and structural reform requirements.

  • States that spent 25-50% on non-institutionally-based LTSS are eligible for a 2% enhanced FMAP. These States must reach 50% of total LTSS expenditures on non-institutionally based LTSS by September 30, 2015.
  • States that spent less than 25% on non-institutionally based LTSS are eligible for 5% enhanced FMAP. These States must reach 25% of total LTSS expenditures on non-institutionally based LTSS by September 30, 2015.

The Balancing Incentive Program Guidelines

The Balancing Incentive Program requires States to implement structural changes, including a no wrong door/single entry point system (NWD/SEP), conflict-free case management services, and core standardized assessment instruments. 

The Balancing Incentive Program  State must agree to use the enhanced FMAP only to provide new or expanded home and community-based LTSS. The State can’t restrict LTSS eligibility more than the standards already in place as of December 31, 2010.

To view the State Medicaid Director letter, click here. 

To apply to the Balancing Incentive Program, click here. 

For more information on the required structural changes, click here. 

For technical assistance with the Balancing Incentive Program, click here. 

Approved Applications

Structural Change Workplans