Money Follows the Person

The Money Follows the Person (MFP) demonstration supports state strategies to rebalance their long-term services and supports systems from institutional to community-based care. MFP has played a key role in many states’ long-term services and supports (LTSS) rebalancing efforts under the Medicaid program providing flexible funding opportunities to help states develop and test the necessary processes, tools, and infrastructure to advance LTSS system reform and to support successful transitions from institutional to community-based settings for individuals eligible for Medicaid LTSS.

Since the inception of the MFP demonstration, forty-five states and the District of Columbia and two territories, American Samoa and the Commonwealth of Puerto Rico, have been awarded grant funding to plan and implement MFP demonstrations. Additionally, in 2013, five MFP states were awarded funding to participate in an MFP Tribal Initiative (TI) to work with qualified Tribes and/or Tribal Organizations to develop culturally responsive home and community-based services (HCBS) and to implement strategies to reduce the use of institutional care for Tribal members.

MFP Program Goals

Increase the use of HCBS rather than institutional LTSS, in the Medicaid program;
Eliminate barriers or mechanisms, whether in state law, state Medicaid plans, the state budget, or otherwise that prevent or restrict the flexible use of Medicaid funds to enable Medicaid-eligible individuals to receive support for appropriate and necessary long-term services and supports in the settings of their choice;
Increase the ability of state Medicaid programs to assure continued provision of HCBS to eligible individuals who choose to transition from an institutional to a community setting; and
Ensure that procedures are in place (at least comparable to those required under the qualified HCBS program) to provide quality assurance for eligible individuals receiving Medicaid HCBS and to provide for continuous quality improvement in such services.

MFP Demonstration Cooperative Agreement Awards

The type of award issued under the Money Follows the Person demonstration is a cooperative agreement. A cooperative agreement differs from a grant in that it provides for substantial involvement between the federal awarding agency and the non-federal entity in carrying out the activity contemplated by the federal award. Under each cooperative agreement, CMS’s purpose is to support the award recipient’s activities by involvement in, and otherwise working jointly with, the award recipient in a partnership role. The partnership between CMS and the recipients of the MFP cooperative agreement awards includes the provision of technical assistance, coordination of relevant federal collaboration to support MFP demonstrations, program evaluation, and oversight and monitoring activities.

MFP Implementation

The Money Follows the Person (MFP) demonstration has successfully transitioned thousands of people with a disability and older adults who are eligible for Medicaid long-term services and supports (LTSS) from inpatient facilities to community living. MFP Success Stories highlight the challenges, solutions, and results of effective MFP demonstration programs. Under the MFP demonstration, recipients develop and implement innovative approaches to enhance comprehensive transition coordination services and advance LTSS system reform including:

hiring and embedding local staff in inpatient facilities to provide options counseling to residents, which increased transitions to the community;
reinforcing high quality standards for home and community-based services during transition coordination and post-transition;
investing in critical one-time transition costs, home accessibility modifications, and medical equipment;
information sharing to enable transition specialists to focus on understanding participants’ goals and preferences and improve their experience of care;
forming strong partnerships with public housing authorities, state housing and health agencies, aging and disability networks, landlords, and developers to increase housing options; and
building on existing delegations, meetings, and trusted relationships to engage with Tribal Nations to advance the MFP Tribal Initiative.

MFP Quality Improvement

MFP grantees have broad flexibility to incorporate many key HCBS system elements into their program design, strategies, and services, including processes and measures to enhance Medicaid HCBS quality. To guide MFP quality improvement, CMS issued a State Medicaid Director Letter to release the first official version of the HCBS Quality Measure Set. The HCBS Quality Measure Set is a set of nationally standardized quality measures for Medicaid HCBS. CMS encourages states to use the measure set to assess quality and outcomes in their HCBS programs including MFP. CMS also plans to incorporate use of the measure set into the reporting requirements for MFP and other programs.

MFP Guidance and Programs

Money Follows the Person Demonstration Expansion

In 2022, CMS released a Notice of Funding Opportunity (NOFO) that awarded approximately $25 million in planning grants to five new states and territories to expand access to home and community-based services (HBCS) through Medicaid’s Money Follows the Person (MFP) program. These funds support states during the initial planning and implementation of their programs.

Notice to Current MFP Grantees: Changes to MFP Supplemental Services

On March 31, 2022, CMS notified current MFP grantees that it is increasing the reimbursement rate for MFP “supplemental services.” These services are now 100% federally funded with no state share. CMS also announced that it is expanding the definition of supplemental services to include additional services that can support an individual’s transition from an institution to the community, including short-term housing and food assistance. These changes will help to address barriers to community transition for eligible individuals in institutions, increase community transition rates, and increase the effectiveness of the MFP demonstration. Additional information on MFP supplemental services and the changes announced by CMS are available in the notice that was provided to MFP grantees. Questions about the notice can be directed to MFPdemo@cms.hhs.gov.

MFP HCBS Capacity Building Initiative

On September 23, 2020, CMS announced a supplemental funding opportunity available to the MFP demonstration states currently operating MFP funded transition programs. Under this supplemental funding opportunity, up to $5 million in MFP grant funds was made available to each eligible state for planning and capacity building activities to accelerate LTSS system transformation design and implementation and to expand HCBS capacity. This funding strengthens the focus and attention on LTSS rebalancing among states participating in the MFP demonstration and supports MFP grantees with making meaningful progress with LTSS rebalancing.

Eligible states submitted supplemental budget requests under this funding opportunity. Funds were awarded to 33 states beginning federal fiscal year in which the award was received through four additional fiscal years.

The CMS Money Follows the Person Tribal Initiative

In 2013, CMS awarded funding for the MFP Tribal Initiative (TI) to five state grantees: Minnesota, Oklahoma, North Dakota, Washington and Wisconsin. The MFP TI offers existing MFP state grantees and tribal partners the resources to build sustainable home and community-based services specifically for Indian country. HCBS are those types of assistance with daily activities that generally help older adults and people with disabilities to remain in their homes. This initiative makes available these services to people with functional limitations or cognitive impairments that need assistance with activities of daily living such as bathing, dressing, eating, or other basic activities when they have been in an institutional setting for over 60 days. These services help individuals move back into the community. In addition, the MFP TI advances the development of infrastructure required to implement HCBS in American Indian and Alaska Native (AI/AN) communities. Funding is intended to support the planning and development of:

An in-state Medicaid HCBS program (as an alternative to institutional care) tailored for AI/ANs who are presently receiving services in a medical facility
A service delivery structure that includes a set of administrative functions delegated by the state Medicaid agency to tribes or tribal organizations (T/TOs), such as enabling tribe(s) to design an effective program or package of Medicaid HCBS and operating day to day functions pertaining to the LTSS program(s)

MFP TI may be used to cover costs necessary to plan and implement activities consistent with the objectives of this funding and within federal grant regulations. The funds are subject to all the terms and conditions of the MFP program.