Strengthening and Investing in Home and Community Based Services for Medicaid Beneficiaries: American Rescue Plan Act of 2021 Section 9817

Background

The COVID-19 public health emergency (PHE) has underscored the urgent need to reduce the reliance on institutional services and expand access to high-quality home and community-based services (HCBS) to improve outcomes for people with long-term services and supports (LTSS) needs. HCBS allow millions of Medicaid beneficiaries to receive services in their own home or community rather than in institutions or other isolated settings.

Consistent with many beneficiaries’ preferences for where they would like to receive their care, HCBS have become a critical component of the Medicaid program and of broader efforts across the federal government to promote community integration of older adults and individuals with disabilities. As the primary funder of HCBS nationally, Medicaid plays a critical role in supporting states’ efforts to strengthen these services for their beneficiaries. In November 2020, CMS released a toolkit to help states to rebalance their LTSS systems by increasing the share of spending and service use delivered through HCBS, relative to spending and services provided through institutional care.

Section 9817 of the American Rescue Plan Act of 2021 (ARP) (Pub. L. 117-2) provided qualifying states with a temporary 10 percentage point increase to the federal medical assistance percentage (FMAP) for certain Medicaid expenditures for HCBS beginning April 1, 2021, and ending March 31, 2022. This increased funding represented a rare opportunity for states to identify and implement changes aimed at addressing existing HCBS workforce and structural issues, expand the capacity of critical services, and begin to meet the needs of people on HCBS waitlists and family caregivers. This funding also provided states an important opportunity to enhance individual autonomy and community integration in accordance with the home and community-based settings regulation, Olmstead implementation, and other rebalancing efforts. States expected to spend nearly $37 billion on activities to enhance, expand, or strengthen HCBS as a result of ARP section 9817.

State Activities Under ARP Section 9817

All 50 states and the District of Columbia were fully approved to claim the HCBS FMAP increase from April 1, 2021, until March 31, 2022, and to begin implementing activities under ARP section 9817 to enhance, expand, and strengthen HCBS. CMS expected states to expend the funds by March 31, 2025. However, about half of states were approved to expend the funds after this date. This table provides information on approved extensions and the closeout date (if applicable) for each state.

States implemented a number of innovative and exciting activities as a result of ARP section 9817. For example, states:

•  Provided recruitment and retention bonuses, pay increases, and student loan forgiveness for direct support professionals, including behavioral health providers, as well as developing certification and training programs for direct support professionals (Nearly all state spending plans and narratives include workforce development initiatives);
• Expanded coverage of HCBS services to those who are currently on wait lists;
• Implemented in-home and mobile COVID-19 vaccination programs for people with disabilities and older adults;
• Developed deed-restricted accessible and affordable housing units for people with disabilities;
• Expanded access to assistive technologies to promote independence and community integration;
• Expanded HCBS eligibility to children with disabilities in the TEFRA group (commonly referred to as the Katie Beckett waiver);
• Implemented new behavioral health crisis response services for people with intellectual and developmental disabilities;
• Provided additional home-based services to support people to return home and avoid a skilled nursing facility admission following a hospitalization;
• Built partnerships to increase access to affordable and accessible housing and housing assistance for people with disabilities and older adults;
• Provided housing-related services and supports, such as home accessibility modifications and case management and other supportive services to help people obtain and maintain housing; and
• Developed new initiatives to increase access to competitive integrated employment for people with disabilities.

Additional Information

• State Medicaid Director Letter # 21-003, Implementation of American Rescue Plan Act of 2021 Section 9817: Additional Support for Medicaid Home and Community-Based Services during the COVID-19 Emergency
• State Medicaid Director Letter # 22-002, Updated Reporting Requirements and Extension of Deadline to Fully Expend State Funds Under American Rescue Plan Act of 2021 Section 9817
• ARP Section 9817 Approved Extensions and Closeout Status

For more information, contact HCBSincreasedFMAP@cms.hhs.gov.